Stakeholder Health Care will increase funding for national health service

Article date: 12 March 2003

Norwich Union Healthcare has unveiled full details of itsStakeholder Health Care model, which aims to increase funding anddeliver the health service the public demands.*

Incorporating the most successful elements of healthcare systemsacross Europe, Stakeholder Health Care aims to deliver a firstclass affordable one-tier service for everyone in the UK.

The model, which was announced as a concept in 2001, has beendevised by Norwich Union Healthcare with NERA (National EconomicResearch Associates).

One of the key principles of Stakeholder Health Care is greatertransparency – individuals would pay a separate premium fortheir healthcare and income tax rates would be reduced to reflectthis. The model projects that the average premium for anindividual, including dependent children, would be £1,518,approximately 10 per cent of taxable income.

Under the Stakeholder Health Care model, the NHS would act as aninsurer, competing with private health insurers to provide astandard package of services. The public would be able to choosetheir stakeholder insurer, based on premiums and quality ofservice.

Some of the key features include:

  • The NHS continues as the main provider of health services
  • Tax funding still flows into the system e.g. to pay premiumsfor the unemployed and public health
  • The NHS acts as an insurer
  • Insurers compete to provide a standard package of care
  • Insurers, including the NHS, can offer ‘top-up’services, charging a risk-rated premium if they wish
  • Premiums are paid to a central fund and distributed toinsurers
  • Premiums are community-rated and allowed to vary as aproportion of income

Commenting on the proposed model, Tim Baker, Commercial Directorfor Norwich Union Healthcare, said: “While Derek Wanless hassuggested that the NHS needs an 80 per cent increase in real termsfunding by 2013, we believe it is questionable whether theseincreases can be raised by taxation alone.

“Stakeholder Health Care builds on the strongest featuresof the current system, but by creating greater transparency, choiceand competition, there are bigger incentives to improve quality andtap into people’s ability to pay more for theirhealthcare.”

Research into other healthcare systems in Europe suggests thataffordable top-up services would prove popular for a largeproportion of the population, who are prepared to pay more for non-essential services – such as dentistry – and levels ofcomfort. Based on a third of the population spending £315 per yearon top- up services, an additional £6.4 billion could beraised.

Norwich Union Healthcare will be talking to a number of keyGovernment representatives and other organisations over the nextfew months to explain the full benefits of Stakeholder HealthCare.

For a copy of the Executive Summary or the full report, titled‘Stakeholder Health Care: Moving from Concept toReality’ please e-mail a PDF version can be downloaded

Media contact:
Liz Kennett at Norwich Union Press Office on 08703 66 68 63or
Matt Buchanan at QBO Bell Pottinger on 0207 861 2511.
Edward Bramley-Harker, NERA, 0207 659 8534

Notes to editors:

  • *In his April 2002 report, Derek Wanless suggested that by2013 the NHS needs an unprecendented and sustained increase of 80%real terms funding to deliver the responsive health servicecitizens want.
  • Norwich Union Healthcare was founded in 1990 as the healthcarearm of Norwich Union and now provides a range of income protectionand private medical insurance products to to around 750,000customers. It is one of the largest providers of income protectionand private medical insurance in the UK.
  • National Economic Research Associates (NERA) is aninternational economic consulting firm founded in 1961 to provideclients with practical research and analysis of economic andfinancial issues arising in public policy, regulation, litigationand management. In the health sector, NERA has worked acrossEurope for governments, policy makers and private sector clients,providing advice on all aspects of health sector financing andreform. NERA employs some 300 professional economists in officesin the United States and in London, Madrid, Sydney andBrussels.
  • Norwich Union’s news releases are available on the Avivaplc website at
  • A selection of images is available from the Norwich UnionNewscast site at
  • An ISDN facility is available for studio quality broadcast.Call the press office on 08703 66 68 68

For all life & pensions media enquiries call 08703 66 6873
For all other media enquiries call 08703 66 68 68

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