Open-access content
Monday 30th April 2012
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updated 5.13pm, Wednesday 29th April 2020
Combining actuarial data with insurers clinical practice knowledge could improve health outcomes, says Adrian Baskir
Health insurance plays an important role in the UK healthcare system, providing some £4bn of care each year. But to be sustainable, health insurance must remain affordable and continue to deliver high-quality, good-value healthcare. So it is clearly problematic that medical inflation has been rising at a staggering rate, resulting in premium increases of 10% a year for most of the past decade.
Many models of managed care have been attempted around the world to optimise the scarce financial resources available for healthcare - health maintenance organisations (HMOs), network options, consumer-driven healthcare, to name but a few. But none seem to have definitively redefined the patient journey or achieved a sustainable dent in medical inflation.
For this reason, our review of the way in which patients are referred from primary to secondary care is particularly interesting.
Today in the UK, as in many other countries, accessing healthcare starts with a visit to the general practitioner. Traditionally, when GPs recommend that a patient sees a specialist privately, they provide a referral to a named consultant or local private hospital.
However, as research carried out by the UK's Office of Fair Trading shows, GPs often have limited information about a consultant's care practices, patient experience or private charges. This means when insured members need specialist care, they are often referred to a consultant based on 'informal' information, and sometimes experience unexpected top-up fees, because the consultant charges outside the health insurer's monetary limits, which the GP would be unaware of.
Conversely, health insurers have access to a wealth of data. We know how many patients have been to a particular consultant or hospital and where readmissions have occurred, because we provide members with pre-authorisation for consultations and treatments, and receive and pay the bills. We also have access to more objective data about individual consultants than is available to an average GP.
This led Bupa to introduce 'open referrals' in January, following successful testing with several corporate clients and our own employee health insurance scheme. Members ask for an open (as opposed to a named) referral. When they call us, they are given a choice of two or more consultants.
We use a simple algorithm based on patient and providers' postcodes to find convenient consultants, and match the patient's requirements in terms of the speciality, sub-speciality and even the type of procedure the consultant performs. We then provide members with a choice of convenient and relevant consultants who guarantee to charge within our monetary limits, meaning there will be no additional fees for their treatment, which is a frequent cause of complaints.
Customer feedback has been positive: we've seen a 27% uplift in customer satisfaction for those referred this way, relative to a control group who were not. There's a financial benefit too: initial premiums for corporate customers on this arrangement will be lower than for those on a traditional referral path, and further savings will accrue in subsequent years. As savings are incremental, the cost of delay is significantly more over the period.
Open referrals have also enabled us to respond to corporate clients, who tell us that they want their employees to receive quality healthcare but to not have to pay any shortfalls.
Savings are important, but the real opportunity is to ensure members have continued access to high-quality healthcare. Initial indications are that combining the data and statistical analysis available to an actuary with information about clinical practice available to the insurer will enable us to improve health outcomes - for example, reduced repeat admissions. But this is a longer-term aim. Getting the metrics and measurement right is critical - and complex.
As an afterword, a short personal anecdote: I was recently sitting in a GP's consulting room and he needed to refer me to a consultant. Unable to identify anyone from his Filofax, he turned to Google. Would you rather be referred by Google or via objective analytical information about clinical practice?
Adrian Baskir is head of pricing and actuarial, Bupa Health and Wellbeing
For this reason, our review of the way in which patients are referred from primary to secondary care is particularly interesting.
Today in the UK, as in many other countries, accessing healthcare starts with a visit to the general practitioner. Traditionally, when GPs recommend that a patient sees a specialist privately, they provide a referral to a named consultant or local private hospital.
However, as research carried out by the UK's Office of Fair Trading shows, GPs often have limited information about a consultant's care practices, patient experience or private charges. This means when insured members need specialist care, they are often referred to a consultant based on 'informal' information, and sometimes experience unexpected top-up fees, because the consultant charges outside the health insurer's monetary limits, which the GP would be unaware of.
Conversely, health insurers have access to a wealth of data. We know how many patients have been to a particular consultant or hospital and where readmissions have occurred, because we provide members with pre-authorisation for consultations and treatments, and receive and pay the bills. We also have access to more objective data about individual consultants than is available to an average GP.
This led Bupa to introduce 'open referrals' in January, following successful testing with several corporate clients and our own employee health insurance scheme. Members ask for an open (as opposed to a named) referral. When they call us, they are given a choice of two or more consultants.
We use a simple algorithm based on patient and providers' postcodes to find convenient consultants, and match the patient's requirements in terms of the speciality, sub-speciality and even the type of procedure the consultant performs. We then provide members with a choice of convenient and relevant consultants who guarantee to charge within our monetary limits, meaning there will be no additional fees for their treatment, which is a frequent cause of complaints.
Customer feedback has been positive: we've seen a 27% uplift in customer satisfaction for those referred this way, relative to a control group who were not. There's a financial benefit too: initial premiums for corporate customers on this arrangement will be lower than for those on a traditional referral path, and further savings will accrue in subsequent years. As savings are incremental, the cost of delay is significantly more over the period.
Open referrals have also enabled us to respond to corporate clients, who tell us that they want their employees to receive quality healthcare but to not have to pay any shortfalls.
Savings are important, but the real opportunity is to ensure members have continued access to high-quality healthcare. Initial indications are that combining the data and statistical analysis available to an actuary with information about clinical practice available to the insurer will enable us to improve health outcomes - for example, reduced repeat admissions. But this is a longer-term aim. Getting the metrics and measurement right is critical - and complex.
As an afterword, a short personal anecdote: I was recently sitting in a GP's consulting room and he needed to refer me to a consultant. Unable to identify anyone from his Filofax, he turned to Google. Would you rather be referred by Google or via objective analytical information about clinical practice?
Adrian Baskir is head of pricing and actuarial, Bupa Health and Wellbeing
