Table of Contents
Executive Summary
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- Private acute healthcare
- Market forecast
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- Figure 1: Pre- and post-COVID-19 forecast of UK expenditure on private acute healthcare (£m at 2019 prices), 2020-24
- Market size
- Specialist fees record strongest growth in expenditure
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- Figure 2: Segmentation of private healthcare market expenditure by service type (% of total expenditure), 2019
- Private medical insurance
- Market forecast
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- Figure 3: Pre- and post-COVID-19 UK market forecast for PMI subscription income (£m at constant prices), 2020-24
- Corporate PMI pathways continue to drive overall market growth
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- Figure 4: Segmentation of private medical insurance, by policyholder type (000 subscribers and £m), 2015-19
- Regional analysis
- Impact of COVID-19 on private healthcare
- Short-, medium- and long-term impact on the industry
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- Figure 5: Expected impact of COVID-19 on private healthcare and PMI, short, medium, and long term, 22 June, 2020
- The consumer
- 58% of people have never used a private healthcare service
- ‘Self-pay’ now the most common singular payment method, but combined PMI still dominates
- What we think
The Impact of COVID-19 on Private Healthcare
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- Short-, medium- and long-term impact on the industry
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- Figure 6: Expected impact of COVID-19 on private healthcare and PMI, short, medium, and long term, 22 June, 2020
- Short-term
- Medium-term
- Long-term
- Opportunities and threats
- Industry’s NHS partnership through the pandemic could open up further collaboration in the future
- The private sector will face challenges in reassuring consumers about safety
- Even longer NHS waiting times will boost interest in private treatment
- Health insurers forced to demonstrate value of PMI during the shutdown
- Doubts remain over when private facilities will fully reopen for non-COVID treatments
- Insurer reaction has included rebates and adding additional cover benefits
- Impact on the market
- Ceasing of a majority of the market’s procedures in H1 2020 will affect growth in the short term but sharp rebound expected
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- Figure 7: Pre- and post-COVID-19 private healthcare market forecast (£m at 2019 prices), 2020-24
- Market hit by rebates in H1 2020 but consistent corporate PMI growth expected to drive value to 2024
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- Figure 8: Pre- and post-COVID-19 UK market forecast for PMI subscription income (£m at constant prices), 2020-24
- How a COVID-19 recession will reshape the industry
- The rise in unemployment could dampen appetite for private healthcare with a lower number of company PMI policyholders…
- … although those due treatment before the pandemic are likely to still seek treatment once services reopen and resume
- Impact on the marketing mix
- Greater collaboration with the NHS and remote units will alter the setting where some services will take place
- Paying for private healthcare may need to become more structured to adapt to the new challenging economic environment for demand to remain steady
- COVID-19: UK context
- Economic assumptions
Issues and Insights
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- The pandemic has reduced the function of cash plans but it is vital that people remain covered
- The facts
- The implications
- Lack of private-hospital data, which impacts transparency drive, is slowly starting to be remedied
- The facts
- The implications
The Market – What You Need to Know
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- Specialist fees record strongest growth
- Ceasing of a majority of the market’s procedures in H1 2020 will affect growth in the short term but sharp rebound expected
- Corporate PMI growth remains key source of PMI income
- Market hit by rebates in H1 2020 but consistent corporate PMI growth expected to drive value to 2024
Private Acute Healthcare
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- Cancer treatment
- IVF
- Market value
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- Figure 9: UK expenditure on private acute healthcare (£m), 2015-19
- PHIN
- Private patient units
- Number of hospitals and beds
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- Figure 10: Analysis of the development of private acute hospitals in the UK (number of hospitals and % change), 2015-19
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- Figure 11: Analysis of the development of the number of beds in private acute hospitals in the UK (number of beds and % change), 2015-19
- Market segmentation
- Expenditure by service type
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- Figure 12: Segmentation of private healthcare market expenditure, by service type (£m), 2015-19
- PMI remains largest revenue source, but self-funders continue to close the gap
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- Figure 13: Funding sources for private acute hospitals and clinics (£m and % of total spend), 2018 and 2019
- Private Practice Register has been updated to increase sector information
- Market share
- Hospital and bed share
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- Figure 14: Major private acute hospital operators (number of hospitals, beds and average number of beds per hospital), 2019
- Independent healthcare providers commit to implement a new medical governance in England
- The PPR gives independent hospitals access to information on consultants
- PHIN and NHS Digital consult on public-private healthcare data alignment
- Industry deals and developments
Forecast
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- Overview
- Ceasing of a majority of the market’s procedures in H1 2020 will affect growth in the short term but sharp rebound expected
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- Figure 15: Pre- and post-COVID-19 forecast of UK expenditure on private acute healthcare (£m at 2019 prices), 2020-24
Private Medical Insurance
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- PMI ownership and availability
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- Figure 16: Interest in health cover, by level of interest (% of respondents), August 2019
- Average PMI premiums
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- Figure 17: Annual average PMI premium, by purchaser type (£), 2009-19
- Subscription growth
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- Figure 18: The UK PMI market, by number of policyholders and people covered (000), 2014-18
- Market development
- Market segmentation
- Overall PMI market
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- Figure 19: Segmentation of PMI subscribers, by policyholder type (in 000), 2015-19
- Figure 20: Segmentation of PMI market value, by policyholder type (£m), 2015-19
- Regional analysis
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- Figure 21: Estimated regional PMI penetration and weekly spend on PMI premiums (% of households in 2017-19 and average weekly spend on PMI premiums in 2017-19)
- Household expenditure by age group
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- Figure 22: Average weekly household expenditure on medical insurance premiums, by age group (£), 2014-19
- PMI industry structure
- Market share
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- Figure 23: Estimated market share in the UK PMI market, by company (% of total subscription revenue), 2019
- Recent industry deals and developments
PMI forecast
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- Overview
- Market hit by rebates in H1 2020 but consistent corporate PMI growth expected to drive value to 2024
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- Figure 24: Pre-COVID-19 UK market forecast for PMI subscription income (£m at constant prices), 2020-24
- Figure 25: Post-COVID-19 UK market forecast for PMI subscription income, (£m at constant prices), 2020-24
The Impact of the Economy
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- Annual GDP growth falls to decade low in 2019 and is expected to significantly decline in 2020 due to large economic shutdown
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- Figure 26: Annual GDP growth rate, (%), 2015-19
- Bank rate set at a record low of 0.1%
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- Figure 27: Bank rate, by date of adjustment (%), 2008-20
Market Drivers
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- Figure 28: Total departmental expenditure limits, in real terms (£m, % of total DEL and % change in NHS DEL), 2015/16-2019/20
- COVID-19 adds further pressure on NHS towards meeting waiting time targets that could drive further private provision
- Outsourcing to private sector remains high with rise in contract value recorded
- Rise in disposable income could help PMI uptake
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- Figure 29: GDP per head at current market prices and real household disposable income per head (£), Q4 2015-Q4 2019
- Rise in unemployment rate could lead to a reduced demand for corporate PMI
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- Figure 30: Total UK unemployment rate among people aged 16+ (%), Q1 2016-Q1 2020
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Companies and Brands – What You Need to Know
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- Vitality GP offers at home or at work blood testing
- PHIN and NHS Digital consult on public-private healthcare data alignment
Competitive Strategies
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- Vitality GP offers ‘at home’ or ‘at work’ blood testing
- BMI launch a series of free ‘one-to-one’ consultations
- HCA UK partners with Circle Harmony to provide expertise in China
- Ramsay Health Care forms partnership to create a ‘one-stop’ centre of excellence
Company Profiles – Private Hospital and Clinic Providers
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- BMI Healthcare
- Recent company activity
- Financial information
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- Figure 31: Financial analysis of BMI Healthcare (£000), 2014-19*
- HCA International
- Recent company activity
- Financial information
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- Figure 32: Financial analysis of HCA International (£000), 2014-18
- Roodlane Medical
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- Figure 33: Financial analysis of Roodlane Medical, (£000), 2014-18
- Ramsay Health Care UK Operations
- Recent company activity
- Financial information
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- Figure 34: Financial analysis of Ramsay Health Care UK operations (£000), 2014-18
- Spire Healthcare
- Recent company activity
- Financial information
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- Figure 35: Financial analysis of Spire Healthcare Group (£m), 2015-19
Company Profiles – Private Medical Insurance Providers
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- Aviva Healthcare
- Recent company activity
- Financial information
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- Figure 36: Financial analysis of Aviva plc (£m), 2015-19
- AXA PPP Healthcare
- Recent company activity
- Financial information
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- Figure 37: Financial analysis of AXA PPP Healthcare (£m), 2014-18
- Bupa
- Recent company activity
- Financial information
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- Figure 38: Financial analysis of Bupa (£m), 2015-19
- VitalityHealth
- Recent company activity
- Financial information
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- Figure 39: Financial analysis of Vitality Health Limited (£000), 2015-19
The Consumer – What You Need to Know
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- 58% of people have never used a private healthcare service
- ‘Self-pay’ now the most common singular payment method, but combined PMI still dominates
- Avoiding a long waiting list and obtaining non-NHS treatment most common reasons for using private healthcare
- NHS holds strong positive opinion while private healthcare is deemed too expensive
The Consumer – Last Private Healthcare Visit
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- 58% of consumers have never used a private healthcare service
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- Figure 40: Private healthcare use, by time passed since last visit, (% of respondents), April 2020
- Younger people most likely to have used private healthcare over the last year
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- Figure 41: Private healthcare use, by time passed since last visit and by age and gender (% of respondents), April 2020
- Those aged 25-44 most likely to consider using private health services in the future
The Consumer – Method of Payment
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- ‘Self-pay’ now the most common singular payment method, but combined PMI still dominates
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- Figure 42: Private healthcare payment method (% of respondents), April 2020
- 39% of women have self-funded their private healthcare treatment
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- Figure 43: Private healthcare payment method, by gender (% of respondents), April 2020
The Consumer – Health Insurance Provider
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- Bupa is the largest provider of health insurance
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- Figure 44: Private healthcare insurance provider (% of respondents), April 2020
The Consumer – Choice Factors
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- Avoiding a long waiting list and obtaining non-NHS treatment most common reasons for using private healthcare
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- Figure 45: Private healthcare choice factors (% of respondents), April 2020
The Consumer – Private Healthcare Opinion
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- NHS holds positive public opinion while private healthcare is deemed too expensive
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- Figure 46: Private healthcare opinion (% of respondents), April 2020
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Methodology
Further Sources and Contacts
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- Trade associations
- Trade magazines
- Trade events
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