Private health care: the emerging two-tier system

The NHS was established because the rich could pay for healthcare, but poor people often went without or delayed access until it was too late. For over 75 years, the NHS has provided healthcare free at the point of need. It has been the envy of many other countries. However, the NHS is struggling to cope with a significant mismatch between demand and supply. With many struggling to access NHS services or having to wait for procedures, private healthcare use has dramatically increased. The UK now has the fastest growth in spending on private insurance and out-of-pocket healthcare among all G7 nations.

Despite the NHS’s aspirations of free healthcare at the point of need, there are procedures that are not covered, such as cosmetic surgery, and co-payments are required for some services, such as prescriptions. Opticians, and to a growing extent dentists, are only available to people through out-of-pocket payments or insurance. Provisions are made for those who cannot afford co-payments, such as the NHS Low Income Scheme. The public has generally accepted out-of-pocket payments and co-payments, with safeguards, acknowledging the challenge of funding comprehensive healthcare through general taxation.

For some, an increase in private healthcare is welcome—it is argued that it takes pressure off the NHS, increases choice for patients, and is similar to the existing out-of-pocket payments and co-payments. For others, it marks a worrying trend, with richer people being able to access quicker and higher-quality healthcare, while poorer people are left waiting for publicly funded care. There are knock-on consequences of waiting for care, such as physical deconditioning and an inability to return to work.

While private healthcare has always been a reality in the UK, historically, the benefits have only outweighed the costs for a small number of people. Now it appears that many more people are deciding that the costs of private healthcare are worth it. We don’t have good data on who uses private healthcare or how use varies across the country.

Our latest paper explores the trends and geographical variations between the north and south of England in privately funded and NHS-funded privately delivered orthopaedic procedures. We found considerable geographical inequalities in access to orthopaedic private healthcare between regions within England, highlighting signs of a growing two-tier healthcare system. The south of England performed almost double the number of privately funded procedures compared to the north (23 vs 12/10,000), but there were fewer NHS-funded private procedures in the south (40 vs 45/10,000). It appears that people in the south of England have the resources and willingness to pay for private orthopaedic procedures, either through insurance or out-of-pocket payments.

Policymakers and politicians face a difficult balancing act. Increasing the use of private healthcare may, in the short term, help remove patients from NHS waiting lists and result in higher economic growth. However, it is likely to lead to a two-tier system, with those who can afford it or who have work-related insurance being able to access quicker care and a wider range of services, while others have to settle for publicly funded care. Many staff who work in the private sector are also NHS staff, and we don’t yet know the impact of a growing private sector on the NHS workforce.

Please read our full article here.