Private Medical Insurance: A Buyer’s Guide

Healthcare Executive Search

Private Medical Insurance (PMI) is a popular employee benefit, offering staff access to private medical treatment and helping employers to reduce sickness absence. However employers and insurers are looking for ways to keep the cost of cover down in order to keep premiums affordable.

Healthcare analysts Laing and Buisson found in their Health Cover UK Market Report 2012 that the number of employees receiving employer-paid PMI had fallen by 1.3% and that spending on these policies was down by 2.9%, indicating that employers are moving to lower-cost medical insurance policies.

Another way employers are reducing their costs is by introducing excesses into their policies, whereby the employee is liable for the first part of any claim up to a set limit, for example £100. This can reduce costs and deter employees from making smaller claims. A £150 excess can reduce an insurance premium by approximately 3%, whilst an excess of £200 can reduce the premium by 5.5%. There is also an option where the excess is paid by a health cash plan provider, with several providers now offering this type of cover. For example, Medicash offer up to £200 per year towards PMI excesses on a £1 per week plan, and the level of benefit increases to £400 on its £5 per week plan.

Co-insurance is another option for employers looking to reduce their costs. With this policy, rather than paying an excess, the employee pays a set percentage of claims up to an annual total amount. Through a ‘Shared Responsibility’ option, WPA pays 75% of all eligible claims up to the annual limit. So an employee with a £250 annual limit who has a £200 consultation and then has a £2,000 minor operation, pays £50 for the consultation and then £200 towards the cost of the operation. The WPA will then pay all other eligible treatment costs in a given contract year.


  • 5%-7%: average annual premium increase
  •   Source: Laing and Buisson Health Cover UK Market Report 2012

  • 10.9%: the percentage of people in the UK with private medical insurance
  •   Source: Laing and Buisson Health Cover UK Market Report 2012

  • 2.5 million: the number of people on NHS waiting lists in England
  •   Source: NHS Consultant-led referral to treatment waiting times statistics for England, 2012 annual report,  Department of Health

  • 8.5 weeks: average wait for admitted treatment in England in 2012
  •   Source: NHS Consultant-led referral to treatment waiting times statistics for England, 2012 annual report,  Department of Health

  • 87%: the percentage of employers with flex schemes that offer private medical insurance
  •   Source: Employee Benefits/Towers Watson Flexible benefits research 2012

  • 28%: the percentage of employers offering private medical insurance as a means to manage long-term absence
  •   Source: CIPD Absence Management Report 2012


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Rise in UK Employee Presenteeism

Healthcare Executive SearchCanada Life Group Insurance have reported a rise of ‘presenteeism’ among the UK workforce, with 93% of UK employees surveyed having attended work whilst ill. 36% of employees surveyed stated they would rather use annual leave when ill than have the time off showing on their sickness record. Canada Life’s research shows an average of 4.1 sick days in 2012, with male employees in particular taking fewer days off for illness (3.5 days compared to 4.4 days for women).

Canada Life found that the majority (76%) of workers said they had come into work because they didn’t feel their illness warranted a day off, while almost a third (31%) felt their workload was too great to take time off. A fifth (20%) said that they were worried about the financial implications of their absence and (19%) had been made to feel guilty about taking time off by colleagues or senior members of staff. One in eight (13%) had felt too threatened by the risk of redundancy.

This has resulted in around a quarter of respondents (26%) having used their holiday allowance whilst ill, in order to avoid a poor sickness record or to conform to their employer’s sickness absence policy. A third of the employees surveyed said that they were so reluctant to take time off ill that they would still come into work if they were suffering from flu and 14% would come into the workplace if they had vomiting and diarrhoea. When it came to stress-related illness, over three quarters (80%) said that this would not make them take time off work.

Having unwell staff at work can have an impact on health in the workplace, with 81% of the employees surveyed saying they have caught illnesses from other members of staff and a fifth (20%) saying that it is a frequent occurrence. Productivity also suffers with over three quarters (82%) of those who continued to work whilst ill saying they felt they had performed worse than usual.

Paul Avis, Marketing Director of Canada Life Group, commented:

“It is worrying that the UK’s workers are so reluctant to take time off even when they are genuinely unwell. Anxieties about a heavy workload, risk of redundancy and criticism from other colleagues are preventing employees from taking the sick leave that they need, yet are also no doubt exacerbating certain conditions, particularly those that are stress-related.

Employers need to do more to make their stance on sickness absence clear – the fact that 37% are not aware of any workplace support in terms of sickness absence shows that there is still some way to go in communicating the different options available to staff should they become unwell for an extended period of time. Our research demonstrates the importance of rehabilitation consultants, with almost a third (29%) saying a rehabilitation programme would provide peace of mind.

“Employees should not be discouraged from taking time off when they are genuinely unwell, as presenteeism creates not only an unpleasant working environment but also one that is counter-productive. Staff need to feel that they won’t be penalised for taking sick leave and organisations therefore should ensure they communicate their support.”


GMC Spends £250,000 on Private Healthcare for its Staff

Healthcare Executive SearchThe General Medical Council (GMC) have admitted to providing private healthcare to more than 550 of its employees, costing more than £250,000 per year.  Critics say that in supplying private healthcare, the GMC is showing little faith in the doctors that they are regulating.

The GMC has responded that after a review of the policy last year, they decided the incentive would help to attract and retain high quality staff.

The British Medical Assocation (BMA), the trade union for doctors, has also admitted to offering private medical insurance to very senior staff.

A BMA spokesperson stated that “The remuneration package ensures that we are able to continue to attract very senior members of staff by offering benefits that you might expect from similar roles in similar organisations.”


Rising Cost of Private Healthcare is Unsustainable

Healthcare Executive SearchBupa Managing Director, Damien Marmion, has told a Reform event on affordable healthcare that the private healthcare sector is becoming unsustainable due to its high policy premiums and that there is a risk of more pressure being placed on the already struggling NHS, with patients wanting to abandon private healthcare to reduce their costs.
Marmion also stated that the private healthcare industry is worse than the NHS at charging for clinical outcomes for patients, rather than courses of treatment “We are collectively paying the equivalent of more than £2,000 an hour for cataract surgery, which is more than is currently charged for complex heart and brain surgery.
“We want to change the competition rules in the market to give our customers more choice about where they can go for treatment, and ensure that the prices we pay on behalf of our members are fair and take into account all of the medical evidence.
“There needs to be greater transparency about every step of the patient journey, including the clinical outcome. We call on all stakeholders in the market to work in collaboration in providing healthcare that is an affordable complement to the NHS.”


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