The cost of providing private medical cover for company staff may soar by 70 per cent in the next five years, a healthcare consultancy has warned.

Buck and Willis Healthcare said the additional £1.1bn bill businesses faced could result in them suffering the same fate as final salary pension schemes.

The health plans, which cost businesses £1.6bn a year, cover the cost of private medical treatment if policyholders need to see a doctor or have an operation.

But Buck and Willis said the rising cost of such schemes could force companies to restrict how much they pay towards them.

It estimates the cost of the plans will increase by £380 to £930 per employee for companies with 100 or more staff during the next five years if medical costs rise at their predicted rate of 11 per cent per annum.

Adrian Norris, managing director of Buck and Willis, said: "Employers need to take action now to prevent the cost of medical benefits escalating out of control, or the existence of company medical plans could be threatened.

"These spiralling liabilities could see medical plans going the same way as final salary pension schemes."

Mr Norris said he expected companies to look increasingly to reduce the cost of the plans by introducing defined liability schemes which, for example, require staff to pay the first £100 of any claim.

About 4.5m people in the UK have private medical cover for themselves and their families. Sixty per cent of the schemes are paid for by companies and ten per cent are sponsored by firms with employees making a contribution.