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Private Healthcare - UK - June 2019

Market Segmentation

  • Company schemes
  • Group schemes
  • Individual policies
  • Health cash plans

Company Profiles

Private Healthcare Industry

  • BMI Healthcare
  • HCA International
  • Ramsay Health Care UK Operations
  • Spire Healthcare

Private Medical Insurance Industry

  • Aviva Healthcare UK
  • AXA PPP Healthcare
  • Bupa
  • VitalityHealth (formerly PruHealth)

“Whilst NHS income from private patients is predicted to grow by 6% a year until 2020, it is becoming more of a necessity to determine whether this represents a net financial gain. Existing providers are expected to expand over the next decade while new operators enter the market to try and gain market share. Expansion will not only occur for large hospital operators; there is also likely to be a multitude of different providers, from small clinics and specialist centres to digital healthcare companies.”
– Lewis Cone, B2B Analyst

This Report looks at the following areas:

  • Insurers still missing out on opportunities in the SME sector
  • Calls for private hospitals to publish data to help improve patient safety and outcomes

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
      • Executive Summary

          • Private acute healthcare
            • Market value continues to grow but growth rate stagnates
              • Figure 1: UK expenditure on private acute healthcare, 2014-18, (£ million)
            • Expenditure on health screenings shows strongest growth
              • Figure 2: Segmentation of private healthcare market expenditure by service type, 2018, % of total expenditure)
            • Stable growth expected to 2023
              • Figure 3: Forecast UK expenditure on private acute healthcare, 2019-23, (£ million at 2018 prices)
            • Private medical insurance
              • Corporate PMI market continues to drive growth
                • Figure 4: Segmentation of private medical insurance, by policyholder type, 2014-18, (000 subscribers and £ million)
              • Regional analysis
                • Slow but consistent growth expected to 2023
                  • Figure 5: UK market forecast for PMI subscription income, 2019-23, (£ million at constant prices)
                • Companies and brands
                  • Bupa and Babylon extend SME access to digital health solutions
                    • The consumer
                      • 62% of people have never used a private healthcare service
                        • PMI cover via the workplace most common payment, but ‘self-pay’ continues to close the gap
                          • What we think
                          • Issues and Insights

                            • Insurers still missing out on opportunities in the SME sector
                              • The facts
                                • The implications
                                  • Calls for private hospitals to publish data to help improve patient safety and outcomes
                                    • The facts
                                      • The implications
                                      • The Market – What You Need to Know

                                        • Expenditure on health screenings records strongest growth
                                          • Hospital and clinic spend to remain stable to 2023
                                            • Corporate PMI market continues to drive growth
                                              • Moderate growth in PMI value expected over the next five years
                                              • Private Acute Healthcare

                                                  • Cancer treatment
                                                    • IVF
                                                      • Market value
                                                          • Figure 6: UK expenditure on private acute healthcare, 2014-2018, (£ million)
                                                        • Number of hospitals and beds
                                                          • Figure 7: Analysis of the development of private acute hospitals in the UK, 2014-18, (number of hospitals and % change)
                                                          • Figure 8: Analysis of the development of the number of beds in private acute hospitals in the UK, 2014-18, (number of beds and % change)
                                                        • Market segmentation
                                                          • Expenditure by service type
                                                              • Figure 9: Segmentation of private healthcare market expenditure, by service type, 2014-18, (£ million)
                                                            • PMI remains largest source of revenue, but share continues to fall
                                                                • Figure 10: Funding sources for private acute hospitals and clinics, 2017 and 2018, (£ million and % of total spend)
                                                              • Cataract surgery is the most commonly performed procedure
                                                                • Figure 11: Top 10 private procedures, 2017, (number of procedures in 000 and % annual change)
                                                              • Market share
                                                                • Hospital and bed share
                                                                    • Figure 12: Major private acute hospital operators, 2018, (number of hospitals, beds, and average number of beds per hospital)
                                                                  • Independent inquiry examines the way NHS patients are referred to and from the private sector, with a report due this summer
                                                                    • Private healthcare data will be integrated into NHS systems to improve transparency regarding care standards
                                                                      • Industry deals and developments
                                                                      • Forecast

                                                                          • Stable growth expected to 2023
                                                                              • Figure 13: Forecast UK expenditure on private acute healthcare, 2019-23, (£ million at 2018 prices)
                                                                          • Private Medical Insurance

                                                                              • PMI ownership and availability
                                                                                  • Figure 14: Ownership of health insurance, cash plans, and related products, August 2018, (% of respondents)
                                                                                • Average PMI premiums
                                                                                    • Figure 15: Annual average PMI premium, by purchaser type, 2008-18, (£)
                                                                                  • Subscription growth
                                                                                      • Figure 16: The UK PMI market, 2014-18, by number of policyholders and people covered, (000)
                                                                                    • Market development
                                                                                    • Market Segmentation

                                                                                        • Overall PMI market
                                                                                          • Figure 17: Segmentation of PMI, by policyholder type, 2014-18, (000 subscribers and £ million)
                                                                                        • Regional analysis
                                                                                          • Figure 18: Estimated regional PMI penetration and weekly spend on PMI premiums, (% of households in 2016-18 and average weekly spend on PMI premiums in 2016-18)
                                                                                        • Household expenditure by age group
                                                                                            • Figure 19: Average weekly household expenditure on medical insurance premiums, by age group, 2013-18, (£)
                                                                                          • PMI industry structure
                                                                                            • Market share
                                                                                                • Figure 20: Estimated market share in the UK PMI market, by company, 2018, (% of total subscription revenue)
                                                                                              • Recent industry deals and developments
                                                                                              • PMI Forecast

                                                                                                  • Slow but consistent growth expected to 2023
                                                                                                      • Figure 21: UK market forecast for PMI subscription income, 2019-23, (£ million at constant prices)
                                                                                                      • Figure 22: UK market forecast for PMI, by number of policyholders, 2019-23, (000s of subscribers)
                                                                                                  • The Impact of the Economy

                                                                                                    • Annual GDP growth falls to six-year low in 2018
                                                                                                      • Figure 23: Annual GDP growth rate, 2014-18, (%)
                                                                                                    • Bank rate remains at 0.75%
                                                                                                      • Figure 24: Bank rate, 2008-18, by date of adjustment, (%)
                                                                                                  • Market Drivers

                                                                                                        • Figure 25: Total departmental expenditure limits, in real terms, 2014/15-2018/19, (£ million, % of total DEL and % change in NHS DEL)
                                                                                                      • NHS continues to fall short of waiting time targets, leading to calls for further private provision
                                                                                                        • With Brexit still on the horizon, uncertainty remains over its potential impact on healthcare spending and recruitment
                                                                                                          • Outsourcing to private sector remains high despite annual decline in contract value
                                                                                                            • Increase in disposable income could offset the impact of a rise in PMI premiums
                                                                                                                • Figure 26: GDP per head at current market prices and real household disposable income per head, Q4 2014-Q4 2018, (£)
                                                                                                              • Near all-time low unemployment rate should maintain demand for corporate PMI despite business uncertainty
                                                                                                                • Figure 27: Total UK unemployment rate among people aged 16+, Q1 2015-Q1 2019, (%)
                                                                                                            • Companies and Brands – What You Need to Know

                                                                                                              • Private healthcare solution launched that works alongside the NHS
                                                                                                                • Bupa and Babylon extend SME access to digital health solutions
                                                                                                                • Competitive Strategies

                                                                                                                  • Private healthcare solution launched that works alongside the NHS
                                                                                                                    • Bupa and Babylon extend SME access to digital health solutions
                                                                                                                      • HCA and Bupa launch new specialist centres for breast cancer
                                                                                                                        • Aviva launches new corporate PMI service
                                                                                                                        • Company Profiles – Private Hospital and Clinic Providers

                                                                                                                          • BMI Healthcare
                                                                                                                            • Recent company activity
                                                                                                                              • Financial information
                                                                                                                                • Figure 28: Financial analysis of BMI Healthcare, 2013-18*, (£000)
                                                                                                                              • HCA International
                                                                                                                                  • Figure 29: Financial analysis of HCA International, 2013-17, (£000)
                                                                                                                                • Roodlane Medical
                                                                                                                                    • Figure 30: Financial analysis of Roodlane Medical, 2013-17, (£000)
                                                                                                                                  • Ramsay Health Care UK Operations
                                                                                                                                    • Recent company activity
                                                                                                                                      • Financial information
                                                                                                                                        • Figure 31: Financial analysis of Ramsay Health Care UK operations, 2014-18, (£000)
                                                                                                                                      • Spire Healthcare
                                                                                                                                        • Recent company activity
                                                                                                                                          • Financial information
                                                                                                                                            • Figure 32: Financial analysis of Spire Healthcare Group, 2014-18, (£ million)
                                                                                                                                        • Company Profiles – Private Medical Insurance Providers

                                                                                                                                          • Aviva Healthcare
                                                                                                                                            • Recent company activity
                                                                                                                                              • Financial information
                                                                                                                                                • Figure 33: Financial analysis of Aviva plc, 2014-18, (£ million)
                                                                                                                                              • AXA PPP Healthcare
                                                                                                                                                • Recent company activity
                                                                                                                                                  • Financial information
                                                                                                                                                    • Figure 34: Financial analysis of AXA PPP Healthcare, 2013-17, (£ million)
                                                                                                                                                  • Bupa
                                                                                                                                                    • Recent company activity
                                                                                                                                                      • Financial information
                                                                                                                                                        • Figure 35: Financial analysis of Bupa, 2014-18, (£ million)
                                                                                                                                                      • VitalityHealth
                                                                                                                                                        • Recent company activity
                                                                                                                                                          • Financial information
                                                                                                                                                            • Figure 36: Financial analysis of Vitality Health Limited, 2014-18, (£000)
                                                                                                                                                        • The Consumer – What You Need to Know

                                                                                                                                                          • 62% of people have never used a private healthcare service
                                                                                                                                                            • PMI cover via the workplace most common payment, but ‘self-pay’ continues to close the gap
                                                                                                                                                              • NHS expected to remain free at the point of use, but people remain concerned over funding and staffing
                                                                                                                                                              • Last Private Healthcare Visit

                                                                                                                                                                • 62% of consumers have never used a private healthcare service
                                                                                                                                                                  • Figure 37: Private healthcare use, by time passed since last visit, April 2019, (% of respondents)
                                                                                                                                                                • Younger people most likely to have used private healthcare over the last year
                                                                                                                                                                  • Figure 38: Private healthcare use, by time passed since last visit and by age and gender, April 2019, (% of respondents)
                                                                                                                                                                • Young people most likely to consider using private health services in the future
                                                                                                                                                                • Method of Payment

                                                                                                                                                                  • PMI cover via the workplace most common payment, but ‘self-pay’ continues to close the gap
                                                                                                                                                                    • Figure 39: Private healthcare payment method, April 2019, (% of respondents)
                                                                                                                                                                  • A third of women self-fund treatment
                                                                                                                                                                    • Figure 40: Private healthcare payment method, April 2019, (% of respondents)
                                                                                                                                                                • Health Insurance Provider

                                                                                                                                                                  • Bupa is the largest provider of health insurance
                                                                                                                                                                    • Figure 41: Private healthcare insurance provider, April 2019, (% of respondents)
                                                                                                                                                                • Future of the NHS

                                                                                                                                                                  • NHS expected to remain free at the point of use, but people remain concerned over funding and staffing
                                                                                                                                                                    • Figure 42: The future of the NHS, April 2019, (% of respondents)
                                                                                                                                                                • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                    • Abbreviations
                                                                                                                                                                      • Methodology
                                                                                                                                                                      • Further Sources and Contacts

                                                                                                                                                                        • Trade associations
                                                                                                                                                                          • Association of British Insurers (ABI)
                                                                                                                                                                            • Association of Medical Insurers and Intermediaries (AMII)
                                                                                                                                                                              • British Healthcare Trades Association (BHTA)
                                                                                                                                                                                • Federation of Independent Practitioner Organisations (FIPO)
                                                                                                                                                                                  • The Independent Doctors Federation (IDF)
                                                                                                                                                                                    • Independent Healthcare Providers Network (IHPN)
                                                                                                                                                                                      • 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 events
                                                                                                                                                                                                          • Health and Care Innovation Expo 2019
                                                                                                                                                                                                            • 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 (P4H) England

                                                                                                                                                                                                                    Private Healthcare - UK - June 2019

                                                                                                                                                                                                                    US $1,912.55 (Excl.Tax)