{"id":625745,"date":"2026-10-09T20:58:11","date_gmt":"2026-10-09T20:58:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/625745\/"},"modified":"2026-10-09T20:58:11","modified_gmt":"2026-10-09T20:58:11","slug":"insurance-model-is-no-substitute-for-the-nhs-healthcare-industry","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/625745\/","title":{"rendered":"Insurance model is no substitute for the NHS | Healthcare industry"},"content":{"rendered":"

In Dining across the divide<\/a> (4 October), the young participant, Ted, is quoted as expressing his \u201cdesire to abolish the NHS and replace it with a social insurance model. This would still have provision for free treatment at the point of need, but people would pay\u00a0through insurance systems, and they would choose the level of\u00a0cover they\u2019ve\u00a0got. Those models\u00a0deliver far better outcomes\u00a0for patients.\u201d<\/p>\n

As a retired insurance underwriter, I must disagree profoundly with Ted\u2019s assertion. Let\u2019s concentrate on business fundamentals. Insurance<\/a> comes in two \u201cflavours\u201d: first, events that become likelier as time goes on \u2013 eg,\u00a0life assurance. The older you get, the more likely you are to die and the more premium is needed to\u00a0cover the risk; and second, events whose likelihood stays essentially the same over time, eg\u00a0home insurance \u2013 the likelihood\u00a0of a house burning down\u00a0is much the same for everyone and the cost is spread evenly between policyholders.<\/p>\n

Clearly, medical insurance is flavour one. Premiums need to rise with age. To reduce premiums and keep customers, insurance companies apply ever-increasing \u201cexcesses\u201d and \u201cco-pays\u201d and can refuse to cover pre-existing conditions. The more you need medical insurance, the more expensive and difficult it is to get.<\/p>\n

There is also the business case. When you buy an insurance\u00a0policy,\u00a0premiums are\u00a0calculated to include the cost of\u00a0claims (about 60%); administration (about 10%); sales\u00a0(about 20%); shareholder profits (about 15%); less investment\u00a0returns (about 5%).<\/p>\n

In contrast, an NHS-style system does not require either sales costs or shareholder profits. Of course, there would be no investment return \u2013 but nevertheless, it is still about 30% cheaper to operate than an insured healthcare system. Like\u00a0most sound business ideas, it\u2019s\u00a0simple arithmetic.
Susan Jones
Biggin Hill, London<\/p>\n

Have an opinion on anything you\u2019ve read in the Guardian today? Please email<\/a> us your letter and it will be considered for publication in our letters<\/a> section.<\/p>\n","protected":false},"excerpt":{"rendered":"In Dining across the divide (4 October), the young participant, Ted, is quoted as expressing his \u201cdesire to…\n","protected":false},"author":2,"featured_media":625746,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[134,527,111,139,69],"class_list":["post-625745","post","type-post","status-publish","format-standard","has-post-thumbnail","category-healthcare","tag-health","tag-healthcare","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/625745","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=625745"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/625745\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/625746"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=625745"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=625745"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=625745"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}