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Is it time to make a ‘chronic condition’ allowance standard in UK Private Healthcare?

By Andrew Supple, Partner

Healthcare Design Trends

Over the last five years we’ve seen the crystalising of a trend in healthcare design that should be starting a big conversation about where we are going with the products in this sector.

Andrew Supple

Let's Start With The Basics

Private healthcare schemes are designed to work alongside the NHS. This means that broadly ‘acute’ or short-term treatment is covered, and that ‘chronic’ or long-term treatment is not, as the NHS should pick this up.
Emergency treatment is solely the preserve of the NHS. This is a dramatic oversimplification of the approach, but we need a broad, high level, starting point shape for this discussion.

Distinguishing Between ‘Acute’ and ‘Chronic’

However, this very broad distinction between ‘acute’ and ‘chronic’ is a mess in the current private healthcare market. Cancer cover has, for a long time, blurred the lines by covering aspects of chronic and acute care.
Why is the default option based on the acute / chronic distinction not to push diagnosed cancer patients back in the NHS for treatment?
The cost of this ‘enhanced’ cancer cover is certainly making an impact on healthcare costs with some cancer claims regularly pushing beyond the £100,000 per annum mark.
It is the emotional impact of cancer that is allowing this to happen, with most employers wanting to support their employees fully with the problem of a cancer diagnosis.
However, where is this flexibility with heart disease or other serious health issues that all too often fall in to the emergency or chronic camps and thus have little support from private healthcare? Should we be diluting the acute and chronic split for a specific illness / injury?

Private Healthcare Is Expanding Into New Areas in Terms of Cover



Gender Health Issues


Stem Cells

Personalised medicine

Mental Health Issues (to name a few)...

Areas that would not have been addressed previously - as they would be seen as chronic - are now being, either reinterpreted to allow for more access to treatment, or greater guidance is being issued in how healthcare schemes can support them through ‘acute’ avenues.


What Does This Mean For The Employer?

This in turn leads to more potential to claim and greater costs for the employer.
It seems to me that we are letting cultural changes shape the market rather than the science.
Arguably, heart disease and mental health are two of the most important illnesses/injuries for employers to manage, but any serious support is often frustrated by the chronic definition.
Mental health issues are particularly important, as they are often a factor in other illness/injury, but we have thankfully seen some relaxation of the rules around mental health cover in the market due to this.
If we are looking at ‘opening up’ what we cover in the market, there is a decent case it should be in these two areas rather than elsewhere.

What can be done?

If we accept that the current acute/chronic dynamic is too simplistic for modern society and the market, then a simple solution is to bring in an annual ‘chronic’ allowance.
An example might be £1,000 per annum for any outpatient support for any condition/chronic conditions.
Several providers are already offering a form of this to their clients, such as Aviva’s catchily named ‘GP Referred Services’ Option (Group Private Medical Insurance | 250+ Employees - Aviva).
The Benefits of an annual ‘chronic’ allowance
The benefit of such an allowance would be to provide some much-needed healthcare support to employees who have previously had none, due to their condition being labelled as chronic.
This could potentially mitigate some larger costs – by helping to prevent acute flare ups of chronic conditions which would be covered – and help employers to meet some level of support for modern cultural healthcare requirements that are much in demand by employees and their families.

How will it affect claim funds?

The introduction of this allowance will put some level of pressure on claims.
Initial, very anecdotal evidence is that it is only having a limited impact on claims funds, as it is a niche offering and isn’t well communicated or understood by most employees.
However, should communication and understanding improve, it could become a reasonable source of small regular claims in the market – again driving up costs for employers.


In summary, the old acute/chronic distinction that has helped to control costs is falling apart.

Cancer has already blurred the lines and a new wave of illness/injury has support to have some level of cover under modern private healthcare solutions.

However, the more cover expands, the more claims there will be and the more pressure there is on employer costs for cover.

Can an annual outpatient allowance for chronic illness/injury be a step in the right direction in offering more support to employees, but with enough control to keep costs bearable for employers?


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