HM Meets… Subashini M

PMI is enjoying something of a boom as NHS waits continue to grow. But can insurers meet the costs of rising demand particularly in areas of high medical inflation such as cancer care. Aviva medical director Subashini M will be discussing the challenges and opportunities at LaingBuisson’s Private Acute Healthcare Conference on 11 October. HM caught up with her ahead of the event to talk about the demand drivers, growing interest in private healthcare and the company’s approach to commissioning services

Demand for PMI is on the rise. According to the latest figures from LaingBuisson, there was a 4.7% jump in the number of people covered by PMI or enrolled in health trusts in 2021 and anecdotal evidence from insurers suggests the trend is continuing, perhaps even accelerating, despite the precarious economic climate. In the first quarter of 2023, insurer Aviva reported a 25% leap in health sales with particularly strong performance in the corporate sector. Subashini M took over as the company’s medical director earlier this year and is focused on ensuring this growth is accompanied by a drive towards value-based healthcare.

What do you think are the main driving forces behind the increased interest in PMI?

It’s a combination of factors. I think workplace health is becoming a key priority in employers’ minds. There is a lot of competition for talent, so they need to make sure that there is a really good benefits package and one element of that is keeping people healthy.

The second thing is the NHS. Everyone is aware of the struggles in the healthcare system, and the difficulty of accessing care in a timely manner. So, from emergency services to referral from primary care to secondary care, there is a logjam in every aspect of the service. We all know there are 7.4 million people on the waiting list but we don’t know how much that captures the numbers of people who are unable to function in their full state of health.

The third thing that’s driving it is a shift in consumer attitude. People want to take a more proactive approach to their own health and since the pandemic have begun to realise that actually health is wealth. Combined with the fact that people are sometimes too unwell to work, this is another driver. It’s not one particular thing that’s driving demand, but a combination as people realise there are different ways of accessing healthcare.

Do you think increased interest in PMI is sustainable or is it still vulnerable to the performance of the wider economy?

Traditionally, it’s been the case that PMI demand fluctuates with economic performance, but now there are also other factors at play, such as the continued pressures on the NHS and the need for people to prioritise their health in order to stay in work. We are predicting that high demand is here to stay. I think the self-pay market might be levelling off, partly because of the economic climate and consumers becoming much more price conscious, but PMI has a different customer segment.

There are still a lot of unmet health needs in the population and it is not clear how quickly the NHS can get into a position to serve those needs. I don’t think it’s going to be a quick fix, but on top of that, PMI is no longer just a product to pay for private medical bills. In the corporate sector, in particular, customers are not just looking for reimbursement, they want health and wellbeing benefits. So, we are looking at things like fertility, menopause and neurodiversity pathways alongside other aspects which are not necessarily met by the traditional product.

I think higher demand is not just more people wanting the same kind of service, it’s more people wanting more kinds of support and in a very holistic sense as opposed to just wanting treatment when they are unwell.

Are these shifting consumer demands driving more innovation at the lower cost end of the PMI market?

We are seeing more demand from people who would not have previously thought about PMI, both at an individual and corporate level because individuals want to be able to ensure they can stay in work and businesses want to know that they can survive. Price has been a barrier to comprehensive PMI, so we’re making sure that the lower cover products are designed innovatively. We have launched three different tiers of cancer cover for corporates to help them tailor products for their workforce. We are also looking at how we can personalise cover and focus on prevention and proactive health management.

Alongside increased sales, are you seeing an increase in claims as more people turn to private healthcare?

Initially in 2021, there was a dampening of claims demand and activity, but we are seeing the number of claims in 2022/23 going ahead of what we had experienced pre-pandemic, so it feels like there’s a little bit of that pent up demand coming through. People are using their private healthcare product in a slightly different way. Where previously they might have gone through the NHS first and then used their private health benefit, now they are looking at what their benefits cover and accessing private treatment first.  We are seeing people accessing their policies for low value claims, so almost using private care as a substitute for NHS provision.

As more people use private healthcare and their private health cover, how can insurers continue to manage costs?

Cost is just one element. Our approach is value-based healthcare, so the value equation is outcomes over costs and what we look at is what does the customer need, what is the commercial benefit and what is the clinical unmet need. Then we have to balance how we focus on the health treatments that give the best outcomes while minimising those that do not necessarily deliver the same results. That means things like ensuring what we fund is in line with the best clinical guidance and making sure that we reduce waste in healthcare.

We are really focused on being a commissioner of care. That means moving away from that reactive, passive bill payer model to working hand in hand with our suppliers. Key examples are the treatment pathways and networks we have launched where we are working closely with providers to focus on outcomes and a reduction in unwarranted variation to get best value.

How are you managing costs in areas such as cancer care, where there is high medical inflation combined with new treatments?

We are not seeing a big increase specifically in cancer claims at the moment but we know this could be an issue coming down the road. The Cancer Research UK report found that between 2023 and 2040 there could be 8.4 million new cases of cancer diagnosed. That’s an increase of 32%. On top of that, we also have medical inflation. For cancer specifically, there are new drugs coming through. To give you the quantum, 2012 to 2016, there were 11 new molecules and substances developed to tackle cancer, but from 2017 to 2021 there were 21 new oncology launches. Because the drugs are effective, people are living longer and will need to continue with them. And the same applies to radiotherapy. Because treatments are becoming so effective, people are living longer and it is becoming increasingly expensive to deliver.

How we mitigate this is to be really robust in terms of the value we are getting. One of the problems is that once a drug is licenced by the FDA or MHRA, people continue using it even when research shows it doesn’t work to increase quality or quantity of life. We definitely need more discipline in the system to ask are we funding the right treatment at the right time.

At the moment, services are also quite fragmented, so again we need to have the discipline to be really customer-centric and ask if we are getting the right group of treatments together with the right oversight.

As an insurer, we need to lean into the position that we’ve got because we are funding and need to make sure that for every pound we pay out, which is essentially the customer premiums we are holding, we are assured that it is giving the best quality care.

We have a weekly experimental panel to look at data from new drugs and we work with providers, both consultants and hospitals, to make sure we share best practice.

We also make sure customers are really active in their care pathways and have launched ‘talking through cancer’ to give people mental health support while they are going through their cancer journey. We know that this helps to reduce inpatient admissions because people feel more supported at home.

At the same time, we really need to focus on prevention and early detection. If you look at the Cancer Research UK data, four in ten cancers are caused by lifestyle factors. There is a host of things we are doing at Aviva to help support prevention. One example is our wellbeing proposition and the use of the wellbeing app to help reduce the modifiable risk factors.

We are also investing in research to support early detection, including breath biopsy company Owlstone and That helps open up access for our customers and maximises efficiencies.

Can PMI afford to cover cancer in the long term?

We can but only if people are willing to pay for it.

“You can price anything, but it’s pricing it in a way that consumers are able to afford.”

I think that’s the biggest challenge. How do you quantify the cost of a cancer treatment and whether people are willing to pay that amount of money, especially when the attitude when you’re purchasing PMI versus when you’re making a claim are so diverse. You might want to pick the cheapest product because in that moment it’s what you can afford. But when it comes to actually claiming, you want to have everything available to you. There is a mismatch of expectations and it’s something that we need to address.

As insurers, we need to do more to protect our customers and make sure there’s real clarity about what we are funding. And I think that’s the big challenge. We need to think about how we deal with the increasing number of people getting cancer; what we can do upstream to reduce that and ensure they can access diagnosis quickly. The earlier the detection, the sooner you can get people on a treatment journey and the better the outcomes.

“When it comes to treatment, we have to make sure everything we are funding contributes to quality and quantity of life.”

And then from a consumer perspective, we need to make sure that through this entire journey, customers know what good looks like and what to expect.

What are your priorities for the next 12 months?

If I go back to the four pillars of medical ethics: do no harm, make sure it is doing good, respect autonomy and treat all people equally and equitably, that is a good place to start. We need to ask if what we’re paying for is delivering the best outcomes for patients, so I plan to lead on that and how we can get the best value for our consumers. The next piece is about autonomy and customer choice. And for me, part of that is reducing health inequalities. We know that especially in healthcare, there are data gaps when it comes to gender and ethnicity, so we need to look at how we can make sure cancer care is inclusive and accessible. And then the last piece is justice and how you make sure you have a system that is enduring and sustainable both in terms of premiums and the health of the nation.

Value-based contracting and value-based healthcare is at the top of my list because value in terms of health outcomes means it has to be inclusive and accessible.

Aviva medical director Subashini M will be discussing the future of insurance-funded cancer care at LaingBuisson’s Private Acute Healthcare Conference on 11 October.