Health secretary Alan Milburn is determined to reassure the public that the NHS is getting better. But, many people, including some who support Labour, are far from being convinced.

So, if you have the cash, should you buy private health cover? This is certainly something that Tory health spokesman Liam Fox favours. He's reported to have been taped while arguing for this at a fringe meeting at the recent party conference.

The fact that Dr Fox wants a rethink on how the NHS is funded and greater take up of private insurance is no surprise. But, even those who feel by-passing the NHS is somehow unethical may also think the state system needs radical surgery. But, if it is gradually sinking, is the only lifeboat one called private medical insurance (PMI)?

For many people, PMI does provide peace of mind - if they can afford it. So, if you decide to take the plunge, what makes the perfect policy?

You can choose from budget plans or comprehensive cover, which will include extra benefits such as alternative health cover. It's also important to look out for a policy that offers "full refund" of treatment costs - some only pay up to a specified limit with you having to foot the rest of the bill.

Insurance policies are notorious for including a lot of clauses which ensure you can only claim under very stringent conditions. You may find out your insurance claims are turned down if you want untried, pioneering treatment however, or if you are trying to claim because of a pre-existing condition.

But, private medical insurance is not a total panacea. If you buy insurance and stay healthy then you'll have wasted your money. Some common questions on private medical insurance are answered below.

What's good about private cover?

The number one reason most people choose it is that they can avoid waiting lists. You should have a choice of specialists and have more flexible visiting times. You'll also have a private room and so miss out on the communal and often noisy ward system. If you're well enough to eat, private hospitals often offer quality meals akin to a smart restaurant.

What's bad about it?

It's very expensive, particularly if you want a good comprehensive policy and premiums rise the older you get.

Can you obtain cover through your job?

Some jobs already have private medical insurance as a free perk. Others may offer it at a subsidised rate. This is well worth taking up and you may also be able to buy discounted cover for your partner and any children.

Louise Zucchi, spokeswoman for Norwich Union Healthcare says: "The small company market is the fastest growing sector in the market. Even if individuals have to make a contribution, cover will be cheaper."

Budget or comprehensive?

Budget plans won't cover you for outpatient treatments such as physiotherapy - they exist only for in patient care. You could also find there are other exclusions such as psychiatric. Comprehensive plans offer wide reaching cover, but always check what isn't included too.

Don't expect cover for existing health problems

Insurance is there for the unknown. This means any existing health condition will be excluded. You'll need to state on the application form any current illnesses or chronic ailments such as asthma or eczema. Also, don't expect to have your baby in The Portland Hospital - as favoured by celebrity mums - paid for by the insurer. Although complications in pregnancy may be covered, childbirth won't be because you know it will happen.

Which insurer to choose?

Don't feel you just have to pick a big name insurer. There are smaller ones that offer good service and cover. All insurance companies based in the UK and offering insurance to the public are regulated and so you can buy with confidence.

What about cash plans?

Companies such as Hospitals Savings Association (HSA) advertise their cash plans widely. A cash plan pays out a set amount if you need to go into hospital or for other healthcare needs such as glasses. Paid for with regular subscriptions, they have benefits and can top up your income, but they are not a substitute for insurance. Payouts will only be up to a stated amount and certainly wouldn't cover the cost of private treatment.

How do I find a cheaper deal without compromising on cover?

The cheapest cover will typically be plans with high excesses. An excess is the amount you pay before the insurer steps in. Some insurers offer policies where they'll only pay after you've paid the first £5,000. Standard Life Healthcare's Choices, for example offers excess levels of £1,000, £2,500 or £5,000.

But Ms Zucchi says: "We're not convinced by high excess policies. Up to say £1,000 say, could be fine for many people, but above this and many people will feel it's not good value for money."

If you agree to have treatment in an NHS private wing rather than a private hospital, you should also find costs are lower. In the case of serious illness, some also find that the large NHS hospitals can have better facilities to deal with an emergency. Some plans only pay for private treatment if the NHS waiting list is longer than six weeks and again these can be cheaper policies.

The number of conditions that are covered can make a difference to cost. AIG's Healthnow policy covers a list of around 100 conditions including cataracts, hip replacements and varicose veins. But, if you contract a serious problem such as cancer you won't be covered.

All policyholders do have initial access to a private consultant. The company insists serious conditions are often best treated in the NHS and its list covers those conditions that often have long waiting lists. Premiums are around 30% less though than with a standard policy. But, if you're not convinced that the NHS will work out in the case of serious illness, this is far from being a full insurance panacea.

Need advice?

A good broker may charge you a fee or earn commission, but if you're confused, they can help you pick the right policy. Check for one who's registered with either the General Insurance Standards Council or belongs to the Association of Medical Insurance Intermediaries. They should supply you with a range of quotes and reasons why they think a certain plan is right for you.

What about self pay?

Paying for your own treatment is taking off fast for those who can afford it. If you have the money set aside then there are also companies around to help make sure you get the best deals. They will negotiate with hospitals and ensure you receive an all-inclusive price for your treatment.

These include Healthcare Navigator and Go Private. Neil Armitage, marketing director for Go Private says: "Many people who can afford private care, don't know how to source it. We'll do that and advise on the right hospital, consultant and other information they need to know. We also help with loan sourcing if required."

Membership of Go Private, which also includes access to helplines costs £34.95 a year for an individual and £39.95 for a family.

Insurer Western Provident Association (WPA) also offers a policy called Self-Pay Protect, which pays back either 30%, 50% or 75% of hospital bills depending on the level you take out, up to a limit of £50,000 a year.

At the 30% level of cover, someone aged between 35 and 44 would pay around £48 a year. For someone aged 55 to 64, this increases to around £85. At the 75% level, someone aged between 35 and 44 would pay £155 a year. For someone, 55 to 64, this increases to £275.

Of course, one problem with self pay is that the costs can be enormously high. Mandy Blanks, spokesperson for Standard Life Healthcare says: "Claims can be beyond the cost of many people. Recent ones I've seen have been £135,000 for cardiac surgery with complications and cancer treatments are often well over £100,000."