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Private Healthcare - UK - June 2018

Private Healthcare - UK - June 2018

“An efficient and cost-effective private healthcare sector would lead to greater benefits for patients, providers, healthcare professionals and insurers, while also easing pressures on the NHS and wider healthcare industry.”

- Lewis Cone, B2B Analyst

This report will look at the following areas:
Are private providers gaining patients from the NHS due to increased waiting times at NHS hospitals?
Can improvements to information regarding treatment help improve the number of patients using private healthcare?
Can data and technology help hospitals adjust to changing patient needs?


EXECUTIVE SUMMARY
Market size
Figure 1: UK Expenditure on Private Acute Healthcare, 2013-17, (£ Million)
Figure 2: The UK PMI Market, 2013-2017, by Number of Policyholders and People Covered, (000)
Figure 3: Estimated Weekly Spend on PMI Premiums, by Region, 2015-17, (Average Weekly Spend in £)
Market factors
Continued pressures on the NHS provide opportunities, but private providers must proceed with caution when acquiring patients
Slow progress in Brexit talks means uncertainty remains over future impact on healthcare spending and recruitment
Third IPT rise in two years adds barrier to PMI growth
Consumer
Forecast
3% growth per year expected to 2022
Figure 4: Forecast UK Expenditure on Private Acute Healthcare, 2018-2022, (£ Million at 2017 prices)
Growth will be driven by uptake in corporate PMI but will remain sluggish
Figure 5: UK Market Forecast for Private Medical Insurance Subscription Income, 2018-2022, (£ Million at constant prices)
What we think
KEY INSIGHTS
Are private providers gaining patients from the NHS due to increased waiting times at NHS hospitals?
Can improvements to information regarding treatment help improve the number of patients using private healthcare?
Can data and technology help hospitals adjust to changing patient needs?
INTRODUCTION
Definitions
Methodology
Abbreviations
Market positioning
Healthcare Environment
UK ECONOMY
Key points
Overview
Figure 6: UK GDP, 2007-2017, (% Quarterly Growth and GDP in £ Billion)
Figure 7: UK Output, by Industry, 2008-2017, (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, 2007-2018, (12 month % change)
Consumer spending
Manufacturing
Figure 10: UK Manufacturing, 2014-18, (Index, 2013 = 100)
Business investment
Imports
Exports
MARKET FACTORS
Key points
Continued pressures on the NHS provide opportunities, but private providers must proceed with caution when acquiring patients
Figure 11: Total Departmental Expenditure Limits, in Real Terms, 2013/14-2017/18, (£ Million, % of Total DEL and % Change in NHS DEL)
Figure 12: Total Departmental Expenditure Limits, in Real Terms, 2013/14-2017/18, (£ Million and % of Total DEL)
Slow progress on Brexit talks means uncertainty remains over future impact on healthcare spending and recruitment
Business rate rise has had less of an impact on private providers
Outsourcing to private sector has been boosted by regulation updates
Fall in disposable income in 2017 adds to the downward impact of PMI premium growth
Figure 13: GDP per Head at Current Market Prices and Real Household Disposable Income per Head, Q4 2013 - Q4 2017, (£)
Figure 14: GDP per Head at Current Market Prices and Real Household Disposable Income per Head, Q4 2013 - Q4 2017, (£)
Record low unemployment rate should at least maintain corporate PMI demand
Figure 15: Total UK Unemployment Rate Among People Aged 16+, Q1 2013 - Q4 2017, (%)
INDEPENDENT HOSPITAL AND CLINICS
Key points
MARKET SIZE
Key points
Figure 16: UK Expenditure on Private Acute Healthcare, 2013-17, (£ Million)
Figure 17: UK Expenditure on Private Acute Healthcare, 2013-17, (£ Million)
Figure 18: Analysis of the Development of Private Acute Hospitals in the UK, 2013-2017, (Number of Hospitals)
Figure 19: Analysis of the Development of the Number of Beds in Private Acute Hospitals in the UK, 2013-17, (Number of Beds)
Figure 20: Development of the Number of Beds in Private Acute Hospitals in the UK, 2013-17, (Number of Beds)
MARKET SEGMENTATION
Key points
Expenditure
Figure 21: Segmentation of Private Healthcare Expenditure, by Type, 2013-2017, (£ Million)
Figure 22: Segmentation of Private Healthcare Expenditure, by Type of Service, 2013-2017, (£ Million)
PMI remains largest source of revenue, but share is declining
Figure 23: Funding Source Segmentation for Acute Hospitals and Clinics, by Source, 2016 and 2017, (£ Million and % Share)
Figure 24: Funding Source Segmentation for Acute Hospitals and Clinics, by Source, 2017, (% of Total Value)
Growth in ‘self-pay’ users showing no signs of slowing
Regional analysis
Figure 25: Regional Analysis of UK Independent Acute Hospitals, 2017/18, (Number of Hospitals and Beds)
Figure 26: Regional Analysis of UK Independent Acute Hospitals, 2017/18, (% of Hospitals and % of Beds)
MARKET SHARE
Key points
Hospital and Bed Share
Figure 27: Major Private Acute Hospital Operators, 2017/2018, (Number of Hospitals, Beds and Average
Figure 28: Major Private Acute Hospital Operators, 2017/18, (Number of Hospitals and Beds)
NHS foundation trusts report stagnating private patient income, but continuing financial pressures could lead to growth
CQC inspections show that overall standards of care in independent hospitals are at a good level
Malpractice case leads to calls for greater transparency
COMPANY PROFILES – PRIVATE HEALTHCARE INDUSTRY
BMI HEALTHCARE
Recent company news
Figure 29: Financial Analysis of BMI Healthcare, 2012-16, (£ 000)
Company strategy
CARE UK
Recent company news
Figure 30: Financial Analysis of Care UK, 2013-17, (£ Million)
Figure 31: Revenue Breakdown of Care UK, by Division, 2015-17, (£ Million)
Company strategy
HCA INTERNATIONAL
Recent company news
Figure 32: Financial Analysis of HCA International, 2012-2016, (£ 000)
Company strategy
ROODLANE MEDICAL
Figure 33: Financial Analysis of Roodlane Medical, 2012-2016, (£ 000)
Company strategy
NUFFIELD HEALTH
Recent company news
Figure 34: Financial Analysis of Nuffield Health, 2012-16, (£ 000)
Company strategy
RAMSAY HEALTH CARE UK OPERATIONS
Figure 35: Financial Analysis of Ramsay Health Care UK Operations, 2013-17, (£ 000)
Company strategy
SPIRE HEALTHCARE
Figure 36: Financial Analysis of Spire Healthcare Group, 2013-17, (£ Million)
Company strategy
ST MARTINS HEALTHCARE
Figure 37: Financial Analysis of St Martins Healthcare, 2012-2016, (£ 000)
Company strategy
INDEPENDENT HOSPITALS AND CLINICS FORECAST
Key points
Lead up to Brexit could pose several challenges
3% growth per year expected to 2022
Figure 38: Forecast UK Expenditure on Private Acute Healthcare, 2018-2022, (£ Million at 2017 prices)
Figure 39: Forecast UK Expenditure on Private Acute Healthcare, 2018-2022, (£ Million at 2017 prices)
Release of data on patient outcomes will improve transparency and may increase trust among patients considering using private healthcare
PRIVATE MEDICAL INSURANCE
Key points
PMI Ownership and Availability
Figure 40: Ownership of PMI and related health products, August 2017, (% of Respondents)
MARKET TRENDS
Key points
Medical inflation rates continue to put pressure on uptake levels
Increasing waiting times for NHS treatments provide opportunities
MARKET SIZE
Key points
Figure 41: Annual Average PMI Premium, by Purchaser Type, 2007-17, (£)
Figure 42: Average Annual PMI premium, by Purchaser Type, 2007-17, (£)
Premium and Subscription Growth
Figure 43: The UK Market for Private Medical Insurance, 2013-17, (£ Million)
Figure 44: Claim Amounts Incurred as a Proportion of Gross Earned Premiums, 2013-17, (£ Million and % Gross Margin)
Figure 45: PMI Gross Earned Premiums, Claims Paid and Gross Margin, 2013-2017, (£ Million and % Gross Margin)
Figure 46: The UK PMI Market, 2013-2017, by Number of Policyholders and People Covered, (000)
Figure 47: The UK PMI Market, 2013-2017, by Number of Policyholders and People Covered, (000)
Market development
Private practice register helps streamline insurers’ recognition processes
MARKET SEGMENTATION
Key points
Corporate and Group PMI
Individual PMI
Overall PMI Market
Figure 48: Segmentation of Private Medical Insurance, by Policyholder Type, 2013-17, (000 Subscribers and £ Million)
Figure 49: Segmentation of Private Medical Insurance Subscribers, 2013-2017, by Policyholder Type, (000 Subscribers)
Figure 50: Segmentation of Private Medical Insurance Value, 2013-2017, by Policyholder Type, (£ Million)
Regional Analysis
Figure 51: Estimated Regional PMI Penetration and Weekly Spend on Private Medical Insurance Premiums, (% of Households in 2015-2017 and Average Weekly Spend on PMI Premiums in 2012-14 and 2015-17)
Figure 52: Estimated Regional PMI Penetration, 2015-17, (% of Households)
Figure 53: Estimated Weekly Spend on PMI Premiums, by Region, 2015-17, (Average Weekly Spend in £)
Household Expenditure by Age Group
Figure 54: Average Weekly Household Expenditure on Medical Insurance Premiums, by Age Group, 2013- 17, (£)
INDUSTRY DEVELOPMENT
Key points
Improvements made to industry sourcing system that will aid PMI advisers
Recent industry acquisitions
Market share
Figure 55: Estimated Market Share in the UK PMI Market, by Company, 2017, (% of Total Subscription Revenue)
Figure 56: Private Medical Insurance Market Share, by Company, 2017, (% of Total Subscription Revenue) .. 119
COMPANY PROFILES – PRIVATE MEDICAL INSURANCE INDUSTRY
AVIVA HEALTHCARE UK
Figure 57: Financial Analysis of Aviva Plc, 2012-16, (£ Million)
Company strategy
AXA PPP HEALTHCARE
Figure 58: Financial Analysis of AXA PPP Healthcare, 2012-16, (£ Million)
Company strategy
BUPA
Figure 59: Financial Analysis of Bupa, 2013-17, (£ Million)
Figure 60: Divisional Analysis of Bupa, 2013-17, (£ Million)
Company strategy
VITALITYHEALTH (FORMERLY PRUHEALTH)
Figure 61: Financial Analysis of VitalityHealth (formerly PruHealth), 2013-17, (£000)
Company strategy
WESTERN PROVIDENT ASSOCIATION
Figure 62: Financial Analysis of Western Provident Association, 2012-16, (£ 000)
Company strategy
PMI FORECAST
Key points
Growth will be driven by uptake in corporate PMI but will remain sluggish
Figure 63: UK Market Forecast for Private Medical Insurance Subscription Income, 2018-2022, (£ Million at constant prices)
Figure 64: UK Market Forecast for Private Medical Insurance Subscription Income, 2018-2022, (£ Million at constant prices)
Figure 65: UK Market Forecast for Private Medical Insurance, by Number of policyholders, 2018-2022, (000s of Subscribers)
Figure 66: UK Market Forecast for Private Medical Insurance, 2018-2022, by Number of Policy Holders, (000s of Subscribers)
The growing popularity of the self-pay market could further dampen PMI growth
Demographic trends are likely to drive PMI product design
THE CONSUMER – LAST PRIVATE HEALTHCARE VISIT
Key points
Nearly three-quarters of consumers have never used a private healthcare service
Figure 67: Private Healthcare Use, by Time Passed Since Last Visit, April 2018, (% of Respondents)
Figure 68: Private Healthcare Use, by Time Passed Since Last Visit, April 2018, (% of Respondents)
Under-44s most likely to have used private healthcare in the last year
Figure 69: Private Healthcare Use, by Time Passed Since Last Visit and by Age and Gender, April 2018, (% of Respondents)
Figure 70: Private Healthcare Use by Males, by Time Passed Since Last Visit and by Age, April 2018, (% of Respondents)
Figure 71: Private Healthcare Use by Females, by Time Passed Since Last Visit and by Age, April 2018, (% of Respondents)
Young people most likely to consider private healthcare in the future
THE CONSUMER – METHOD OF PAYMENT
Key points
PMI cover via employer pays for most healthcare but self-pay on the rise
Figure 72: Private Healthcare Payment Method, April 2018, (% of Respondents)
Figure 73: Private Healthcare Payment Method, April 2018, (% of Respondents)
A third of women self-fund treatment
Figure 74: Private Healthcare Payment Method, by Gender, April 2018, (% of Respondents)
Figure 75: Private Healthcare Payment Method, by Gender, April 2018, (% of Respondents)
Self-payment and employer-provider PMI used in most recent private use
Figure 76: Private Healthcare Use, by Time of Last Visit and by Payment Method, April 2018, (% ofRespondents)
Figure 77: Private Healthcare Use, by Time Passed Since Last Visit and by Payment Method, April 2018, (% of Respondents)
THE CONSUMER – HEALTH INSURANCE PROVIDER
Key points
Bupa represents close to 30% of health insurance coverage
Figure 78: Private Healthcare Insurance Provider, April 2018, (% of Respondents)
Figure 79: Private Healthcare Insurance Provider, April 2018, (% of Respondents)
THE CONSUMER – CHOICE FACTORS
Key points
Treatment cost determines choice of healthcare provider
Figure 80: Private Healthcare Choice Factors, by Rank of Importance, April 2018, (% of Respondents)
Figure 81: Private Healthcare Choice Factors, by Rank of Importance, April 2018, (% 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 View
Trade Exhibitions
Health and Care Innovation Expo 2018
Healthcare Efficiency Through Technology (HETT)/Commissioning in Healthcare (CIH)/Procurement in
Healthcare (PIH)/Cyber Security in Healthcare (CSIH) Expo
Hospital Innovations
Safety & Health Expo
The Private Healthcare Summit
The Procurement Event for Health
UK B2B
Trade research
Informal
Formal
Desk research
Consumer research
Sampling and weighting
Qualitative Research
Further Analysis
Statistical forecasting

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