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The top-up test

Cancer tzar Mike Richards’ decision to allow NHS patients to pay for cancer and other drugs not available from the state seems to be the first step towards creating a two-tier system within state provision. It also looks set to lead to rapid product development of top-up insurance plans.

With 88 per cent of Britons not holding private medical insurance, there is clearly a market to be penetrated and this latest ruling looks likely to prompt renewed interest in private medical insurance.

Paying for something you can already get off the state does not make much sense to lots of people. Buying something that covers you against the perceived failures of the state system has a lot more appeal.

The issue of private top-ups for state healthcare is a divisive one. Critics will see it as the thin end of the wedge, allowing people to take the best of the state system and waltz off for private care when it suits them, leaving their less well-off ward-fellows ruing the day that they settled for NHS care.

Supporters would say that there are already many situations where you can switch between state and private and that insurance policies already exist to help you to do this.

Advocates for change of the existing rules add that Richards’ recommendations rationalise a situation that has developed into one that currently operates on a piecemeal basis. You have been able to combine NHS and private treatment for dental care for years.

Existing rules on infertility treatment allow for three attempts at IVF off the state, after which you have to go private, but if the private IVF treatment is successful, then ante-natal treatment is offered by the state.

The strength of feeling among parts of the medical profession supporting this side of the argument has got so high that one doctors’ group had put up a fighting fund of £35,000 to pay for a judicial review of the current legislation.

Professor Richards has put forward proposals that remove as much as possible of the sourness created by a two-tier system. Patients paying for their own treatment will have to receive it away from other NHS patients, either in private wards in NHS hospitals or in completely different hospitals altogether. This removes the unpleasantness of the top-up have-nots having to watch others getting treatment refused to them.

Richards has also called for patients suffering from side-effects of topped-up drugs to be required to pay for this themselves, which helps satisfy the demand of some critics that top-ups should not be burdensome on the NHS in any way.

He has also proposed that the entire cost of administering top-up treatment, including ancillary assistance in relation to it, be paid for in full by the patient.

This has all been coupled with an announcement from the Department of Health that the process for Nice approval of drugs will be made quicker and more comprehensive, thus ensuring that the need to buy your drugs privately will be diminished.

But there will always be drugs that are not covered by Nice and as long as patients continue to miss out on drugs, demand for top-ups will remain, which is no doubt why the big insurers are doubtless already poring over Richards’ proposals to create top-up products as quickly as possible.

In recent years, more affordable cashplans, which some would say are effectively a form of healthcare top-up, have seen a surge in popularity that has not been matched by PMI and anything the insurers can do to offer a cheap health insurance option can only offer greater consumer choice and potentially drive volumes.

The bigger question posed by the acceptance of all 14 of Richards’ proposals by the Department for Health is whether this marks the first signs of an ideological shift in favour of private sector funding for health. Health Secretary Alan Johnson is adamant that it will not. Bodies from the BMA to Bupa will continue to try to edge the issue of concerns about the NHS’s ability to meet the rising expectations and demands of an ageing population back onto the political map.

John Greenwood is editor of Corporate AdviserMoney Marketing


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