GP fundholding is directly to blame for the rise in the number of PMI claims which are driving up premiums and preventing more corporate and individual customers from buying cover according to Gissings, the employee benefits advisers and actuaries.
Paul Farrell, senior manager at Gissings, said: “While innovation – people being able to have more advanced and costly operations – is partially to blame, the real culprit is incidence, that is the rising number of claims per person covered.”
GPs who change status become responsible for their own budgets, and Gissings believe this has lead them to routinely recommend undergoing private rather than NHS treatment to patients with PMI in order to avoid financing it from their own budgets.
Major medical insurance companies are then forced to pass their higher operating costs on to their customers, and some corporate clients are facing annual premium increases of 10 to 30%.
Fundholding was first introduced in 1991, and coincided with the end of growth in the PMI market. Statistics have since shown the number of people with PMI cover has barely changed. The fundholding system is due for review in 1999.
Farrell said unnecessary claims could be prevented if both corporate and individual consumers played a more active role in choosing between the public and private routes, discussing their options with their GPs. He added it would also be useful if private healthcare providers were to issue performance measurements to guide individuals trying to choose which sector to use.
Farrell pointed out: “With 50 years of tax payers’ investment the NHS has been able to build up resources and an infrastructure that allows it to perform better in some areas than the private sector– paediatric care for example.”
Gissings’ group secretarial service allows their clients’ employees access to advice from registered nurses with various medical backgrounds on deciding between private and NHS treatment.
See page 32 for Gissings profile.