Price-cutting followed by cost-cutting would create “commoditisation hell” for the private medical insurance sector, warned Dr Natalie-Jane Macdonald, managing director of Bupa Health & Wellness.
Speaking at the Association of Medical Insurance Intermediaries annual exhibition and conference in Leicestershire on July 1, Macdonald warned that advisers need to ensure clients understand the way healthcare can help their businesses weather the economic downturn.
Pointing to more than 30 studies of return on investment on workplace healthcare, with business benefits ranging from between £2 and £34 per pound spent by management, Macdonald urged intermediaries that adopting a cost-cutting approach would be negative for the PMI industry.
Macdonald said that intermediaries could not expect any decline in NHS performance to affect the desirability of private medical insurance any time soon, as such changes in mindset do not happen quickly. But intermediaries could expect a modest upswing in consumer confidence through the year, she said.
Macdonald said: “There are two directions the industry could go. We could see price cutting followed by cost-cutting. We describe this as ‘commoditisation hell’. This is very dangerous because if anything is not a commodity it is the health of ourselves, our kids and our employees. Or the other approach is reinvention. We can help companies to weather the recession with a strong workforce.
“Improvements in the NHS were slow to impact people’s attitudes to private medical insurance and a decline in NHS performance, in terms of waiting times for GPs and waiting lists for surgery will be slower than people think too.”