Patients willing to pay

Liz Heath

Liz Heath, author of LaingBuisson’s latest report into the UK self-pay market, shares some insights and considers key issues for consultants. 

The self-pay market is doing well despite economic uncertainty created by Covid-19 and Brexit. 

With NHS elective surgery restricted and few opportunities to spend on discretionary items such as holidays and leisure, many people are discovering that paying for treatment is affordable and accessible.

The LaingBuisson report reveals a sense of optimism about the future of self-pay. A ‘pent-up demand’ is driving interest and there appears to be a direct correlation between the well-publicised waiting lists for NHS elective procedures and diagnostics and inquiries about self-pay.  

Delayed access

This relationship has not always been easy to determine in the past, but delayed access to NHS services now seems to be the primary driver. The scale of growth is difficult to estimate, as there are still capacity issues impacting the ability of many private sector providers.  

These will ease through 2021 and early 2022 when we will be able to assess whether opportunity has translated into activity. Interest in private medical insurance products has also grown in recent months.    

As expected, there is some regionality to the self-pay market. London and the South-east’s higher-density population and greater prosperity continues to drive market growth. However, research by Private Healthcare UK showed that, compared to 2019, visits to its website from all UK regions were significantly up in 2020.  

This suggests that interest in private healthcare overall has jumped noticeably in the past year. Providers are reporting heightened interest in self-pay in traditionally lower-volume regions such as northern England. 

Sustained growth

The cycle of growth in self-pay treatment tends to follow the UK economic cycle. However, the recent sustained growth in the self-pay sector appears to be better than might have been expected given the economic challenges around Covid-19 and Brexit. 

Recent data on the increase in personal savings among some segments of the population may also indicate that decisions about discretionary spending – such as that on private healthcare – may become easier for some. 

Around 59% of respondents to LaingBuisson’s survey believed the main growth in self-pay is likely to come from the over-55 age groups. This is a slight reduction on 2019 although, given the various demographic drivers, still puts the over-55s in the core growth group for self-pay, and mirrors feedback from other sources.  

Twenty-one per cent of respondents felt there was potential growth in the 35-44 age group, higher than for the 45-54 age group. This may reflect the rapid adoption of technology and willingness to embrace digitisation around self-pay services such as GP consultations and diagnostics in a younger demographic. 

As a barometer of general interest in private healthcare and specifically the cost of private treatment, Google Trends shows that interest has not diminished in the UK and aside from a dip in spring and early summer 2020, the general trajectory and relative search interest has been sustained and has shown some peaks towards late 2020.  

This may relate to corresponding news coverage about record NHS waiting times and may also correspond to increased promotion of private medical insurance and a range of private healthcare services during late 2020 and early 2021. 

Is confidence justified?

In 2019, an estimated 21% of independent acute medical hospital revenue was derived from self-paying patients residing in the UK, equivalent to £1,117m. Self-pay spending at independent hospitals continues to show growth.  

LaingBuisson estimates tend to be more cautious than some others, but even considering slight dips in some years, the overall trajectory remains positive and providers are optimistic about prospects.  

Over the five-year period between 2014 and 2018 inclusive, private self-pay growth averaged 7.4% annually in real terms, reflecting a period of high private demand for many acute medical treatments. Strong self-pay business continues to underpin profitability for hospitals and clinics.  

This contrasts to demand for cosmetic surgery self-pay, which has shown little or no growth over the same period.  

Recently, we have seen an upswing in interest in self-pay spending in the Midlands and the North. This is supported by recent data from Healthcode, the online solutions provider for private healthcare. It showed a surge in billed insured activity in the West Midlands at the end of 2020 and a return to pre-Covid levels in most other areas, including – encouragingly – London. 

Of note was also an increase in activity in areas such as the North-east and South-west. By and large, most providers have experienced good growth in self-pay recently. Some, such as Nuffield Health, have outperformed the market for several years.  

The report costs £895 for a single user printed hard copy or £2,238 for a multi-user digital PDF plus printed hard copy. Details at 

Understanding how potential patients seek information

An important change in the way potential patients seek information is emerging. Social media and rapid availability of information play an important part and perhaps the role of the GP may be declining.  

Through analysis of Google Trends, we noted that there were subtle differences in the way searches occur. For example, for some procedures, there were more searches related to price than cost. 

Understanding the tone and language used by potential patients and matching that in communication, whatever the medium, is becoming much more important.  

Decreasing length of stay and an increase in outpatient/ambulatory procedures means that the cost of self-pay treatment may be considered more affordable than previously.

Finance plans 

Certainly, when other factors such as long NHS waits come into play, more patients are clearly considering funding their own treatment. The wide availability of finance plans to spread the cost is also a positive factor.  

Affordability was cited as a key factor in engaging with potential patients and the ability to easily illustrate how to spread the cost of treatment appears to be a successful tactic. The ability to fix and guarantee the price is an important consumer consideration. 

Ophthalmology is a specialty where the costs of accessing private treatment are relatively lower than 20 years ago and competition in this sector has ensured prices remain accessible. 

Restrictive NHS funding criteria continue to have an impact in driving growth in private ophthalmology. The presence of many specialist ophthalmology providers has also ensured a more commercial approach.

Outcome measures 

There is greater transparency of information available on quality, and provider groups are working to further develop publicly available quality and outcome measures. 

It is not clear yet how much the public has engaged with this, although LaingBuisson’s survey suggested growing impact from the Private Healthcare Inform­ation Network’s work. We also noted consultants increasingly provide information on their own outcomes via their personal websites. 

Consultants can be more proactive in supporting patient decision-making. Visibility and greater discussion of outcomes and quality measures are important. 

For most patients who choose the self-pay option at their local hospital, price is not the key determinant – even if the same procedure is available at a much lower price elsewhere. 

Rather it is an overall perception of value for money from the consumer perspective, which may include ‘soft’ and ‘hard’ quality indicators. 

The challenge for providers – and consultants – may be to try and distil some of these positive factors into promotional and media messages as well as personal interactions and consultations.

Room for improvement

We continue to be of the view that consumers are not being as well served by the systems and processes around self-pay inquiries. 

Navigating through online information, online chat or using a helpline needs to be easy and stress-free, especially given that they may be seeking help while worrying about their medical condition. 

Unfamiliarity with private healthcare is common and so potential patients need strong, supportive guidance. If affordability is a key consumer concern, then guide prices for procedures and consultant fees need to be easily accessible and transparent.  

Consumer expectations have been heightened by the concept of ‘on demand’ for many everyday services, and private healthcare is no different.  

Online no longer means sitting at a desktop computer and access is 24/7 from virtually anywhere. LaingBuisson’s random mystery shopping for common self-pay procedures found provider responses mainly satisfactory, but not always timely. The live chat function offered by one provider worked well. 

Demographic shift  

The UK population’s growth rate in mid-2017 and mid-2018, at 0.6%, was slower than any year since mid-2004. In 1998, around one in six people were 65 years and over (15.9%); this increased to one in every five people in 2018 (18.3%) and is projected to reach around one in every four people (24.2%) by 2038.

These headline data from the Office for National Statistics are important in shaping the self-pay market. The ‘baby boomer’ generation is widely acknowledged to have more disposable income due to generous pensions and the ability to invest in leisure and other activities related to quality of life.  

If the NHS cannot offer them timely treatment, then they may increasingly look to the private sector.  

Department for Work and Pensions (DWP) data in 2018 showed pensioners had higher annual incomes than 20 years previously. Significantly, 67% received money from private pensions, a 5% rise from 1998.  

In 2019, the proportion receiving income from private pensions had grown again to 69%. The DWP reported that the percentage of pensioners in the top half of the overall population income distribution in 2017-18 was 49%. In 1994-95 this was 38%. Pensioner couples in the South-east have the highest pensioner income, 14% higher than the UK average.  

The potential to deliver sustained self-pay growth requires a collaborative approach from all involved in the design, delivery, and financing of the self-pay market. 

If we have learnt anything from the past year, it is that the old rules and restraints can torn up. New relationships, strategies and focus will be required to realise the opportunities this market offers.

The report costs £895 for a single user printed hard copy or £2,238 for a multi-user digital PDF plus printed hard copy. Details at