With reduced opportunities from the NHS sector, a relatively flat PMI market and an aging, less active and increasingly stressed population, the shape of the private healthcare market is undergoing rapid change. As demand for healthcare increases, identifying and investing in new opportunities will be key to the industry’s future success.
Data from LangBuisson (Private Acute Medical Care Report, 4th edition) shows that in comparison to the past 10 years’ 5% growth rates, the PMI market is now relatively flat, at between 0% and 3%. The NHS market has also fallen: sitting at 7% now compared with an average compound annual growth rate of 20% in the previous decade. Opportunities in the NHS market are also beginning to look as though they may come through more local and tactical relations, rather than as a result of central directives based on the choice agenda.
Yet, from a market perspective the demand for healthcare is increasing. There are definite opportunities for the private healthcare sector, but they will arise in new areas and the industry may need to change to meet these new challenges.
Within the PMI market, the industry should be exploring partnerships and looking at potential non-surgical pathways, as well as supporting surgical pathways. Open referrals also provide a way to control costs and there is already a shift to about 30%/35% of activity through the PMI market coming through open referrals.
With 70% of the nation’s wealth in the hands of the older generation and evidence that this age group already has an expectation that people will pay for their own healthcare (LEK consulting report), it is looking like the real opportunity for growth lies in developing the self-pay market. With this in mind, there are five key areas the industry needs to address to maximise this opportunity:
- Brand reputation – target and drive enhanced brand awareness within the population of people that have the propensity to use the self-pay market.
- Customer experience - foster a customer-centric approach, e.g. investment in the hospital environment, management visits to view services through the eyes of the customer, use of Net Promoter Scores (NPS) and CSAT.
- Customer engagement – improve the digital journey and access to information about surgeons, quality of care, outcomes, etc. Make coming into a private hospital easier and more streamlined.
- Quality and outcomes – create toolkits to ensure good and outstanding ratings from CQC. Measure outcomes to compare surgical and non-surgical treatments to find the best treatment in terms of cost-effectiveness and clinical outcome. Use measurement of outcomes to develop new models that work both for the provider and PMI companies, e.g. a move towards non-surgical pathways or a population management approach. Outcomes can also be used to advertise clinical effectiveness and create differentiation.
- Holistic care – provide healthcare designed to keep individuals fit and healthy, not just about fixing them when things go wrong. This can include aspects like GP services, physiotherapy, mental health support, wellbeing services through to surgical intervention, if necessary.
Technology will have a vital role in improving health care. Whether technology is incorporated to make the patient journey seamless in terms of booking and referral, or to enable collection of data to understand best outcomes and best cost, to support clinical decision making or the potential for treatment on a digital basis. Without this technology roadmap, there is a danger that the industry will carry on in the same space that it currently occupies.
In conclusion, the private healthcare industry is well placed to face the changing shape of the market through investment, a move towards non-surgical pathway expansion and development of the most cost-effective and clinically-effective treatments as part of a holistic approach to patient care.