Karen Woodley
|Head of Healthcare Distribution
Through an election campaign, vote, Budget and the Chancellors first Mansion House announcement in November, the political landscape for UK advisers and insurers has certainly changed since this time last year.
One important area of continued focus from the Labour government has been a commitment to increasing support and funding for the NHS. This includes allocating an additional £22 billion to health and social care and promising to reduce waiting lists by providing an extra 40,000 appointments per week1.
The 2024 Budget promised a 3.8% increase in the overall health and care budget for NHS England, with a further 3% increase this year2. The Chancellor was clear that this funding would be allocated to ‘day-to-day’ budgetary needs, including the reduction of elective waiting lists.
This increased investment is undoubtedly needed, with data from the NHS showing the total waiting list for consultant-led elective care sitting at 7.48 million as of November 2024, with over six million patients waiting for treatment in England3.
The important role of private healthcare
However, added investment in NHS infrastructure and services alone won’t solve the NHS's challenges - at least in the short term. With the prime minister announcing further plans to increase the use of private healthcare resources to tackle waiting times4, it’s clear that the private sector has an increasingly important role to play in the nation’s healthcare.
And this role should extend beyond NHS patients being treated privately. It also presents an opportunity for the private sector to show its worth as an alternative to public health services, particularly for those who may not currently have cover.
The equivalent challenge to this opportunity for the private sector will be how well it maintains the treatment and service it offers whilst retaining existing customers and attracting new ones; especially when the NHS recovers into a more attractive option.
The benefits of private care will remain
As NHS waiting lists eventually decline, there may be concerns that demand for private health insurance may drop too. However, the benefits of private healthcare should continue to be as attractive in the future as they are now. What’s more, they should also be a core consideration when it comes to retaining existing customers.
Let’s briefly look at two of these: speed of care and digital treatment.
Even as waiting lists decline, private healthcare will continue to be reliably efficient with waiting times for policyholders accessing appointments with a consultant likely to be quicker than they are on the NHS, where the median waiting time for treatment currently stands at 14.2 weeks3.
The earlier intervention benefits offered through private healthcare not only mean that patients have the potential of being diagnosed or treated more quickly but that earlier treatment may also reduce the likelihood of symptoms worsening. A prolonged illness or injury could potentially require more manipulative or invasive treatment, whilst also having a prolonged impact on an individual’s quality of life or ability to work.
Another key benefit of private health insurance is the availability of digital healthcare support which has become increasingly important in recent years. Since the pandemic we have continued to see year-on-year increases in usage of the digital services we provide through Square Health, as part of our member benefits app HealthWise; driven by health insurance members.
Notably, in the last twelve months the demand for remote GP appointments has been a key driver of the app’s popularity: with members being able to access an unlimited number of remote appointments, accounting for almost three-quarters of all usage in 20245. However, it isn’t just GP appointments that are being utilised with members also accessing support across wider services which also include physiotherapy, mental health, and registered dietitian consultations.
The availability of easily accessible services allows members to proactively manage their health and provides an “everyday” benefit to their healthcare cover; something that will continue to be a valuable addition to propositions in the future.
A positive outlook
The past two years have seen a significant increase in demand for private health insurance and this trend looks set to continue. In a recent survey, 40% of advisers who advised on health insurance predicted that demand would increase in the next 12 months, with only 21% expecting demand to fall6.
What’s more 31% of advisers surveyed stated “continued health service pressure” as an opportunity for their business in the next 12-24 months6, painting a positive picture for the private sector over the next couple of years.
Everyone would like to see waiting times reduced and any increase in NHS investment should be widely welcomed across the healthcare industry. We shouldn’t, however, forget that the private sector will play a key role in helping to meet the UK’s healthcare needs.
ENDS
1 - www.gov.uk
3 - www.bma.org.uk
4 - www.bbc.co.uk
5 – The Exeter, 2024 HealthWise usage data
6 – The Exeter adviser research, conducted between 12/11/2024-18/11/2024, surveying a sample of 250 UK financial advisers discussing insurance products with their clients.
This article was published in COVER on 05.03.2025