Pay-as-you-go private operations are in rude health

The sharp rise in the number of people prepared to pay for private operations illustrates just how great a crisis the NHS is in.

Keen to bypass lengthy waiting lists, patients without private medical insurance are paying cash to beat the queues. A growing number of private hospital networks, along with the private wings of some NHS hospitals, now offer the service.

Figures announced just before Chancellor Gordon Brown's recent Budget revealed that in 1999 some 160,000 people raided their savings to fund operations on a pay-as-you-go basis - almost 50,000 more than in 1996, the year before Labour was elected.

Bupa Hospitals recorded a 30 per cent increase in the number of operations it performed last year on this basis, with patients spending £240m.

The Chancellor's Budget announcement - where he promised £15bn in funding for the NHS over four years - may halt the trend. But if you are facing a long wait for NHS treatment, it may be worth considering paying for it yourself.

The traditional method of funding private treatment, through regular-premium private medical insurance, is too expensive for many. Self-pay care lets you forget the monthly drain of premiums and splash out for a private operation when you need one.

The schemes are being promoted by several different private hospital networks, notably Bupa Hospitals, Nuffield Hospitals Direct and BMI Healthcare. Following diagnosis from a consultant, you will be quoted a fixed price for the treatment you need. This varies from hospital to hospital, depending on the complexity of the operation, your age and medical condition.

The quoted price should include accommodation, nursing care, operating theatre fees, drugs, dressings, X-rays, tests and consultants' fees. This price will be guaranteed even if there are complications and you have to stay in hospital longer than an-ticipated - which protects you from bills running out of control.

If you go through Nuffield, expect to be charged from £1,300 to £1,425 per leg for varicose veins, between £1,350 and £1,700 for a hernia, between £1,950 and £2,600 for a cataract operation, and between £5,800 and £7,500 for a hip replacement (see the box below for further costs).

For more complex treatments such as a heart bypass, expect to pay from £12,000. You can also buy operations that aren't covered by private medical insurance policies, such as cosmetic surgery.

The private medical sector is promoting the schemes, particularly as the number of people paying for private medical insurance remains static. Annual premium increases of over 10 per cent have made it too expensive for most of us to consider buying a policy.

A single man aged 35 would pay from £35 to £70 a month, but at 55 his premiums could range from £75 to £200 a month, depending on the level of cover bought. Premiums could rise to as much as £500 a month as he gets older. Parents in their late thirties with two young children would pay from £70 to £150 a month for full cover.

So it is not surprising that a growing number prefer to go without cover in the hope they will never need it - and stump up the cash for a one-off operation if they do.

Bupa marketing director Howard Beveridge says awareness of pay-as-you-go surgery is still low as almost half the people surveyed by Bupa did not realise they could use private hospitals if they didn't have medical insurance.

Bupa found that most people who pay themselves are over 55. Many are on long-term waiting lists or want hip replacements or cataract surgery. The self-employed are also prepared to pay to avoid spending long periods off work through illness, as are young professionals with money to spare but no insurance. People in well-paid employment often buy operations for retired parents.

Self-pay schemes may also suit those who have private medical insurance but need treatment for a condition excluded under that policy - for example, if they had an existing condition when they took out their medical cover.

Bupa Hospitals' scheme allows treatment at all of its 36 hospitals. If you need to borrow money, it offers a loan service through Colonial Finance UK. The APR is 14.9 per cent, the minimum loan size is £1,000 and you must pay 10 per cent of treatment costs yourself.

BMI Healthcare and Nuffield both offer interest-free loan periods. BMI Healthcare, which treated 35,000 patients at its 42 hospitals last year, offers six months' interest-free credit. After this, the APR is 15.5 per cent.

Nuffield, which has 40 hospitals across the country, reveals that self-pay is the fastest-growing part of its business. It offers interest-free credit for 12 months through Mercantile Credit, with an APR of 15.9 per cent after that.

George Connelly, specialist private health broker with Healthcare Matters, says self-pay schemes may suit those who baulk at insurance premiums or believe their chances of needing treatment are slim.

But he says they do not provide the peace of mind of private medical insurance. "When it came to the crunch, ask how you would feel stumping up £7,000 for a hip replacement. Many people may prefer to wait for the NHS, even if they are in pain. With insurance you don't have to make that choice."

Another question to ask is whether you can lay your hands on more than £12,000 to fund a serious operation such as heart bypass surgery.

With private medical insurance so costly, self-pay care will continue to appeal to many - unless, that is, the Chancellor's recent injection of cash really does get the NHS waiting lists down.

Contacts: BMI Healthcare, 0207-419 6000; Bupa, 0845 600- 8822; Nuffield Hospitals Direct, 0800 688699.