Demand for private medical insurance (PMI) seems to be going only one way as the population adjusts to a ‘new normal’ in which NHS wait times remain stubbornly high.
Insurers are investing in virtual GP offerings and other services to meet this demand as claims numbers soar.
However, this has come in the form of not just investment on the technology front but also in recruiting new staff across claims teams.
And it appears this has all meant the focus for insurers has been on the prevention of issues developing in the future – in more ways than one.
Waiting lists stays above 7.5 million
Data released from NHS England this month indicates that marginal progress continues to be made in cutting the number of people on the waiting list.
While that number was reduced by 36,000 people in England in February, the number of referral to treatment (RTT) pathways where a patient was waiting to start treatment remains above 7.5 million people.
Significant uptake
With wait times at such high levels, one of the country’s biggest protection advice firms LifeSearch chose to ramp up its PMI offering.
“The NHS is under huge strain, and anxiety about wait times is a significant driver of people looking to private health insurance,” Debbie Kennedy, LifeSearch CEO, tells Health & Protection.
“Given the range of options available to consumers, our conversations with customers have reinforced the importance of guidance and advice, delivered simply.”
And Kennedy adds LifeSearch has seen “significant” uptake of its PMI offering since the official launch earlier this year.
“In the short time since we rolled out the offering, there’s been a significant uptake – with referrals doubling after the first month. Of those, just a quarter were switching from a current provider, highlighting that a significant proportion of enquires are new inflows to the market.”
High claims numbers
Kyle Godden, managing director at Clarity Health Insurance, tells Health & Protection the firm has seen a significant increase in claim numbers.
“We’ve seen a steady rise in the number of people using our claims service, with a 76% increase in claims in 2023 on the previous year and a 24% increase in Q1 2024 compared to the same period in 2023.
“This shows clearly that claims are more frequent and is also reflected in the number of claims cases we are seeing when our clients are coming to renewal.”
But what of the insurers? How are they coping with increased demand for their services?
Keith Klintworth, managing director of VitalityHealth, reveals claim numbers and uptake of the firm’s services have “steadily” increased in recent years.
“This is in part due to convenience and access to a broad range of services, awareness of the wider benefits offered by health insurance, plus pressure on the wider healthcare system,” Klintworth says.
“Authorisation rates continue to be 18% higher than previous years, with much of this demand within the primary care treatment environment which is enabling quicker diagnosis and treatment and therefore reducing the case complexity and complication rates for in-hospital treatment.”
Capacity concerns
But increased appetite for services brings with it concerns over whether the sector has the capacity to meet this demand.
This last year saw the virtual GP service used by Axa Health – Doctor Care Anywhere – downgraded by the Care Quality Commission.
And Axa Health commercial director, Fergus Craig concedes demand for its PMI and health and wellbeing support services has grown ahead of expectations since the pandemic.
“For example, we have 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. This is now around 55,000 per month.”
Making an acquisition
But Axa Health has shown it is prepared to hit the acquisition trail as demand for its services increases.
“Our recent acquisition of HBSUK, a provider of online outpatient services, allows us to expand direct access to clinician care for Axa Health members and build on the existing relationship and accelerate the development of the online muscles, bones and joints service,” says Craig.
“In the future, Axa Health intends to expand the services to allow more choice, flexibility and value. This will help to increase value for members, offer more accessible treatment and support the ambition to provide private healthcare solutions which meet a broader range of customer needs.”
And Aviva, who gave further reassurance about its claims service levels after it came under fire for long call wait times, has also seen increased demand for services.
“In the last few years, we’ve seen a growing demand for private medical insurance and an increase in claims volumes,” Steve Bridger, managing director UK Health at Aviva, tells Health & Protection.
“In 2023, we took on over 100,000 new health customers in the UK and saw a 24% uplift in the number of claims received as a result of this customer growth and a change in their behaviour – with customers using their PMI for lower-cost procedures which would have traditionally been sought under the NHS.”
Hitting the recruitment trail
In order to tackle increased demand, Aviva has hit the recruitment trail, Bridger says.
“At Aviva we’ve recruited and trained new people to support the increased claims demand we’re currently seeing.
“We’ve also invested heavily in our digital capabilities to offer customers an alternative route to contact us and streamlined several processes, meaning that we have been able to increase first point resolution from 85% to 92% and improved average days to decision from six to one.”
Good level of resilience
But for Duncan Reeves, head of underwriting and claims at National Friendly, while the mutual has seen higher numbers of claims, it has also managed to achieve “good” levels of operational resilience.
“Claim volumes are 24% higher so far in 2024 compared to this time last year,” Reeves says.
“New customers can take out a policy up to age 85, so we see a lot of musculoskeletal claims.
“It’s cancer claim expenses that are rising exponentially though.
“Biological cancer drugs can be very effective as part of a patient’s cancer treatment, but they are incredibly costly, so we have seen some very high individual claim expenses feeding through into our experience.
“We have a good level of operational resilience with the majority of medical claim calls still being answered within 20 seconds. Access for particular specialities can reach pinch points.
“Where there might be a long wait time to see a particular consultant, having access to consultant availability means we can proactively look at alternatives and get customers booked in to see someone else quickly.”
And in terms terms of providing treatment and appointment availability at least, according to Marcia Reid, non executive director at Sherwood Healthcare, insurers have been coping “pretty well”.
Though Reid adds the firm is aware of challenges for providers – particularly around PMI’s main selling point – speedier treatment.
“In some cases, there are significant delays in obtaining private consultant appointments for dermatology and mental health conditions,” she continues.
“We note that the top inpatient speciality for claims continues to be orthopaedics and anecdotally have heard that waiting times in private facilities for ‘cold’ surgery such as hip and knee replacements can be up to three months in some areas.
“This could prove a challenge for insurers as one of the major benefits of health insurance is speedy access to diagnosis and treatment and delays could undermine the value of the proposition.”
Improved service
But according to David Booth, sales director at Santé Group, actions taken from insurers have resulted in improved service.
“The claim numbers will be high because more and more people are coming into the market. But the measures insurers put in place in 22/23 will continue to improve service and be the platform to deal with that demand,”
Booth says. “It’s a growing industry, but it’s also one that’s constantly improving with technology from investment not only within the way claims are handled, but also how treatment and care pathways are helping the patients.”
But even with swift action taken from insurers, the fall out from prolonged wait for NHS treatment is still being keenly felt across the UK population as a whole.
And Christine Husbands, commercial director, RedArc, tells Health & Protection the firm is seeing customers with more complex needs, due to long NHS waiting lists and late diagnoses.
“We often find that customers are becoming mentally unwell as a consequence of physical conditions taking longer to be treated,” she adds.
Focus on prevention
All of which means the combination of digital transformation in how services are delivered and the focus on prevention of problems developing in the first place become ever more important.
Klintworth says: “A digital transformation has been happening for many years, with technology embedded throughout Vitality services and processes, including clinical pathways.
“Members can now start their claims through our online Claim Hub, with 50% of referrals now starting online by the members themselves.
“These improvements also open up servicing capacity for people who have claims that need additional support.”
Though Klintworth adds this digital transformation is just beginning and a focus on prevention is only going to become more important within healthcare.
“It is estimated that 35% of the UK population is currently inactive, which is contributing to declining health and increased levels of non-communicable diseases such as type 2 diabetes, and increased incidence of hospitalisation,” he adds.
“By supporting people to live healthier lives, we have the potential to continue to transform how people use healthcare and the pressure on resources.”
And looking to the future, Debra Clark, head of wellbeing at Towergate Health & Protection, says she believes employers’ focus will be on increased prevention of poor wellbeing than dealing with a situation once it has hit ‘crisis’ point.
“I think insurers can see this coming too as they have been consistently adding services to support prevention and wellbeing on top of the insurance element,” Clark says.
“These include screening and know-your-number days, questionnaires and assessments, access to nutrition and physical activity support.
“Towergate Health & Protection delivers wellbeing webinars to its clients to improve awareness and provide education on a range of topics related to wellbeing.
“Employers want to empower their employees to do what they can as well making use of the support and services available to them.”
Effective monitoring
But that focus on prevention also extends to effective monitoring of service levels.
“We regularly monitor the wait times that customers are seeing to access appointments and negotiate with our key partners to ensure this remains at an acceptable level, as well as updating our guiding approach to adapt to changing demands,” Bridger says.
“Our digital services are fully available, and customers can submit and update claims via MyAviva as well as view invoices.
“Customers can also use our virtual assistant to enquire about their policy.
“Our investment into digital solutions has seen the amount of claims started online double over the past year and our focus on recruitment means that we have more capacity to support customers contacting us via the telephone.”