Drop in Health Insurance Spending

A recent report has indicated that consumer spending on private medicine is down for the first time in 20 years. This obviously has implications for medical insurance companies but if you are planning to take out health cover we may see strong competition in the near future from companies vying for your business.

The report by health analysts, Laing and Buisson, found that in 2007, £345 million was spent by patients on operations and treatments compared to 2006 where spending was £374 million: a fall of 7.8 per cent. The figures did not include cosmetic surgery figures and when taking into account inflation the drop represents just over a 10% fall in spending.

The change in consumer spending is said to be triggered by two things. Firstly NHS waiting times have reduced.

The Telegragh reported that Ben Bradshaw, the Health Minister said, 'It is a mark of the faith that people now have in the NHS that 10 per cent fewer patients chose to pay out of their own pockets to go private last year - the first fall for 20 years.

'These figures show that patients are voting with their feet. More and more people are turning their backs on paying out of their own pockets for private health care because they now trust the NHS to treat them quickly, effectively and comfortably.'

The Laing report also pinpointed the economic recession as another reason why people were turning their backs on private health insurance and predicted that spending figures would drop further.

'Economic prosperity and business / consumer confidence in the past has driven demand for private medical insurance.

'A strong and predictable business environment and high employment in particular has corresponded with solid corporate demand for health and care cover.'

The current economic climate is creating conditions where people either cannot afford medical cover or feel that they cannot. The report says,

'The recession leads to a sizeable fall in demand for private medical insurance, as employers and individuals feel the pinch, and the economy takes time to pick up again.'

Health Insurance News UK has provided many articles on the best way to secure good quality, cheap health insurance and find ways to cut down on costs by being able to compare medical insurance cover and pick the policy that best suits you and your families needs. We will wait and see how the health insurance companies respond to the drops in health care spending.