The Woking Nuffield Hospital is a typical example of a Nuffield Hospital. Evidence of the hospital group’s commitment to providing quality care is everywhere. Patients are assured of privacy, the best conditions and access to the latest medical technology. And while being in hospital is never enjoyable, the company tries to make the patient’s stay as relaxed as possible.
Nuffield Hospitals began in 1957, and the past 40 years have seen it emerge as the largest network of charitable, independent hospitals in the country. Today it boasts a network of 38 hospitals and a centre for the care of the elderly, as well as a nurses’ education centre in Wolverhampton.
Michael Hughes, Nuffield’s head of partnership development, is in charge of commercial relations with private medical insurers. His is a comparatively new role which was created when he joined the company nearly three years ago, but the relationship between the hospitals and insurance providers is clearly of paramount importance.
The literature for Nuffield Hospitals details its pledge to assist insurers. It promises to help them supply affordable health care to policy holders and to work towards high standards for health care, and to aid insurers in their product development.
Hughes says Nuffield Hospitals’ working relationship with insurers has changed in recent years: “We’ve moved away from the patient coming in, being treated, and then claiming. We now use pre-authorisation. It’s much better as there are no nasty surprises for customers. Although it does tend to highlight the strange nature of contractual arrangements.”
This last comment is a reference to the hospital’s arrangement with consultants, who work at the hospitals, but are not directly employed.
This means the individual hospital bills the patient, as does the consultant, and it requires a close alliance with the insurer is vital to ensure an efficient turnaround of claims and facilitate direct settlements for the client.
A partnership with insurers is also essential to increase the size of the market, primarily by keeping prices down.
Nuffield Hospitals is one of the biggest users of “procedure pricing”, a method it has used to help keep charges at or below inflation level year on year.
Hughes explains: “A hospital bill is computer generated and has many lines of charges – including things like the daily charge, operating theatre use and a charge for consumables – and a total. The result is every bill is different.
“It’s confusing for insurers and makes forecasting difficult. So we use procedure pricing. This incorporates 40 common procedures with one price for everything. We take the risk.”
The disadvantage is that a long-stay patient could cost far more than the set price, but Hughes says 99% of patients stay within the agreed amount. He believes procedure pricing saves the insurer a lot of effort and says an additional 20 procedures will probably be in effect soon.
But there are areas where Hughes sees a need for education to make the hospital system run more smoothly. Eighty per cent of Nuffield Hospitals’ business is derived from commercial PMI, with roughly half of this being company-paid. But it seems business-paid patients have a different mindset to those who have paid for their own treatment.
“Self-payers better understand about cover and have made decisions about excesses. Company-covered patients, and especially the partner of the insured, tend to be vague about what the product or insurance is.
“To make it work, the employer has to make sure the employee understands what they are covered for and what the benefits are,” comments Hughes.
Self-payment accounts for 15-20% of business and is Nuffield Hospitals’ biggest growth area. It is currently advertising a self-pay initiative in the national press in an attempt to clarify the process for potential customers.
“We are saying to people that it is easier to come to Nuffield Hospitals than they might think. They can ring us and we can tell them things like the prices and options about payment. It is a de-mystifying process,” says Hughes.
The Nuffield Hospitals Direct launch means the public can now call a freephone number and receive a free booklet guiding them through the referral process, as well as speaking to customer services staff.
Hughes concedes many IFAs may not like Nuffield Hospitals’ promotion of self-payment. But he stresses some hospitals have established close links with local brokers.
He believes local relationships make it easier for IFAs to recommend hospital products as they then have a feel for the hospital: “It’s better if brokers come and look at the hospital.”
The future for Nuffield Hospitals looks bright. It is presently building a new site in Guildford, Surrey, which should be open by the end of the year, and has plenty of other development ideas up its sleeve.
But all based around one key point – that the provision of private, comprehensive and professional healthcare is in safe hands.