Westfield Health’s new corporate cover for hospital procedures has been hailed as a welcome addition to the healthcare market for cash-strapped employers.
Last month the provider launched its Hospital Treatment Insurance (HTI), which offers employees access to more than 1,300 surgical and medical procedures such as knee replacements and cataracts for a fixed cost of £16 per scheme member.
But to keep costs down, the product does not cover cancer and heart conditions, nor does it cover private consultations.
Westfield argues that the NHS provides excellent care for life-threatening conditions such as cancer, but says it is routine surgery where the effects of spending cuts are beginning to take hold and waiting times are increasing.
Paul Shires, executive director for sales and marketing at Westfield, said: “Delays in non-urgent medical care can increase sickness absence and place a heavy financial burden on employers. HTI will help employers to manage staffing levels more effectively and lower costs, while employees will benefit from quick treatment.”
Westfield has been providing hospital treatment cover since 2007 through its Surgery Choices product, but is hopeful that the more comprehensive HTI will develop a “new market” between cash plans and private medical insurance (PMI), a view largely shared by the wider industry.
Colin Boxall, corporate director at intermediary ADVO Group, said that in recent years the traditional barriers between cash plans and PMI have become increasingly blurred as the former have become more comprehensive.
He said: “There still remains, however, a wide middle ground waiting to be filled, and Westfield’s HTI product goes a long way to bridging this gap.
“It should certainly not be seen as a replacement to PMI, but it does open the door to a large number of companies who either wish to offer wider coverage within a tight budget or are facing the prospect of having to cancel existing PMI due to the economic downturn.”
But some observers have raised concerns that Westfield’s attempts to keep costs low could prove problematic. Mike Blake, director at PMI Health Group, said employers signing up to the scheme will need to think carefully about how patients’ consultations will be funded.
He said: “Employers will need to cover that cost with a cash plan or something else, so I don’t see HTI working as a standalone product.”
Philip Wood, executive director at cash plan provider Health Shield, said that the exclusion of private consultations effectively positions the product as a cash plan add-on.
He said: “If patients were to use an NHS consultant they may be subject to long waiting times and it could make the process complicated.”
Westfield’s Shires said, though, that the product can be used “seamlessly” with its cash plan which provides refunds for private consultations, while equally, its purpose is to provide employees with fast access to hospital treatment after diagnosis by an NHS consultant.
Tom McGuinness, business development and HR director at national intermediary Premier Choice Group, said the timing of the scheme’s launch is perfect as more and more clients are trying to access affordable health cover due to the growing pressures within the NHS. He believes the product will be popular both among employers with a cash plan in place and those currently uninsured, while it will have less value for those down trading from PMI.
He said: “There certainly will be firms which decide to cancel their PMI and switch to this cover, but if I was going to see a company that was finding its PMI too expensive, I would look at every option to reduce costs – such as introducing excesses and hospital lists – before I even touched on this scheme as a means of keeping some form of cover in place.”
COST VERSUS COVER
McGuinness and Wood said separately that their discussions with employers show firms value cancer and heart treatment cover highly, while Wood added that the fact the plan may not cover treatment in London hospitals could prove difficult.
Employees can go to any hospital under the scheme, but Westfield concedes that benefit limits may fall short of covering treatment in central London hospitals and says that patients can “top up” the differences in these instances.
Wood said: “For the moment we have pulled back on our plans to develop a product for the ‘middle-ground’ market, partly because a lot of our clients are London-based and we didn’t want to have to ask customers to pay extra if their treatment exceeded the maximum cover.”
There are also concerns that the product might be difficult to communicate to employees, who may be confused as to what treatment they are covered for.
PMI Health Group’s Blake said that communication will be far easier for those firms adding HTI to an existing cash plan, than for those trading down or introducing it as a standalone benefit.
He said: “Employees who are already offered a cash plan will find the product easier to understand, and firms could create a very positive message around this as an additional benefit. But as a trade down from PMI I think it would be difficult to communicate, while for previously uninsured companies, there is a risk staff will see it as ‘budget PMI’ or think they are covered for things they are not.”
Shires said he is confident the firm will be able to communicate the plan effectively to employers through its “comprehensive” marketing literature and sales staff, adding that intermediaries have an important role to play in helping sales teams gain access to employers to help improve employee understanding.