2050: health insurance in tomorrow's world
03 03 08 - 13:00
What will the world of PMI look like in the future? Harvey Jones makes some predictions
Making predictions is difficult - especially about the future, as physicist Niels Bohr famously remarked. But this has not deterred Health Insurance magazine from taking a brave punt at predicting how the private medical insurance industry (PMI) might look like in the distant year of 2050.
That is more than 40 years hence, which leaves plenty of time for a host of groundbreaking policy innovations and breathtaking leaps in technology. Plus a few wrong turns along the way.
We asked a selection of PMI industry futorologists to polish their crystal balls and deliver their predictions.
Charlie MacEwan, head of communications at WPA, sees a bright future for private healthcare, and a dwindling role for the NHS. This will put the customer in charge of managing their own health.
He says: "One day, the patient could finally become the customer, with a means-tested healthcare allocation for them to save and spend during their lifetime."
People will be free to top up their healthcare account themselves and buy a superior level of service, says MacEwan: "Co-payment may even stretch into new areas, such as A&E and long-term care."
As more people directly contribute to their healthcare costs, they will have a strong incentive to live a healthy lifestyle, in a bid to trim their private treatment top-up premiums.
The future will see the end of one wrong turn: all those controversial "Easi-hospitals", painted in bright orange, that promised to revolutionise healthcare by offering cheaper treatment for patients who booked early. MacEwan says that widely-scorned fad will have died out by 2020.
Geoff Salter, head of product development at AXAPPP healthcare, also expects the state to pass on more of its costs on to the private sector, and this will have a major impact on the corporate PMI market.
"Employers will have to pick up a greater share of responsibility for staff welfare, giving insurers the opportunity to play an increased role in integrated healthcare management," he says.
Corporate health insurance will offer a growing range of psychiatric, attendance management and rehabilitation services, and wellbeing programmes to identify potential lifestyle problems with individual members of staff.
"We will offer more intervention, earlier, and more help and support," says Salter.
Patient attitudes to the NHS will have radically changed.
"There are still plenty of people alive who remember the birth of the NHS in 1948. By 2050, it will be 102 years old, and future generations won't feel the same sentimental attachment. This chould finally open up the NHS to a long-awaited overhaul," says Salter.
Mike Hall, chief executive at Standard Life Healthcare, says the health service of the future will offer choice, promote wellbeing, and deliver the latest drug therapies, but this cannot be fully funded from taxation.
"We are already seeing more co-operation between the public and private sectors, such as independent sector treatment centres and private commissioning, and can expect a far more integrated offering between the two," Hall says.
Access to treatment may depend on how well individuals have looked after themselves.
"Cardiac procedures are already being denied to smokers who won't give up. That process will continue," Hall says.
By 2050, basic primary care services may still be funded from taxation, but all but the poorest will pay for secondary care, most likely through government-regulated private insurance schemes. "Some 5% to 10% of the population will continue to fund their care wholly through the private sector. But the overall private market will have expanded significantly, with a mandatory top-up for all those earning above a certain threshold," Hall predicts.
The next 42 years will see a stream of new vaccinations, treatments and drugs - but they will have to be rationed somehow.
"Patients may be required to meet minimum health standards, for example, keeping their body mass index below a certain level, not smoking, drinking only a certain number of alcohol units per week. They will be supported by screening programmes to help them stay healthy and detect problems at an early stage," he says.
As healthcare funding shifts to the private sector, the PMI industry will be increasingly in the firing line.
"More of the bad press will fall to insurers, as they increase prices well above the consumer price index to keep pace with healthcare inflation," Hall predicts.
Others believe the NHS could prove surprisingly resilient. Martin Howell, director of brokers Medisearch, says both the main political parties have pledged their loyalty to the NHS, at least in public.
"Everybody complains about the NHS, but it remains embedded in the public's psyche," Howell adds. "Tackling that will be political dynamite - or suicide."
So the NHS could limp on for decades, dragging the private sector behind it.
"If this happens, PMI will be increasingly unaffordable. A fully comprehensive policy with no-claims discount will become a museum piece," says Howell.
Fiona Harris, head of personal markets at BUPA, hopes that by 2050, the NHS and private sector will work more closely and reduce the duplication seen today, where PMI customers pay twice for their healthcare. The most likely solution will be privately funded top-ups.
"We also see a continued focus on improving productivity in purchasing and managing the distribution of healthcare. This is already being addressed with the engagement of private health commissioning of health management experts, including BUPA, in the NHS," Harris says.
Advances in technology will help to drive the popularity of PMI in 2050.
"Health information needs to evolve to include clinical outcome measures and service comparisons, which will give consumers the tools they need to make informed choices about treatment options. This is likely to increase the demand for supplementing NHS care with privately-funded choice," Harris says.
Ann Dougan, marketing director at CIGNA HealthCare, says consumers in 2050 will be even more demanding, and insurers must respond with increasingly flexible features and benefits.
"The traditional generic PMI product that aims to cover most healthcare needs will be redundant. Instead, we'll be looking to mix and match particular conditions with particular services. Employers may even use multiple insurers to provide more choice for their employees," she says.
Customers will be leading even more busy, stressful lives in 2050, with less time to seek face-to-face medical support.
"Insurers will need to provide greater online health management, including risk assessment, diagnosis and even treatment," Dougan continues. "In the future, we will be able to take a stress assessment at our desks, then be directed to a choice of online or downloadable therapeutic packages."
Some analysts have a bleak vision of the future. Chris Shaw, adviser at IFAs Beacon Asset Management, says by 2050 the country will be squeezed by the unhealthy combination of an ageing population and a younger generation inclined to obesity.
"Waiting lists will go up, up, up. PMI will get more and more expensive. People may resort to buying private healthcare policies that merely move them halfway up the waiting list," Shaw says.
Another problem is that retired people will be less affluent than today.
"We are raising a nation of debtors," says Shaw. "Many won't have paid off their mortgage, let alone have money to buy PMI. The industry will have to do everything it can to cut costs."
George Connelly, broker with Health Care Matters in Dorset, has a more optimistic vision. He believes healthcare will actually be cheaper in 2050, rather than more expensive.
"The NHS will become an entirely different beast," he suggests. "Right now, it is focused on curing people. In future, it will shift towards prevention, as science makes it easier to target and prevent ill-health."
People are already starting to change their behaviour, he continues: "More people will take exercise, eat healthily, and seek preventive treatment, and this could ease pressure on health services. It's an unfashionably optimistic view, but it really could happen."
Howard Hughes, sales and marketing manager at BCWA, says by 2050, the state will have belatedly woken up to the fact that the private sector is a huge reservoir of additional healthcare funding.
"The World Health Organisation estimates that $5 trillion is spent globally on healthcare each year, of which $1 trillion goes on private medicine. In the UK, we will reach at least this 20% expenditure level in the next 50 years."
What goes around comes around, but each time it gets more expensive, he adds: "My grandfather had bad knees, and his GP recommended a walking stick. It cost six shillings. My father-in-law is currently having artificial knee surgery costing £12,000. What will happen when I need my knees fixed? Stem cell treatment? Robotic surgery? How much will that cost? And who will pay for the re-work I will need at age 99, to see me through the next 20 years?"
At this point, his crystal ball clouds over, but the consensus is that cost will still be the major challenge in the year 2050, particularly as we will be living to 200 and taking cross-border elective surgery on Mars.