Health Insurance – There is another way.

We are in changing times currently and although I bring this information from a physiotherapy perspective I equally find it impossible not to think that other health practitioners or doctors are being affected in a similar way. I have taken some time to consider my wording here so as not to be perceived to just be moaning about the current system, that is very much not the case. It is a review of the current system and the direction it is going and the effect this is having on both patient choice and the ability to run a profitable business that has the patients health concerns at the heart of its system.

Firstly it should be noted that I am not suggesting anything new, nothing that is not in place elsewhere around the world successfully. This is about giving the choice back to the client, allowing them to decide who they see and what they invest in their healthcare. My personnel experiences are related to the Australian system but there are probably others that work effectively too.

The reason for my concern and desire to inform people of the changes in the current system is driven by the fact that I believe most people are unaware of how these changes are affecting their choice of health care provider. I feel this must be at the heart of any discussion as it is choice that allows us to invest in our future according to our levels of personal value. Along with this I think that the changes that could be made to allow this patient choice back into the medical system are easy to implement. So what am I proposing is a slight change to the current system whereby the health insurance companies allow top up fees on their approved rates. This allows any health insurance company to set a rate that works for their business model. This system gives the client back the opportunity to choose whom they receive their treatment from, the skill level they are at and how they run their service for the client. It allows, in a controlled environment, the clinics to charge amounts that allow them to run successful businesses with experienced practitioners at the heart of their business, focusing on good clinical judgement, sound clinic statistics and driven by local market forces.

It is probably worth breaking this down further to clarify the thinking behind these changes. Essentially in the current model, which for all intensive purposes is broken, almost every health insurance company is working towards a number of new initiatives that are affecting the people using their system. Rightly or wrongly, and we must remember that they have a duty of care towards their customers, they are trying to drive the price down for the services they are paying for, on a model of volume to the service provider, the physiotherapist. Unfortunately we are a labour intensive business and so the capacity of any one individual is limited, each new physiotherapist requires a new room space while obtaining the best quality staff around requires continual internal and external training, costing both time and money. However rarely does this volume come in an amount that significantly affects the clinic, and if it does then the insurance companies appear to then be using this to further ‘negotiate’ the price of their service.
Along with this there is a huge variation currently, even internally for some insurance companies, on the allocation of appointments available to clients for treatment, this directly affects the ability of the client to achieve their best results from treatment. Individuals and companies pay a vast sum of money to these health insurance companies and should receive the medical choice and expertise they are paying for. Is it clear that increasingly the idea is to offer a triage (telephone) service for clients; I do not believe that this is what people think they are paying for? There is a clear need for the insurance companies to explain with some clarity the service they are offering in their package and the changes that have come in over the recent years. Many claim they do but few clients that I have discussed these points with understand how their policy has changed, the health insurance companies are neglecting their own customers.

So why offer top up fees as an alternative. Essentially it gives all the control back to the client using the services, and it works on a very simple business model for the service providers; supply and demand. If this system were brought in tomorrow the following would probably occur. Each health insurance company would evaluate its business and decide at what price it would enter the market and how many sessions it would approve, either for an individual episode or over the course of a year. Each service provider (physiotherapist) would evaluate their business and decide at what price they would place themselves in the local market considering their service level. The service user (clients) would then chose the service provider they felt offered them the service they were happy to pay for and receive. Therefore the individual would only pay top ups if happy to, and only to a level that they felt was necessary. This automatically would control the service providers as if you over price yourself in the market for the service you are providing then you would be obtaining a small proportion of the client base and would either go out of business, develop your business so it was servicing clients at the level they felt the service matched the price they were paying or would need to change the pricing structure to fit in with the local market.

There are a few ways for clinics to survive in the current changing market, firstly to accept the low pricing structure and take on junior staff to put through volume of work. This does not benefit the client as they are seen by less experienced staff who will likely take longer to achieve the same results, they will not have the time for the learning required in the early years to grow into great practitioners in the future and will become disheartened by a system that is clearly not working and has little to offer as a future business model. Secondly leave the insurance business model and work outside this system, it is risky at first and takes careful development of your business model but is possible to achieve, although these are going to be the more dynamic clinics. Health insurance companies should be wanting to develop relationships with these skilled businesses to help build a better future for their customer base in the long term and develop a model that works for everyone involved, the customer (client) being the most important factor in these changes.

We already have one system, the NHS, struggling to cope with the workload being demanded of it by an ever-growing population. We need to build a private system that allows all the people involved in it, in particular the end user, the choice to receive the best care. This will allow us to take some pressure off a great but overloaded system. Private healthcare, whether we like it or not, is going to become an increasingly important part of our national healthcare system in the coming years and it is important we get it working well now for the clients who will require its services.