Editorial Friday 23 December 2011: Goodwill to all men? Not from BMI to BUPA

Goodwill to all men? Ahem. Not from private provider BMI to insurer BUPA, as the following letter sent yesterday from BMI's chief executive Stephen Collier to their consultant suppliers reveals.

Cah. Purchaser-provider splits, eh?

Still, cracking opportunity for the NHS to get in there ... private patient income caps permitting.

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Click here for details of 'Be jolly, bottom-up”, Comrade Sir David tells NHS - 'tis the season to, apparently', the new issue of subscription-based Health Policy Intelligence.

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"This is going to be a hard few months for us all – BMI and consultants.

"Despite our best efforts we have not been able to bridge the gap between Bupa’s request for a massive price reduction, and the continued quality and financial viability of BMI’s service to patients.

"Bupa continues to insist on an across the board near double digit percentage price reduction, and the most we are able to do is a short term accommodation to help them meet their financial pressures. This is something that Bupa was not prepared to accept. The reality is therefore that we will not now achieve a pricing agreement with Bupa, and we will be out of contract and out of network from 1 January 2012.

"This situation is nobody’s preferred option. With its 42% share of the PMI market Bupa is in a powerful position to dictate price, hospital network coverage, and open referral pathways. I very much regret that, as a result, consultants and patients are being drawn in to what is a commercial and pricing negotiation between Bupa and BMI, but given the likely end-point of a delisting of most BMI hospitals, this is inevitable.

"We do not believe that prohibiting its subscribers from using most BMI hospitals is a strategy that will increase Bupa’s market share, and clearly we will be working collaboratively with those insurers which do want to list BMI as an option for their subscribers. It will take time for this to deliver increased activity, and therefore we cannot count on this to address the immediate challenges of the removal of Bupa-funded patients from most BMI hospitals. As things stand today, Bupa has told us it wants to continue using some hospitals, but we are in a debate about the price of that, given the 70% reduction in volumes that Bupa is implementing.

"In the short term, Bupa-funded patients who have already been pre-authorised before the end of the year for treatment after 31 December will be funded by Bupa at all BMI hospitals, but no new patients will be pre-authorised by Bupa for treatment or investigations (except MRI and cataracts) at delisted hospitals after that date. As a result, from around mid-January BMI expects its volumes of Bupa-funded work to fall dramatically. This will create significant capacity within our hospitals, but there are things that you can do to help, for example:-

"Securing now the necessary pre-authorisations for Bupa patients needing treatment in early 2012, as Bupa will continue to fund such patients;

"Telling Bupa patients what this will mean for their future treatment – perhaps letting them know exactly which local units they can look forward to being treated at in the future;

"Bringing your other - non-Bupa funded - patients to the hospital, where they will be warmly welcomed, and

"Reminding GPs that they have the Right to Refer to which consultants they choose, and to which hospitals they choose, whether for their NHS or their private patients.

"But the best advocates for BMI’s hospitals are satisfied consultants and satisfied patients – whether Bupa funded or not. Delivering on this is very much in the hands of our staff, and their enthusiasm and positive approach to patient care is critical. Your engagement in supporting our staff at this time would be greatly appreciated. Maintaining high service quality must continue to be our combined priority.

"I have said to a number of you at the various regional and local events and MACs that I have attended that BMI would face a number of challenges in the year ahead. This is the first. But I am confident that we can address and resolve each of these – and emerge stronger as a result – provided we have the active support of our consultants in helping defend what we have together created within BMI".