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Private Healthcare - UK - June 2018

“An efficient and cost-effective private healthcare sector would lead to greater benefits for patients, providers, healthcare professionals and insurers, while also easing pressures on the NHS and wider healthcare industry.”

- Lewis Cone, B2B Analyst

This report will look at the following areas:

  • Are private providers gaining patients from the NHS due to increased waiting times at NHS hospitals?
  • Can improvements to information regarding treatment help improve the number of patients using private healthcare?
  • Can data and technology help hospitals adjust to changing patient needs?

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Table of contents

  1. Executive Summary

      • Market size
        • Figure 1: UK Expenditure on Private Acute Healthcare, 2013-17, (£ Million)
        • Figure 2: The UK PMI Market, 2013-2017, by Number of Policyholders and People Covered, (000)
        • Figure 3: Estimated Weekly Spend on PMI Premiums, by Region, 2015-17, (Average Weekly Spend in £)
      • Market factors
        • Continued pressures on the NHS provide opportunities, but private providers must proceed with caution when acquiring patients
          • Slow progress in Brexit talks means uncertainty remains over future impact on healthcare spending and recruitment
            • Third IPT rise in two years adds barrier to PMI growth
              • Consumer
                • Forecast
                  • 3% growth per year expected to 2022
                    • Figure 4: Forecast UK Expenditure on Private Acute Healthcare, 2018-2022, (£ Million at 2017 prices)
                  • Growth will be driven by uptake in corporate PMI but will remain sluggish
                    • Figure 5: UK Market Forecast for Private Medical Insurance Subscription Income, 2018-2022, (£ Million at constant prices)
                  • What we think
                  • Key Insights

                      • Are private providers gaining patients from the NHS due to increased waiting times at NHS hospitals?
                        • Can improvements to information regarding treatment help improve the number of patients using private healthcare?
                          • Can data and technology help hospitals adjust to changing patient needs?
                          • Introduction

                              • Definitions
                                • Methodology
                                  • Abbreviations
                                    • Market positioning
                                      • Healthcare Environment
                                      • UK Economy

                                        • Key points
                                          • Overview
                                            • Figure 6: UK GDP, 2007-2017, (% Quarterly Growth and GDP in £ Billion)
                                            • Figure 7: UK Output, by Industry, 2008-2017, (Index 2013 = 100)
                                            • Figure 7: Quarters after GDP Peak, 1979, 1990 and 2008, (Number of Quarters and GDP as % of Pre-Downturn Peak)
                                          • Inflation
                                            • Interest rates
                                              • House prices
                                                • Figure 8: UK House Price changes, 2007-2018, (12 month % change)
                                              • Consumer spending
                                                • Manufacturing
                                                  • Figure 9: UK Manufacturing, 2014-18, (Index, 2013 = 100)
                                                • Business investment
                                                  • Imports
                                                    • Exports
                                                    • Market Factors

                                                      • Key points
                                                        • Continued pressures on the NHS provide opportunities, but private providers must proceed with caution when acquiring patients
                                                            • Figure 10: Total Departmental Expenditure Limits, in Real Terms, 2013/14-2017/18, (£ Million, % of Total DEL and % Change in NHS DEL)
                                                            • Figure 11: Total Departmental Expenditure Limits, in Real Terms, 2013/14-2017/18, (£ Million and % of Total DEL)
                                                          • Slow progress on Brexit talks means uncertainty remains over future impact on healthcare spending and recruitment
                                                            • Business rate rise has had less of an impact on private providers
                                                              • Outsourcing to private sector has been boosted by regulation updates
                                                                • Fall in disposable income in 2017 adds to the downward impact of PMI premium growth
                                                                  • Figure 12: GDP per Head at Current Market Prices and Real Household Disposable Income per Head, Q4 2013 - Q4 2017, (£)
                                                                  • Figure 13: GDP per Head at Current Market Prices and Real Household Disposable Income per Head, Q4 2013 - Q4 2017, (£)
                                                                • Record low unemployment rate should at least maintain corporate PMI demand
                                                                  • Figure 14: Total UK Unemployment Rate Among People Aged 16+, Q1 2013 - Q4 2017, (%)
                                                              • Independent Hospital and Clinics

                                                                • Key points
                                                                • Market Size

                                                                  • Key points
                                                                      • Figure 15: UK Expenditure on Private Acute Healthcare, 2013-17, (£ Million)
                                                                      • Figure 16: UK Expenditure on Private Acute Healthcare, 2013-17, (£ Million)
                                                                      • Figure 17: Analysis of the Development of Private Acute Hospitals in the UK, 2013-2017, (Number of Hospitals)
                                                                      • Figure 18: Analysis of the Development of the Number of Beds in Private Acute Hospitals in the UK, 2013-17, (Number of Beds)
                                                                      • Figure 19: Development of the Number of Beds in Private Acute Hospitals in the UK, 2013-17, (Number of Beds)
                                                                  • Market Segmentation

                                                                    • Key points
                                                                      • Expenditure
                                                                          • Figure 20: Segmentation of Private Healthcare Expenditure, by Type, 2013-2017, (£ Million)
                                                                          • Figure 21: Segmentation of Private Healthcare Expenditure, by Type of Service, 2013-2017, (£ Million)
                                                                        • PMI remains largest source of revenue, but share is declining
                                                                          • Figure 22: Funding Source Segmentation for Acute Hospitals and Clinics, by Source, 2016 and 2017, (£ Million and % Share)
                                                                          • Figure 23: Funding Source Segmentation for Acute Hospitals and Clinics, by Source, 2017, (% of Total Value)
                                                                        • Growth in ‘self-pay’ users showing no signs of slowing
                                                                          • Regional analysis
                                                                            • Figure 24: Regional Analysis of UK Independent Acute Hospitals, 2017/18, (Number of Hospitals and Beds)
                                                                            • Figure 25: Regional Analysis of UK Independent Acute Hospitals, 2017/18, (% of Hospitals and % of Beds)
                                                                        • Market Share

                                                                          • Key points
                                                                            • Hospital and Bed Share
                                                                                • Figure 26: Major Private Acute Hospital Operators, 2017/2018, (Number of Hospitals, Beds and Average Number of Beds)
                                                                                • Figure 27: Major Private Acute Hospital Operators, 2017/18, (Number of Hospitals and Beds)
                                                                              • NHS foundation trusts report stagnating private patient income, but continuing financial pressures could lead to growth
                                                                                • CQC inspections show that overall standards of care in independent hospitals are at a good level
                                                                                  • Malpractice case leads to calls for greater transparency
                                                                                  • Company Profiles – Private Healthcare Industry

                                                                                    • BMI Healthcare

                                                                                        • Recent company news
                                                                                            • Figure 28: Financial Analysis of BMI Healthcare, 2012-16, (£ 000)
                                                                                          • Company strategy
                                                                                          • Care UK

                                                                                              • Recent company news
                                                                                                  • Figure 29: Financial Analysis of Care UK, 2013-17, (£ Million)
                                                                                                  • Figure 30: Revenue Breakdown of Care UK, by Division, 2015-17, (£ Million)
                                                                                                • Company strategy
                                                                                                • HCA International

                                                                                                    • Recent company news
                                                                                                        • Figure 31: Financial Analysis of HCA International, 2012-2016, (£ 000)
                                                                                                      • Company strategy
                                                                                                      • Roodlane Medical

                                                                                                            • Figure 32: Financial Analysis of Roodlane Medical, 2012-2016, (£ 000)
                                                                                                          • Company strategy
                                                                                                          • Nuffield Health

                                                                                                              • Recent company news
                                                                                                                • Figure 33: Financial Analysis of Nuffield Health, 2012-16, (£ 000)
                                                                                                              • Company strategy
                                                                                                              • Ramsay Health Care UK Operations

                                                                                                                    • Figure 34: Financial Analysis of Ramsay Health Care UK Operations, 2013-17, (£ 000)
                                                                                                                  • Company strategy
                                                                                                                  • Spire Healthcare

                                                                                                                        • Figure 35: Financial Analysis of Spire Healthcare Group, 2013-17, (£ Million)
                                                                                                                      • Company strategy
                                                                                                                      • St Martins Healthcare

                                                                                                                            • Figure 36: Financial Analysis of St Martins Healthcare, 2012-2016, (£ 000)
                                                                                                                          • Company strategy
                                                                                                                          • Independent Hospitals and Clinics Forecast

                                                                                                                            • Key points
                                                                                                                              • Lead up to Brexit could pose several challenges
                                                                                                                                • 3% growth per year expected to 2022
                                                                                                                                    • Figure 37: Forecast UK Expenditure on Private Acute Healthcare, 2018-2022, (£ Million at 2017 prices)
                                                                                                                                    • Figure 38: Forecast UK Expenditure on Private Acute Healthcare, 2018-2022, (£ Million at 2017 prices)
                                                                                                                                  • Release of data on patient outcomes will improve transparency and may increase trust among patients considering using private healthcare
                                                                                                                                  • Private Medical Insurance

                                                                                                                                    • Key points
                                                                                                                                      • PMI Ownership and Availability
                                                                                                                                          • Figure 39: Ownership of PMI and related health products, August 2017, (% of Respondents)
                                                                                                                                      • Market Trends

                                                                                                                                        • Key points
                                                                                                                                          • Medical inflation rates continue to put pressure on uptake levels
                                                                                                                                            • Increasing waiting times for NHS treatments provide opportunities
                                                                                                                                            • Market Size

                                                                                                                                              • Key points
                                                                                                                                                  • Figure 40: Annual Average PMI Premium, by Purchaser Type, 2007-17, (£)
                                                                                                                                                  • Figure 41: Average Annual PMI premium, by Purchaser Type, 2007-17, (£)
                                                                                                                                                • Premium and Subscription Growth
                                                                                                                                                  • Figure 42: The UK Market for Private Medical Insurance, 2013-17, (£ Million)
                                                                                                                                                  • Figure 43: Claim Amounts Incurred as a Proportion of Gross Earned Premiums, 2013-17, (£ Million and % Gross Margin)
                                                                                                                                                  • Figure 44: PMI Gross Earned Premiums, Claims Paid and Gross Margin, 2013-2017, (£ Million and % Gross Margin)
                                                                                                                                                  • Figure 45: The UK PMI Market, 2013-2017, by Number of Policyholders and People Covered, (000)
                                                                                                                                                  • Figure 46: The UK PMI Market, 2013-2017, by Number of Policyholders and People Covered, (000)
                                                                                                                                                • Market development
                                                                                                                                                  • Private practice register helps streamline insurers’ recognition processes
                                                                                                                                                  • Market Segmentation

                                                                                                                                                    • Key points
                                                                                                                                                      • Corporate and Group PMI
                                                                                                                                                        • Individual PMI
                                                                                                                                                          • Overall PMI Market
                                                                                                                                                              • Figure 47: Segmentation of Private Medical Insurance, by Policyholder Type, 2013-17, (000 Subscribers and £ Million)
                                                                                                                                                              • Figure 48: Segmentation of Private Medical Insurance Subscribers, 2013-2017, by Policyholder Type, (000 Subscribers)
                                                                                                                                                              • Figure 49: Segmentation of Private Medical Insurance Value, 2013-2017, by Policyholder Type, (£ Million)
                                                                                                                                                            • Regional Analysis
                                                                                                                                                              • Figure 50: Estimated Regional PMI Penetration and Weekly Spend on Private Medical Insurance Premiums, (% of Households in 2015-2017 and Average Weekly Spend on PMI Premiums in 2012-14 and 2015-17)
                                                                                                                                                              • Figure 51: Estimated Regional PMI Penetration, 2015-17, (% of Households)
                                                                                                                                                              • Figure 52: Estimated Weekly Spend on PMI Premiums, by Region, 2015-17, (Average Weekly Spend in £)
                                                                                                                                                            • Household Expenditure by Age Group
                                                                                                                                                              • Figure 53: Average Weekly Household Expenditure on Medical Insurance Premiums, by Age Group, 2013-17, (£)
                                                                                                                                                          • Industry Development

                                                                                                                                                            • Key points
                                                                                                                                                              • Improvements made to industry sourcing system that will aid PMI advisers
                                                                                                                                                                • Recent industry acquisitions
                                                                                                                                                                  • Market share
                                                                                                                                                                    • Figure 54: Estimated Market Share in the UK PMI Market, by Company, 2017, (% of Total Subscription Revenue)
                                                                                                                                                                    • Figure 55: Private Medical Insurance Market Share, by Company, 2017, (% of Total Subscription Revenue)
                                                                                                                                                                • Company Profiles – Private Medical Insurance Industry

                                                                                                                                                                  • Aviva Healthcare UK

                                                                                                                                                                        • Figure 56: Financial Analysis of Aviva Plc, 2012-16, (£ Million)
                                                                                                                                                                      • Company strategy
                                                                                                                                                                      • AXA PPP Healthcare

                                                                                                                                                                            • Figure 57: Financial Analysis of AXA PPP Healthcare, 2012-16, (£ Million)
                                                                                                                                                                          • Company strategy
                                                                                                                                                                          • Bupa

                                                                                                                                                                                • Figure 58: Financial Analysis of Bupa, 2013-17, (£ Million)
                                                                                                                                                                                • Figure 59: Divisional Analysis of Bupa, 2013-17, (£ Million)
                                                                                                                                                                              • Company strategy
                                                                                                                                                                              • VitalityHealth (formerly PruHealth)

                                                                                                                                                                                    • Figure 60: Financial Analysis of VitalityHealth (formerly PruHealth), 2013-17, (£000)
                                                                                                                                                                                  • Company strategy
                                                                                                                                                                                  • Western Provident Association

                                                                                                                                                                                        • Figure 61: Financial Analysis of Western Provident Association, 2012-16, (£ 000)
                                                                                                                                                                                      • Company strategy
                                                                                                                                                                                      • PMI Forecast

                                                                                                                                                                                        • Key points
                                                                                                                                                                                          • Growth will be driven by uptake in corporate PMI but will remain sluggish
                                                                                                                                                                                            • Figure 62: UK Market Forecast for Private Medical Insurance Subscription Income, 2018-2022, (£ Million at constant prices)
                                                                                                                                                                                            • Figure 63: UK Market Forecast for Private Medical Insurance Subscription Income, 2018-2022, (£ Million at constant prices)
                                                                                                                                                                                            • Figure 64: UK Market Forecast for Private Medical Insurance, by Number of policyholders, 2018-2022, (000s of Subscribers)
                                                                                                                                                                                            • Figure 65: UK Market Forecast for Private Medical Insurance, 2018-2022, by Number of Policy Holders, (000s of Subscribers)
                                                                                                                                                                                          • The growing popularity of the self-pay market could further dampen PMI growth
                                                                                                                                                                                            • Demographic trends are likely to drive PMI product design
                                                                                                                                                                                            • The Consumer – Last Private Healthcare Visit

                                                                                                                                                                                              • Key points
                                                                                                                                                                                                • Nearly three-quarters of consumers have never used a private healthcare service
                                                                                                                                                                                                    • Figure 66: Private Healthcare Use, by Time Passed Since Last Visit, April 2018, (% of Respondents)
                                                                                                                                                                                                    • Figure 67: Private Healthcare Use, by Time Passed Since Last Visit, April 2018, (% of Respondents)
                                                                                                                                                                                                  • Under-44s most likely to have used private healthcare in the last year
                                                                                                                                                                                                    • Figure 68: Private Healthcare Use, by Time Passed Since Last Visit and by Age and Gender, April 2018, (% of Respondents)
                                                                                                                                                                                                    • Figure 69: Private Healthcare Use by Males, by Time Passed Since Last Visit and by Age, April 2018, (% of Respondents)
                                                                                                                                                                                                    • Figure 70: Private Healthcare Use by Females, by Time Passed Since Last Visit and by Age, April 2018, (% of Respondents)
                                                                                                                                                                                                  • Young people most likely to consider private healthcare in the future
                                                                                                                                                                                                  • The Consumer – Method of Payment

                                                                                                                                                                                                    • Key points
                                                                                                                                                                                                      • PMI cover via employer pays for most healthcare but self-pay on the rise
                                                                                                                                                                                                          • Figure 71: Private Healthcare Payment Method, April 2018, (% of Respondents)
                                                                                                                                                                                                          • Figure 72: Private Healthcare Payment Method, April 2018, (% of Respondents)
                                                                                                                                                                                                        • A third of women self-fund treatment
                                                                                                                                                                                                          • Figure 73: Private Healthcare Payment Method, by Gender, April 2018, (% of Respondents)
                                                                                                                                                                                                          • Figure 74: Private Healthcare Payment Method, by Gender, April 2018, (% of Respondents)
                                                                                                                                                                                                        • Self-payment and employer-provider PMI used in most recent private use
                                                                                                                                                                                                          • Figure 75: Private Healthcare Use, by Time of Last Visit and by Payment Method, April 2018, (% of Respondents)
                                                                                                                                                                                                          • Figure 76: Private Healthcare Use, by Time Passed Since Last Visit and by Payment Method, April 2018, (% of Respondents)
                                                                                                                                                                                                      • The Consumer – Health Insurance Provider

                                                                                                                                                                                                        • Key points
                                                                                                                                                                                                          • Bupa represents close to 30% of health insurance coverage
                                                                                                                                                                                                              • Figure 77: Private Healthcare Insurance Provider, April 2018, (% of Respondents)
                                                                                                                                                                                                              • Figure 78: Private Healthcare Insurance Provider, April 2018, (% of Respondents)
                                                                                                                                                                                                          • The Consumer – Choice Factors

                                                                                                                                                                                                            • Key points
                                                                                                                                                                                                              • Treatment cost determines choice of healthcare provider
                                                                                                                                                                                                                  • Figure 79: Private Healthcare Choice Factors, by Rank of Importance, April 2018, (% of Respondents)
                                                                                                                                                                                                                  • Figure 80: Private Healthcare Choice Factors, by Rank of Importance, April 2018, (% of Respondents)
                                                                                                                                                                                                              • Further Sources and Contacts

                                                                                                                                                                                                                • Trade Associations
                                                                                                                                                                                                                  • Association of British Insurers (ABI)
                                                                                                                                                                                                                    • Association of Independent Healthcare Organisations (AIHO)
                                                                                                                                                                                                                      • Association of Medical Insurers and Intermediaries (AMII)
                                                                                                                                                                                                                        • British Healthcare Trades Association (BHTA)
                                                                                                                                                                                                                          • Federation of Independent Practitioner Organisations (FIPO)
                                                                                                                                                                                                                            • The Independent Doctors Federation (IDF)
                                                                                                                                                                                                                              • London Consultants’ Association (LCA)
                                                                                                                                                                                                                                • The Private Healthcare Information Network (PHIN)
                                                                                                                                                                                                                                  • Trade Magazines
                                                                                                                                                                                                                                    • COVER
                                                                                                                                                                                                                                      • Health Business
                                                                                                                                                                                                                                        • Health Insurance & Protection
                                                                                                                                                                                                                                          • Health Service Journal
                                                                                                                                                                                                                                            • Hospital Times
                                                                                                                                                                                                                                              • The View
                                                                                                                                                                                                                                                • Trade Exhibitions
                                                                                                                                                                                                                                                  • Health and Care Innovation Expo 2018
                                                                                                                                                                                                                                                    • Healthcare Efficiency Through Technology (HETT)/Commissioning in Healthcare (CIH)/Procurement in Healthcare (PIH)/Cyber Security in Healthcare (CSIH) Expo
                                                                                                                                                                                                                                                      • Hospital Innovations
                                                                                                                                                                                                                                                        • Safety & Health Expo
                                                                                                                                                                                                                                                          • The Private Healthcare Summit
                                                                                                                                                                                                                                                            • The Procurement Event for Health

                                                                                                                                                                                                                                                            Private Healthcare - UK - June 2018

                                                                                                                                                                                                                                                            £1,495.00 (Excl.Tax)