Private healthcare in the UK is booming as more Britons are opting to bypass the long NHS waiting lists by paying for treatment. As a result, private hospital admissions have surged to record highs, driving up the costs of medical insurance. This trend highlights growing frustrations with the NHS and a significant shift in how people are managing their healthcare needs.
In the first quarter of 2024 alone, private hospitals in the UK admitted 238,000 patients, according to the latest figures. This is the highest number ever recorded in any quarter.
With the NHS waiting list currently at 7.62 million treatments affecting over 6.39 million patients, it’s easy to see why more people are turning to private healthcare.
Long waits for treatment have become a growing concern since the COVID-19 pandemic, which severely impacted NHS services, creating a backlog that still lingers today.
As demand for private healthcare rises, so too do the costs. Brokers report price hikes of around 25% in private medical insurance over the past year, primarily due to increased claims and rising medical costs.
Brett Hill, head of health and protection at Broadstone consultancy speaking to inews, described the period of claims inflation as unprecedented. “I’ve been in this industry for more than 25 years, and I cannot recall a period with such an acute surge in claims inflation,” he said.
Claims inflation refers to the rise in the number of insurance claims and their associated costs. When more people make claims, especially for high-cost procedures, insurers are forced to increase premiums to maintain their coverage model.
Hill noted that private healthcare is increasingly being used to cover care that can no longer be readily accessed through the NHS, driving demand for insurance.
Who’s driving the shift?
Interestingly, the biggest growth in private healthcare admissions has been among younger people. Between January and March 2024, admissions among patients aged 20 to 39 increased by 13%.
This may reflect a growing awareness among younger adults about the benefits of private healthcare and how it can provide faster access to treatments. Historically, older adults have made up the majority of private healthcare users, but the rise in younger patients signals a shifting trend.
Dr. Christopher Smith-Brown, clinical adviser at the Private Healthcare Information Network (PHIN) quoted by inews, suggests that younger people are thinking more carefully about their healthcare options. “This increase may be due to worries about NHS waiting lists, as well as more employers offering insurance as an incentive,” he explained.
Women continue to make up the majority of private healthcare users, with 88,100 female admissions in the first quarter of 2024 compared to 79,900 men. This trend could be due to the growing demand for non-traditional healthcare benefits such as menopause, fertility, and neurodiversity coverage.
According to one insurance broker, these areas of care are becoming increasingly important to policyholders, influencing their decision to take up or renew insurance plans.
The most common procedures covered by private medical insurance include cataract surgery, chemotherapy, endoscopy, colonoscopy, and hip replacements.
Notably, orthopaedic and ophthalmology services have some of the longest waiting times in the NHS, which likely drives people to seek faster treatment privately.
For example, cataract surgery can significantly improve quality of life, and waiting months or even years for such a procedure on the NHS is prompting many to pay for quicker access.
Many people are accessing private medical insurance through their employers, with premiums often deducted from their salaries. This type of workplace benefit is becoming more attractive as the NHS backlog persists.
In fact, the Association of British Insurers (ABI) reported that 4.4 million people were covered by work-related health insurance in 2022, an 8% increase from the previous year. This is the highest number since 2008.
However, with insurance costs rising, employees who choose to extend coverage to family members are facing higher premiums. According to Hill, premium increases of 15-25% are common, with some employees seeing even steeper hikes.
These increases make it more expensive for workers who opt to include their partners or children on their health plans.
The NHS crisis and private healthcare demand
The NHS crisis is the key factor pushing many people towards private healthcare. Long waiting lists, staff shortages, and overstretched resources have left many patients waiting months, if not years, for treatment.
A study by the Health Foundation showed that the NHS waiting list grew by 60% between 2020 and 2023. This backlog is driving people to seek private healthcare, even if it means paying out-of-pocket or taking out medical insurance.
Private healthcare is not just an option for wealthy individuals anymore. More middle-income earners are purchasing policies, particularly as employers offer health insurance as part of benefits packages.
This shift in consumer behavior is reshaping the healthcare landscape in the UK.
Employers are also feeling the squeeze. Workplace schemes that used to see moderate increases are now facing hikes of 15-25%, with some policies spiking by up to 50%.
Matt Fletcher, a senior health insurance broker at Globacare, expressed frustration over the rising costs. “It’s very frustrating. We’re seeing price rises of 18-24% even for clients who haven’t made a claim,” he said.
Corporate medical inflation levels are also up to 18%, according to Aon UK. These rising costs are tied to increased demand for care that is difficult to access through the NHS, as well as advances in medical technology and cancer treatment.
Despite these cost pressures, insurers like Aviva emphasize their commitment to offering affordable premiums by maintaining strong relationships with healthcare providers and using value-based strategies.
Data from the ABI also shows that health insurance payouts hit a record high in 2022, totaling nearly £3 billion. The average claim payout for the year was £2,147, reflecting the growing cost and demand for private healthcare. With more people opting for private treatments, insurers are paying out more than ever before.
As NHS waiting lists continue to grow and private healthcare demand surges, the gap between public and private healthcare is widening. While private healthcare provides a much-needed alternative for those who can afford it, the growing costs of medical insurance may eventually limit access for middle-income families.
This surge in private healthcare demand is not expected to slow down anytime soon. Experts warn that as long as the NHS struggles to manage its backlog, more people will continue to turn to private options, pushing up costs even further.
Whether this will lead to a more accessible system or exacerbate inequality remains to be seen.
Ultimately, the rise in private healthcare reflects a healthcare system in flux, where patients are increasingly taking matters into their own hands to get the treatment they need.
Whether this trend continues to rise will depend on how the NHS responds to its challenges and how the private sector adapts to meet growing demand.