21 November 2023
“Bupa is facing a mass rebellion by anaesthetists demanding higher fees for private work, as the UK’s largest medical insurer competes for doctors to treat a surge in patients turning to private healthcare amid NHS pressures.” [Financial Times].
This ongoing clash sheds light on the intricate dynamics between healthcare providers and medical professionals and raises critical questions about the sustainability and fairness of current compensation models.
Doctors have long chafed at insurers’ ability to dictate rates. A 2014 report by the competition regulator acknowledged the biggest insurers had “significant buyer power”, but said it had not found “sufficient evidence that it was currently being exercised in such a way as to harm competition by suppressing fees to uneconomic levels”.
At the heart of the matter is a growing discontent among UK doctors with the fees offered by Bupa for their services. some cite fees frozen for more than 20 years doctors are asserting that the reimbursement rates are inadequate and fail to reflect the true value of their expertise and services.
One cited a fee Bupa would pay for an anaesthetist working on a joint replacement surgery in 1994, at £320. At the start of this year, the same operation paid just £5 more, the doctor said. Bupa declined to comment. A person familiar with its position said it was incorrect to say it had not increased fees since the 1990s, and that this example was misleading in isolation. Some fees had fallen over the years as procedures became easier or faster, while other fees had risen, the person said.
Whatever the truth, clinicians are riled up. Bupa, in an attempt to address the issue, wrote to anaesthetists offering a 20% increase in rates for each procedure. James Sherwood, the general manager for Bupa UK insurance healthcare management, emphasised the company’s commitment to balancing affordability for customers with the demands of the doctors.
The CMA’s 2014 investigation of the sector looms large however. It is illegal for doctors in private practice to collude over pricing as the BMA have been at pains to remind its members. In a recently shared letter, the Private Practice Committee (PPC) of the BMA cautiously reminds its members that despite concerns about Private Medical Insurers and their undue influence on the private healthcare market, including patient choice, consultant entry, and fee control, members need to abide by competition law or risk a substantial fine.
The legal advice presented affirmsg insurers’ rights to determine consultant fees within competition law limits. The PPC emphasises the illegality of organising boycotts against PMIs but encourages individual doctors to make independent decisions regarding agreements with PMIs, highlighting the PPC’s support for doctors in their economic choices.
This couldn’t have come at a worse time for insurers with a flood of demand from existing members and a huge influx of new members dissatisfied with long wait times in the NHS. A reluctance among doctors to participate in the Bupa network may limit the choices available to patients, raising concerns about the quality and accessibility of care within the private healthcare system.
Bupa’s confrontation with doctors prompts a broader reflection on the dynamics of the private healthcare industry. It is largely impenetrable. negotiations between PMIs and Hospital Groups are mired in secrecy, participants cite commercial sensitivity but the reality is the CMA may have been looking the wrong way back in 2014. Doctors make up a relatively small part of the patient’s bill. the truth is that PMIs have held the trump card for decades, they have been the single largest source of patients in the private sector so they have had the whip hand when setting rates for both doctors and other healthcare providers.
The problem for the insurance sector now however is that self-pay patients who are more profitable for both doctors and hospitals, are on the rise, moving from 20% to 40% and more in some sectors. With more demand than ever for private treatment, doctors will start deciding to not include insurers who pay poorly, after all, most already carry a full load in the NHS, their private practice is limited, why not choose the work that is the most profitable? Hospitals and PMIs have.
At Medmin we understand the delicate balance between complying with CMA rules and maximising the opportunities for busy clinicians to work smarter not harder. Whether PMIs are the Evil Empire or not remains to be seen but in round one of what might be a long and drawn out fight, they seem to have lost on points.