The pandemic dramatically changed how people across the country perceive private healthcare.
Private health benefits can be the deciding factor as to whether a company secures the candidate they are seeking to recruit, while persistently high wait times for NHS treatment has meant growing numbers are considering funding their own care.
But whether that is through an insurance policy or through self pay, these customers will often find their treatment is delivered by any one of the growing number of private hospital facilities across the country.
While customers are increasingly prepared to self pay for a diagnosis, they are also questioning the affordability of this care as tensions grow between insurers and the institutions providing private care who face their own challenges of supporting the NHS and remaining commercially viable.
In response, hospital groups continue to not only provide pathways to drive down costs for customers in the near term but over the long term are turning to technology as means of delivering efficiencies over the longer term.
A question of affordability
“As workload increases, private hospitals are having a direct impact on the health insurance market,” Peter Lurie, director at Proactive Medical and Life, tells Health & Protection.
“Insurers are under pressure because more people are claiming, treatment costs are higher, and private hospitals are busier. That inevitably feeds into premiums,” he adds.
And this is resulting in more clients questioning affordability, Lurie continues.
“This is especially true of families and smaller businesses, so the conversation has moved away from simply “who is the best insurer?” to “how do we design cover that is sustainable long term?”
Tension between hospitals and insurers
The obvious answer is for insurers and private hospitals to come together, and while this is happening, Lurie notes there is still tension.
“Insurers want quality care, fast access and good outcomes, but they also need to control claims costs,” he continues. “Hospitals want fair reimbursement and enough margin to invest in facilities, staff, theatres, scanners, technology and patient experience. The result is more focus on agreed pricing, tighter networks, pre-authorisation, clinical pathways and steering patients towards appropriate consultants and hospitals rather than simply giving completely open-ended choice in every case.”
Working with the NHS
But it is not just insurers private hospitals are seeking to work in partnership with.
The Independent Healthcare Providers Network’s (IHPN) maintains the independent sector is committed to playing its part in supporting the NHS to cut waiting times and increase the choices available to patients.
“Last year the sector removed over 1.5 million patients from NHS waiting lists,” the IHPN says.
“We are continuing to work with our colleagues in DHSC [Department of Health and Social Care] and NHS England to build on this partnership, and ensure that the sector is a core part of the NHS’ long term elective recovery.”
Supporting mental health
But the NHS is not just struggling to meet demand for elective surgeries amid increased demand for mental health services across UK plc.
To help tackle this issue, in May, Bupa opened a mental health centre at Broadgate Central, London.
The centre will support employers with their workforce’s mental health and the government’s aim to boost economic growth through workplace health and wellbeing.
Proactively working with private hospitals
Though insurers are equally aware of the need to collaborate with private hospital partners. And this includes Aviva.
Adi Nye, supply chain director at Aviva Health, tells Health & Protection: “Aviva works collaboratively with private hospital providers to help deliver efficient and effective healthcare.
“A good example is the development and enhancement of networks for customers with hip, knee and spinal conditions which target better customer clinical outcomes, make it simpler for customers, and are more cost-effective.
“We continue to work with providers on further opportunities to open up access, improve health outcomes and optimise pathway efficiency.”
Growing importance of pathways
For Lurie, pathways, guided care and hospital lists are already becoming much more important in the market.
“For some clients, particularly those who want to keep premiums under control, a guided option can make complete sense,” Lurie maintains.
“If the insurer can direct the patient to a good quality hospital or consultant at a lower negotiated cost, that can help reduce premiums.
But Lurie notes that pathways do need to be explained properly.
“Customers need to understand the trade-off between cost and choice,” he continues.
“A lower premium may mean less freedom over which hospital or consultant they use. That is not necessarily a bad thing, but it has to be clear at the outset.
“For advisers, this makes advice more important, not less. Two policies can look similar on paper but operate very differently when someone actually needs to claim. Hospital lists, guided consultant options, outpatient limits, cancer pathways, mental health access and underwriting terms can all make a huge difference. The cheapest premium is rarely the full story.”
Expanding MSK oncology and pathways
A good example of private hospital groups and insurers working together is Spire who earlier this spring signed a four-year strategic partnership agreement with Bupa UK insurance.
Under the agreement, Spire will provide care to Bupa’s UK health insurance customers, including access to eight existing cancer specialist centres across the UK.
There is also a commitment to expanding oncology and musculoskeletal (MSK) patient pathways, including adding five new Bupa cancer specialist centres to the network and five new MSK rapid-access pathway sites.
But the company also notes a new gynaecology specialist centre will be launched as part of the extended network.
It added that Spire Healthcare has five breast cancer specialist centres in Bristol, Bushey (Watford), Edinburgh, Little Aston (Birmingham), and Southampton. It has two prostate cancer specialist centres in Bushey and Solihull (Birmingham), and one bowel cancer specialist centre in Portsmouth.
And in terms of delivering quicker access to musculoskeletal services, Spire pointed to work with Bupa and Vita Health, which is part of Spire Healthcare Group, to develop an initiative to provide rapid access to MSK services offering triage within 24 hours and imaging where required within three working days, currently being piloted across six Spire sites across the country.
Investing in AI to halve scan times
But that is not all. Spire also pointed to its work to meet rising demand for diagnostic MRIs where it has applied artificial intelligence (AI) to increase image quality, throughput, and capacity in scanners at 21 hospital sites, halving the scan times to contribute more than £2.5m in earnings in 2025 through growth in activity.
AI not feeding through to cost efficiencies yet
While it is hoped AI can deliver cost efficiencies across healthcare, they do not appear to have materialised yet, according to Marcia Reid, non-executive director at Sherwood Healthcare.
“I doubt if investment in AI is having an impact on costs yet, and I think it is a myth that AI is the panacea for medical inflation,” Reid tells Health & Protection.
“However, I believe that targeted application of AI systems can improve patient outcomes, enhance efficiency and facilitate easier access to care.
“One of the greatest challenges on cost is the increasingly complex treatments now available and insurers are seeing an increase in ‘severe’ cases resulting in ultra-high claims. While AI may assist with early diagnosis and streamlined pathways, these severe cases will still have a significant impact on premiums.”
Encouraging screening
Though Arun Thiyagarajan, CEO of VitalityHealth, notes AI is part of the solution to deliver preventative care.
“Private hospitals are essential partners for us in delivering great, effective and timely care for our members,” Thiyagarajan says.
“In common with all parts of the healthcare system at the moment, both hospitals and insurers are navigating a period of rising costs and inflationary pressures,” he continues.
“At times like these, we have found that close collaboration with our hospital partners is critical – which of course include tariff discussions, but it also focuses on care pathways, digital innovation, proactive rehabilitation and recovery and preventative care.
“At Vitality we believe that the best way to ensure that healthcare demand and cost is sustainable is to improve lifestyle behaviours to prevent serious health conditions and encourage screening and early intervention to diagnose and treat illness at the earliest stage possible.”
Self-pay for diagnostics
Though looking to the future while ensuring people do not become sick in the first place is a noble aim, for some paying for diagnostics is key to ensuring they can get to the bottom of their ailments.
Kristian Breeze, director of healthcare at Ascend Health, tells Health & Protection: “Growth is strongest in diagnostics, oncology, outpatient and day‑case services, where speed and capacity matter most.
“Self‑pay and employer‑funded services are also expanding as access pressures persist in the NHS.”
Reid agrees, adding that she suspects that self-pay, especially for diagnostics and elective surgery will continue to develop and hospitals can respond to this need with all-inclusive packages for more procedures.
“The greatest opportunity for growth could be a growing demand for health-related employee benefits as the NHS continues to face enormous challenges from the existing backlog and an increasingly unhealthy population,” she concludes.
