The NHS is in crisis. A once in a lifetime pandemic has contributed to already vast wait times in England while the breakdown of services and a cost of living crisis has led to strike action across the service as many NHS workers struggle to make ends meet.
All of this has meant there has been a shift in attitude towards taking out private medical insurance (PMI) among customers with products being developed to meet this growing appetite.
But while we are barely 12 months away from a period in which the major political parties begin to prepare for a general election, advisers emphasise that the current clouds around the NHS are not likely to clear anytime soon.
Latest data from NHS England showed the number of people waiting to start routine treatment at the end of November remained at a record 7.2m.
In response, prime minister Rishi Sunak committed to cutting NHS waiting lists by giving people greater choice over their healthcare, but said he would be stopping short of structural reform or privatisation of the service.
However, there is evidence that prolonged wait times have resulted in a shift in the public’s perception of paying for treatment.
In the summer of 2021, Health & Protection reported on LifeSearch’s latest Health Wealth and Happiness Index which showed one in 10 Britons had taken out private medical insurance (PMI) due to increased NHS waiting times.
Fast forward to last month and official data from the Office for National Statistics showed that around one in eight adults it surveyed had paid for private medical care because waits for NHS treatment were too long.
Shift in attitudes towards private healthcare
According to professor Sneh Khemka, CEO at Simplyhealth, his firm is seeing a “real shift” in attitudes towards private healthcare.
“With the NHS increasingly having to concentrate on inpatient and emergency care, there needs to be wider discussion on the future provision of outpatient care – including dentistry, ophthalmology, dermatology, and physiotherapy,” Khemka tells Health & Protection.
“For us, that represents an opportunity to be able to serve people, especially in that outpatient space. Through affordable health and dental plans, we can serve the everyday healthcare needs of the working backbone of Britain, taking some weight off the NHS and allowing it to focus on where it needs to most.”
Marcia Reid, non-executive director at Sherwood Healthcare, agrees, adding: “There is no doubt that changes are needed within the NHS and whatever is going on with our state-funded care is bound to have a direct impact not only on private sector usage, but also shape future strategy.
“The challenges faced in primary care and difficulty in accessing GP appointments is driving delays in specialist referrals and increased traffic to NHS A&E departments.
“This means private GPs can play their part in avoiding unnecessary emergency NHS hospital visits and delayed treatments and diagnoses. As a result, virtual GP services are one of the most popular benefits within PMI offerings.”
Creating flexible products
But Joanna Streames, managing director at Velvet, maintains that it is also up to insurers to create flexible products in light of the increased burden on the NHS.
“If they could create more flexible products and services and introduce more things like the NHS waiting list option so if you are able to be seen on the NHS within a certain time frame then that is what you do, but if not, you can take the private care route,” she says.
“This open-minded thinking should be welcomed more at all providers. If they can get more creative in the private sector as well as within the NHS, then even more people could access it and this would help ease some of the burden on the NHS.”
It is clear that insurers are seeing increased interest in their services, as Dr Doug Wright, medical director at Aviva UK Health, points out.
“Aviva and other insurers have seen increased interest in private health cover from both consumers and employers over the last few years,” he says.
“While the primary intention of the cover is to provide individuals with the choice to have treatment privately, it also means their care is not contributing to the demands on the NHS.
“Through access to wellbeing and prevention services, private health cover also increasingly contributes societally by helping to build resilient and productive communities.”
Private sector stepping up
But there are also signs the private sector is stepping up to develop new solutions to pick up the slack where the NHS is under increased strain.
At the start of the year HCA Healthcare became the latest private healthcare provider to respond to NHS pressures by launching an urgent acute admissions service and a private ambulance service across London.
This followed PMI provider Axa Health in November revealing it was trialling a service connecting members with urgent care centres and offering them a 75% discounted rate to avoid attending accident and emergency departments.
“We have also developed products and propositions which help support our customers in areas which are seeing high demand in the NHS, such as our neurodiversity support service and the launch of a London based urgent care trial,” an Axa Health spokesperson told Health & Protection.
“There has been considerable increased interest in mental health provision and we are transitioning from being a traditional insurance provider to a health and wellbeing partner to meet these needs,” the spokesperson added.
Axa Health added that it believes support for conditions such as cancer and MSK will remain prevalent in terms of member demand.
Indeed analysis of patient data from RedArc this month revealed that cancer, musculoskeletal problems, and mental health concerns were the three conditions most referred to it in 2022.
Cancer and musculoskeletal issues were up by 18% and 19% respectively in 2022 compared to the previous calendar year.
Group PMI should be key priority
Of course these are the very conditions that are proving a ticking timebomb for UK plc – meaning it is in the interests of employers to offer group PMI, according to Steve Herbert, wellbeing and benefits director at Partners&.
“It is in the interest of employers to avoid their employees ending up on waiting lists for even routine but still potentially disruptive in productivity terms conditions,” he says.
“So offering at least some access to company-funded private healthcare options must be a key priority for employers that can afford to implement such cover or access in 2023.”
And Isaac Feiner, owner of LifePoint Healthcare, explains while the sector has a great opportunity to grow, the cost of cover could challenge that growth.
“If somehow costs to purchase health insurance could be lower it would drive a huge segment of the population towards taking out a PMI plan,” Feiner continues.
“We all know the impact the removal of insurance premium tax (IPT) could make. Ultimately, we have seen that as the pressures mount, people are realising they have less option and are finding the money to spend on this.
“What was once considered a luxury is fast becoming a necessity.”
NHS reform and a looming election
However according to Claire Ginnelly, independent healthcare consultant and vice chairwoman of the Association of Medical Insurers and Intermediaries (AMII), the result of the next general election could dictate the future of the NHS.
“If Labour wins the next general election, it is difficult to say what will happen as it depends how much they value the important role the private sector has to play.
“If the Conservatives win, I suspect the two sectors will continue to run alongside each other in the way they do now.
“Regardless, it is important for advisers to continue to talk to clients about how PMI can sit alongside the NHS to help get them access to treatment.
“We do have to highlight that even the private sector sometimes faces challenges regarding access to certain treatments but that does not mean PMI no longer represents value for money.”
But even with a general election looming in 2024, Prosperis associate director Steve Ellis argues whichever party wins, they will face post-pandemic issues.
“As ever, the NHS and how it is funded is the political hot potato and with the election looming, no doubt the volume will be turned up to maximum,” he says.
“Whichever party is in charge, they will be faced with the same post-pandemic issues of an aging population and increasing waiting lists. Throwing money at the NHS is unlikely to solve the issues.”
So ultimately, the answer to alleviating the crisis does not lie completely with the private sector or the NHS.
As Steve Desborough, director of Fidelis, explains: “There is an endemic that chooses one over the other, but we believe that both can still survive as a complementary system.
“The question is how and that is something that the private healthcare system will work with alongside the NHS to address.
“Like it or loathe it private health care is part of the answer here… so we must find the most effective way to use it.”