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Private providers are banking on this government driving patients into their hands

Advert for private health insurance

Above: Recent private health insurance advert, with promise to "leapfrog long NHS waiting lists".

However much you love the NHS you still use private healthcare. If you have a headache and buy some ibuprofen from a supermarket, that is private healthcare spend. If you ask your local pharmacist for the best cream for the insect bite you've got, that is private healthcare spend. If you use "complimentary treatments": acupuncture, hypnotherapy or herbalism, that is usually private healthcare spend.

The part that we usually regard as private – those people who regard themselves to be too grand to use the NHS and will use a private GP or a private hospital paid through insurance or out of pocket – is just one part of the overall spend on private healthcare. However good the NHS is, as a nation, we will always spend a proportion of our healthcare spend on private treatments.

The Office of National Statistics have published a document that lists what proportion of the total spend on healthcare is private, and what is public. The following graph is created from their figures.

ONS breakdown of public/private healthcare

The graph shows that over the last decade the proportion is pretty much flat: about 80% is public and 20% is private. The most recent figure in the graph is for 2008 when 17.4% (or £21.8bn) was spent on private healthcare. The spend on private healthcare includes a wide range of services, but for comparison, earlier this year the Office for Fair Trading announced that they were investigating the competitiveness of private healthcare and in the scoping document for the investigation they say that in 2008 the spend on private hospital care was £5.5bn, with 61% from private medical insurance (PMI) and 15% out of pocket payment (the balance is the NHS usage of private providers).

Unfortunately I cannot find figures for the total spend on private healthcare before 1997, but I can find figures for part of the private healthcare spend: private medical insurance (PMI). The Thatcher doctrine was that if you can afford private healthcare you should pay for it: the NHS was for the poor. The Thatcher government squeezed NHS spending and made PMI more attractive with tax benefits, and consequently more of us chose pay for insurance during the period of the last Tory government. The following graph is from the Office for National Statistics and shows the number of people (in millions) who have PMI whether it is through personal or employers' contributions.

People with private medical insurance

The graph shows a rise throughout the 80s and a levelling off during the 90s. Bear in mind that there was a recession in the early 90s when individuals and companies looking to save money would choose to use the NHS rather than pay insurance. In addition, the large investment in the NHS after the Blair victory in 1997 also contributed to people deciding to use the NHS rather than pay for insurance. The levelling off also coincides with the fairly level proportion of private healthcare spend shown in the first graph.

The 20% figure is clearly an important benchmark. Consistently over the last decade or so the public has shown its trust in the NHS by choosing to use its services rather than private healthcare. At the next election we will hold this government to account for how it has managed the NHS. If the number of people paying for private insurance has gone up, and the proportion of the total healthcare spend on private healthcare has increased, then it will indicate that the public has less trust in the NHS and this will be the fault of the government. At the next election, if more than 20% of total healthcare spend is on private healthcare, then we will know that the government has failed in its provision of public healthcare.

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Richard Blogger writes about the NHS and social policy at NHS Vault.


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