Speaking of BUPA…….

BUPA have published interim results for the first time. During the first half of 2006, BUPA’s 'surplus' (as a Provident Association they do not make profits) increased 9.6% on last year to £139.9 million. This sounds reasonably successful, but most of this has been earned abroad, particularly in their highly profitable operations in Spain where they own the 'Sanitas' medical insurance and hospital company.

The division that includes the UK insurance business actually saw a fall in the surplus by £2.8 million to £38 million. This appears to be due to higher than expected claims experience and has prompted the M.D. of this division, Fergus Kee, to declare that various steps have been taken to rectify the position.

Specifics have not been mentioned, but we know that BUPA are intent on a policy of driving patient volumes through restricted networks of providers where they have negotiated low price, while at the same time assuring a high level of quality. Their MRI Network was the first of these and has been accepted by the market with few problems. However, very few major providers were excluded and this may not be the case with future networks. We are waiting for details of the next one, covering Ophthalmology, which is due to be launched early next year, but BUPA have not been helped by the initial refusal of both the BMA and the professional body representing Ophthalmologists to co-operate with the bidding process.

BUPA’s experience on claims does not seem to be replicated to the same degree by their competitors, many of which have been able to under-price BUPA on a regular basis. In presenting their interim results, BUPA even went as far as admitting that they have been affected by the aggressive pricing of other insurers.
 

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