While the share of private healthcare provision varies in different markets, in recent years, Western European healthcare systems have evolved, providing a favourable outlook for private providers. In view of the increasing demand for healthcare services and increasing pressure on healthcare budgets, private providers are seen by governments as part of the solution to relieve the pressure from an increase in healthcare expenditure. This is due to their perceived high quality and high productivity offering, which is increasingly attractive to both payers and patients, who also benefit from reduced waiting times.
There are generally two primary means by which the public system can shift volumes to private providers: tendered contracts or the implementation of free patient choices. Going forward, the share of healthcare services provided by private providers in Europe is expected by Capio to increase, with the following potential benefits:
- Lower unit price: Private providers offer a lower unit price for healthcare based on the combination of contracts awarded through competitive bidding and centrally-determined patient choice reimbursement levels
- Leveraging patient involvement: The implementation of patient choice creates an incentive for providers to improve quality (such as encouraging an improved quality/value offering or shorter waiting times). This creates an opportunity for private providers to attract elective (planned) volumes by developing competitive quality and value offerings
- Explicitly connecting reimbursement to quality: The public healthcare systems are developing towards measuring and taking account of the quality of delivered healthcare, and ensuring the right incentives to drive quality improvements and apply modern, evidence-based medical methods. One element of this is to adapt reimbursement models so that they no longer impede quality improvements which can lead to reduced average length of stay (AVLOS) and the transition from inpatient to outpatient care
- Increased co-payments: Potential limitations to the public offering of healthcare due to longer waiting times are expected to stimulate an increase in privately financed healthcare, such as private health insurance and out-ofpocket expenditure, thereby affording private providers the opportunity to expand service offerings
- Co-investments in capacity: The use of public-private partnerships, and the shift of specific volumes of healthcare for which public providers lack capacity and private providers hold excess capacity, benefit both the public system and private providers