News analysis Doctors vow to drive down ‘unsustainable’ private medical insurance costs


MADELEINE DAVIES n Doctors rationalising healthcare claim huge savings are possible


A private firm of doctors used by the UK’s leading private medical insurance (PMI) providers has reduced the number of operations it delivers to knee pain patients by 25%, lending weight to its claim that some private patients are currently subject to costly over-treatment. Alliance Surgical, a group of 1,250 NHS consultants, believes that the


project exposes the financial incentives that exist in the private healthcare market, which result in patients undergoing potentially unnecessary tests and treatment, and highlights the potential to dramatically reduce costs. Bruce Braithwaite, consultant surgeon and director of operations at


Alliance Surgical, led the team of orthopaedic surgeons and auditors which developed the protocol for knee pain that resulted in the reduction in surgery. He believes that the lessons learned from the study should be applied to other areas of private healthcare. “We want to make sure that the private healthcare market is not only


sustained, but actually grows,” he toldHealth Insurance. “I’m not sure anyone but doctors can make it grow because it is doctors that control costs by determining treatment. We are committed to measuring what it is that doctors do, across the whole patient pathway from GP referral to discharge and we know what the clinical outcomes of care are. Doctors in the group are willing and open to scrutiny and will adjust their behaviour so that it is in line with their peers.” Founding director Ann Copsey


believes that the private healthcare market is in urgent need of modernisation. “We had to bring healthcare into the


Alliance Surgical’s Braithwaite:


doctors hold the key to growing the PMI market


21st century and rationalise it,” she said. “If the market is to grow we must address the issue of price. There are too many individual sellers [doctors] with no quality assurance. We want to enable buyers to get the benefit of being a volume buyer and contract on quality and price.”


INSURERS Several insurers currently have agreements with Alliance Surgical. AXA PPP healthcare has an agreement whereby it can refer members to Alliance Surgical if the member’s GP issues them with an open referral for a consultation with a specialist or if the specialist chosen by the GP charges more than the insurer’s fee schedule. Alliance Surgical guarantees no shortfalls for insured patients. Aviva UK Health has a similar relationship with the group. “Alliance Surgical is thinking about the right things – how do you improve


both the experience for the patient and also make sure that you manage the costs in a sensible way?” said Dr Doug Wright, head of clinical services at Aviva UK Health. “The major challenge is deciding when it is appropriate for our customers to go down that route. It’s quite a different proposal to the standard PMI proposal. The promise we make when we provide those [standard] policies to customers is that it is about choice and accessing the specialist that you and your GP have chosen. This is a similar theory but it is not about the specialist that you have chosen to go to and that is the challenge for existing PMI provision.”


April 2011 www.hi-mag.com n Some clinicians still concerned about insurers’ influence on care pathway A spokesman for Bupa confirmed that the insurer is in discussions


with Alliance Surgical but that no formal relationship is yet in place. Both PruHealth and Simplyhealth have relationships with the company but declined to comment.


CONFLICT AND CO-OPERATION The Alliance Surgical approach to standardisation of care and prices strikes a very different note to the antagonistic undertones of many interactions between consultants and insurers, with the former often resisting the latter’s attempts to address variations in clinical practice and costs. For example, the Federation of Independent Practitioner Organisations


(FIPO), a membership organisation representing over 20 consultant groups and specialist medical associations, has expressed concerns about insurers’ attempts to impose limits on consultant fees. “The gradual erosion of the GP to consultant referral pathway and the


inroads of some – not all – of the insurers into clinical care will have an adverse impact on the consultant patient relationship, patient choice and ultimately on the standard of care being offered,” said FIPO chairman Geoffrey Glazer. The Office of Fair Trading’s current review of the private healthcare


market will explore whether insurer’s restrictions on consultants limit choice and quality of care for patients and the role of consultants in determining how, where and by whom patients are treated. Against this background, the management team at Alliance Surgical is


keen to stress that nobody is forced to see one of its members. In fact, chief executive Charles Byrne believes that there are several factors making it difficult for GPs to make named referrals, including the increase in the number of consultants practising in the UK and the NHS Choose and Book system which is based on choice of hospital. “I spent time with over 500 GPs and the vast majority – almost all – have


gaps in their knowledge and the vast majority have big gaps,” he said. “The selection process for consultants is, by GPs’ own volition, flawed.” According toThe Sunday Times, Byrne’s organisation is the 18th fastest


growing company in the UK. If more insurers embrace its approach, it could rise further up the table.


HI EVIDENCE OF OVER-INTERVENTION


In some ways the NHS is far ahead of the private healthcare sector in recognising the potential for cost savings in standardising care pathways. In November 2010 the NHS organisation Right to Care published an atlas of care revealing “unwarranted” variation across the NHS, including:


A two-fold variation in the number of days that cancer patients spend in hospital, from 40 per 1,000 people in some regions of England to 65 per 1,000 people in others. This results in a variation in cost of £22,000 to £38,000 and excludes the most extreme ends of the scale.


Expenditure on musculoskeletal conditions ranging from £40,000 per 1,000 people to almost £120,000 per 1,000 people.


A 50-fold variation in the number of knee reconstructions per 1,000 people across England.


HealthInsurance


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