FIPO Consultant Survey into Current Private Medical Insurance Trends
Detailed Review of Results
5th May 2010
Methodology of the FIPO Survey
The FIPO Consultant Survey took place in March - April 2010. This fully confidential on-line survey was conducted using SurveyMonkey software with certain built in security controls. These results have been interpreted in a general statement from FIPO.
The more detailed results depicted here were taken from the SurveyMonkey website and were based on 789 respondents. This number of respondents has since increased to 802 but the percentage analysis has not changed.
This analysis of the survey involves
- 789 consultant participants (18 with no private practice)
- 203 freehand entries (with a wide range of comments)
- 92.1% completion of the questionnaire (but not all questions were relevant to every consultant)
There were 18 consultants (2.2% of respondents) who had no private practice commitments. The specific views of this group are unclear and some may object to independent practice on various grounds. It is not possible to assess what impact this may have had on the statistical analysis and this could produce some distortion of the results. Nevertheless, the views of these 18 consultants have been considered along with the whole group and they have not been separately analysed.
Demographics of the Consultant Respondents to the FIPO Survey
Clinical specialty of the consultants in the FIPO survey
There was a wide range of clinical specialties represented in the FIPO survey with major blocks from general surgery, orthopaedic surgery, ENT surgery and anaesthetics but all specialties were represented (Figure 1).
Figure 1 - Clinical specialty of the consultants in the FIPO survey
Geographical origin of consultants in the FIPO survey
The consultants came from all over the UK with the highest concentration (41.5%) from within the M25 but all areas were represented (Figure 2).
Figure 2 - Geographical origin of consultants in the FIPO survey
Consultant participants and NHS commitments
89.1% of respondents had some NHS affiliation and 10.9% were fully independent.
Consultant participants and their involvement in private practice
97.8% of respondents had some private practice and 2.2% (18 consultants) had no involvement in private practice.
Years in Private Practice
Consultant experience of those engaged in private practice ranged from 1 year to 38 years. The average period working in private practice was 12 years.
Working Arrangements of Consultants
Three quarters of consultants (74.6%)work as sole traders (Figure 3) 9% work in a Chambers arrangement (sole traders but some joint activities with colleagues) whilst 16.4% are working in a legal entity (9.3% in a partnership and 7.1% in a limited company).
Figure 3 - Group working arrangements of consultants in the FIPO survey
Main hospital group of respondents in the FIPO survey
Consultants worked in all the major groups of independent hospitals as shown in Figure 4.
Figure 4 Main independent hospital affiliation of consultants in the FIPO survey
Fee Structures of Consultants in the FIPO Survey
Fee estimates and charging levels
This series of questions in the FIPO survey must be considered as separate but interrelated (Figure 5).
- 64.4% of consultants give fee estimates to patients and thus 30.7% currently give no estimates of their fees
- 42.3% of consultants set their fees according to the BUPA benefit rates awarded to patients. A similar number of consultants (42.8%) set their fees according to the relevant insurance company benefit rates
- 41.6% of consultants set their own fee levels
- 74.2% consider that the current BUPA rate of benefits for patients to consultant fees is too low whilst 18.3% thought that these were adequate
- 69.3% of consultants did not believe that any new Fixed Fee schedule introduced by an insurer would keep up with inflation whilst 24% thought that inflationary increases would be introduced
Figure 5 - Consultants and their fee arrangements, the Bupa schedule of benefits and the impact of inflation on a fixed fee schedule
Direct patient billing
In the light of current insurance pressures consultants were asked if they would consider directly billing their patients. The responses (Figure 6) show
- 69.7% of consultants would be prepared to bill their patients directly
- 64.9% of consultants would bill directly depending on the insurer
Figure 6 Consultants views on direct billing to patients
AXA PPP Fixed Fee Schedule and Newly Appointed Consultants
New consultant appointments since July 2008
There were 55 newly appointed consultants since July 2008 in the FIPO survey at which time the new Terms and Conditions (Fixed Fee Schedule) were introduced by AXA PPP.
AXA PPP Fixed Fee schedule for newly appointed consultants
63.6% of the newly appointed consultants (35 out of 55) have been forced to enrol in the PPP fixed fee schedule (Figure 7). Of the remainder, 14 (25.5%) are not enrolled, presumably being enrolled before the full introduction of the scheme or because they have been refused or were later delisted. Some may yet have to apply. Six (10.9%) consultants were unsure of their status possibly because their application may now be under review.
- 87.3% new consultants objected to these terms and conditions imposed by AXA PPP
- 74.5% felt forced in to this (but this number of 41 consultants answering this question is larger than the actual 35 enrolled and so there would appear to be a general feeling of enforcement
- 3.6% (two consultants) have refused to be enrolled under the scheme
- 1.8% (one consultant) has been enrolled and then subsequently delisted by AXA PPP for reasons unclear.
Figure 7 - New consultants’ responses to the AXA PPP fixed fee schedule
AXA PPP Fixed Fee Schedule and Established Consultants
AXA PPP Fixed Fee Schedule for established senior consultants
Apart from newly appointed consultants AXA PPP have contacted a number of senior consultants asking them to adhere to the same fixed fee schedule as newly appointed consultants. AXA PPP will not delist consultants who fail to agree but there is an implication that patients will be “warned” at preauthorisation about the fact that the consultants fees will not be met and that alternative cheaper consultants are available.
The numbers of consultants capped according to AXA PPP is 5% but the findings in the FIPO survey are different (Figure 8) and show that;
20.4% of senior consultants have been written to by AXA PPP asking them to adhere to the new lower fee schedule
76.7% of consultants would not accept this demand (and this figure includes both consultants approached and not approached by AXA PPP).
The consultant views on the AXA PPP fixed fee schedule are as follows;
- 90.0% of consultants disagree with the AXA PPP initiative and support for this initiative is low at 4.7%
- 84.8% feel that this will break the consultant/patient contract whilst 6.9% do not think this will happen (although there was some confusion here as respondents may have referred to the duty of care between the consultant and the patient as opposed to the financial contract which was the meaning behind this question).
The implications of a fixed fee schedule are clear to consultants;
- 91.5% feel that a fixed fee schedule removes consultant independence
- 92.2% believe that a fixed fee schedule removes patient choice
- 94.7% disagree with an insurer controlling the referral of patients
- 89.8% do not believe that inflationary increases will occur with a fixed fee schedule
Figure 8 - Consultant attitudes to the AXA PPP proposal to limit reimbursements to patients by a fixed fee schedule
Previous attempts by AXA PPP to challenge and negotiate fees with established senior consultants and the impact on patient referrals and reimbursements
The new fixed fee schedule proposed by AXA PPP is the end result of a long history of challenges to consultant’s fees based on this insurer’s interpretation of “usual and customary” fee levels. The FIPO survey analysed this issue (Figure 9) and found that;
- 37.3% of consultants had been previously challenged over their fees
- 29.7% have been previously asked to modify or negotiate a fee structure with AXA PPP
An insurer who diverts patients to another consultant at pre-authorisation using suggestions of “overcharging” is an issue that concerns consultants. Up to now the evidence for this has been anecdotal. The FIPO survey has shown that;
- 24.8% of consultants have experience of AXA PPP suggesting another consultant to a patient that was originally referred to them (and this figure may hide many more diversions which the original consultant may not even be aware of as they occur before s/he has ever met the patient)
- 13.3% of consultants have evidence that AXA PPP has suggested they would reimburse the patient less than they would have done if the consultant had accepted the new rates
Figure 9 - Previous attempts by AXA PPP to challenge and limit benefit reimbursements to patient
by fee negotiations with senior consultants and the impact on patient referrals.
Private Medical Insurers – Different Attitudes towards Consultants on Fee Negotiation
Fee negotiations between insurers and established consultants
It would appear that 22.5% of consultants have been approached at some time to negotiate fees directly with insurers (77.5% never approached). The FIPO survey also shows that the main insurer to adopt this line is BUPA (12.4%) but this response may have been biased by the long standing BUPA partnership (which offers a limited 10% annual bonus only on operative fees if consultants stick to the BUPA benefit rates for their fees).
The second most active group in trying to negotiate fees directly with consultants was AXA PPP (7.5%) followed by Aviva (6.4%) and Standard Life (4.4%) and then the others in lower numbers (Figure 10). In a follow up question on the survey (data not displayed here) it was shown that 19% of consultants approached by insurers to lower their fees were promised a greater volume of work. 19% of consultants did in fact accept lower than BUPA rates but it is unclear if these are the same individuals. It should be understood that these percentages only apply to the 199 consultants who answered this question (i.e. those who had been approached by an insurer to negotiate fees). This was 38 consultants out of a total of 789 which represents only 4.8% overall of consultants have accepted a lower fee.
Figure 10 - Private medical insurers and directly negotiated fees with consultants
Private Medical Insurers and Consultants Delisting
Insurers threats to delist consultants
Some private medical insurers have adopted a harsh line towards certain consultants and have threatened or actually delisted them. In this FIPO survey 18.7% of consultants have been threatened in this fashion (81.3% never threatened).
The main insurer to engage in this tactic is AXA PPP (14.9% of consultants threatened) with Aviva also following a similar line (3.7% threatened). BUPA has threatened 2.5% of consultants and the other insurers only about 1% or less (Figure 11).
Figure 11 - Threats to delist consultants by private medical insurers
Insurers actually delisting consultants
The threats to delist consultants by an insurer have been translated in to actual de-recognition as can be seen in Figure 12. This shows that 5.1% of consultants have been delisted by one or other insurer (94.9% never delisted). However, this number of derecognised consultants may be slightly inflated as some consultants may have been delisted by more than one insurer.
The precise insurers who have gone as far as derecognising consultants only partially reflect those who make this threat. Thus, AXA PPP heads the list having derecognised 4.1% of consultants followed by Aviva who have delisted 1.1%. Thereafter delisting is 0.6% and below. Significantly BUPA has only delisted 0.4% despite threatening a higher number (3 out of 18 consultants).
Figure 12 - Actual numbers of consultants delisted by insurers
Consultant Views on Insurance Guided Options
Guided insurance arrangements with selected hospitals
An insurance guided option is an arrangement which specifically directs the subscriber to a hospital with which the insurer has struck a financial deal. Many insurance policies have network arrangements with certain hospitals but the guided option is different because in the guided option the hospital then chooses the consultant who will treat the patient. This choice made by the hospital is based on an internal agreement between the hospital and a limited number of consultants who have been persuaded to treat on a lower than BUPA rate tariff. This is thus a commercial arrangement and it began a few years ago with the Standard Life Company. Now AXA PPP, working in conjunction with the BMI hospital group, is trying to promote a similar type of insurance policy (Corporate Health Plan Pathways). Subscribers will presumably know that they will have limited choice when they seek secondary care.
However, more recently and in the light of the fee capping of many consultants, BMI and AXA PPP have developed an “open referral” strategy which means that many more patients may be diverted at pre-authorisation to a BMI hospital, not just those who have bought the specific insurance policy. In the FIPO survey consultants were asked their views on this strategy (Figure13). There was an overwhelming rejection of this BMI / AXA PPP strategy with
- 96.3% of consultants believing that this would restrict patient choice
- 93.4% of consultants believing that the hospital choice of consultant would be based on price 87.4% of consultants believing that this could affect continuity of clinical care
- 88.2% of consultants believing that this could lead to managers overriding clinical decisions
Figure 13 - Consultant views on the AXA PPP package deal with BMI hospitals
Summary of Consultant Views on the Current Independent Healthcare Market
and the role of the Financial Ombudsman
Clinical Guidelines
Some insurers, BUPA in particular, have espoused a “quality agenda” which in certain instances leads to clinical guidelines, criteria for recognition of certain hospital services and definitions of scope of clinical practice. In the FIPO survey consultants were clear about professional guidelines (Figure 14).
- 96.5% of consultants stated that clinical guidelines should only be developed by professional groups and only 1.1% disagreed with this
- 96.5% also felt that a private medical insurer had no part to play in the development of clinical guidelines (1.9% feeling they do have a part to play and 1.5% unsure)
Figure 14 - Consultant views on the development of clinical guidelines
What considerations drive the insurer - quality or commercial?
In taking an overview of the current scene consultants felt strongly that insurers were driven by commercial as opposed to quality motives (Figure 15). Thus
- 95.7% of consultants did NOT feel that insurers were driven by quality considerations (and 1.1% felt that they were)
- 98.1% of consultants felt that the insurers were driven by commercial considerations (and only 1% disagreed with this verdict)
Figure 15 - Consultant views on the insurer’s motivation in their new strategies
The part to be played by the Financial Ombudsman Service in rectifying a patients complaint against an insurer
The Financial Ombudsman’s Service (FOS) is available for patients who have a complaint against their insurer. The FOS has made some interesting judgements in favour of patients and consultants were asked in the FIPO survey about their own patients’ experience of this (Figure 16).
Overall 7.1% of consultants (51 in total) said that one or more of their patients had complained to the FOS. In terms of a successful outcome the answer is difficult to assess as more than 51 replies were received. It would appear that 24 patients were actually successful (47%).
Whilst this percentage figure is hard to confirm or to translate generally there is a growing awareness that the FOS may be a route for patients to complain and 60.0% of consultants said that they would advise patients accordingly whilst 34.7% were currently unsure of the value of this tactic.
Figure 16 - Consultant views on the Financial Ombudsman Service