Don’t sit back and wait for patients
Liz Heath
Reflections on the UK self-pay market – can we be optimistic about growth prospects? Liz Heath, author of market analyst LaingBuisson’s latest self-pay report, shares some thoughts.
While there is a continued sense of optimism about the future of the self-pay market, we must acknowledge that it is not immune to economic uncertainty.
Improved information about all forms of private healthcare has been important in raising awareness of choice and, for some, ways to spread the cost and make it more affordable.
It is no surprise that there remains a direct correlation between the well-publicised and lengthening NHS waiting lists for elective procedures and diagnostics and inquiries around self-pay.
But other factors are at play, such as the wider economy and economic confidence at an individual level.
The balance of these factors and the role of NHS waiting times in driving demand for private treatment has not always been easy to determine in the past and while other factors remain, access to – and maybe loss of confidence in – NHS services does now seem to be the primary driver.
Future projections
While future projections appear sound, the scale of growth is difficult to estimate, as there are constraints on the private sector’s ability to expand – primarily related to capacity, staffing and resourcing.
Innovation and efficiency are becoming important factors that are driving shorter hospital stays and an increasing shift to ambulatory and day surgery.
Providers are optimistic about the future and assuming inflation levels begin to stabilise and fall and economic confidence begins to return, demand looks set to continue at current levels for the foreseeable future.
Consumer confidence is key to discretionary healthcare spending, whether this be for an MRI scan, a knee replacement or a facelift. Some of the key demographics for self-pay and some cosmetic surgery appear to be choosing to spend money on health and well-being if they can, despite the financial pressures on household spending.
Elective providers often view the over-60s market as their core self-pay market. The continuing growth of the ‘baby boomer’ generation and, to a degree, their insulation from some of the impacts of the financial crisis, suggests a sustainable market in some of the core specialties such as orthopaedics, general surgery and ophthalmology.
Greater demand
For the first time in recent years, interest in private medical insurance has also grown markedly, suggesting there is greater demand for private healthcare overall and, for some, a desire to protect themselves in case of healthcare need and ensure rapid access to cancer treatment, for example.
Looking back, the double-digit annual self-pay growth predicted some years ago was achieved but growth then stalled slightly, with high single-digit growth reported subsequently.
This year, the general feeling is that self-pay growth will be in the low to mid-single digits as we look forward through the rest of 2024 and into 2025.
This does not mean that for individual consultants and some providers the bubble has burst – indeed we know that there are pockets of high self-pay growth with continuing demand for services across the board.
In LaingBuisson’s provider survey, carried out as part of the report’s research, no respondent felt the market overall would decrease in the next three years. 30% believe it will grow by more than 10%, 30% by 5-10%, 10% by up to 5% and 30% felt it would remain static.
This is quite a shift over the last 18 months but perhaps reflects a more realistic view of the short-term market.
Additional feedback from those within the industry suggests sustainable low-to-middle single-digit growth over the next two years, which fits with the pattern of activity noted by the Private Healthcare Information Network (PHIN) and others – and still reflects higher self-pay activity than in 2019.
What about cosmetic surgery?
LaingBuisson’s self-pay report also focuses on the cosmetic surgery and hair restoration surgery markets. The latter has shown signs of expansion in recent years and a small part of the overall cosmetic surgery and self-pay market, appears reasonably robust.
The same cannot be said for demand for cosmetic surgery, which, according to the British Association of Aesthetic Plastic Surgeons (BAAPS) annual audits, has dipped after the post-Covid bounce-back.
This is at odds with the global picture, with growth seen in all the most popular cosmetic surgery procedures.
Even the non-surgical aesthetics market has seen a slight recent slow-down in the UK.
Does this mean the aesthetics and cosmetic surgery market has peaked or, more likely, found its level?
It is difficult to be sure, but we do know that economic pressures can influence discretionary spend and maybe consumers are being more cautious in their approach to treatments.
Of course, there is always a twist, and we are still seeing many patients choosing treatment abroad, primarily for cost reasons and some non-UK providers becoming more active in their patient acquisition strategies in the UK.
Is there evidence of consumers making different choices?
Providers we spoke with all felt that many consumers were making conscious and informed choices in seeking private healthcare options.
We know from recent research from PHIN and earlier research from the Independent Healthcare Providers Network that this is a consistent theme but not yet fully embedded as a consumer behaviour.
What emerged very clearly from the PHIN research, however, was that information to make those choices – particularly for those new to private healthcare – can be lacking. And we must not forget that self-pay spans a vast range from a low-cost private GP appointment right through to complex and costly cancer care.
Mix and match
PHIN noted that increasingly, consumers are adopting a ‘mix and match’ approach to private healthcare and the NHS, opting to seek the best ‘fit’ for their needs at the time, whether this be consultation, diagnostics or treatment. This too is a trend LaingBuisson has identified.
Elements of choice are not just about which hospital or consultant but may also involve reassurance and certainty around pricing and ways to spread the cost of treatment.
LaingBuisson has found that different elements of the patient pathway before committing to treatment are sometimes disconnected and do not always support the patient sufficiently from first inquiry through to treatment.
Ironically, this is something the cosmetic surgery sector generally does well, so perhaps there is some learning here. The surge in self-pay demand outside of the ‘traditional’ geographic private healthcare hotspots also means that it is far less likely that patients will have existing knowledge of how to navigate the sometimes complex entry points and pathways into private healthcare.
In terms of specialties, consumers are making different choices sometimes because they feel there is no alternative. The highest demand for self-pay procedures remains in hip and knee replacements and cataract surgery. However, other specialties such as general surgery and gynaecology have also seen growth.
Growth in areas such as gynaecology are also leading to younger patients seeking self-pay options as they weigh up the long NHS waits and their own well-being and lifestyle circumstances.
What can private practitioners take from this research?
As well as LaingBuisson’s research, recent research from the Private Healthcare Information Network (PHIN) also provides a strong steer for practitioners. The passive approach and hoping that patients will somehow find their way to you is very much a thing of the past.
Whether it is individual consultants, groups or chambers or clinics offering a range of services, a proactive approach needs to be a strong feature in business development.
PHIN noted that not all patients have a ‘consumer mindset’ when navigating private healthcare, although there has been a clear shift over recent years.
One of the key findings from the PHIN research was around patient journeys, something LaingBuisson has also reflected on.
Patient journeys are very diverse because of their priorities and circumstances. So too their appetites for information, which can depend on their physical or emotional state, confidence in handling such information and previous experience in the private sector.
This has been described to LaingBuisson in the past as the difference between the ‘desperate and the discerning’ – the former just wanting to get treatment as quickly and affordably as possible and the latter taking time to consider options and choices.
Invest in your ‘shop window’
Perhaps most importantly, as confirmed by LaingBuisson’s research, PHIN was told by patients that ‘consultants should invest in their ‘shop windows’, including participation in legally-mandated processes like PHIN, and provide information that adds a human touch to their clinical information.
It is often the human touch and ensuring that language used is patient friendly that can make the difference. The difference between simply providing information and genuinely seeking to engage with potential patients is subtle but very important.
In LaingBuisson’s own survey, it was clear that a significant proportion of marketing and promotional spend is being committed to self-pay, as shown on the right.
This acknowledges that engaging with consumers and potential patients proactively around self-pay is increasingly important.
The highest spend areas within marketing budgets were digital, online and social media. Promotion to GPs by consultants, clinics and larger providers is still deemed important, but our digital world means that engaging with potential patients and referrers now needs a more refined approach.
Simply having a website that is updated occasionally is not sufficient. All recent research suggests a heavy bias towards seeking online information for all forms of healthcare, so visibility and proactive presence online is becoming increasingly important.
Source: LaingBuisson survey 2024
For more information about the LaingBuisson Private Healthcare Self-Pay Report 6th edition, follow this link: https://go.laingbuisson.com/selfpay6