Financial Medical Partnership

Development of the Self-Pay Market in Medicine in the UK

29 Oct 2007 by Mr M. Reeves MICM, Dr C.A.Jenner MB BS, FRCA

The Concept
A self-pay patient is defined as a citizen or resident of a certain area, who does not have any sort of coverage under a health insurance plan and any sort of a government plan. Such patients are not eligible for free care or partial free care under the said programs.
Self-pay market constitutes a major section of the healthcare market in the UK. In the recent years, the figures representing the development of self-pay market have spiraled drastically, vis-à-vis those covered under some form of insurance in the UK.
In the further sections, we've presented an in-depth analysis on this trend, its causes, key statistics and relevant observations.
Market Analysis
Recent news reports and research studies strongly indicate towards the rising trend of self-pay patients. Rapidly rising premiums are being assumed to be the main cause of the trends, experts suggest. The average private medical insurance (PMI) premiums are believed to be rising at around three to five times the general rate of inflation.
According to a news release, the number of people in Britain who paid for their operation dramatically rose from 50,000 to 25,000 just in a few years. Meanwhile, the number of people with medical insurance reportedly fell by 200,000 in a single year, while the number of self-pay patients in private hospitals kept on rising rapidly.
Research also shows that there is a dual set of factors promoting this trend. High insurance premiums coupled with long NHS waiting lists have emerged to be the main causative factors. Figures show that at Bupa, self-pay has come out to be one of the fastest growing business areas. Reports released also reveal that the revenue of Nuffield Hospitals jumped by a whopping 17.5% in a single year.
Another fact that propagates the self-pay market in the UK is that the private medical insurance can cover people only for a limited range of treatments. Most of the PMIs do not cover accident and emergency, pregnancy, HIV/AIDS, chronic illnesses, treatment for alcohol, drug-abuse and psychiatric conditions.
In fact, in some cases private hospital groups have been found encouraging the growth of self-pay business with the fixed-price packages as it takes away any concerns of unexpected costs. There have been cases where the self-pay patients are likely to have a better and faster access to new technology as against those having a private insurance coverage.  
The Statistics
To understand the impact of the changing trend and related causes, it is important that we analyze a few specific statistics in the context.
Studies show that a 40-year old healthy male, with no dependants is likely to be charged ₤500-₤750 a year for the PMI. On the other hand, a luxury plan without any restrictions, like the Axa PPP's 'Premier' plan will cost a 40-year old Londoner more than a massive ₤1,500 a year.
Meanwhile, the premiums being expected from the elderly have reached new heights, a staggering amount of ₤2,000-₤3,000 a year being the average rate.
Such trends and market rates have transformed the UK viewpoint to self-pay systems to quite an extent and are likely to show even a greater impact in the years to come.

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