Total expenditure on UK healthcare (public, private and complementary) was worth £69.73bn in 2002 and given the current political pressures to improve healthcare in the UK, there are likely to be opportunities and growth in most sectors of the market.
The UK healthcare market continues to be dominated by the National Health Service (NHS). Since its inception in 1948, it has provided comprehensive healthcare services to all UK citizens on the basis of need and not on their ability to pay. The NHS constituted 74.3% of all healthcare spending in the UK in 2002, including private medical insurance. Total expenditure on UK healthcare (public, private and complementary) was worth £69.73bn in 2002 but current political pressures to improve healthcare in the UK, means that there are likely to be opportunities and growth in most sectors of the market, public, private and voluntary.
(PRWEB) August 29, 2003
Research and Markets have announced the addition of the "Healthcare Market, - Market Review 2003" report to their offering.
The UK healthcare market continues to be dominated by the National Health Service (NHS), the large and comprehensive public sector, which remains the world-leading public healthcare service, according to the World Health Organization (WHO). The NHS is funded by general taxation and National Insurance (NI) contributions. Since its inception in 1948, it has provided comprehensive healthcare services to all UK citizens on the basis of need and not on their ability to pay. Although there is overlap between the different sectors of the healthcare market, the NHS constituted 74.3% of all healthcare spending in the UK in 2002, including private medical insurance. Total expenditure on UK healthcare (public, private and complementary) was worth £69.73bn in 2002. Expenditure on UK medical supplies amounted to £14.29bn.
Of the two main arms of the NHS, hospital and community health services, which consists of hospital-based care and certain community services, was the largest in 2002, with a 70.3% share of NHS services. The other branch of the NHS, responsible for primary care services (family health services), accounted for the remaining 29.7% of expenditure on public healthcare services.
The UK private healthcare market consists of both commercial and charitable interests, which fund and provide healthcare. The public sector is becoming a major commissioner of services in the private sector. In 2002, private healthcare, including private medical insurance, was estimated to constitute 24.3% of the UK healthcare market. The main market sectors in private healthcare are long-term care, acute hospital care, psychiatric care and primary care services. In 2002, long-term care was the largest individual sector, constituting 67.5% of all expenditure in the private sector (excluding private medical insurance).
The remaining healthcare markets include palliative care, which is organised and provided largely by the voluntary sector, often in partnership with the NHS. Complementary healthcare consists of a wide range of different therapies and treatments provided as an alternative, or in addition to, orthodox medicine. Some of the most popular and well-regulated therapies such as chiropractic, acupuncture and osteopathy, as well as reflexology, aromatherapy counselling, hypnotherapy, massage disciplines and other relaxation therapies, are becoming integrated into mainstream medicine and healthcare. Expenditure on palliative care constituted 0.5% of all healthcare spending in the UK in 2002, while complementary healthcare constituted 0.9% of all expenditure.
In the market for healthcare supplies, the single largest sector was that of prescribed pharmaceuticals, which constituted more than half (57.3%) of all expenditure in 2002. Over-the-counter (OTC) pharmaceuticals had the highest level of growth, primarily because of new product introductions expanding the market, but constituted only 12.2% of the market. Medical equipment and consumables was the second-largest sector, constituting 17.5% of expenditure, while equipment for the disabled accounted for 13%.
The combination of an ageing population and the expanding scope of treatments, together with a demanding public, is significantly increasing the need for healthcare services. This, and the rising cost of care, has caused healthcare expenditure to rise. Successive governments have introduced a variety of reforms aimed at rationalising care, improving efficiency, cost-effectiveness and containing costs, but expenditure continues to grow and the NHS, in spite of unprecedented funding increases, continues to suffer problems, although recent figures indicate improvements in waiting lists.
The Private Finance Initiative (PFI) is generating capital and resources towards the outdated and ageing infrastructure of the NHS, although such projects are complex, costly and highly bureaucratic. There are concerns that the initiative may mean short-term gain at the cost of the long-term future and cause delays. Chronic staff shortages are fast becoming a point of crisis, particularly as significant numbers of staff are nearing retirement age or planning early retirement as a result of poor staff morale. The Government is attempting to attract former nurses through advertising campaigns and family-friendly policies, increasing training places and improving career structures and salaries. In the short term, agency staff are being employed and healthcare professionals recruited from abroad.
Although high growth is forecast in expenditure on the NHS as a whole and the Government is trying to build up primary care services, improving early cost-effective access to care, hospital expenditure is likely to continue to grow rapidly as the boundaries of care expand and greater numbers of patients enter the system.
The private healthcare market is much smaller than the comprehensive public sector. However, in the face of continuing problems with the NHS, it is beginning to develop and expand into new areas of care. The sector is increasingly operating in partnership with the NHS, or running NHS services, which is likely to continue with the advent of Primary Care Trusts (PCTs) and the `concordat' agreement. The concordat is an agreement between the NHS and the private sector for the use of private facilities for NHS patients at times of pressure on services. It was signed in October 2000. The NHS is becoming a major commissioner of private healthcare services.
Within the private sector, primary care services are hampered by the `gatekeeper role' taken by the public sector, with general practitioners (GPs) able to refer patients to either the public or private sector and patients able to access a GP within a reasonable time, unlike waiting lists to see NHS hospital consultants. The private acute care and psychiatric services sectors are both developing greater levels of partnership with the NHS to supply services, rather than competing with the public sector. These two sectors are growing significantly.
In the UK, the principal source of funding for private healthcare is private medical insurance, although self-paying schemes are becoming more popular, particularly in fields such as cosmetic surgery. Many providers now offer fixed price agreements and loan schemes for patients. Although insurance is set to show some growth, it is still hampered by the lack of government incentives for people to take out insurance, since taxpayers cannot redirect NHS payments into private schemes and they must also pay insurance premium tax. Funding for long-term residential care remains a significant problem and Scotland agreed to fund care costs in full in January 2001 following the Royal Commission report in March 1999. England announced partial funding in December 1999.
The palliative care sector also has funding problems, particularly as the majority of its finances come from voluntary/charitable sources. The market for complementary medicine is growing steadily as certain established therapies are increasingly integrated into orthodox healthcare. Greater regulation is likely in this area.
In the medical supplies sector of the market, expenditure on prescribed pharmaceuticals is set to continue to rise in spite of generic prescribing and clinical guidance from the National Institute for Clinical Excellence (NICE). The OTC pharmaceutical market is also set to grow as more pharmaceuticals are delisted and broaden the current limited availability. Expenditure on medical equipment is increasing, as hospitals are refurbished and built under PFI schemes and healthcare organisations replace outdated equipment. Expenditure will grow as the number of people with mobility and health problems rise in an ageing population.
Given the political pressures to improve healthcare in the UK, there are likely to be opportunities and growth in most sectors of the market, public, private and voluntary. The boundaries between the public and private sectors are likely to continue falling, as are the boundaries between orthodox medicine and at least some complementary therapies. In the long-term care sector, however, unless funding issues are completely resolved, market growth is likely to be significantly affected in spite of high and increasing demands for services in that area.
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REPORT DATA SUMMARY:
Healthcare Market, - Market Review 2003
Category: Healthcare & Medical Devices
URL: www. researchandmarkets. com/reports/35075 (http://www. researchandmarkets. com/reports/35075 )
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