Health policy aims cover towards NHS pay beds: Budget medical plan may give a boost to threatened public sector

WESTERN Provident Association, the third-largest medical fees insurer, is to launch a policy next month that it says offers dramatic reductions in premiums for private healthcare while putting money into the National Health Service.

WPA reckons that if all its subscribers opt for the policy - a somewhat unlikely scenario - it would put an estimated pounds 50m a year into the NHS. The key to the policy, called Astute, is that the cover must be used for 'pay beds' in NHS hospitals. There are more than 3,000 pay beds in the NHS, compared with 13,000 beds in the private sector. Several hundred of the NHS private beds are in London, including more than 40 in the Lindo Wing at St Mary's. Nearly all the hospitals at present under threat of closure, including Charing Cross and Queen Charlotte's, have private beds.

WPA's cover will meet in full the charges for a stay in an NHS hospital. Visits to a consultant outside the NHS hospital will also be covered.

Julian Stainton, managing director of WPA, explained the aim of the policy: 'Thousands of people are having to give up private medical insurance because of the costs. By reverting to the NHS, we can keep costs down and patients can have the very high quality treatment available at NHS hospitals.

'If we can encourage people to fill the private beds, it is a lot of money being generated for hospitals in London and elsewhere, and you will know that every penny of profit the hospital makes will go to help your next-door neighbour.'

But how many patients are concerned about the good of the community when buying medical insurance? The lack of choice of hospitals may be more relevant. People who pay for private care want to choose where they go for treatment.

With any preferred hospital scheme, there is also the problem of GPs who may recommend a particular consultant who does not work in an NHS hospital with pay beds.

Private patients also expect a modicum of pampering. Penny O'Nions, a doctor and a director of De Havilland, the financial intermediary, said: 'People who are used to private hospitals and would now use NHS pay beds could, in some parts of the country, be disillusioned with the 'hotel' side of their treatment. Staffing levels may well be lower, and the food will often be the same as in the NHS ward - perhaps with a sprig of parsley on the fish.

'The cost of the Astute policy will be the crux. If it is cheap enough, then peple will put up with the restrictions.'

Full details of the premiums have yet to be released. However, Astute will be much cheaper than WPA's conventional fully comprehensive health policies.

WPA reckons existing subscribers can cut their premiums by between 20 and 40 per cent. Others will be able to freeze premiums at last year's level but keep all the same benefits.

Under the terms of the policy, in the event of an NHS pay bed not being available, WPA will provide pounds 450 a day for hospital costs. Patients would then negotiate the cost of their stay with the private hospital.

Mr Stainton admitted there might be a shortfall with some of the high-priced private hospitals. 'The negotiating power of patients is such that, if you say you only have insurance for pounds 450 a day, many hospitals will only charge you that amount.'

If you apply for an Astute policy you are given a copy of the WPA Guide to Hospitals and Treatment, listing all private hospitals and the NHS hospitals that have private beds. It also lists the facilities in private hospitals, such as whether it has an intensive care unit, a resuscitation team or scanning equipment. 'We tell you about the services you get, not just the quality of the flowers,' Mr Stainton said.

Another insurer believes the shake-up of the health service in London could in the long term bring lower premiums for private health cover. David Cavers, managing director of Norwich Union Health Care, said there was a glut of unemployed consultants that could result in their being taken on staff by private hospitals.

'At the moment there is a growing interest in package- pricing for hospital treatment. If the consultants were employed, you would include their cost in the package as well. It would certainly get the costs down if they were employed on a salary, rather than us having to pay them for all those part- time sessions.'

(Photograph omitted)