11 things that will change your work by 2020

An explosive and detailed analysis for Independent Practitioner Today by leading specialist medical accountants Stanbridge Associates has identified 11 big changes doctors can expect to see in private practice over the next five years.

The Stanbridge Report 2bIndependent practitioners and the private practice market in the UK are facing a period of unprecedented change.

The impact of this year’s general election results, changes in organisation and practice in the NHS, the impact of the Comp­etition and Markets Authority’s (CMA’s) October 2014 ruling, and the aggressive fee reducing strategies of some insurers are just a few of the pressures for changes affecting the sector.

Whatever happens, those practising in 2020 will be working in a vastly different environment than those today.

Rugby ballCHANGE 1:

Seven-day working in the NHS will be the norm

Many sectors in the community now have to work a seven-day week. The old days of a nine-to-five environment, Monday to Friday, for a professional have gone for many.

By 2020, consultants with an NHS appointment will have to work on a ‘five days in seven’ contract, effectively on a rotational basis.

This increased flexibility will make it harder for many to plan and organise their private practices. Private clinics will have to become more flexible – and, in turn, could be carried out at weekends.

This will introduce more flexibility in the market place and, as a result will result, paradoxically, in an increase in the number of private patients for many consultants.

The proposed changes in the NHS will have positive long-term tax benefits in the private sector.

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More consultants will have a second job with a private hospital

With the NHS already accounting for close to 30% of the spend in the private sector, there will be an increasing number of consultants who choose to take a second salaried job with a private hospital.

The potential advantages for them are many. If they do NHS work alone, they do not have to incur the huge cost of indemnity insurance.

Secretarial and other costs will be borne by private hospitals and they will not have total patient responsibility.

This phenomenon has happened in the US and some private hospital groups are known to be looking at strategies as how best to take advantage of this trend over here.

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Private practice will be confined increasingly to London and the South-east

Already it is estimated that more than 50% of private practice is conducted in this area. The proportion of self-pay is much higher in the South-east than elsewhere.

In addition, overseas patients, with one or two notable exceptions, do not venture out of London and are seen by London-based consultants.

There will be obvious exceptions to this trend, but it will be increasingly difficult to find consultants engaged in private practice in the rural shires of England and in the extremities of the UK.

Patients will increasingly be seen to travel to the South-east for their treatment. A return to the glory of Harley Street?

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Groups will dominate private practice

Accurate information is very hard to find, but groups now appear to account for between 15-20% of the patient spend on consultancy fees in the UK.

Groups have been shown to increase disposable income of their members. Patients like groups, consultants like them, and hospitals feel comfortable with them.

At Stanbridge Associates, we anticipate that insurers – despite AXA PPP’s challenge to the CMA rulings – will increasingly see the merits of doing business with groups and negotiating group rates.

As a result of this, we would expect to see a new breed of professional group practice managers emerging.

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There will be sharp growth in self-pay

Figures suggest that an increasing number of people are establishing their own private savings schemes to meet the cost of future medical bills.

Published data suggests that the number of insured individual patients has declined in recent years as a result of recessionary pressures, rising premiums and increasing confusion as to what personal private medical insurance actually offers.

With the anticipated recovery in the economy and increase in disposable income, we anticipate that people will save themselves rather than return to insurers.

The situation will, of course change drastically if tax relief were ever to be introduced on private medical insurance premiums.

Evidence from around the world is mixed, although it suggests that tax relief does stimulate demand.

If the economy improves, there is increasing pressure on the NHS and the Labour party falls in to disarray, we could possibly see the introduction of tax relief on medical insurance premiums by 2020. The odds, however, at this stage are still pretty long.

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An arbitration system will be operational to determine consultant-insurers’ disputes

A large number of consultants will have tales of alleged bad treatment and bullying by some insurers.

Some consultants have had their recognition removed by insurers for the flimsiest or very dubious reasons.

Individual efforts can reverse such decisions, and some insurers are sympathetic to consultant views when errors are made. However, there is no formal system of arbitration or redress.

This situation will change by 2020. Some doctor groups, such as the Independent Doctors Federation, are already in negotiations with insurers.

By 2020, it is believed that a proper independent system will be in place to formally assess disputes between consultants and insurers.

There will be more openness and consultants will generally feel less aggrieved. Some of the worst insurer behaviour over the past five years will be a thing of distant memories.

 

Rugby ballCHANGE 7:

There will be a rise in real terms in consultant fees from insurers

Insurers do need consultants on board if they are to grow their market.

Over the next few years, we can expect to see a number of charm offensives from insurers reversing pressures over the past five to ten years.

There will be a difference. All consultants believe they provide a ‘quality’ service. Insurers take this for granted.

We can expect to see an increasing interest in remuneration packages for consultants linked into their economic and financial efficiency. This means the more efficient they are and the more they save insurers money, the better they will be rewarded.

The science of measurement in economic terms of consultant quality is still very young.

By 2020, it will be commonplace and insurers will use the vast amount of data they have to differentially reward consultants.

We can also expect to see the formal introduction of part payment, top-up fees or partial insurance cover.

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Rulings from the Competition and Markets Authority will be softened

While some of the CMA rulings in its October 2014 directive are theor­etically sound, there are practical implications.

Already, for example, its ruling that consultants cannot have in excess of 5% shares in certain undertakings is resulting in some unforeseen effects – discrimination against doctors, more power to hospitals and a reduction in competition.

Given that many consultants charge the same fees – they have to under the Bupa open referral and similar schemes – much of the investment into obtaining fees comparative data may prove to be irrelevant. In any event, many patients do not choose their consultants on price alone.

Overall, we would expect that some of the rulings will be reversed or overtaken by events, since they are not necessarily appropriate to the natural pace of market changes.

Rugby ballCHANGE 9:

There will be less medico-legal work

One of the phenomena of the past few years has been a significant growth in medico-legal work. This has followed the American pattern of behaviour in an increasing litigious environment.

Many NHS trusts are facing increasing claims and these are becoming very expensive. Some indeed are spurious and the days of the ambulance-chasing solicitor have not totally been eliminated in practice.

Over the next five years, we would expect an increasing debate on the concept of a ‘no fault’ culture as evidenced by countries such as New Zealand.

The introduction of changes along this model will have the effect of reducing claim costs on both the NHS and private sector.

There will be, in time, a decline in the inexorable rise of premium costs on the one hand. On the other hand, there will be a decline in incomes for those who have increasingly turned to medico- legal work.

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There will be a decline in numbers of consultant ‘characters’

The days of the mega-practice are already probably in decline, save in London.

Younger consultants have more sub-specialisation than their elder colleagues and have been trained in an era of EU working time directives and human rights.

For many younger consultants, family life is more important than their private practice potential and the hard work it entails.

As a result of these changes in work-life balance in society in general, we would expect to see a gradual decline in the number of large practices run by ‘characters’, who satisfy the three ‘A’s – affability, availability and ability, in that order.

The consultants of the future will generally be less ambitious and will work fewer hours than their predecessors. As a result, private practice delivery will become more regimented.

Rugby ballCHANGE 11:

The electronic revolution will take off

In business terms, perhaps the most dynamic expected change in the market will be the result of the electronic revolution.

This is already being eagerly embraced by younger consultants. We can expect to see consultants using Skype from home, greater use of social media, Facebook as a measure of quality and very fast interchange of information that will be totally alien to many practices.

Personal contact and recommendation will increasingly be succeeded by machine recommendation.

Ray StanbridgeConclusion

Of course, it may be that not everything discussed above will happen. Other changes will force their way in too. But at the very least, all those involved in the private medical sector market in the UK will have a fascinating, if not bumpy, ride over the next five years.

Ray Stanbridge (right) is a specialist medical accountant with Stanbridge Associates