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The private hospital sector in the UK is small compared with the National Health Service (NHS). In per capita terms, there were 20 private acute beds per 100,000 people in 1997/1998 compared with 219 per 100,000 for the NHS. The value of private hospital and clinic services provided in 1999 for acute medical/surgical inpatient and outpatient care was £1,548 million. The private health care market is complex and quite concentrated. The three largest medical insurance companies are Bupa, PPP and WPA. Insurers have focused their cost containment efforts on reducing provider prices charged by private hospitals. The level of demand for private healthcare has always been associated with dissatisfaction with the public services provided by the NHS. There are some 14,000 private practice consultants in 15 medical and surgical specialities in the UK. The estimated average net private income per NHS consultant in 2000 was £44,000. Within the acute sector, privately-owned hospitals compete with each other for business in the same way that private insurance companies do for large, stable, insured populations. In this competition, the private sector has focused on reducing margin rate strategies. We consider it unlikely that an aggressive reaction by the private sector will outbid the NHS for consultant time. [ABSTRACT FROM AUTHOR]

The private hospital sector in the UK is small compared with the services offered by the NHS. In per capita terms, there were 20 private acute beds per 100,000 people in 1997/8 compared with 219 per 100,000 for the NHS. The value of medical and surgical care provided by independent acute hospitals and clinics in 1999 was £1,548 million. The private health care market is complex and quite concentrated. The three largest medical insurance companies are Bupa, PPP and WPA. Insurers have focused their cost containment efforts on prices charged by hospital providers. The level of demand for private health care has always been associated with dissatisfaction with the public supply of health care provided by the NHS. There are around 14,000 consultants in private practice in 15 specialities in the UK. The estimated average net private income per NHS consultant in 2000 was £44,000. Within the acute sector, private-owned hospitals compete with each other for business and insurers compete with each other for large, stable, insured populations. In this competition, the private sector is focused on margin rate strategies. We regard the risk of the private sector outbidding the NHS for consultant time as unlikely. [ABSTRACT FROM AUTHOR]