The media storm over 'top-up' patients losing their NHS care – and the resulting government review – could change the face of the health service. Katie Puckett finds out what this means for insurers. Illustration by Jonathan Edwards.

When Linda O’Boyle was refused NHS treatment in the later stages of terminal bowel cancer, her case provoked national outrage. O’Boyle, a retired health worker, had spent £11,000 of her savings on a private course of cetuximab, a drug that had the potential to prolong her life. When she returned to the NHS, she was told that her choice of “co-payment” meant she was considered a private patient and had to pay for all her treatment.

O’Boyle died in early June . But the issue of top-ups – paying privately to receive treatment not available through the health service, without losing access to other NHS services – continues to resonate.

This is a complex and divisive issue, one that cuts to the heart of debates around healthcare for the 21st century. The only thing all sides agree on is that the current system is unworkable.

After all, why shouldn’t someone spend their money as they choose while claiming the healthcare services they’ve been paying for through their taxes? On the other hand, politicians are understandably terrified of the prospect of a two-tier system where patients in neighbouring beds suffer different fates based on their income.

The government has put proposals out to consultation until the end of January. The move follows a four-month review of top-up fees by “cancer czar” Mike Richards, a professor and oncologist, who was commissioned by the government in June to conduct a review of the provision of drugs on the NHS. Earlier this month, he reported back with 14 recommendations that focused mainly on improving patient access to drugs through the NHS, but also opened the door for top-ups as a last resort. Ministers gave the report unqualified support.

While critics accuse the government of creating a two-tier system, most insurers are waiting to see what the changes will be before they jump into the market.

AXA PPP, already considering top-up policies, anticipates a large market. “It’s hard to be definitive about this but top-up cover could, in theory, appeal to anyone not already covered by medical insurance – so, potentially, there are another 25 million-plus adults who may be prospective customers,” says Fergus Craig, commercial director at AXA PPP.

A number of things will need to be taken into account, he adds, including the cost of the private drugs and associated treatment costs – whether NHS staff and facilities are used, for instance. The treatment of side-effects and monitoring of tests also need to be considered.

Nick Kirwan, head of health and protection at the ABI, agrees that more detail is needed about what the NHS will and won’t pay for. “We’d like to see a product that’s very affordable for pretty much everyone, including low income households.

“It could be a very well defined insurance. You’re not taking out private medical insurance that provides you with absolutely everything – just a top-up for only a few pounds a month. It would be something that many people would consider. I know I would.”

Meanwhile, Norwich Union Healthcare has been reviewing its policies in this area for the past six months. Doug Wright, head of clinical governance and a former GP, says top-up policies are likely to focus on cancer. “That’s the most obvious one ... it’s also more short-term and there are lots of new drugs and new technologies,” he says.

The insurer will probably launch an update to its existing policies, and a standalone top-up product, but not until next year when it rebrands to the Aviva name.

WPA offers a product called MyCancerDrugs, which provides up to £50,000 towards advanced cancer drugs, where a policyholder’s annual premium is equal to their age (but double for smokers).

A spokesman for the insurer says no one has made a claim yet, so there has been no opportunity to test the product. But he adds that WPA would consider funding a legal challenge and private care if a patient was turned away from the NHS.

The tension between equal treatment for all and freedom to spend your own money as you want has existed since the NHS was founded in 1948. But as more expensive treatments are developed, the cracks in the health service’s provision of comprehensive care for all are beginning to widen.

For insurers, this means an opportunity to develop healthcare products that could help to fill the gap – and appeal to a potentially huge market.

Kirwan says: “[Self-funded] top-ups are only really a practical choice for people who are very wealthy. There are real human dilemmas here. If you’re single you may make the choice to sell your house but it’s very different when you have a family.

“If the government wants to allow people to top up, insurance is the only practical option for most. You could save, but it would take a long time to get enough and what if you get cancer before then? Pooling risks could become something that most people decide to do. It becomes a practical choice rather than a theoretical one.”

There still would be a place for new policies, even if the National Institute for Health and Clinical Excellence (Nice) approves more drugs for use on the NHS. New treatments are constantly developed and cross-selling opportunities for travel, consultation and legal advice would evolve.

Several existing policies could be adapted. Critical illness cover – which pays a lump sum when a patient is diagnosed with a life-threatening condition – could be revamped to pay for drugs and treatment, as could cash plan or deposit schemes.

Another option is what National Deposit, a mutual friendly society, already offers. It has deposit accounts where half of an individual’s monthly premium is saved, building up a cushion that pays for 10% of their treatment should they fall ill. The annual allowance is 500 times the monthly premium, so £20 a month would allow a patient to claim £10,000 of treatment.

Neil Thompson, the product manager, says the plan already allows patients to move between public and private care. “Some people are quite happy to use the NHS if a public hospital is closer to them than the alternative, for example. Or they might have diagnostics done privately – everyone wants to have them done as soon as possible – and then transfer to the NHS for chemo or radiotherapy.”

It seems obvious that all insurers should get in on the action. But private medical insurance remains most easily adaptable to short-term, acute conditions – diseases that are treatable, as opposed to chronic conditions where only palliative care can be provided. This is why it may be harder to develop policies for a disease such as Alzheimer’s, also the subject of dispute over expensive new drugs.

Even if top-ups are allowed, the government has indicated that patients will only be eligible if treatment is delivered away from NHS wards and patients pay for any tests or scans associated with the treatment. Private medical insurance is not traditionally structured along such rigid lines.

Opponents of top-ups also fear that relaxing the rules will dismantle the NHS, in favour of an insurance-based system.

But on this point, Richards says: “A small minority of stakeholders argue that clarifying the circumstances in which patients can purchase additional drugs without losing their entitlement to NHS care should be a precursor to moving towards an insurance-based system. I want to make clear from the outset that I do not accept this premise.”

The row highlights inequities and inconsistencies in the system. Even if top-ups are permitted, grey areas need to be resolved. Even if all top-up treatments and tests associated with them are carried out away from NHS wards, what about any side-effects from new drugs and their interaction with NHS treatments? What if an NHS in-patient can’t physically move elsewhere when a top-up treatment is due?

The government says these issues will be resolved on a case-by-case basis. But that would make it difficult for insurers to assess the risks accurately.

Either way, AXA PPP knows what it wants: “We’d like to see an NHS much like the one we have now but with greater clarity of patients’ entitlement to NHS treatment so people can make better informed choices when trying to secure healthcare provision for themselves and their families.”

What are top-ups?

NHS top-ups are already common in many areas – prescription charges, dentistry, even hospital parking. Patients may pay for a private room in an NHS hospital and couples purchase fertility treatment privately and go on to use NHS maternity services.
The recent furore over "co-payments" specifically concerns cancer drugs and has come to the fore in recent years as the list of potentially life-saving drugs not available on the NHS has grown.
Since 1999, the National Institute for Health and Clinical Excellence (Nice) has been responsible for assessing new drugs on a cost-effective basis. Although the media has been heavily critical of Nice, the King's Fund, a health think tank, says the authority has rejected only four of the 56 cancer drugs it has assessed.
But Nice can be slow to make decisions, something the Department of Health has pledged to address. The department also says it is looking to ensure more drugs are available on the NHS.
Patients may still apply to their local primary care trust (PCT) to receive unapproved drugs in "exceptional circumstances", but decisions vary considerably between trusts, giving rise to the so-called "postcode lottery". Even if Nice does give the green light, PCTs may not be able to afford the rising cost of treatments – some of which can total £5,000 a week.
The top-up cases highlighted by the media have concerned patients who either bought unapproved drugs or paid for drugs their PCT said it could not afford.
Top-ups are not expressly forbidden under the law as it stands. The position is murky – and made more confusing by the differing interpretations of PCTs across the country. This is what everyone hopes the Richards review will clarify.