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Healthcare trust – large surplus or false sense of security?

Healthcare trust – large surplus or false sense of security?

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Running a healthcare trust can be a balancing act at the best of times. Making sure the P11d rates are set correctly, ensuring the funding level is adequate, and having a back-up plan in case your scheme slips into the no man’s land before the stop loss insurance takes over. However, most healthcare trusts are seeing a significant surplus accruing – so does this mean trusts are getting richer? In short, no.

In March 2020, the United Kingdom entered a period of lockdown, with private hospitals reserved by the NHS for the treatment of COVID-19. This meant a significant drop in the level of usage under private plans, and healthcare trusts that have allocated a year’s worth of funding are nowhere near close to using it. But there are a few considerations to think about before dropping your 2021 rate to an all-time low.

Medical conditions don’t go away on their own. As much as some of us like to try this approach, rather than seeking medical intervention, unfortunately it’s usually the case that the longer you leave it the worse it becomes. Therefore, in the private pipeline, we have several postponed cases from March to June which will need to be treated sooner or later.

Employees still get sick after lockdown. Whilst most of us are not daring to cough or sneeze at the wrong time, the reality is COVID-19 is a very small percentage of illnesses in the UK and whether we are in the workplace or working from home, employees will still require their private plan at some point.

Hospitals only opened in June, and this was under strict guidelines. For example, a patient must quarantine for 14 days prior to entering a facility. This will further postpone some treatments that are not considered as critical, particularly by the patient.

Now for some brighter news. In the last couple of months, we have seen the COVID infection rate drop to a significantly lower level than in March when we entered lockdown, and restrictions are gradually being lifted. At some point, we will have to go back to normal. This means on the list of pending treatment, we have postponed cases from March to June and new cases from July to August. There is also a fair debating point that employees who do not normally use the private sector, may feel more comfortable in a private facility than using the NHS and as such, these could also be adding to the list. This is presuming we are on the path back to normality at some point soon. If this is the case, it is likely the spike in claims will be plateaued over a longer period rather than an immediate rise and fall; however as a trust, you still need to ensure adequate funding.

So, in short, whilst the surplus maybe looking healthy now, it will be required in the coming months. Sensible planning and funding will ensure the continued sustainability of the trust which can then continue to provide a valuable benefit for employees for many years to come.

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