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UK Private Healthcare market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Private Healthcare market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Introduction

This report will explore the following key questions regarding the private healthcare market in the UK:

  • What are the key determinants driving the industry?
  • How have government schemes influenced market demand and supply?
  • How has the provision of healthcare services changed over recent times? Has it helped private sector provision?
  • What does the future hold for private healthcare services?

Definitions

This report covers the private healthcare sector, and includes the provision of healthcare services through private hospitals and clinics, and the private medical insurance sector, which is so important to the financing of private medical care. It is estimated that 53% of private medical sector expenditure is met through private medical insurance.

Private residential care and nursing care for the elderly is covered in a separate report published annually by MBD. Other related reports published by MBD include the UK Occupational Healthcare market.

The private healthcare sector operates alongside the publicly available NHS. There is significant interrelationship between the two systems, with the private sector relying on NHS consultants for a large segment of its medical manpower. The development of the private sector is largely reliant on NHS consultants being available to undertake private work.

The DoH also encourages the NHS to utilise private healthcare facilities where this offers an economic opportunity. For this reason, the sector incorporates a number of different scenarios in addition to publicly financed and public supply health services:

  • Publicly financed/private supply
  • Privately financed/public supply
  • Privately financed/private supply

Segmentation

  • Acute Hospitals and Clinics
  • Specialist Fees
  • NHS Private Patients
  • Private Screening
  • Pregnancy Termination

Funding Source Segmentation for Acute Hospitals and Clinics

  • Private medical cover
  • Self-pay, British
  • Self-pay, overseas
  • NHS

Number of Hospitals and Beds by region

  • Greater London
  • South East
  • South West
  • East of England
  • East Midlands
  • West Midlands
  • North East
  • North West
  • Yorkshire & the Humber
  • England
  • Wales
  • Scotland
  • Northern Ireland

Company Profiles

Private Healthcare Industry

  • BMI Healthcare
  • Care UK
  • HCA International
  • Roodlane Medical
  • Nuffield Health
  • Ramsay Health Care UK Operations
  • Spire Healthcare
  • St Martins Healthcare

Private Medical Insurance Industry

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

Expert analysis from a specialist in the field

Written by Lewis Cone, a leading analyst in the B2B sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

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
Research Analyst

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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