The waiting list for NHS treatment in England soared to almost 7.7 million for the first time in July.
It is little wonder the appetite for patients to go private and pay for their own treatment has been on the rise as they face enduring long waits for operations.
However, as demand levels off after an initial surge of interest there are issues which should be addressed and could bring more work for insurers and advisers.
Clarity around pricing is needed as more customers dip into their savings to fund treatment.
And brokers are keen to see further product innovation from insurers to potentially support more customers with pre-existing conditions with access to treatment.
Demand remains buoyant
“Demand for self-pay treatment continues to remain buoyant in 2023 with self-pay activity at Benenden Hospital increasing by double digits since 2022,” Tom Green, head of commercial services at Benenden Hospital, tells Health & Protection.
A key driver behind this growth, according to Green has been growing demand for elective procedures – in particular hip and knee replacement, cataracts, varicose veins, cosmetic procedures, urology, gynaecology and weight loss procedures.
“Support services, such as our private GP service, have also nearly doubled since 2022” Green continues.
“This trend in not only self-pay elective procedures, but also in private GP appointments, points towards the fact that primary care wait lists are long enough to encourage those that can fund their own treatment to do so.”
Wait times a key driver
However more widely, David Hare, chief executive at the Independent Health Providers Network (IHPN), told Health & Protection the initial drive towards self pay has levelled off somewhat since the pandemic.
“Self-pay grew considerably after Covid,” Hare explains.
“More recently, that growth has levelled off but at a much higher level than before – there are around 70,000 admissions every quarter compared to 50,000 in 2019.
“We know many patients are exploring their options for self-pay driven by high NHS waiting lists. This includes not only surgery but diagnostics too, with big growth in that part of the market.”
Those waiting lists have hit a new record. According to data from NHS England, the number of people on its waiting list for treatment neared 7.7 million for the first time in July.
This was up from 7.47 million as of the end of May and 7.21 million as of the end of January, but the waiting list was already around 4.4 million pre-pandemic.
Though Hare adds while prolonged waits for treatment get patients in the door, they then tend to be very positive about their experience.
“Our research tells us that the most important factor in people choosing to self-pay for care is long NHS waiting lists”, Hare continues.
“But also that nearly three quarters of people who’ve actually used private healthcare feel positive or very positive about it, which is a reflection of the high quality care that is on offer across the sector.”
Inevitable increase in demand
Isaac Feiner, owner of Lifepoint Healthcare, points out that long waits for treatment coupled with the fact that only 12% of the UK public has private medical insurance means growth of self pay will be inevitable.
“More people will dip into savings to self-fund,” Feiner predicts. “This again is why I believe education is so important.
“From brokers, insurers and the government alike, the government should be allocating budget to marketing and promoting the take up of private health insurance.
“It is the single easiest way to reduce the burden. Not enough is being done in this regard.”
Package pricing and pre-existing conditions
According to Marcia Reid, non-executive director at Sherwood Healthcare, package pricing is the best way to encourage clients to fund their own care, whether this is required due to an exclusion on their PMI policy or if they are uninsured.
“Patients need the reassurance on their maximum financial exposure before they embark on private treatment and these guarantees will help them to make this decision,” Reid explains.
“Medical insurers are already offering a range of self-pay services, such as Bupa’s pay as you go offering for a range of treatments, and private hospitals have been providing fixed price packages for years.
“I suspect that demand for self-pay will continue to rise as the NHS continues to face its ongoing challenges and people are choosing to invest more of their disposable income, and sometimes their savings, on health services.
“As far as product development is concerned, I am not sure how the market could respond to this need although insurers are best placed to negotiate package prices on behalf of individuals – so maybe a negotiating fee could be an option?”
According to Feiner, product innovation needs to be directed at patients with pre-existing conditions.
“If the underwriters can somehow figure out a way to create a market where everything is medical history disregarded then that would be the most marvellous innovation,” he continues.
“Alas while it is good to dream, this is not going to happen.
“So I feel some form of product innovation in allowing more lower risk pre-existing issues through for virgin clients would be a welcome idea for most.”
More people will choose self pay
But ultimately, however the sector seeks to embrace product innovation, self pay is likely to remain a growing market – at least in the short term.
“Self-pay demand will continue to grow this year, and I would expect a minimum of 10% self-pay market growth next year, with more growth for independent hospitals that are focussing on improved self-pay provisions,” Green says.
“As the NHS continues to work its hardest to tackle waiting lists and focus on supporting our most in-need in the community, elective procedures can sometimes be de-prioritised, depending on your regions’ guidelines leading to more people choosing to self-pay, or joining an insured provider.
“Though, it is worth considering that the market would have grown more if it not for the cost-of-living crisis and inflation.”
