Who pays for private care now, and what it means for where providers build

The UK private hospital market has never been busier. PHIN, the independent body that publishes private healthcare data, recorded 953,000 admissions in 2025, the fourth record year in a row. Behind that headline is a more useful story about who is paying, and it should shape where independent providers invest and what they choose to offer.

Insurance carried the growth in 2025

Of those 953,000 admissions, 670,300 were funded by insurance and 282,625 by patients paying for themselves. Insured activity has climbed steadily, from 624,800 in 2023 to 664,815 in 2024 and 670,300 in 2025.

The Association of British Insurers’ latest figures explain why. Insurers paid a record £4bn in private medical insurance claims in 2024, up 13% on 2023. Some 6.5 million people were covered, up 4%, and 4.8 million of them held cover through their employer. Workplace schemes alone generated £2.6bn of claims, up 16%. The number of people claiming rose 10% to 1.8 million.

This is an employer-led market. Corporate cover is bought as a recruitment and retention tool and as a way of getting staff back to work faster. That makes insured demand sensitive to employment, payroll budgets and premium inflation, and it concentrates it where large employers and higher-paid jobs are.

Self-pay surged, then held

Self-pay is the part of the market that changed most after the pandemic. PHIN’s series of admissions with a recorded patient sex, which covers the large majority of activity, shows self-pay rising from roughly 197,000 in 2019 to about 281,000 in 2023. That is an increase of more than 40%, compared with around 8% for insured admissions over the same four years.

Then it stopped growing. Self-pay admissions were 282,710 in 2023, 282,080 in 2024 and 282,625 in 2025. PHIN noted that the 2025 total sat just 85 admissions below the 2023 peak. The surge was real and it has held, but for three years it has been a plateau rather than a trend line.

The reason it has not fallen away is the NHS waiting list. At the end of August 2026 there were 7.4 million referral to treatment pathways waiting in England, relating to around 6.2 million patients. Only 65.2% had been waiting less than 18 weeks, against a 92% standard, and 113,339 had waited more than a year. Performance is improving, up 4.2 percentage points on a year earlier, and the list is 0.5% smaller. But it is improving slowly, and a patient facing a long wait for a hip or a cataract still has a strong reason to pay.

Early 2026: the balance tilts again

The first quarter of 2026 suggests the plateau may be breaking. PHIN’s September 2026 update shows total admissions of 247,495, less than 1% higher than a year earlier. Within that, insured admissions fell 2.6%, the first fall in a first quarter for five years. Self-pay rose 7.7% to its highest quarterly level on record, taking 31% of all admissions.

The driver was older patients and one procedure. Cataract surgery accounted for 46% of the increase in self-pay admissions, and self-pay cataract activity rose 21%. The 60 to 69 age group added more admissions than any other. It is one quarter of data, so it should not be overread, but it points in a clear direction: growth is coming from older people paying directly for high-volume, predictable procedures.

The full-year 2025 self-pay list confirms the shape of demand. Cataract surgery led with 49,655 admissions, followed by primary hip replacement at 15,590 and primary knee replacement at 8,150. Hernia repair and diagnostic endoscopy follow, with cosmetic breast procedures also in the top ten. These are procedures with clear outcomes, fixed packages and long NHS waits, which is exactly what a self-paying patient can price and compare.

The regional picture is not the national one

National totals hide very different markets. In 2025 London recorded 248,770 insured admissions against 55,755 self-pay, so only around 18% of its private activity was self-funded. In Wales the balance runs the other way: 17,930 self-pay admissions against 14,105 insured, a self-pay share of around 56%. The North East, Scotland, Northern Ireland, the South West and Yorkshire and the Humber all sit at 40% or above.

Growth is also uneven. In the first quarter of 2026, self-pay admissions rose in every English region and by 9.5% across England, while falling 13.3% in Wales. Insured admissions fell in London, the South East, the South West and the East Midlands, but rose in five regions including the North West and Yorkshire and the Humber.

In practice, outside London and the South East a large share of the private market depends on patients spending their own money. Those markets behave differently. They respond to price, to local NHS waiting times and to how easy it is to find and trust a provider.

What this means for providers

Pricing comes first. A self-pay patient compares a package price against an NHS wait, often for a single procedure they will have once. Transparent, all-inclusive prices for cataracts, hips, knees and hernias are now the norm that patients expect, and finance options matter for older patients on fixed incomes.

Service mix should follow the funding mix. Sites with a high self-pay share depend on a narrow set of high-volume procedures, which brings operational efficiency but also concentration risk if NHS waits fall in that specialty. Sites dependent on insured work need strong insurer recognition and consultant relationships, and should watch whether the first-quarter dip in insured activity persists.

Location decisions need local evidence. The question is not whether private demand is growing nationally, but who in a given catchment is likely to pay, how, and for what. That depends on the local age profile, employer base, household wealth, NHS trust waiting times by specialty and the competing supply nearby.

Marketing to self-pay patients is a different discipline from serving insurers. It is a consumer decision, often made by older patients and their families, researched online and influenced by price, reviews and travel time. Providers who treat it as a by-product of insured work will lose ground to those who treat it as a market in its own right.

Next steps

Providers planning new capacity or reshaping existing sites should start by separating their insured and self-pay demand, then test each against local waiting times, demographics and competition rather than national averages. The 2026 data suggests the self-pay patient, particularly the older one, is where the next increment of growth sits. Minshall Group’s site selection and catchment analysis is built to answer exactly that local question.