Private health insurance has always held a peculiar place in the UK. Since the introduction of the NHS in 1948, every private medical provider has focused on complementing NHS services, not providing an all-out replacement. With the UK population firmly committed to a publicly run health service (and the principle of “free at the point of use”), little is likely to change in the coming years.
However, public perceptions about the NHS are beginning to shift in the wake of the COVID-19 pandemic. The backlog from the suspension of some NHS services has rippled forward, creating lengthy waiting times. Almost 10 million people could be waiting for hospital appointments, according to a recent survey by the Office of National Statistics (ONS). It’s led many to turn to the private sector – long waiting times are the driving factor.
In fact, between 2022-23, private admissions rose 7%, with a large rise in private insurance, indicating a potential medium- to long-term shift in how the public access healthcare. Furthermore, because of the rising demand, the cost of private healthcare insurance increased by 25% – in some cases, it rose by 50%.
Is the public’s perception of the NHS accurate? Will there be a longer-term shift towards private medical insurance? And how does this compare to the history of private healthcare in the UK? Let’s find out.
In this guide:
- Private health insurance in the UK
- Changing nature of private healthcare insurance
- Is private medical insurance necessary?
- Planning for the future
Private health insurance in the UK
The private health sector in the UK is more complicated than initial impressions. Common wisdom states that the UK is predominantly a state-run healthcare system – everything goes through the NHS. While there’s certainly truth to that, large swathes of the sector are private.
General practice, much of dentistry, community pharmacies, and optometry have been in private hands since the foundation of the NHS. However, most of the money earned by these private organisations comes from the NHS. The only exception is dentistry, which, unlike the other elements of the private sector, has seen a continual drift of patients from NHS to solely private services.
So, where does private health insurance fit into this equation? Primarily, it provides top-up care, helping patients get seen sooner or receive slightly better (or more luxurious) treatment. Patients may choose to purchase private medical insurance as they get older or receive it as part of an employer-backed scheme. There’s also the option to pay for specific care without any insurance – for example, a knee operation.
The NHS itself is responsible for purchasing private healthcare, especially since the pandemic. NHS obligations to provide planned care for patients have meant that non-urgent care is increasingly in the private sector due to shortages in capacity. However, urgent care remains almost exclusively in the hands of the public sector.
To put this in perspective, from 2019/20 to 2022/23, NHS-funded, privately provided care rose 30.3%, privately funded, privately provided care rose 16%, while all forms of NHS-provided care fell. In fact, NHS trusts provided fewer planned hospital admissions in 2022/23 than prior to the pandemic – despite higher funding and a large increase in staff.
Changing nature of private healthcare insurance
Prior to the introduction of the NHS, private health insurance was the standard. Following the National Insurance Act of 1911, lower-paid and manual workers were provided access to some medical care, but this led to increasing fees for the middle class and wealthy, who were squeezed by the new system. Most hospitals also had working-class contributory schemes, allowing easy access to hospital care. While the NHS proved a major leap forward, most people had some access to GP and hospital services before 1948, which were free at the point of use.
Changes over the past few years have led to growth within the private health sector. In 1976, private health care accounted for just 3% of total expenditure, compared to over 20% by 2019.
With the increasing pressures on the NHS and the growing backlog of non-urgent treatments, more people are considering private healthcare insurance as a viable alternative to manage their health needs. In some ways, it’s a replay of the interwar years, with the middle classes and wealthy relying on private healthcare to get seen sooner.
While the NHS remains a vital lifeline for urgent and emergency care, private health insurance offers quicker access to specialist treatments, elective surgeries, and diagnostic services. This shift towards private medical insurance, however, raises concerns about inequality in healthcare access, as those who can afford insurance may receive faster and more personalised care.
Despite this, private health insurance is still seen by many as a supplement to NHS services rather than a complete substitute, giving individuals greater choice and control over their healthcare journey.
Is private medical insurance necessary?
Given the challenges currently facing the NHS, some might conclude that the increasing reliance on private healthcare is necessary. Without it, they argue, waiting times would be even longer. Taking a quick glance at the data would seem to confirm the argument.
However, as the Nuffield Trust shows, the NHS is running well below optimal efficiency rates. Often, patients in busy areas spend months and months waiting for a non-urgent hospital appointment, while elsewhere, the waiting times are relatively short. Many of these appointments are usually unnecessary, requiring little more than a quick consultant review. There’s also a strong dependency on in-person hospital appointments, reducing patient choice due to travel restrictions.
Indeed, the concept of the patient’s “Right to Choose” is increasingly neglected due to pressure from the health system. Most patients just want to get seen quickly; they’re often not interested in finding the absolute highest standard of care. After all, almost all private consultants are also NHS consultants.
The solution, therefore, would be to provide quicker referral times for non-urgent appointments by connecting patients in high-demand areas with specialists in low-demand areas. Doing so would make better use of NHS capacity. Virtual consultant-led reviews provide the perfect medium for triaging patients. Consultants can decide if a patient needs further testing or treatment or if there’s nothing to worry about, discharging them to their GP. Fewer patients attending in-person consultations shortens the waiting time for everyone else.
Since 2013, Medefer has filled this niche in the market, tackling one of the NHS’s biggest challenges: long waiting times for specialist referrals. The average waiting time is 18 hours from GP referral to initial consultant review for non-urgent consultations. This has led to in-person outpatient department attendance reductions by up to 70%. Not only does this help patients get seen sooner, but it also allows patients to exercise their legal right to choose. Small wonder that it’s resulted in a 90% patient satisfaction rating.
Planning for the future
As the NHS continues to face growing pressure, private health insurance is becoming less of a luxury and more of a practical solution for many. While it still serves as a complement to NHS services, the demand for quicker access to treatments and specialists is pushing more people to explore private options. However, the landscape is shifting in a way that goes beyond traditional private insurance.
Services like Medefer highlight how innovation in healthcare delivery can bridge the gap. By offering remote-first reviews, Medefer addresses one of the NHS’s key challenges—long waiting times—without patients needing to rely solely on private insurance. This blend of public and private solutions could represent a new model for healthcare where flexibility and accessibility are prioritised.
Moving forward, the challenge will be not only finding the right balance between the NHS and private providers but also ensuring that these innovations don’t widen the gap between those who can afford private care and those who cannot. The future of healthcare may lie in hybrid models, but careful planning will be required to make sure these changes benefit everyone.
