Will self-pay keep on rising?
Liz Heath
LaingBuisson’s Self-pay Report, 5th Edition, has now been published. Its author Liz Heath reflects on what it tells us about the market – a market that has underpinned growth for many providers over the last two years and has led to a surge in demand for consultations and diagnostics.
Patients are seeking out self-pay options for surgery in greater numbers, as well as the vast range of other self-pay services from virtual and online GP and medical services right through to complex cancer care.
Data from various sources backs this up, though it suggests demand has steadied a little over recent months. However, this is set in the context of higher self-pay activity than pre-2020.
Consumer confidence is key to discretionary healthcare spending, whether this is for an MRI scan, a knee replacement or a face lift. Perhaps surprising, then, that cosmetic surgery demand rose in the last 18 months, not just, it appears, as a result of post-pandemic catch-up.
For self-pay elective procedures, providers all view the over-60s market as their core self-pay market – the profiles are slightly different for cosmetic surgery.
The growth in this demographic and, to some degree, their insulation from some of the impacts of the current financial crisis, suggests a sustainable market in some of the core specialties such as orthopaedics, general surgery and ophthalmology.
For others, private healthcare is only affordable with the help of payment plans and other options to spread the cost. This segment of the self-pay market does appear to be most at risk from continuing economic uncertainty and high costs of living.
Covid’s effect
The cycle of growth and decline in self-pay treatment has historically tended to follow the UK economic cycle. However, Covid-19 has had a much more pronounced impact on self-pay activity since early 2020, leading into the current situation where NHS access appears to be overriding concerns around economic impact.
Nevertheless, we cannot ignore the influence of economic factors, whether macro-economic or those related to individual circumstances and personal consumer confidence.
Our research indicates the UK self-pay market continues to grow and that this trend will continue over the next three to five years.
The rate of growth may slow a little, but there is a genuine sense of optimism among almost everyone we engaged with, although a note of caution was raised by some around the constraints such as staffing and capacity on realising the growth potential.
Of note is that we are seeing growth in demand for self-pay across all areas of the UK, including areas that have traditionally not been private healthcare ‘hot spots’ such as Wales and Scotland.
What’s driving demand?
The highest demand for self-pay procedures remains in orthopaedics – for example, hip and knee replacements – and ophthalmology –cataract surgery.
These procedures and specialties very much reflect an ageing demographic with those over 60 being the largest self-pay group. But other specialties such as general surgery and gynaecology have also seen growth in younger age groups, who are more likely to seek out ways of spreading the cost of their treatment.
While frustration with long NHS waits and difficulty accessing NHS services is the primary driver, rapid access, affordability and the certainty in being able to plan treatment are also key decision-making factors.
We are also seeing the emergence of different types of self-pay consumers. There are those who weight up the pros and cons of waiting for NHS diagnosis or treatment and, having undertaken their research and perhaps had discussions with friends and family, make a specific choice to seek out a particular provider or treatment option.
For others, an element of desperation fuels their desire to seek out private treatment – maybe for the first time – when faced with the reality of long waits, the experience of demand management by commissioners or just their own deteriorating clinical situation.
Inquiries about private healthcare in general or how to navigate the system have grown significantly. GoPrivate.com has seen its web traffic increase from two million to four million visits in just over two years.
While younger consumers are often thought of as being much more digitally ‘savvy’, older generations are now much more engaged in the digital world and are actively seeking out information and options.
Talk about quality and safety
For those new to private healthcare, there may still be concerns around quality and safety. It is clear that many consumers undertake research to inform their decision-making, and prominent information about quality, safety and outcomes is becoming more important, as are reviews from trusted sources.
Openness, publication of quality data and outcomes by individuals and groups is becoming increasingly common and contributes to informed decision making.
Future prospects?
In 2019, only 11.1% of respondents to LaingBuisson’s survey intended to allocate more than 30% of their marketing budget to self-pay.
At the end of 2022, this had risen significantly to 41.7%. Investment in online, digital and patient acquisition are likely to feature strongly and were viewed as the most successful channels.
This is something that consultants and specialists can also take on board when considering how best to connect with potential patients.
We found the view on growth prospects reasonably consistent, with high single-digit growth being viewed as achievable year on year.
However, while this projection is based on what appears to be a reasonably solid market at present, there is always concern that at some point, economic concerns will provoke caution from consumers – whether or not NHS access improves.
Taking a different perspective, the recent rise in self-pay demand may be signalling a permanent shift in our expectations around NHS-funded care and may underpin a very different landscape in which a ‘mix and match’ approach to private and NHS funded care is the reality for many people.
LaingBuisson’s Self-pay Report 5th Edition is now available in digital and hard copy at www.laingbuisson.com/healthcare-report-store/
