There will be no true innovation in private medical insurance (PMI) without a public private partnership (PPP).

This is according to the chair of the ABI's private medical insurance committee (PMIC) and chief executive of Standard Life Healthcare Mike Hall.

"There is an inadequate dialogue between the public and private sectors in terms of funding," he said. "It is seen as politically off the agenda, but the government has a fight on its hands."

Hall suggested increased taxation would not help the NHS long-term because the service would need more and more taxes. "The higher taxes will be an extra cost to businesses. People will feel pain through their payslips next year and then start thinking seriously about health." Hall said this was where the private sector could come in.

"The NHS should do the things it does best, like cancer and heart surgery and not spread its resources across everyone and everything. PMI premiums would decrease."

Hall said these ideas were being lobbied by the PMIC.

He said another issue being dealt with by the committee was PMI's problems with innovation and market share.

"The smaller insurers need to be more nimble and consider ideas the larger companies are more reluctant to consider," he said.