21 December 2023
Navigating the Challenges of Private Medical Insurance
Doctors practising in the private sector in the United Kingdom typically have a diverse patient mix, including both self-funded individuals and those with private medical insurance (PMI) coverage. The UK market for PMIs is comprised of major players such as BUPA, AXA, Vitality, Aviva, and WPA, alongside several smaller insurers. However, the four largest PMIs dominate the market, holding over 90% of the market share.
For a long time, there has been frustration among the medical consultant community that the PMIs haven’t increased the reimbursement they provide to defray procedures performed by consultants since 1993. This frustration has been further aggravated by the fact that, since 2010, newly recognised consultants have been granted significantly lower reimbursement rates for their services.
In 2012, Bupa took the lead in implementing substantial reductions in procedure reimbursements. The largest reduction in reimbursement occurred in cataract surgery, with the amount decreasing from £741 to £289. Bupa justified this reduction by arguing that the time required to perform the procedure had decreased to only 25% of what it was in 1993. These reductions across the board were despite significant advances in medical and surgical technology over this time, as well as the increasing complexity of care provided by the medical profession. The current PMI coding for surgical procedures is designed by and for the use of the PMIs to assist in their billing. This results in considerable bundling of procedures which is to the advantage of the PMIs but the opposite for consultants.
PMIs' use of CCSD coding fails to provide an accurate description of the procedures performed, unlike the more precise OPCS coding system. The PMI’s coding has not kept pace with surgical advances and is no longer able to describe those procedures adequately to facilitate accurate billing and funding for many operations. In addition, the reduction in remuneration fees to doctors has led to a significant shortfall in their real-term income from PMIs, especially when the effect of monetary inflation over those 30 years is taken into consideration (£100 of fees in 1993 should be £265 now).
Doctors are growing increasingly frustrated with PMIs for imposing constraints on individual insured policyholders, which can potentially restrict their choice of healthcare providers and treatment facilities, often without the prior knowledge of the insured patients. Policy holders often find themselves offered referrals to two consultants who are frequently the least experienced and the cheapest. Thus, freedom of choice is almost entirely removed.
If individual doctors elect to remove themselves from an insurer’s recognition, they risk losing a significant proportion of their private practice income, and consequently many feel compelled to persevere with the current arrangements. On the other hand, if consultants do not charge what they are told to by the PMIs they will have their recognition removed without the ability to appeal that decision. This is particularly true for those consultants who have only recently commenced their private practice as they often believe that without access to insured patients, their practice will struggle to grow. Consultants who have recently been approved for recognition with the PMIs experience the most significant restrictions on their remuneration and practice.
Whilst this situation has been gradually worsening over the last 30 years, the level of dissatisfaction among doctors is becoming more apparent and vocal. However, the UK Competition Act 1998 (policed by the Competition and Markets Authority – CMA) forbids anyone (including doctors) from acting as a group to collude in a manner that could be perceived as anti-competitive, and doctors need to be mindful of this before entertaining any level of “group action” towards a particular PMI.
In 2019, the Competition and Markets Authority (CMA) levied a substantial fine of £1.2 million on Spire Healthcare Ltd and seven ophthalmologists for their involvement in illegal price fixing. This follows a previous fine imposed by the CMA in 2015 to another group of private ophthalmologists (CESP Ltd) where they were found to have recommended that their medical consultants refuse to accept lower fees offered by an insurer and where they set fixed prices for insured patients for cataract surgery. Organisations such as the BMA Private Practice Committee or other trade unions like HCSA or CBS may be better placed to engage with PMIs on behalf of the medical profession and avoid the risk of breaching UK anti-competition law. However, that does not include a discussion about fee levels. The Federation of Independent Practitioner Organisations SFIPO), gave extensive evidence to the CMA which led to their flawed 2014 report. In that report, the CMA highlighted certain PMI behaviour that they felt might have an Adverse Effect on Competition (AEC).
If extensively and rigidly applied, fee-capping consultants could lead to distortions in competition between consultants and to reduced consumer choice. Fee-capping (and derecognition of consultants who do not agree to abide by the insurer’s fee schedule) has the potential to increase the disincentives on consultants from setting fees to reflect their costs, experience, expertise and the local market conditions. This distortion may potentially be increased, the greater the number of insured patients on policies that require open referrals from GPs as policyholders are channelled to lower-cost consultants.
Feedback has been provided to the CMA on several occasions, highlighting their own statements, however, they have been reluctant to acknowledge the existence of the situation mentioned. Nevertheless, we have been advised that once the information remedy, managed by the Private Healthcare Information Network (PHIN), effectively delivers information to patients, the CMA will reassess the private healthcare market.
Authors
Richard Packard, MD, FRCS, FRCOphth
Emeritus Consultant Surgeon, Prince Charles Eye Unit, King Edward VII Hospital Windsor
Niall Patton, MB ChB, MD, FRCOphth
Consultant Vitreoretinal Surgeon, Manchester Royal Eye Hospital
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