House of Lords Debates PMI Issues
November has been a busy month for the House of Lords in respect of two Private Medical Insurance (PMI) issues that lobbyists have been successful in getting an airing. The first concerns a long running dispute between certain consultants and the two largest private medical insurers around the latter looking to implement fixed fee schedules on the former. The second relates to the impact that private medical insurers reimbursement policies have on cancer patients. Let’s look at each in turn and what relevance they have for employers.
There has been a long running battle between The Federation of Independent Practitioner Organisations (FIPO) and the two biggest insurers, Bupa and Axa PPP. The two insurers want to set fixed fee schedules for consultants services for a number of reasons. It would help the insurers assess their pricing if fee levels were consistent and possibly reduce their costs. It would ultimately help their customers avoid shortfalls in the payment of claims where a consultant’s fees exceed the insurer’s limit, an on-going source of customer irritation.
FIPO argue that fixing fees, coupled with insurers acting as some form of regulator, will erode patient choice and continuity of care. You can read their full argument on their website.
I can see the case of both sides, but the background against which this argument is taking place helps put things into context for employers.
Consultants can quite literally charge what they like for their services. At the same time, there is no accepted qualitative or quantitative methodology for assessing how good they are. Consultants reputations are built on word of mouth – mainly from within their own profession. Employers really have nothing to judge whether their money is being well spent when they pay for private treatment for their employees.
This is not the fault of consultants, it’s just the way their services have developed. The real question for employers is what is being done in their best interests. Should they support the status quo and rely on the medical profession to do the right thing by them, or should they support insurer initiatives that are driven more by financial considerations? Which camp do you sit in?
The second issue debated by the Lords is around the way private medical insurers reimburse cancer treatment costs. This has always been a thorny issue and insurers have been challenged many times on what they actually cover and how transparent their policy wording is.
Cancer claims are the biggest single financial cost to insurers and ultimately their paying customers, employers. This is before taking into account the huge social and emotional costs.
I have no issue with insurers who make it absolutely clear what they will and won’t cover from the outset so that a paying customer knows what they are buying. There is also a big responsibility on the part of any adviser involved to establish absolute clarity.
There is a great deal of evidence to show that survival rates improve and costs reduce dramatically if cancer is detected and treated at an early stage.
The UK lags behind the rest of Europe in this regard. Greater investment and emphasis should be put on cancer screening and preventative services. What better way to reduce all the financial and emotional costs under discussion in the Lords at the moment.