The growth of private healthcare is fueled by NHS waiting lists

The value of Britain’s private healthcare market rose to a record £12.4 billion last year as long NHS waiting lists fueled demand from individuals and the health service paid out almost £3.5 billion in procedures to catch up to be eliminated in healthcare.

As private health insurance boomed, total revenues generated in the independent healthcare sector reached a record high in real terms, pegged at 2003 prices, research showed.

The total value of work done in hospitals, clinics and by privately practicing doctors, including cataract removals, knee operations and MRI scans, was £1 billion higher than in 2022, according to the latest report from healthcare data provider LaingBuisson.

Last year, more patients went private the NHS waiting list peaked at 7.77 million in Septemberup sharply from 4.57 million at the end of 2019. More people were taking out private health insurance to finance their treatment, while the number of people paying out of pocket has fallen, LaingBuisson said.

To clear the backlog, the NHS paid more to private providers to offer treatments. Last year, £2.1 billion was spent in private hospitals – up from £1.9 billion in 2022 – accounting for almost a third of their revenues, up from 10% two decades ago. The NHS spent a further £1.5 billion on private clinics.

Of the 1.3 million procedures performed by private hospitals and clinics in 2023, almost 445,000 were funded by the health service, the report found.

Cataract surgery is the most common private procedure, costing around £2,000 for private payers and less for NHS contracts. Chemotherapy, upper gastrointestinal endoscopy, colonoscopy, hip replacement, arthroscopy and knee replacement, and hernia repair were the top private procedures.

Wes Streeting, the Health Secretary, wants to use the private sector to tackle the backlog in NHS care. This week he said delays within healthcare meant a “death sentence” for some NHS patients, as Keir Starmer highlighted the need for greater use of AI and technology.

Private acute hospitals recorded a turnover of £6.7 billion last year, up from almost £6 billion the year before. The five largest operators accounted for three quarters of this turnover. FTSE 250-listed company Spire Healthcare and Abu Dhabi-owned Circle Health Group are the two largest, followed by the British arm of US company HCA Healthcare, British charity Nuffield Health and Australia’s Ramsay Health Care UK. The four largest hospital groups have annual turnovers of £1 billion or more.

Private clinics and privately practicing doctors generated a turnover of £4.9 billion in 2023, while the NHS earned £700 million from treating non-NHS patients and international visitors – known as ’embassy patients’ – in private patient wards, mainly in London , such as the Royal Marsden Hospital in West London.

Tim Read, the co-author of the report, said: “Increasingly we are seeing people willing to seek alternatives rather than waiting to be seen by the NHS. Independent hospitals are seeing a continued increase in the number of people claiming health insurance, while independent clinics offering cheaper treatments – whether it’s cataract surgery or a diagnostic scan – are becoming increasingly common on England’s high streets, and not just in the affluent areas. traditionally associated with private healthcare.”

The two specialties with the longest NHS waiting times – ophthalmology and orthopedics – continue to show the greatest growth in private healthcare. The NHS now pays for more cataract operations performed by private eye clinics than it performs itself. The number of eye clinics has skyrocketed since 2020, with Newmedica, SpaMedica, CHEC and Optegra all opening more locations. However, doctors have argued that the cataract boom means there is less NHS funding to treat more serious conditions that can lead to blindness.

David Hare, head of industry body Independent Healthcare Providers Network, said: “Private healthcare is now becoming increasingly relevant to the lives of many more millions of people, with ‘going private’ now the ‘new normal’.”