Select Committee on Health Written Evidence

Memorandum submitted by HSA Group Ltd (CP 27)


  1.1  The HSA Group Limited is a mutual organisation based in Andover, Hampshire. The HSA Group also includes Leeds-based health plan provider LHF (The Leeds Hospital Fund), Manchester based HealthSure and Bristol-based BCWA. As its early name (Hospital Saving Association) implies, HSA was originally established in 1922 to help save hospitals from closure in the pre-NHS days.

  1.2  The HSA Group provides health cash plan insurance, known as Health Cash Plans (HCP), which in essence provides cash benefits to cover the cost of health care treatment, expenses associated with hospital treatment and post operative care. Our plans aim to meet the cost of everyday healthcare, with cash benefits covering a broad spectrum of treatments such as optical, dental, osteopathy, chiropractic, complementary therapies, consultation, health screening, chiropody, physiotherapy and hospital in-patient stay. Today we are the largest mutual HCP provider, covering in excess of 1.1 million policyholders, providing health cover for more than two million people across the UK.

  1.3  In 2004 we paid claims to the value of approximately £166 million, projected to rise to over £200 million in 2005, to our members, of which a very substantial amount related to the accessing of NHS provided healthcare. The HSA Group therefore welcomes a new inquiry into co-payments and charges in the NHS.

  1.4  Any evidence submitted or recommendations for action are based on most accurate and up to date information available to us, as well as information received from members.


  2.1  Equitable and appropriate charges

  2.1.1  Our main areas of activity, relating to the co-payment and charges in the NHS referred to in the terms of reference of the inquiry, are treatments (day surgery and hospital in patient stay), dentistry and optical services. These items of benefit (as referred to in HCP terms) form the common denominators of most packages of benefit offered across the HCP market. These items of benefit achieve a combined figure of 73% of the total value of benefits paid across the HCP market, representing a substantial proportion of member activity. (Laing & Buisson UK Health & Care Cover 2005.)

  2.1.2  The number of lives covered in the UK by HCP and Private Medical Insurance (PMI) would lead us to conclude that significant proportion of the general public is able and willing to take appropriate measures in order to reduce the impact on their personal cash flow of the NHS charges or co-payments incurred.

  2.1.3  Such charges can only be regarded as equitable and fair in an environment where the service user perceives the cost incurred as affordable and proportionate in relation to the service received and the level of personal responsibility accepted.

  2.1.4  We would encourage fair and equitable charges, consistently applied. A possible example of such an instance is the proposed dental patient charges (as set out in the Consultation of the draft National Health Service (Dental Charges) Regulations 2006) which would appear to be a step in the right direction for the patient, as it attempts to simplify and introduce a fair and equitable charging system, as well as defining the instances of exemption from charges.

  2.1.5  As the NHS is subject to rising costs due to a number of well-documented reasons and the demand for access to a widening range of services are increasing year on year, it is felt that the charges are broadly speaking not inappropriate. It is appreciated that organisations representing specific interest groups may highlight areas of inequity or inappropriate charging.

  2.2  Optimal level of charges

  2.2.1  It would not be considered appropriate for the HSA Group to speculate as to the optimal level individual charges should be set at, as this does not lie within our remit to do so.

  2.3  Transparency of system of charges

  2.3.1  Based on our experience (tens of thousands of customer interactions on a daily basis) we would suggest that not all charges are sufficiently transparent to the general public. An example would be the current system of dental patient charging, which has been recognised as lacking in transparency.

  2.3.2  A question of transparency to the service user also arises in the event of private sector involvement in the provision of a service. In this instance a concise, plain language communication of what is "covered" or chargeable by the NHS will aid tremendously to the publics understanding and ability to exercise choice.

  2.3.3  Transparency is only achievable as a consequence of openness, consistency and education. We would encourage these principals to be applied to all areas of charging and co-payments throughout the NHS.

  2.4  Criteria for payment and exemption

  2.4.1  Affordable shared responsibility are the criteria we would propose for the determination of payments. Payments should be affordable to all and payments should be applied to all, as this is a fair and equitable way of encouraging publicly shared responsibility. Government intervention is suggested in the instances of disaster and an element of means testing or exemption should be applied for the elements of society unable to contribute.

  2.5  Awareness of eligibility of exemption

  2.5.1  The Financial Services industry is regulated by the Financial Services Authority, who places regulatory requirements on financially regulated organisations, in order to protect the interest of customers. As co-payments and charges in the NHS may impact on people who could be perceived to be more vulnerable than they normally would be, at the moment of interaction with a NHS service, a code of self regulation, in reference to the fair treatment and transparency of co-payments and charges, subscribed to by all providers of NHS services (as described in the terms of reference to the new inquiry) is suggested.

  2.6  Abolishment of charges

  2.6.1  The abolishment of charges could place a greater burden on the NHS and would not encourage the acceptance of personal responsibility for being able to access healthcare.

  3  Recommendations

  3.1  A broadening of charges or the establishment of an affordable shared responsibility premise based charge, with Government intervention in cases of disaster or "means tested need" is recommended.

Bernie Hurn

HSA Group Ltd

December 2005

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