Given that US healthcare insurers have hiked their rates by 60% since 2000, how come niche player Preferred Global Health claims not to have raised its rates at all?
Chairman and CEO Paul Eckbo says the level of cover has stayed the same, at $2 million, for his 20,000 members.
He reckons the lack of a price hike reflects the fact that PGH exists to ensure that its patients get the right diagnosis and the best possible treatment for their condition irrespective of costs: "US health insurers have a one year time horizon, which means they concentrate on costs, rather than on output; this tends to lead to complications and hence to higher costs."
On the other hand, PGH’s own Outcome Optimized Policy pays directly for the best practice protocol recommended by the medical professionals. There is no opportunity for the insurer to select a lower cost.
Eckbo says that PGH quality controls the full diagnostics and treatment process across the silos of the medical sectors. He claims that this has resulted in far fewer of the preventable medical errors and complications that are so costly in terms of bad outcomes for the patient and higher costs for insurers.
Instead, PGH focuses on ensuring the best possible treatment, with each patient assigned a PGH Personal Care Manager.
This may mean finding the specialist at Harvard who is the expert in a rare condition, and getting him or her to talk to the local doctor: "Second opinions often don’t work even in a city as large as London, as the old boys network stops the patient actually getting a real second opinion. We avoid that."
Members get treatment in the top 1% of US hospitals, with high volume throughput and high volume surgeons. Treatment is guided by PGH's Harvard based medical board, a core staff of 12 and a large network of healthcare professionals and national distributors.
Eckbo reckons that, typically, the world experts on a condition are 17 years ahead of the practice on the ground, and the company endeavours, through its medical board, to close this loop as far as possible.
He adds: "A lot of this is about ensuring the right diagnosis. In the UK and Nordics this tends to be a weakness in the public sector – not enough resources are put into this stage, so we go to experts at Harvard or The Mayo."
Patients are spread across the world, and are likely to be rich – a 60 year old would pay just over $3,000. It also takes on fee-for-service patients as a service for families and colleagues of members, but Eckbo says that this is not the focus.
The company, which is privately held, has had £10m invested in it since 1999, and hit a large rock in 2003 in a dispute with Skandia Insurance, which, Eckbo says, was about not reporting sales of PGH memberships in Sweden, and was violating non-compete clauses. A legal battle saw Skandia pay out £4m, and the company was then resurrected.
Eckbo says there is very little direct competition: "Essentially, we are competing with national health systems and private healthcare/insurance combinations, although Pinnacle does something similar in the USA, but with no insurance."
PGH is now launching a preventative programme. Eckbo has bought rights to cholesterol tests developed at the University of California and Berkeley HeartLab which pick up on problems in 40% more of those screened.
He claims: "It can also enable a diagnosis which tells you what aspect – diet, exercise, stress – is behind the condition."
Through Berkeley Health Europe, PGH has an exclusive licence to the HeartLab tests and risk reduction programs which the company has adapted to the European market.
The preventative programme involves working with a coach: "It is a high tech/high touch approach. You need both – changing behaviour is very hard."
PGH is now expanding: "Insurance brokers find it hard to sell quality differential, so we are now partnering with quality-focused medical providers, like the Westover clinic group in London."
The corporate goal is to halve the risk of death for clients from the three big killers – CVD, cancer and preventable medical errors.
For Eckbo, the paradox is that all three are often preventable: "Cardiovascular disease, CVD, accounts for about 40% of all deaths and is primarily lifestyle related and preventable. Cancer accounts for about 20% of all deaths, about half of which are preventable with lifestyle change. Preventable medical errors, PME, account for 5-8% of all deaths and are due to the silo-organization of the health sectors in all countries, but are preventable with the right kind of quality control process, as has been demonstrated by the PGH – hospital cooperation."
And what of the money?
Eckbo says that the company is still at the 'small scale verification stage', and investing in development and readiness for 'large scale implementation'. He adds: "We don't expect to be profitable for some time; the company is owned by people with a 'missionary spirit' and long term focus."
