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Tony Levene: Could PMI become a casualty of the rise of private A&Es?

Not quite an emergency - yet

Is the growth of privately-run accident and emergency departments a threat to private medical insurance (PMI)? Or could this be an opportunity to grab it by its shoulders and shake it until new customers arrive in droves? Or – a third choice – will the whole thing fizzle out much in the same way as many private GP services have quietly closed down due to lack of demand?

London already has six centrally located private A&Es – mostly run by and located in HCA Healthcare hospitals. Now, one has opened in Manchester – this time in a BMI Healthcare hospital. And others are planned across the country in many major cities – there will be even more if the first group is successful.

The trouble for PMI is urgent care is not generally covered by policies. The advice is to go to your local A&E on the NHS but if follow up treatment is required, then it can be reimbursed from insurance.

The attraction of private A&E is clear. There are so many media scare stories of waiting times at NHS hospitals stretching half or more of a day (or night) that anywhere that can promise no more than ten to 15 minutes waiting time has got to be worth considering – even if that involves a £100 or so fee, with perhaps extras for dressings and other treatments.

That’s the spin – and it’s at least partly true. NHS A&E units have been shut in many parts leaving those remaining under even more pressure. Many patients divert to A&E rather than wait days or even weeks for a GP appointment.

But for those with the cash to choose, it all depends not just on where you live – so far just London and a few other places – it also hinges on what time of day the emergency occurs.

What’s not in any of the marketing spin, of course, is that by paying the money, you avoid the riff-raff. Private A&Es are unlikely to deal with gunshot wounds or stabbing or drug or alcohol intoxication or near-suicides or any of the other less pleasant sides of medicine. You pay the money and you get comfort and exclusivity.

They are good for sports injuries, other sprains and strains, minor ear nose and throat problems and the worried well. At least one facility makes it clear that more serious conditions such as heart attacks, strokes, seizures, major injuries/trauma, internal bleeding and mental health issues are all excluded. The advice for those with such conditions – even in the times the facility is open – is to go to the nearest NHS hospital or call upon their GP to get the referral to a private hospital.

Some are clearer than others in saying their services are not covered by PMI. They all say it is self-pay but some suggest PMI can help – although that is only true in the majority of cases if the treatment leads to a referral for something more serious or for a follow-up. Fall over running or cycling and you get the after-treatment, possibly including physiotherapy on the policy.

In terms of paying, BMI’s Manchester facility promotes its BMI credit card which gives interest-free loans for BMI bills repayable over twelve months. An initial consultation there costs £85.

According to some, the private A&E market could eventually be worth around £5bn a year. It’s not immediately evident where that figure comes from but it is claimed the market has already grown by 50% over the past five years – not that impressive when you consider this is from the tiniest of standing starts.

Where does this leave insurance? PMI almost never offers cover for A&E. As consumer group Which? says: ‘PMI doesn’t replace all NHS services – for example, accident and emergency treatments aren’t covered.’

Insurers could add in A&E cover although that could be difficult. PMI works, in its present incarnation, best with non-urgent cases. It needs a GP referral to start the process and, by definition, that gatekeeper role is not present in an emergency situation. And even if it could be added in, current private A&E has restricted opening hours. Emergencies do not happen to coincide with fixed times.

The downside for those in PMI is these facilities can introduce patients to the concept of self-pay. That can be especially true for younger lives – often the insured who make the difference between red and black on the bottom line – who might see that self-pay is not so bad as paying regular (and increasing) premiums, the more so if they can get an easy pay scheme to spread the cost over time (which is, after all, their conception of what health insurance can and ought to do).

But private A&E could also work to PMI’s benefit. It can show potential purchasers how vulnerable their health could be. It will also demonstrate the low level of waiting time and the high level of comfort that’s inherent in the private system. Little touches like comfortable chairs, tea and coffee on tap and a generally more relaxed attitude can all help to create future prospects.

Will they work? It will depend on the number of day time injuries and whether these facilities manage to grow beyond a few major city centres. It’s early days yet – after all, many of the now closed private GP surgeries hung on for years. Their costs are not prohibitively high – all so far are housed in existing private hospitals, and if A&E specialised staff are not needed to take care of the walking wounded, they can be switched to other tasks.

Their final advantage is, private or state-run, no one has yet come up with a phone app to replace A&E. There’s no substitute for bandages and plaster.