The business press and private sector spin doctors are doing their best to talk up the growth of the private hospital sector despite increasing signs that the prices of private care are unaffordable.

The most recent flurry of puff came as a result of analysis by independent consultancy Broadstone, which showed admissions using private medical insurance increased to 458,000 for the first three quarters of 2023, an 11 per cent rise on the equivalent  2022 figures.

The Broadstone ‘analysis’ is in fact shamelessly lifted almost wholesale from the official figures and commentary produced for the private sector by the Private Healthcare Information Network (PHIN). These do indeed show an 11% increase – which sounds more exciting than the actual number of extra privately insured patients, just 46,000.

Nor does Broadstone point out that the 2023 numbers have fallen back in quarters two and three. Instead it claims that the numbers could exceed 610,000 in 2023/24, “which will be a record annual level.”

This “record” would be just 30,000 (5%) above the 580,000 privately insured patients treated in 2019 – despite the fact that the NHS waiting list has risen by over 3 million since then.

City am reports breathlessly: “Broadstone predicts if the annualised rate of growth were to be continued, the total private healthcare admissions would reach 917,000 in 2024 (up from an expected 882,000 in 2023)” – of which 661,000 would be privately insured.

What neither Broadstone nor the mainstream press are admitting is that this projection implies a continuing reduction in numbers of self-pay patients who borrow or raid savings to pay up front for health care.

Since a dramatic 30% leap – from around 50,000 per quarter – in Q2 2021  self-pay numbers have been more or less level at around 70,000 per quarter, and have fallen back during 2023. The City am projections would suggest an even bigger fall – to 256,000 a year – in 2024.

Self-pay has been seen by many as the way the private sector could really cash in on the lack of NHS capacity, since NHS waiting list patients are by definition unable to take out private insurance to enable them to jump the queue – because they have a pre-existing diagnosed health issue.

However that growth has stalled as the cost of living crisis and the soaring costs of private ops have made private treatment unaffordable to most. So while City am bigs up a “0.4% increase” in self pay compared with 2022, Actuarial Post is almost alone in flagging up the relatively small scale of this market, and pointing out the obvious:

“In comparison, self-pay admissions are plateauing due to a natural limit on the amount of people able to fund expensive treatments entirely out of their own pocket.”

Private health insurers (seeking to maximise their own profits) have become more canny in holding down the prices they pay to private hospitals, whereas self-pay patients could be charged whatever the hospitals think they can get away with. So a market so clearly dominated by privately insured patients is bad news for the hospital bosses.

But if the private self pay sector has not been able to grow significantly and rapidly during the past few years, it’s arguable that it will never have a better chance, since the growth of the NHS waiting list after the peak of the Covid pandemic has been faster than any other period in its history.

It’s this clear evidence of the lack of any sustainable organic market for private health care which means despite all the claims of booming demand the private hospital sector is still eager to grab more contracts to treat NHS-funded patients to fill otherwise empty beds.

Meanwhile there is more evidence of the marginal status of private healthcare in the figures published by PHIN for the numbers of NHS consultants involved with private treatment. Back in 2000, a staggering 70 percent of NHS consultants (16,000 out of 23,000) did some private practice.

24 years later, with the NHS consultant workforce having risen to 60,000 in 2023, PHIN reports only 9,000 consultants (15%) active in private healthcare.


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