The rise of self-pay in healthcare

Self-pay healthcare continues to be on the rise, so we can’t ignore it. As the proportion of consultants’ income from self-pay hits a new record high, we think this trend is likely to continue to grow, even as we move into more certain times, post the COVID-19 pandemic.

Many of us think of private medical practice as being solely or mainly funded by the insurance market - but it isn’t that simple. 

Well over 90% of the population in the UK do not have private health insurance and the NHS is suffering due to the ever-increasing demands put upon it by ageing populations, organisational pressures and significantly increased treatment wait times as a result of covid plus current funding levels. This, coupled with (an often unfair) bad press on the quality of care in NHS hospitals, is leading to an increasing number of people seeking alternatives to the NHS.

However, to control the cost of insurance premiums, many policies have ever-increasing elements which are not covered by the policy - thus rendering them either unattractive to the patient, or useless when in the time of need.

In the UK - even as far back as 2019, some 200,000 a year (around 1 in 4) of all private operations / treatments in the UK were self-funded (with the other three being insurance / company funded). We will naturally have ebbs and flows of growth due to unforeseen circumstances - such as COVID-19, the UK Cost of Living Crisis and the current global impact of Russia’s war on the Ukraine, so we must look at this over a longer period.

In our report in October, we spoke about the effect of consumer trust on self-pay. Consumer trust and dissatisfaction levels with the NHS causes somewhat of a Catch-22 situation for patients. In the UK we have, (across most areas of the political, social and geographic divides) a deep-rooted, somewhat symbolic love for the NHS and an innate desire to see it succeed. At the same time, due to chronic underfunding and severely increased wait times - we are seeing a much larger shift towards private healthcare, specifically in telemedicine and minor treatments. This will only grow over time, as we see in our research that younger audiences are notably less likely to feel loyal to the NHS.

Treatment Areas

In terms of treatment areas - it was hardly any surprise to see private dental and optical as the treatment areas with the highest proportion of current and past need, they have been largely privatised relative to other areas of healthcare for a long time. However interestingly, two areas of chronic under-funding, and huge wait times in the NHS (Physiotherapy and Mental Health Services) place 2 and 3 on the list for respondents who have had need in the past (or currently have a need).

The overwhelming driver in increasing the likelihood of using self-pay is immediacy in being seen, and not necessarily because people believe the treatment or the practitioner will be better than they would otherwise experience on the NHS

Final Thoughts

Despite what I’ve already mentioned above, the UK (and the rest of the world) is facing a long and arduous period of uncertainty over the next few years and with cost being the main barrier to higher uptake of self-pay; there is a danger that the socio-economic gap between the haves and the have nots will widen, thus further entrenching private self-pay healthcare perception in the UK as a “domain of the super wealthy”. Clinics, private hospitals and other providers have an opportunity to stem that mis-conception by growing and exploring the options available to patients for financing self-pay, such as financing and instalment models. We know that almost 3 quarters (74%) of adults in the UK say that having to pay in full before having treatment would make them less likely to have the treatment.

We firmly believe that as we move into 2022 where fuel, energy, clothing and food are all skyrocketing, financing will be at top of mind for patients. This factor most of all, is what will allow continued growth and improved sentiment towards the self-pay sector. 

Understanding patients and working with healthcare providers to help translate those needs into actionable intelligence for growth is our speciality. Talk to us today if you’d like to learn more about this, or any of our other capabilities in healthcare.