Private health market 'shrinks'

By Nick Triggle
Health reporter, BBC News

The NHS in England has until the end of the year to hit the 18-week target

Spending by individuals on private healthcare has seen the first significant fall since the mid 1990s, figures show.

Analysts Laing and Buisson estimate that in the last year, UK spending on non-cosmetic surgery such as knee and hips fell by nearly £30m to £345m.

The last significant downturn was in the recession of the early 1990s.

Experts said it was probably down to the economic climate and the ever-shortening NHS waiting lists.

With NHS waiting times falling there are less reasons to opt out Philip Blackburn, Laing and Buisson

Each UK nation has set its own target to reduce waiting times, with England setting the most ambitious - by the end of 2008 all patients should be seen within 18 weeks.

However, the drop in self-paying private patients from 2006 to 2007, which would be even bigger if inflation was taken into account, is not hitting the profits of health firms as they have seen a surge in NHS activity.

In England, the NHS has paid for patients to be treated by private health firms to drive down waiting lists.

Over £600m a year is spent by the NHS in this field, the figures, which were based on information provided by the leading private health firms in the country, suggested.

Referral

Philip Blackburn, senior economist at Laing and Buisson, said: "I think the NHS market is going to grow in the future and the fall in self-pay private patients could continue.

"First of all there are the problems with the economy which mean people have less spare money, but it is also true that with NHS waiting times falling there are less reasons to opt out."

The results come amid a rising number of referrals for hospital treatment in England.

The NHS Confederation, which represents managers, said the health service had experienced a 15% rise in the first part of this year.

Some NHS trusts have responded by offering GPs bonuses to cut referral rates.

David Stout, of the NHS Confederation, said: "It is unclear what exactly is happening. But one theory is that as NHS waiting lists come down, people are less likely to go private."

Health minister Ben Bradshaw said: "We predicted when we embarked on the drive to reduce waiting times that this would mean fewer people choosing to go private.

"This report and the recent increase in GP referrals show this happening."