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Private Healthcare - UK - June 2017

EXECUTIVE SUMMARY
Market size
Figure 1: UK expenditure on private acute healthcare, 2012-16, (£ Million)
Figure 2: The UK PMI market, 2012-16, by number of policyholders and people covered, (000)
Figure 3: Estimated weekly spend on PMI premiums, by region, 2014-16, (average weekly spend in £)
Market trends
Medical inflation rates putting pressure on uptake level
Healthcare trusts emerging as an alternative to PMI
Market factors
Strain on the NHS will impact industry development
The uncertainty surrounding the outcome of ‘Brexit’ will influence spending and recruitment
Third IPT rise in two years adds further barrier to PMI market growth
Industry structure
Private Acute Medical Care
PMI
Consumer
Forecast
5% growth per year expected to 2021
Figure 4: Forecast UK expenditure on private acute healthcare, 2017-21, (£ Million at 2016 prices)
Corporate PMI will drive overall market growth
Figure 5: UK market forecast for private medical insurance subscription income, 2017-21, (£ million at constant prices)
What we think
KEY INSIGHTS
Is private involvement in the NHS going to rise?
Is the industry tackling barriers to private healthcare usage?
What are the main issues that could arise from Brexit?
INTRODUCTION
Definitions
Methodology
Abbreviations
Market positioning
Healthcare environment
UK ECONOMY
Key points
Overview
Figure 6: UK GDP, 2006-16, (% quarterly growth and GDP in £ billion)
Figure 7: UK output, by industry, 2008-16, (Index 2013 = 100)
Figure 8: Quarters after gdp peak, 1979, 1990 and 2008, (number of quarters and GDP as % of pre-downturn peak)
Inflation
Interest rates
House prices
Figure 9: UK house price changes, 2006-17, (12-month % change)
Consumer spending
Manufacturing
Figure 10: UK manufacturing, 2014-17, (index, 2013 = 100)
Business investment
Figure 11: UK gfcf 2005-16, (£ million)
Imports
Exports
MARKET FACTORS
Key points
Strain on the NHS will impact industry development
Figure 12: Total departmental expenditure limits, in real terms, 2011/12-16/17, (£ million, % of total DEL and % change in NHS DEL)
Figure 13: Total departmental expenditure limits, in real terms, 2011/12-16/17, (£ million and % of total DEL) .. 38
The uncertainty surrounding the outcome of Brexit will influence spending and recruitment
Business rate increase has added to provider cost pressures
Outsourcing to private sector boosted by new regulations
Slight improvement in disposable income in 2016 partially offsets impact of PMI premium growth
Figure 14: GDP per head at current market prices and real household disposable income per head, Q1 2012 - Q4 2016, (£)
Figure 15: GDP per head at current market prices and real household disposable income per head, q1 2012 - q4 2016, (£)
Third IPT rise in two years adds further barrier to PMI market growth
The record low unemployment rate should boost corporate PMI demand
Figure 16: Total UK unemployment rate among people aged 16+, Q1 2012 - Q4 2016, (%)
INDEPENDENT HOSPITAL AND CLINICS
Key points
MARKET SIZE
Key points
Figure 17: UK expenditure on private acute healthcare, 2012-16, (£ million)
Figure 18: UK Expenditure on private acute healthcare, 2012-16, (£ Million)
Figure 19: Source: Analysis of the development of private acute hospitals in the UK, 2012-16, (number of hospitals)
Figure 20: Analysis of the development of the number of beds in private acute hospitals in the UK, 2012-16, (number of beds)
Figure 21: Development of the number of beds in private acute hospitals in the UK, 2012-16, (number of beds)
MARKET SEGMENTATION
Key points
Expenditure
Figure 22: Segmentation of private healthcare expenditure, by type, 2012-16, (£ million)
Figure 23: Segmentation of private healthcare expenditure, by type of service, 2012-16, (£ million)
Figure 24: Source segmentation for acute hospitals and clinics, by source, 2015 and 2016, (£ million and % share)
Figure 25: Funding source segmentation for acute hospitals and clinics, by source, 2016, (% of total value)
‘Self-pay’ represents close to a fifth of total funding for private acute healthcare
ANALYSIS BY TYPE OF OPERATOR
Figure 26: Analysis of private acute hospitals in the uk, by type of operator, 2016/17, (number of hospitals and beds, % of total)
Figure 27: Analysis of private acute hospitals in the UK, by type of operator, 2016/17, (% of all acute hospitalsand % of all acute beds)
UK hospitals subject to new business rates that could impact healthcare provision
REGIONAL ANALYSIS
Figure 28: Regional analysis of uk independent acute hospitals, 2016/17, (number of hospitals and beds)
Figure 29: Regional analysis of UK independent acute hospitals, 2016/17, (% of hospitals and % of beds)
MARKET SHARE
Key points
HOSPITAL AND BED SHARE
Figure 30: Major private acute hospital operators, 2016/2017, (number of hospitals, beds and average number of beds)
Figure 31: Major private acute hospital operators, 2016/17, (number of hospitals and beds)
Private companies looking to capitalise on excess demand for NHS services
NHS Foundation Trusts report annual increase in private patient income
COMPANY PROFILES – PRIVATE HEALTHCARE INDUSTRY
BMI HEALTHCARE
Figure 32: Financial analysis of bmi healthcare, 2012-16, (£ 000)
Company strategy
CARE UK
Figure 33: Financial analysis of care UK, 2012-16, (£ million)
Figure 34: Revenue breakdown of care uk, by division, 2015-16, (£ million)
Company strategy
HCA INTERNATIONAL
Figure 35: Financial analysis of HCA international, 2011-15, (£ 000)
Company strategy
ROODLANE MEDICAL
Figure 36: Analysis of Roodlane Medical, 2011-15, (£ 000)
Company strategy
NUFFIELD HEALTH
Figure 37: Financial analysis of nuffield health, 2011-15, (£ 000)
Company strategy
RAMSAY HEALTH CARE UK OPERATIONS
Figure 38: Financial analysis of Ramsay Health Care UK Operations, 2012-16, (£ 000)
Company strategy
SPIRE HEALTHCARE
Figure 39: Financial analysis of Spire Healthcare Group, 2012-16, (£ Million)
Company strategy
ST MARTINS HEALTHCARE
Figure 40: Financial analysis of St Martins Healthcare, 2011-015, (£ 000)
Company strategy
INDEPENDENT HOSPITALS AND CLINICS FORECAST
Key points
Lead up to Brexit could pose several challenges
Extra capacity provided by the sector can help reduce rising NHS waiting times
Private provider income faces further cost pressures due to new national tariff
5% growth per year expected to 2021
Figure 41: Forecast UK expenditure on private acute healthcare, 2017-21, (£ million at 2016 prices)
Figure 42: Forecast UK expenditure on Private Acute Healthcare, 2017-21, (£ million at 2016 prices)
PRIVATE MEDICAL INSURANCE
Key points
PMI ownership and availability
Figure 43: Ownership of PMI and related health products, August 2016, (% of respondents)
MARKET TRENDS
Key points
Medical inflation rates putting pressure on uptake level
Healthcare trusts emerging as an alternative to PMI
MARKET SIZE
Key points
Figure 44: Annual average PMI premium, by purchaser type, 2006-16, (£)
Figure 45: Average annual PMI premium, by purchaser type, 2006-16, (£)
Premium and subscription growth
Figure 46: The UK Market for Private Medical Insurance, 2012-16, (£ million)
Figure 47: Claim amounts incurred as a proportion of gross earned premiums, 2012-16, (£ million and % gross margin)
Figure 48: PMI gross earned premiums, claims paid and gross margin, 2012-16, (£ million and % gross margin)
Figure 49: The UK PMI market, 2012-16, by number of policyholders and people covered, (000)
Figure 50: The UK PMI Market, 2012-2016, by Number of Policyholders and People Covered, (000)
MARKET DEVELOPMENT
CMA investigation findings has led to greater industry transparency
MARKET SEGMENTATION
Key points
Corporate and group PMI
Individual PMI
Overall PMI market
Figure 51: Segmentation of Private Medical Insurance, by policyholder type, 2012-16, (000 subscribers and £ million)
Figure 52: Segmentation of Private Medical Insurance subscribers, 2012-16, by policyholder type, (000 subscribers)
Figure 53: Segmentation of Private Medical Insurance value, 2012-16, by policyholder type, (£ million)
Regional analysis
Figure 54: Estimated regional PMI penetration and weekly spend on Private Medical Insurance premiums, (% of households in 2014-16 and average weekly spend on PMI premiums in 2012-14 and 2014-16)
Figure 55: Estimated regional PMI penetration, 2014-16, (% of Households)
Figure 56: Estimated weekly spend on PMI premiums, by region, 2014-16, (average weekly spend in £)
Household expenditure by age group
Figure 57: Average weekly household expenditure on medical insurance premiums, by age group, 2012-16, (£)
INDUSTRY DEVELOPMENT
Key points
New register helps insurers locate and recognise new private providers
Market share
Figure 58: Estimated market share in the UK PMI market, by company, 2016, (% of total subscription revenue)
Figure 59: Private medical insurance market share, by company, 2016, (% of total subscription revenue)
COMPANY PROFILES – PRIVATE MEDICAL INSURANCE INDUSTRY
AVIVA HEALTHCARE UK
Figure 60: Financial analysis of Aviva Plc, 2012-16, (£ Million)
Company strategy
AXA PPP HEALTHCARE
Figure 61: Financial analysis of AXA PPP healthcare, 2011-15, (£ Million)
Company strategy
BUPA
Figure 62: Financial analysis of Bupa, 2012-16, (£ million)
Figure 63: Divisional analysis of Bupa, 2012-16, (£ million)
Company strategy
VITALITYHEALTH (FORMERLY PRUHEALTH)
Figure 64: Financial analysis of VitalityHealth (formerly PruHealth), 2012-16, (£000)
Figure 65: Financial analysis of Vitality Health Insurance Limited (formerly Prudential Health Insurance
Limited), 2012-16, (£ million)
Company strategy
WESTERN PROVIDENT ASSOCIATION
Figure 66: Financial analysis of Western Provident Association, 2011-15, (£ 000)
Company strategy
PMI FORECAST
Key points
The doubling of IPT between the end of October 2015 and June 2017 has affected attempts to reduce premiums for customers
Demographic trends could influence new PMI product design
Corporate PMI will drive overall market growth
Figure 67: UK market forecast for Private Medical Insurance subscription income, 2017-2021, (£ million at constant prices)
Figure 68: UK market forecast for Private Medical Insurance subscription income, 2017-21, (£ million at constant prices)
Figure 69: UK market forecast for Private Medical Insurance, by number of policy holders, 2017-21, (000s of subscribers)
Figure 70: UK market forecast for Private Medical Insurance, 2017-2021, by number of policy holders, (000s of subscribers)
New renewal rules could affect uptake
THE CONSUMER – LAST PRIVATE HEALTHCARE VISIT
Key points
Seven in every 10 consumers have never used a private healthcare service
Figure 71: Private healthcare use, by time passed since last visit, April 2017, (% of respondents)
Figure 72: Private healthcare use, by time passed since last visit, April 2017, (% of respondents)
Age affects likelihood of recent private use
Figure 73: Private healthcare use, by time passed since last visit and by age and gender, April 2017, (% of respondents)
Figure 74: Private healthcare use by males, by time passed since last visit and by age, April 2017, (% of respondents)
Figure 75: Private healthcare use by females, by time passed since last visit and by age, April 2017, (% of respondents)
Young people most likely to consider use in the future
THE CONSUMER – FACTORS BEHIND USING PRIVATE HEALTHCARE
Key points
Avoiding NHS waiting lists tops factors behind service use
Figure 76: Factors that would encourage use of private healthcare, April 2017, (% of Respondents)
Figure 77: Factors that would encourage use of private healthcare, April 2017, (% of Respondents)
Affordability key in convincing non-users to use a private service
Figure 78: Factors that would encourage use of private healthcare, by time passed since last visit, April 2017, (% of Respondents)
Appointment and operation flexibility of importance to individual/family PMI policyholders
Figure 79: Factors that would encourage use of private healthcare, by payment type, April 2017, (% of respondents)
THE CONSUMER – METHOD OF PAYMENT
Key points
PMI cover via employer pays for most healthcare
Figure 80: Private healthcare payment method, April 2017, (% of respondents)
Figure 81: Private Healthcare Payment Method, April 2017, (% of Respondents)
Women use their own income to fund treatment
Figure 82: Private healthcare payment method, by gender, april 2017, (% of respondents)
Figure 83: Private healthcare payment method, by gender, April 2017, (% of respondents)
Recent surge in use of employer-provider PMI
Figure 84: Private healthcare use, by time of last visit and by payment method, April 2017, (% of respondents)
Figure 85: Private healthcare use, by time passed since last visit and by payment method, April 2017, (% of respondents)
THE CONSUMER – HEALTH INSURANCE PROVIDER
Key points
Bupa dominates health insurance coverage
Figure 86: Private healthcare insurance provider, April 2017, (% of respondents)
Figure 87: private healthcare insurance provider, April 2016, (% of respondents)
THE CONSUMER – GENERAL PRIVATE HEALTHCARE OPINION
Key points
Most people agree that treatment is too expensive
Figure 88: Private healthcare opinion, April 2017, (% 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 Outlook
The View
Trade exhibitions
COVER Protection and Health Summit 2017
Health and Care Innovation Expo 2017
Healthcare Efficiency Through Technology (HETT) Expo
Hospital Innovations
Independent Healthcare Summit 2017
Medtec Ireland
Safety & Health Expo
The Private Healthcare Summit 2017
The Procurement Event for Health
UK RESEARCH METHODOLOGY
Consumer research
Sampling and weighting
Qualitative Research
Further Analysis
Brand & Social Media Research
Trade research
Informal
Formal
Desk research
Statistical Forecasting

Private Healthcare - UK - June 2017 “With the UK population becoming more aware of available healthcare options, patients increasingly want to be involved in decisions about their healthcare and the services they are likely to use or not. This is why insurers and hospital providers must offer flexibility to each individual so they feel they are receiving the best value for money.”

–     Lewis Cone, B2B Analyst

This report will cover the following areas:
Is private involvement in the NHS going to rise?
Is the industry tackling barriers to private healthcare usage?
What are the main issues that could arise from Brexit?


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