The Healthcare Industry

The healthcare industry is one of the largest and fastest growing sectors within the economic system, in the world. The industry consists of three main categories, which are health activities, medical and dental activities. It also includes a wide range of professionals, for example surgeons, nurses, doctors, physicians, dentists, social workers and many more.  In the decade before the economic downturn, the UK’s healthcare market witnessed dramatic growth due to the ageing population and growing demand for health services. The public began funding the health care system even more than before and the National Health Service grew dramatically. In 2009, the rate of growth slowed down as public funding declined. The private healthcare market in the UK is dominated by a number of major health care providers including the General Healthcare Group (GHG), Spire, HCA, Bupa, Care UK, Barchester Healthcare, Craegmoor Healthcare and Four seasons. The UK healthcare market is expected to benefit greatly from the ageing population as there will be a greater patient demand as more of the ageing population suffer from long-term conditions and also there will be a larger population. This therefore makes the long-term care sector the largest sector within the private healthcare market. (Wood, 2014)


PESTE Analysis of the Healthcare Market

Political- The UK government are trying to cut the public spending and have been changing on a daily basis. Governments over the world have constantly been looking for ways to reduce the amount spent in the industry. For example, MPs in some countries have renegotiated large contracts in order to reduce them. Some political related issues in the health care industry include strikes by health care experts due to low salaries. This is the main political problem within the healthcare industry. (PESTEL analysis of healthcare industry, 2015)

Economic– Increase in interest rates impacts the healthcare industry dramatically. This is because many investments fail to live up to their standards which therefore causes loss of jobs in the medical industry. Europe’s economy is on of low-growth for the foreseeable future. Therefore it has been estimated that the total health spend in England will reach £3 billion by 2016, which will be a 10% increase form 2010. Many trusts have an ageing legacy system which will need to be replaced at some point and therefore there is a huge potential demand for modern systems. (PESTEL analysis of healthcare industry, 2015)

Social- Patient awareness and changing expectations is a growing issue in the healthcare market. This means that there is more pressure on customer service, increased need for education and more price transparency. (Shaw, 2011)

The increasing age of the population and growth of obesity is also affecting the healthcare market; it means that it is growing as there are increased health concerns. (Shaw, 2011)


Technical- New information and communication technologies are being developed therefore meaning there are new digital opportunities which are creating e-models. An e-model is an online representation of someone or something. This is effecting the healthcare market as people are deciding to go online and try to self-diagnose their problem rather than going to see their doctor, meaning that they are losing out on money. (Shaw, 2011)


Environmental- The UK government has adopted the ‘Green’ agenda as a response to the dangerous climate change. Therefore, this affects the healthcare market directly. Documentation of patient’s files etc., should be electronic, as this would save paper and space. The IT departments in hospitals are often of a very low status and quality. Therefore, for this to move forward and follow the ‘Green’ agenda, hospitals should consider more modern IT facilities which means they need to invest more money in this department of the healthcare sector. Not only will this be better for the environment but also will be more reliable and of a better quality; which is very important in the healthcare market. (beyondclinical, 2012)


Competition for the Healthcare Market

The main competition that occurs in the healthcare market is the increasing amount of independent (private) treatment centres. These are privately owned but also treat National Health Service patients. These have been rising since 2007. Since 2006, patients who have been referred to specialists have actually been given a choice as to where they attend their appointment. Although the amount of patients has increased for all types of trust, there has been a decrease in the amount of patients attending their nearest NHS trust which suggests that the choice may be creating real competition in the health service. The competition will continue to emerge as more private and public health services come available over time.


Public vs. Private healthcare

National Health Service (NHS): The National Health Services runs on a system whereby you are put on a list to see your NHS consultant. The speed that you are seen is carried out in terms of urgency, sometimes you are seen the same day and sometimes you have to wait a considerable amount of time. The quality of care is excellent. The National Health Service have recently had to start rationing patient care and closing waiting lists so that they are not fined for making people wait for too long; waiting times are becoming longer. This is due to the increasing demand because of the ageing population and simply the increase of the population as a whole. Therefore, many patients are deciding to move to private healthcare. Also, with the NHS you do not have a choice as to who treats you.

Private healthcare: The main reason that most people chose to go privately is because they want to avoid the long waiting lists. Other reasons include the worry of hospital infections, dissatisfaction with NHS treatment and the need for a second opinion.

There are actually very few differences between seeing a private consultant compared to a National Health Service consultant. The differences include:

  • In private care you are usually seen within a week of your GP requesting a referral and test are arranged within a few days, whereas with the NHS you can wait weeks, sometimes months.
  • In private hospitals, treatment is in a private room which has a TV, menu choices and a private toilet. However with the NHS you are normally put on a ward, with a shared toilet and rarely there will be a shared TV. However this is beginning to change as the world becomes more modern. NHS hospitals often have private rooms now. Also some hospitals have private NHS units. This is where you are a NHS patient but can choose to go privately with the NHS. This makes money for the hospitals.
  • With private care you can chose which consultant you see.
  • With private care you can chose when you are treated.

(Private health treatment vs. NHS treatment, 2000)

(Henderson, 2011)


 graph healthcare

The graph above shows the public healthcare expenditure, in billions, between 1997 and 2013 in the UK. It shows that as the year’s progress, the public are spending considerably more and more on healthcare. This is probably because of two main reasons. First because of the ageing population, more people are demanding healthcare. Secondly because of the general growth in the size of the population as a whole.


The Health and Social Care Act 2012

The Health and Social Care Act of 2012 introduced a number of big changes to the National Health Service in England. The main changes include:

  • Shifting many of the responsibilities that are usually located in the Department of Health, to a new politically independent board.
  • The making of a health specific monitor with a mandate to guard against ‘anti-competitive’ practices.
  • Moving all National Health Service trusts to foundation trust status.
  • Giving groups of GPs practices clinical commissioning groups which is a real budget to buy care on behalf of the local community.

(Spotlight on: A&E, 2012)


What will happen to the healthcare sector in the future?

Since the start of the NHS, the divide between primary care, community services and hospitals has not been altered. Therefore, the aim for the forthcoming years is to get rid of these boundaries. The main task of the National Health Service will change to solving long term conditions. The National Health Service has stated that there are five things that they need to do in the future. These are:

  1. Manage systems and not just organisations.
  2. Out of hospital care needs to become a larger part of the National Health Service system.
  3. Services need to be integrated around the patient. For example, a patient with a mental illness needs their physical health addressed as well.
  4. They believe that they should learn from examples from all over the world and not just pay attention to those things that happen within the UK.
  5. Lastly, they believe that as they introduce these things, they should evaluate new care models to establish which produce the best experience for patients and which gets the best value for money.

(England, 2016)



Healthcare differs from other market sectors in many ways; that are all very important. For example, the output of a clothes factory is clothes; however it is hard to define the output of the healthcare industry. This is because it is hard to predict and there are many different types of healthcare. As time goes by, the healthcare industry continues to develop and grow stronger, and this will continue to happen every day, as new discoveries and inventions allow this to happen. The healthcare industry is one of the most important market sectors and without it, the country would not be able to operate in the way that it does today. (Healthcare Industry, 2007). I personally believe that the free healthcare system in the UK is excellent and is the most important market sector.













Reference list

beyondclinical (2012) Paul’s PESTLE analysis, UK healthcare. [Online] Available at <> [Accessed 21 January 2016]


England, N. (2016) NHS England chapter three – what will the future look like? New models of care. [Online] Available at <> [Accessed 21 January 2016]


Health care industry (2007) [Online] Available at <> [Accessed 21 January 2016]


Henderson, R. (2011) Introduction to private health care. [Online] Available at <>

[Accessed 21 January 2016]


Private health treatment vs. NHS treatment (2000) [Online] Available at <> [Accessed 21 January 2016]


Public healthcare expenditure in the United Kingdom from 1997 to 2013 (in billion GBP) (2013) [Online] Available at <> [Accessed 21 January 2016]


Richard Disney (2011) Questions on quality, choice and demand. [Online] Available at <> [Accessed 21 January 2016]


Shaw, A. (2011) Home. [Online] Available at <> [Accessed 21 January 2016]


Spotlight on: A&E (2012) [Online] Available at <> [Accessed 21 January 2016]


Wood (2014) Research and Markets: UK Private Healthcare Market Report 2014. [Online] Available at <> [Accessed 21 January 2016]


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