"Uncompetitive" pricing means even more facilities will be withdrawn from use
Bupa has announced that it will take further steps to reduce its use of BMI Healthcare hospitals in 2012.
The insurer has already confirmed that 12 BMI Healthcare hospitals will not be recognised from 1 January next year but has now warned intermediaries that another 24 hospitals are likely to be removed when its contract with BMI Healthcare expires at the end of this month. BMI Healthcare has 72 hospitals and clinics in total, making it the largest private hospital group in the country.
Bupa claims that BMI Healthcare has requested prices for treating members that are more than 20% more expensive than at least one other national hospital group. The insurer argues that this price increase has been proposed "despite, in our view, offering no better quality or service".
In a letter to intermediaries, Linda Wallace, head of intermediary sales at Bupa, writes: "Unfortunately, we see no realistic alternative to this course of action. If we had to include all BMI hospitals in our recognised lists, regardless of price, this would completely undermine our ability to negotiate good value on behalf of Bupa members. We feel these actions are needed to secure affordable, high-quality hospital arrangements for your clients."
The letter confirms that Bupa will continue to recognise "some" BMI Healthcare hospitals if there is no convenient alternative for members nearby. A group of outer London hospitals are also likely to be included, given that the main alternatives in central London may be more expensive.
Bupa has also said that it will not fund treatment at de-listed hospitals for members of the trusts that it administrates.
Bupa is now contacting individual members in the catchment area of potentially affected hospitals, who have pre-authorised treatment between 1 September and 30 November this year, "to ensure they are fully informed and reassured of our commitment to continue to fund their ongoing diagnosis and/or treatment in the affected hospital".
Last month Dr Natalie Jane Macdonald, managing director of Bupa Health and Wellbeing [pictured], criticised BMI Health for sending an "inaccurate" letter to a patient at one of the 12 de-listed hospitals warning that she may be liable for the costs of her care if her bill was not settled by Bupa by January.
In an exclusive piece for Health Insurance published last month, John Von Klemperer, managing director, hospital operations for BMI Healthcare, challenged the claim that the prices charged by private hospital groups was the cause of rising private medical insurance premiums.
"Based on our historic experience, even if our prices to Bupa reduced steeply to the levels they want, it is unlikely that any reduction in premiums would be passed on to customers and even if it was, the change would not be material for customers," he wrote. "From our point of view, a steep reduction in our rates could compromise the level of care we were able to offer. It is interesting that while insurance premiums have risen 10% every year, this figure bears no resemblance to the price increases afforded to private hospitals and consultants which are significantly less, and for some services, have even reduced."
BMI Healthcare has also pointed out that its facilities score highly in patient satisfaction, quality, and clinical governance statistics.
Bupa has promised to provide intermediaries with materials to help explain the changes to clients.
List of 24 hospitals "likely" to be de-listed in 2012
BMI Alexandra Hospital (with the exception of cardiology, cardiothoracic surgery & neurosurgery), Cheshire
BMI Beaumont Hospital, Bolton
BMI Bishops Wood Hospital, Middlesex
BMI Clementine Churchill Hospital, Harrow
BMI Droitwich Spa Hospital, Worcestershire
BMI Duchy Hospital, Harrogate
BMI Esperance Hospital, Eastbourne
BMI Fawkham Manor Hospital, Kent
BMI Goring Hall Hospital, West Sussex
BMI Hampshire Clinic, Basingstoke
BMI Harbour Hospital, Dorset
BMI Highfield Hospital, Rochdale
BMI Huddersfield Hospital
BMI Manor Hospital, Bedfordshire
BMI McIndoe Surgical Centre, West Susssex
BMI Mount Alvernia Hospital, Guildford
BMI Princess Margaret Hospital, Berkshire
BMI Priory Hospital, Birmingham
BMI Sarum Road Hospital, Winchester
BMI Shelburne Hospital, Buckinghamshire
BMI Shirley Oaks Hospital, Croydon
BMI Somerfield Hospital, Kent
BMI South Cheshire Private Hospital
BMI Woodlands Hospital, Darlington