Examination of Witnesses (Questions 495
THURSDAY 9 FEBRUARY 2006
Q495 Chairman: Thank you very much
for coming. Could I first of all apologise for the lateness of
the hour. We were expecting to be into this third session a little
earlier. For the record I wonder if you could give me your names
and the organisations you are from.
Mr Hurn: My name is Bernie Hurn.
I am the Research and Strategy Manager for the Simplyhealth Group,
formerly known as HSA.
Mr Hall: My name is Mike Hall.
I am the Chief Executive of Standard Life Healthcare and, just
for the information of the Committee, you can probably tell from
the lines on my forehead that I have had 30 years' experience
in healthcare, 12 of which were in the NHS and nine of which have
been in the private hospital sector before moving to the insurance
Q496 Chairman: Once again, thanks
for coming along. I wonder if I could ask both of you what are
the major problems that people experience with NHS charges and
what proportion of the population is covered by insurance that
helps them to access NHS provided services?
Mr Hurn: It is a substantial proportion
of the population, in the sense that today are represented here
by private medical insurance, cash plans, complementary products
and so on. About six and a half million people industry-wide are
covered by cash plans and an even larger figure by private medical
insurance. It is in excess of 10 million people today and Simplyhealth
represent about two and a half million lives as a mutual organisation
which in essence has a public concern in that regard. What we
represent is predominantly blue collar workers and these people
have issues in the cash flow impacts of charges on their monthly
cash flow and what we provide is a tool for smoothing that out
and enabling them to access NHS services and services surrounding
Q497 Chairman: Mr Hall?
Mr Hall: As far as the private
medical insurance market is concerned, there are just over 3.6
million subscribers to private medical insurance, but those 3.6
million cover a total of over 6.5 million lives, 6.57 million
to be precise, which equates to about 11% of the total population.
In terms of charges, my view is that because charges have been
developed in a fairly piecemeal fashion over the course of the
last 50 years I do not think they pass the test of fairness and
equity. When I retire my understanding is that I will become entitled
to free prescriptions. I do not think that passes that test. I
would be more than happy to pay for my prescriptions if that meant
that the money I am paying goes back into the NHS to pay for other
people in a less privileged position than I. I think that fairness
and equity test is difficult now to prove. There is evidence to
the contrary, and I think it is difficult for people now to understand
the range of charges that are now made because they themselves
have not chosen to pay for those; they have been decided elsewhere.
The success of our business is made up of providing services,
obviously at a charge, that people want to buy and our evidence
suggests that there is a willingness by people to pay charges.
They may not necessarily be the ones that are currently charged
Q498 Chairman: Would you, for instance,
compensate somebody if they had prescription charges or glasses
charges under your scheme?
Mr Hall: We would not, no.
Q499 Chairman: But you would, Mr
Mr Hurn: We do indeed, and that
is 73% of what we pay out across the cash plan industry but, because
we are also the largest representation within that group, we are
indicative of the industry standard. About 73% of what we pay
back is directly related to NHS charges, that is, dental, optical,
hospital inpatient stay. The rest of that is made up in what we
call POCAH, which is physiotherapy, osteopathy, chiropractic,
acupuncture and homeopathy, something that the previous speakers
alluded to. Those are services that people choose to access which
they take responsibility for and we help them to access those
services as well. What we look at is what the NHS provides, what
the major impact of that is and also, being a mutual, we are driven
by what our members need to create a format for access to the
rest of those services.