A lack of access to NHS services is behind increased consumer demand for private healthcare.
Private healthcare is no longer the preserve of the mass affluent as the sector increasingly targets the mass market.
While the perception among new prospects that private healthcare is expensive remains prevalent, digital GP services are proving a key driver to get consumers to take out cover.
But there are some concerns around whether the industry has the capacity to effectively serve all these new customers as demand for private healthcare shows no signs of abating and NHS wait times remain at record highs.
Ever increasing NHS wait times
“The landscape of private medical insurance has been dramatically reshaped in the wake of Covid-19, with online GP offerings taking centre stage,” James Neeves, director of Premier Choice Healthcare’s consumer PMI division Equity Health Solutions, tells Health & Protection.
“Driven by ever-increasing NHS wait times, access to fast and convenient healthcare online has become a key differentiator for insurers,” Neeves continues.
“What were once considered ‘nice-to-haves’ have now morphed into essential features, determining client choice based on individual needs and priorities.”
Mass market demand
Providing a provider perspective, Ally Antell, distribution director at Aviva UK Health, said the insurer is seeing an increase in demand from a different set of demographics than those who have traditionally bought PMI.
“Five years ago, it was a fairly narrow demographic that actually paid for their own PMI and they would be in the slightly older, more affluent type category,” Antell says.
“We’re now looking at increasingly young families seeking out private healthcare, young professionals – people that don’t even have children yet – more in the mass market rather than the mass affluent.”
According to Andy McClure, marketing and proposition director at Axa Health, demand for PMI and health and wellbeing support services has been ahead of the insurer’s expectations.
“We’ve also seen a significant spike in the use of digital options, particularly our Doctor at Hand GP service.
“Pre-pandemic, the number of Doctor at Hand appointments was in the region of 17,000 per month across all customers (individual and employer). This is now around 55,000 per month.”
Change in promotion of consumer PMI
And for Marcia Reid, non executive director at Sherwood Healthcare, there has been a noticeable change of emphasis in the way insurers promote individual PMI.
“As we know – a major pinch point in the healthcare delivery system is access to GPs, so a digital GP service is one of the key reasons individuals take out and retain their individual PMI cover.
“Additionally, mental health cover and 24/7 support lines are popular and providers need to ensure that service levels remain high in this area.”
Joanna Streames, owner of Velvet Mortgage and Insure Services, maintains consumer PMI is still seen as expensive among virgin customers – so digital GP services are a real pull factor.
“There is more demand for PMI than ever due to NHS waiting lists and general service. Insurers are focusing on making plans more customisable which makes it easier for clients to take up PMI plans,” Streames says.
“This means individual priorities can be met usually on a reasonable budget.
“In my experience with virgin PMI clients there is a misconception that PMI is very expensive. And of course, it can be, but with more flexibility in policies now it is often a nice surprise for clients that they can get their main concerns covered usually at a lower cost than they had imagined.”
Real pull for clients
But Streames adds the introduction of GP services to most plans is a “real pull” for clients at the moment.
“This is because most people have issues getting doctor appointments,” Streames continues. “So having this service, offers solutions to everyday problems and gives clients the feeling of value because they have something tangible to use regularly for smaller incidents as well as being covered for more serious events, illnesses and ops.”
For Oliver Jones, commercial director at National Friendly, while additional services have always been offered through various providers, there has been more of a recent focus around services that clients will actually see as a benefit and use.
“For example offering online GP services without the lengthy waiting times of some GP practices so that clients can access a GP often within 24 hours,” Jones says.
“Services looking at improving mental health and women’s wellbeing are also getting more attention, and rightly so.”
Capacity concerns
Though amid this increased demand for digital GP services and with the Care Quality Commission (CQC) downgrading its rating for one virtual GP provider – Doctor Care Anywhere – who provide services to Axa Health -to ‘requires improvement’ this past autumn, should the sector be concerned at a lack of capacity to serve all these new customers?
Antell said the insurer’s virtual GP provider is categorised as one of its most important providers within Aviva Healthcare.
“What that means is they have a great deal of oversight,” he continues. “We look at their recruitment plans, capacity plans, make sure that they’re ready for their CQC ratings and reviews and all that kind of good stuff.
“They are getting bigger very quickly. There’s a lot of recruitment going on through Square Health which is the organisation that does our digital GP.”
Consequently Antell added that Aviva has a good level of confidence in its offering and its ability to provide customers an appointment within 24 hours.
Though Antell concedes he does have some concerns about the wider market, a market that lacks a high number of large providers and where demand is growing.
“I think it’s at potentially at an industry level that we need to look at that. We’re all promoting it. We’re doing a consumer campaign in Q1. We’re going to be majoring on it as well. We don’t want to create a bottle neck for ourselves by overselling that proposition.
“We’re very confident ourselves, but I think at an industry level it is something that is potentially concerning going forward.”
Though when asked whether Axa Health shared concerns about capacity in the industry given Doctor Care Anywhere’s CQC downgrading, Fergus Craig, commercial director at the insurer, told Health & Protection the provider is equipped to deal with soaring demand.
Craig said that during the pandemic, the provider had seen a “significant” spike in demand for digital options, particularly in relation to its digital GP service and that the aforementioned increase in demand has been consistent for “some time”. “The service we provide is equipped to deal with this level of demand,” he added.
“Of course as the mass market seeks to take out PMI, price also becomes of increasing concern amid a continued cost of living crisis.”
Controlling their budget
And Antell explains these customers often take lower levels of cover because they do not have as much disposable income.
“Therefore it’s really crucial that we’re able to give those right options,” Antell adds.
“And one of our big developments in the consumer market which is now the majority of our sales, is a directed product which is called Expert Select which is us taking control of the hospital pathway and helping customers find the right hospital and consultant.
“That gives people a 15% reduction off what is sometimes a fairly high ticket price – that is quite a big reduction and that is a good option for people rather than going down things like reducing outpatients, putting excesses on the policy. That’s very much the big thing combined with a big increase in our promotion of digital GP.”
Emma Wood, director of healthcare at Broadway Insurance, points out most insurers now offer some form of a guided care option which often provides a “good” saving on premium.
“With these options a member requires an open referral from their GP to a specialist and the insurer will then direct the member to a facility and specialist,” Wood explains.
“Some clients still prefer to be able to specifically choose who they see and where, however the Guided Care options can offer good value for money,” Wood adds.
“The specialists that the insurers will direct members to are usually from a specific panel that have been chosen for their proven treatment pathways with good patient outcomes. This provides peace of mind that you are seeing a quality specialist whilst perhaps containing claims costs against your policy.
“Members will often also not know where to start in researching and choosing a specialist, so this removes that delay and confusion allowing members to quickly progress with a specialist appointment. Some insurers can even book these appointments for their members.”
Though Streames maintains directed care and dedicated treatment pathways should not be used solely for controlling costs.
“These can help to improve the quality of care and give better outcomes depending on the health condition and client involved,” she says.
“I think the important thing is they should not be used solely for controlling costs.”
But while the cost of living crisis may alleviate in 2024 as inflation comes down, the prevailing trend of increased consumer demand for PMI – and particularly for virtual services – shows no signs of slowing down.
Huge demand set to continue
Dr Keith Klintworth, MD of VitalityHealth, said: “A trend we expect to continue, is the growth in everyday care services. These primary care services, giving people quick and easy access to GP appointments, physiotherapy, CBT and dental and optical treatment, have seen unprecedented demand in the last year, and this is something we expect to continue.”
Jones agrees, adding long NHS waiting times for diagnostics will continue to drive demand for PMI.
“There is huge demand, but pricing is key, for something which is affordable to the typical customer and provides access to diagnostics as a minimum with a potential access to treatment of specific conditions,” he says.
“The main driver for private healthcare and something that will hopefully evolve is that speed to diagnosis and treatment, something that the NHS is struggling to cope with its high demands.
“All these will be complimented with various added services such as online GP, mental wellbeing and women wellbeing.”