NHS 'threatening' private sector

Some private patients may return to the NHS, say analysts

The private healthcare sector is "under threat" from changes to the NHS, a report has warned.

Laing and Buisson, independent healthcare analysts, found the number of people with personal or work private health insurance rose slightly in 2004.

But report author economist Philip Blackburn warned reduced waits and more choice in free NHS services could cut demand for private care in the future.

He said the industry would have to adapt in order to meet consumer needs.

It is likely we will see a fall in demand Philip Blackburn, Laing and Buisson

Laing and Buisson said UK spending on health and care insurance products - including private medical insurance, health cash plans, dental benefit plans and long term care insurance - reached £4.2 billion in 2004.

The majority of that sum - £3.4 billion - was spent on private medical insurance and self-insured corporate medical schemes.

In addition, £425m was spent on health cash plans, £274m on dental benefit plans and £136m on long term care products.

Around 20% of the population now have some form of private health cover.

'An edge'

Philip Blackburn said: "In the long-term a public health service where waiting has less significance and where patient choice is a central theme certainly poses some threat to the private product that already offers full consumer choice and no waiting - but at a price."

He told the BBC News website: "The threat relates to waiting. It's a prime reason for people to go private - it always has been.

"For that reason it is likely we will see a fall in demand, but it's unclear how big that might be."

But he said the private sector would still have an advantage in being able to offer a wider choice of hospitals, dates and doctors.

Mr Blackburn added: "There will still be a healthy private healthcare market."

And he suggested private health providers may move towards providing expensive medications, such as cancer drugs, which the NHS may not be able to afford.

Tony Harrison, an expert from independent think-tank the King's Fund, said: "Even if the NHS achieves its target of a maximum 18-week target from GP referral to treatment in hospital, that's still longer than the two weeks the private sector can achieve.

"There will still be people for whom returning to work quickly will be so important that they will go private."

He added: "The private sector will still have an edge. But for how many people that will be critical is unclear.

"I think the 'self-payers' will come back to the NHS."

Mike Hall, chief executive of Standard Life Healthcare and chairman of the Association of British Insurers' Private Medical Insurance Committee said there was a role for both an improved NHS and an innovative private health market.

He added: "The challenge for the private sector will be to continue to innovate for patients."