Fall in proportion of patients who pay for private health care

The proportion of patients who pay for their own operations– through private medical insurance or out of their own pocket– has tumbled almost 30 per cent since Labour took power.

By 2008, however, that figure had fallen to 10.6 per cent, with just over 900,000 patients being treated privately against 7.7m who were funded by the NHS, according to Laing & Buisson in its annual Healthcare Market Review, the bible of the private health industry.

The proportion is likely to have fallen further since then, given a rise in patients choosing NHS-funded care in a private hospital and a steep decline, caused by the recession, in the numbers paying with their own money.

William Laing, chief executive of Laing & Buisson, said: “This remarkable reduction in the privately funded share of elective surgery is not because private healthcare is in decline.”

The numbers choosing to pay for themselves have fallen 20 per cent or more over the past couple of years to just 16 per cent of private hospital income in 2008 against more than 22 per cent a few years earlier.

Until recently, however, the numbers covered by private medical insurance had held up well.

“The main reason for the falling private share is that NHS-funded surgery has been growing so much faster, aided by the massive injection of public spending during the last decade,” Mr Laing said.

The number of cases paid for by the NHS in private hospitals jumped from just above 50,000 in 2007 to 151,000 in 2008. Those numbers are still rising as NHS patients’ rights to choose a private hospital begin to take off. On top of that – and not included in these figures – are approaching 100,000 NHS patients a year being treated in the independent private sector treatment centres that were set up to provide NHS care.

But Mr Laing said the extra business “has been a mixed blessing” for private sector hospitals. NHS work offers a lower profit margin. “If and when” self-pay work revived, many of the private operators would wish to return to their core private market. The big question, he said, was whether any private operators had the appetite to invest in additional, lower cost, facilities aimed at servicing the NHS. 

The ISTC programme, where some contracts were cancelled and the fate of those contracts that are coming up for renewal is uncertain, “has dented providers’ confidence in the government’s long-term intentions,” Mr Laing said.

Patients are to be given a legal right to seek treatment at a private hospital if the NHS fails to honour its promise to treat them within 18 weeks, according to government insiders. The measure is expected to be included in the Queen’s Speech this month. The same entitlement is likely to apply to the pledge that patients with suspected cancer must be seen by a specialist within two weeks.

Patients can already choose to receive their NHS funded care for non-urgent procedures at a private hospital – although it is not routinely possible to switch to private care once diagnosis and treatment are under way.

Labour has already said it will turn its 18-week wait target into an “entitlement”. The move to make it a legal right is at least partly political, with Labour ministers planning to challenge the Conservatives over whether they would repeal such a measure.

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