Does it matter that people are opting out of the NHS into private treatment?

Debates about privatisation in the NHS have been around for decades: is it good or bad? Is it happening now? Will it happen in the future? Over time the content of the debate shifts and changes, even if the word privatisation stays the same.

For most of my working life, the debate about privatisation has really been about the use of non-NHS organisations to deliver care for NHS patients. Using the private sector to deliver NHS care – care that is free at the point of use and meets the same standards as NHS providers – is not new.

New Labour used the private sector in the 2000s to help boost capacity to meet its new waiting times targets; the Conservatives did similar during the height of the Covid-19 pandemic, and the NHS continues to have an arrangement with private providers to help try to reduce waiting lists as quickly as possible.

In mental health services, the private sector has long been a significant part of providing services. And despite fears that NHS reforms pushed through by the coalition government in 2012 would accelerate the use of the private sector, over the past decade there hasn’t been a meaningful change in the proportion of the NHS budget spent on the private sector.

If the debate about privatisation within the NHS is largely a red herring, there is another aspect – the privatisation of healthcare – that is worth more thoughtful consideration. In the late 1990s, with waiting times running high, the use of the private sector by individuals (either through finding the money themselves or through private insurance) was clearly evident, and at that time was a subject of debate.

But with the increased funding for the NHS and the improvements in waiting times that followed, the number of individuals turning to the private sector for treatment reduced substantially. For a long time, the question of individuals opting out of the NHS into purchasing private treatment wasn’t much debated, as shorter NHS waiting times meant people stayed within the NHS system.

But now, with NHS waiting lists and times skyrocketing, we are starting to see a return to those debates as data shows more people have begun paying out of their own pockets for healthcare.

Does it matter that people are opting out of the NHS into private treatment? This is not a straightforward question, with two very different – and at first look, completely contradictory – answers. One answer is yes; one answer is no. Let me explain.

Does it matter? Yes. It matters because it indicates that people do not believe the NHS can provide them with timely clinical treatment and are instead choosing to pay for tests, surgery and even chemotherapy. As the latest briefing from The King’s Fund shows, this is not just limited to the super-rich; people right across the income and wealth spectrum are making the often difficult choice to find the funds for private treatment.

It matters because it tells us that the NHS is not currently able to meet our reasonable expectations about access to care. And the most serious issue is that, of course, not everyone can afford private care. Some people will have to keep waiting, while others are able to skip the queue. This will undoubtedly increase this country’s already very deep social inequality.

Does it matter? If the question really means “Does it matter because this is the start of the privatisation of healthcare or a permanent two-tier system of healthcare?”, then the answer is more likely to be “no” in the long term.

When people talk about opting out of the NHS, they really mean opting out of parts of the NHS for some aspects of healthcare. The private healthcare sector in England is small. There is no private provision of emergency ambulances or major accident and emergency services, and few private providers have critical care facilities.

Where the private sector does offer a viable alternative is in routine elective pathways – the diagnosis and treatment of common conditions. Even here there are limits, with the private sector normally not taking on the most complex cases.

If there is a limit to the breadth of services supplied by private healthcare in England – and this is broadly around planned hospital care – then it’s also important to consider whether there are limits to the demand for private hospital care from individuals. History shows us that once NHS waiting lists start to come down then the public appetite for out-of-pocket expenditure on healthcare reduces considerably.

In effect, people are now making a judgement about the personal cost to them (in terms of pain, anxiety, lack of work) of waiting many months for treatment on the NHS, balanced against the financial cost of being treated more quickly by a private provider. If NHS waiting times return to near the 18-week standard, that judgement is more likely to come out in favour of staying within the NHS.

However, if high levels of people funding their own private healthcare become the standard, it will likely be because the NHS cannot meet people’s expectations. That being said, it doesn’t seem sustainable for any government to live with a health service that really dissatisfies people to that extent. So we can expect NHS services to improve, thereby reducing the appeal (or necessity) of the private sector.

As such, it seems unlikely that the current uptick in people paying for their own care is the start of a long-term structural change towards privatisation of healthcare in England because the limited capacity of private sector provision – and the fact that NHS waiting times will, at some point, finally return to manageable levels – means that public demand for private healthcare is likely to subside.

But that doesn’t mean the increase in self-payers doesn’t matter at all. It still absolutely matters, because it tells us that – despite the best efforts of staff – the NHS isn’t meeting the needs of the public now. Public polling tells us that the public – while understandably frustrated right now with access to services – are still hugely supportive of the overall model of the NHS, free at the point of use and funded by taxation.

But the NHS needs to work better for them. The experience of the 2000s shows that the NHS has turned around performance before, and it can do so again. To do that will require long-term investment from the government in workforce, buildings and equipment, and in their adopting innovations in care pathways.

The solution to increasing numbers of people choosing to pay for private healthcare is not to abandon the NHS; it is to fix the NHS.

Sally Warren is director of policy at health think tank The King’s Fund