The UK Health Care Market


The United Kingdom can be termed as being one of the most developed countries and offers quality health care and social services to its citizens. The United Kingdom is located in the North Western Coast of Europe and includes the Northern- Eastern region of Ireland, Great Britain, and other Islands. Based on the previous census, the United Kingdom has a population of more than 60 million individuals.  The United Kingdom has improved economic and social structures. The government offers health care services to more than 50 million permanent residents.

Health care services in the country can be defined as being free at the point of need with the medical cost being cover by general taxation (Cylus et al. 2015, 115). An example is the fact that close to 18% of citizen’s income is directed to the funding of health care services. Focusing on the past years indicates that the country allocates an estimate of 8% of the total GDP to health care services. Other than the public health acres sector, it is worth noting that the UK has a vibrant private sector that has played a crucial role in the transformation of the health care sector.

Functioning of the United Kingdom Health Care Sector

The organization of the United Kingdom Health acres services can be traced to the 194s. It is during this period that the government founded the National Health Service (NHS).  Before this period, health care services were poorly organized with health services being available to wealth class. It implies that there was the marginalization of the poor class, therefore, leading to a high mortality rate. In 1911, there had been attempts to change the public health care sector through the introduction of the National Insurance Act by David Lloyd George. The initiative saw the deduction of a small amount on incomes to cater to health care services.

The initiative was followed by the creation of tripartite health care systems where there was a division of services into primary care, hospital services, and community services. However, this division often leads to challenges in both the funding and delivery of health care services. It is during the Thatcher years that the country recorded significant improvements in the health care sector (Cylus et al. 2015. 85).  The formation of NHS is often cited as having been one of the most important steps in the restructuring of the health care sector.  Currently, there are significant improvements in the quality of medical services in the country.

There has been the creation of many efforts that allows doctors and other health care providers to have better control of the medical processes. An example is the fact that 80% of the NHS budget is controlled by doctors as this ensures that there is an allocation of funds to priority areas. The changes are based on the need to reduce the time and cost spent in access to medical services. The objective of the NHS is to ensure that all individuals are in a position to access quality and affordable services. The move is in line with the goal of the government to ensure that there is equality in the access to quality health care services regardless of the levels of income, and race.

Since the 1990s, the NHS budget has been trending up thus indicating that there is an allocation of adequate resources to cater for medical needs. A similar trend can be seen in the private sector where the insurance players have taken a central role in shaping the NHS.  It is worth noting that the insurance firms in the country account for more than 15% of the medical costs.  The positive trend can be linked to the move by the government to create internal markets in the health care sector with the goal of including more stakeholders in the sector.

Major Health Carriers in the United Kingdom

The National Health Service monitors the United Kingdom Health Care insurance system. Based on the report issued by W.H.O. The government funds 85% of the health care expenses. The private sector pays the remaining 15% of medical expenses.  There has been a significant development in employer insurance that covers most of the workers in the country.  While the NHS is the major source of funding, there are other private programs. Some of the major insurance firms in the country including

A.    BUPA

It serves as the largest health insurer in the country and offers an alternative to the tax-funded initiative. It covers many health complications such as dental, heart and cancer treatments. It is worth noting that BUPA insurance firm is accredited with more than 400 health care institution in the country.  It has contributed to the efforts of ensuring that all citizens have access to quality and affordable health care services.

B.     AVIVA

AVIVA is explained being as one of the largest insurance companies in the globe. It has operations in more than 23 countries and boasts of over 53 million customers. Its headquarters are in Great Britain and is recolonized as one of the leading health insurers in the country. It covers many medical conditions and allows its customers to access the best treatment in the country.

C.    Medicare International

Medicare international offers insurance cover for chronic conditions such as cancer and diabetes. Other services that are offered by the firm include medical procedures, X-rays scans, specialist fees, and general visits. The company has been active in the UK health care market for more than 20 years.

D.    Freedom Health Insurance

The organization is defined as being one of the best providers of aesthetic and sexual covers. It has been a major player in the UK health care sector and has seen a significant reduction in medical costs.  It is vital to note that there are also other major health care insurers in the country. They have the effect increasing the competition levels thus leading to improvements in the quality of health care services.

Demographic Demand Pattern for Healthcare

During the allocation of resources, there is an analysis of the vulnerable groups on the basis of gender, age and ethnicity. The age-weighted capitation serves as the primary method that is used by the NHS in the allocation of resources.  Elderly persons are seen as likely to have a frequent demand for medical services and also have longer stays in hospitals. In the past years, quality health care services have reduced infancy and neonatal complications. Immunization, hygiene, and advances in health care services have reduced infant mortality rates (Comas et al. 2018. 45). Nonetheless, children and pregnant mothers are still viewed as being vulnerable groups.

On the other hand, progression in age often leads to an equal increase in the number of pathologies and medical costs. Contrary to the youthful generation where there is a focus on curative medicine, it is worth noting that the NHS mainly focuses on palliative medical services when dealing with elderly persons. The prevalence of chronic conditions among the aging population calls for an increase in the budgetary allocations. The high birth rates in the period after the Second World War imply that there are a high number of elderly persons in the UK.

There is also a focus on different ethnic groups in the country as there are seen as requiring different health care needs. An example is the fact that personS from African decedent are seen as being exposed to many health conditions as compared to other persons. Past medical studies indicate that sickle cell mutation is common among people of African descendant as compared to other populations (Comas et al. 2018, 45). The trend implies that the group has a high demand for hematological services. Other than ethnic factors, economic empowerment influences the quality of health care services.

Since 2011, there have been changes in the social structures of the country due to the high number of immigrants. The move has further been triggered by the changes in the European Union system. Unlike the locals, it is worth noting that immigrants often face many economic and social problems. They often depend on the government for the funding of medical services. The trend has led to a demand for more financing. The argument rests on the fact that the population may find it challenging to engage in different health care plans. In the past years, the group was often marginalized and found it challenging to access quality and affordable services.

Possible Causes For and Effects of Shifts in Demand and Supply in the Market

Changes in the UK demographic structures are likely to change the currents setting of the health care sector. Past studies indicate that the high number of baby boomers is a timing bomb and would see an increase in the number of elderly persons. Baby boomers refer to the persons who were born after the Second World War. The argument is based on the fact that elderly person is often faced by chronic health conditions thus increasing the medical costs. On the other hand, an increase in the number of births would call for more budgeting in maternal health.

Other than the age and birthrates, changes in immigration policies will impact on the supply and demand of medical services (O’Dowd et al. 2018.). One of the factors that may affect the demographic structures of the country concerns the European Union.  The exit of the United Kingdom from the European Union implies that there are chances that other countries will place restrictions on the relationships between the UK and other countries. There are high chances that the trend would cause a reduction in the number of immigrants in the country. In such a setting, the demand for health care services would equally reduce. On the other hand, it means that there would be improved efficiency levels in the supply of medical services due to the limited number.

The other factor that may affect both the demand and the supply of medical services concerns the economic empowerment of the citizens. Focusing on pats trends indicates that economic c factors have direct impacts on social structures. The lack of adequate resources has in the past seen the prevalence of chronic health conditions among the marginalized groups. Whoever, the country has been recording consistent that has seen an improvement in the GDP levels. The trend means that the citizens are recording an improved quality of life. In such situations, the citizens have the ability to pay for specialized medical attention thus lowering the government burden (O’Dowd et al. 2018.). On the other hand, an increase in the number of employed persons means that more amounts would be deducted from the employees to finance NHS initiatives.

Impacts of cross-price and income elasticity of demand in the UK Health Market

An increase in the price/cost of health care services may see the customers reduce their spending levels on medical covers.  Price-induced changes can either increase or decrease the spending leveLS on health care services.  In the case of the UK health Market, the low-income earners and marginalized groups would be more sensitive to changes in price levels as compared to other groups.  It implies that the demand for health care services in the country is inelastic to the price levels. Changes in price levels are also likely to affect the purchase of drugs. Activities such as direct-to-consumer promotions are likely to reduce the price elasticity on health care services demand.

When both inpatient and outpatient services are compared, it becomes apparent that outpatients services would be more sensitive to price changes as compared to inpatient services. However, there is the argument that an increase in the level of income does not necessarily prompt consumers to use more health care services. On the contrary, they would settle for better insurance packages and seek specialized treatments. These factors are likely to impacts on the delivery of health care services in the United Kingdom.

Possible Market Failures In Relation To Health Care

Failure of competition may create the risk of market domination or exploitation of the customers by the health care providers. The case is common in cases where private health care providers and insurance firms merge to control a bigger market. Although there is competition in physicians’ services, there are other areas such as insurance that are vulnerable to market failure. Competition among the insurers may prove challenging to be perfect (Lee, 2018, 206). The situation would create a problem of trying to reduce the domination of the market by a few insurance firms. A large number of market players means that there are better offers.

The argument rests on the fact that each health need is different with an emphasis being on offering customized services. On the other hand, some aspects of health care services are seen as being public goods. It is worth noting that public goods do not cost the consumers anything. It is also impossible to exclude some people from enjoying public goods. Some of the public goods in the health acres sector include the vaccination of children and the setting up of communal health care centers. Another example is herd immunity which may create some problem in the control of health care services in the country.

Government Interventions

Most of the failures of the market exist due to Information asymmetries as the health care providers know more information as compared to patients. The situation creates the risk of supplier-induced demand and other complications. However, the government can address this by increasing the public awareness levels of different health care services and the roles played by each stakeholder (Rosen et al. 2018). More attention needs to be placed on the private sector where the government can come up with measures to detect frauds and other illegal activities thus reducing possible exploitation of the customers. On the other hand, there is the option of using antitrust enforcement as a way of reducing possible market domination. The measure controls mergers and ensures that there is fair competition in the health care sector.

Recommendations for the Government

Although the government has played an important role in ensuring that there is a smooth delivery of health care services, there are some areas that ought to be addressed. One of the measures concerns the need to ensure that there is competition in the industry as a way of maintaining innovation levels and customer satisfaction levels. Adequate government regulations will ensure that the insurers and other stakeholders in the private sector do not control the market through mergers. Secondly, Information asymmetries can be resolved by ensuring that there are improved awareness levels. In a situation where the patients have access to vital information, there are fewer chances that they would be exploited by the health care providers.  Additionally, the government needs to improve the funding levels to NHS as a way of ensuring that there is the smooth delivery of health care services.




Reference List

Cylus, J., Richardson, E., Findley, L., Longley, M., O’Neill, C. and Steel, D., 2015. United Kingdom: health system review. Health systems in transition, 17(5), pp.1-126.

Comas-Herrera, A., Wittenberg, R. and Pickard, L., 2018. Long-term care for older people in the United Kingdom: structure and challenges. In Long-Term Care: Matching Resources and Needs (pp. 31-48). Routledge.

O’Dowd, N.C., Kumpunen, S. and Holder, H., 2018. Can people afford to pay for health care? New evidence on financial protection in the United Kingdom. Can people afford to pay for health care? New evidence on financial protection in the United Kingdom.

Lee, K.S., 2018. The ideology of Social Health Insurance and Health Policy. Health Policy and Management, 28(3), pp.202-209.

Rosen, M.A., DiazGranados, D., Dietz, A.S., Benishek, L.E., Thompson, D., Pronovost, P.J. and Weaver, S.J., 2018. Teamwork in healthcare: Key discoveries enabling safer, high-quality care. American Psychologist, 73(4), p.433.