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

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).


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


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.


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;

The implications of a fixed fee schedule are clear to consultants;


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;

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;


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


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).


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


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

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