Contents:

Executive Summary 1. Market Definition REPORT COVERAGE MARKET SECTORS Long Term Care Acute Care Private Health Insurance Psychiatric Care Primary Care MARKET TRENDS Private Medical Treatments Increasing Blurring of the Boundaries between Private and NHS Treatment Internationalisation of the UK's Private Healthcare Sector Health Tourism ECONOMIC TRENDS Population Table 1: UK Resident Population Estimates by Sex (000), Mid-Years 1999-2003 Gross Domestic Product Table 2: UK Gross Domestic Product at Current and Annual Prices (£m), 1999-2003p Inflation Table 3: UK Rate of Inflation (%), 1999-2003 Unemployment Table 4: Actual Number of Unemployed Persons (million), 1999-2003 Household Disposable Income Table 5: Household Disposable Income (£), 1998-2002 Market Position Table 6: UK Public and Private Health Expenditure (£bn and %), 1999-2003e Overseas Table 7: Measured Levels of Expenditure on Health by Leading Developed Country (%), 1998-2001 2. Market Size THE TOTAL MARKET Table 8: The Total UK Private Healthcare Market by Sector by Value (£m and %), 1999-2003p By Market Sector Long Term Care Table 9: The Private Long Term Care Sector by Value by Type of Provider (£m and %), 1999-2003p Acute Care Table 10: The Private Acute Care Sector by Value (£m and %), 1999-2003p Psychiatric Care Table 11: The Private Psychiatric Care Sector by Value (£m and %), 1999-2003p Primary Care Table 12: The Private Primary Care Sector by Value (£m and %), 1999-2003p Private Health Insurance Table 13: The Private Healthcare Insurance Sector by Value by Subscription Income (£m and %), 1999-2003p Table 14: Total UK Private Healthcare Insurance Claims by Value (£m), 1999-2003p Table 15: Number of UK Subscribers to Private Healthcare Policies (000 and %), 1999-2003p OVERSEAS TRADE Imports Exports 3. Industry Background RECENT HISTORY INDUSTRY SYNOPSIS Table 16: Financial Results of Leading Private Sector Hospital Activities in the UK by Turnover and Pre-Tax Profit (£000, % and £), Latest Year End Number of Companies Table 17: Leading UK Companies Operating in the Private Healthcare Market by Sector (number of companies), 2003 Employment Table 18: Employment in the Private Sector Health and Social Work by Number of Employees (000), 1999-2003e REGIONAL VARIATIONS IN THE MARKETPLACE Table 19: Number of Private Hospitals/Clinics by Region, 2003/2004 DISTRIBUTION HOW ROBUST IS THE MARKET? LEGISLATION KEY TRADE ASSOCIATIONS Association of British Healthcare Industries Association of British Insurers (ABI) British Healthcare Trades Association British Medical Association Independent Healthcare Association English Community Care Association Other Associations 4. Competitor Analysis THE MARKETPLACE Acute Care Long Term Care Psychiatric Care Primary Care Private Health Insurance Market Leaders Table 20: Top Ten Private Hospital Groups by Turnover (£000), 2002 Table 21: Top Ten Private Healthcare Insurers by Subscription Income (£m), 2002 - Anchor Trust Company Structure Integrated Care and Housing Current and Future Developments Financial Results - AXA PPP Healthcare PLC Company Structure Current and Future Developments Financial Results - British United Provident Association (BUPA) Ltd Company Structure Current and Future Developments Financial Results - Capio Healthcare Ltd Company Structure Current and Future Developments Financial Results - Four Seasons Healthcare Ltd Company Structure Current and Future Developments Financial Results - GHG Ltd Company Structure Current and Future Developments Financial Results - Nestor Healthcare Group PLC Company Structure Current and Future Developments Financial Results - Norwich Union Healthcare Ltd Company Structure Current and Future Developments Financial Results - Nuffield Hospitals Company Structure Current and Future Developments Financial Results - Standard Life Healthcare Ltd Company Structure Current and Future Developments Financial Results Other Companies OUTSIDE SUPPLIERS Pharmaceuticals Industry Medical Equipment Manufacturers Marketing Activity Table 22: Main Media Advertising Expenditure by Hospitals and Doctors (£000), Year Ending December 2003 Exhibitions and Tradeshows 5. Strengths, Weaknesses, Opportunities and Threats STRENGTHS WEAKNESSES OPPORTUNITIES THREATS 6. Buying Behaviour Penetration of Private Health Table 23: Penetration of Private Health and Medical Insurance by Sex, Age, Social Grade and Region (% of adults), 2003 Overall Penetration in the Adult Population Penetration by Age Penetration by Social Grade Penetration by Region Major Illnesses and causes of death Table 24: Underlying Cause of Deaths in England and Wales by Sex (actual number), 2002 7. Current Issues POLITICAL SCENE Improved NHS Funding and the NHS Plan Foundation Hospitals and Treatment Tariffs New GP Contract/Out of Hours Service New Consultant Contract PFI Hospitals — Public and Private Sector Integration SKILLS SHORTAGES PRODUCT DEVELOPMENT Payment Methods Advances in Medical Technology CONSUMER DEMAND CORPORATE ACTIVITY Acquisitions and Takeover Bids Board Appointments Other Developments LEGISLATIVE CHANGES 8. The Global Market MARKET SIZE Table 25: Measured Levels of Expenditure on Health by Leading Developed Country (%), 1998-2001 MAJOR TRENDS CONSUMER BEHAVIOUR THE FUTURE 9. Forecasts INTRODUCTION Table 26: Forecast UK Key Economic Indicators (% and million), 2004-2008 FORECASTS 2004 to 2008 Table 27: Forecast Total UK Private Healthcare Market by Sector and by Value (£m and %), 2004-2008 FUTURE TRENDS Demographics Market Segmentation Europeanisation/Globalisation 10. Company Profiles Anchor Trust Axa Ppp Healthcare Group Plc Bristol Contributory Welfare Association Ltd British United Provident Association Ltd (the) Capio Healthcare Ltd Nestor Healthcare Group Plc Norwich Union Healthcare Ltd 11. Further Sources Associations Publications General Sources Government Publications Bonnier Information Sources

Summary:

We estimate that the UK private healthcare market was valued at £16.18bn in 2003, increasing by 6% between 2002 and 2003. Although the private healthcare market is comparatively small when compared with the National Health Service (NHS) and private healthcare in other developed countries, it has been growing in importance in recent years. For the purpose of this report, private healthcare in the UK is analysed in terms of five distinct market sectors: long term care; acute care; private health insurance; psychiatric care; and primary care. Long term care relates to residential care, either in a nursing home or a residential care home. Acute care relates to elective surgery, but excludes accident and emergency treatments. Private health insurance handles the market for private health insurance policies. Psychiatric care ranges from the treatment of acute psychiatric conditions to ongoing disorders such as substance abuse, but this sector does not include residential care for the mentally disabled. Primary care refers to private general practitioner (GP) services and occupational health services. Out of these five market sectors, acute care and psychiatric care have been the best-performing areas of private healthcare over the past 5 years. A number of political initiatives by the current Labour Government have had and will have a significant impact on the private healthcare sector in the UK. The most significant development has been the sustained increased funding of the NHS, the private sector's main competitor. Ordinarily this would be a major threat to private sector healthcare. However, instead it has provided opportunities for growth and the Government's planned programme of reforms is likely to continue to open up new opportunities for the private healthcare sector in the UK because these reforms promote a partnership approach between the NHS and private healthcare. A major limiting factor for the private sector and indeed the NHS is the current shortage of medical professionals in virtually all areas of medicine and nursing. Since 2000 and 2001, the private acute sector has benefited from the Government's initiative to cut waiting lists and waiting times for operations, because this has allowed the NHS to make use of the private sector to help clear the backlog of operations. Long term care is currently experiencing a period of slow growth due to a temporary decrease in the number of people aged 85 years and over. This demographic trend was caused by the effects of World War I. Psychiatric care has been experiencing double digit growth in recent years, mainly as a result of the NHS contracting out acute psychiatric care to the private sector. Growth opportunities in primary care remain rather limited for private GP services as a result of competition in terms of price and service from NHS GPs and a general shortage of qualified GPs in the UK at the moment. Reforms to the NHS and reductions in waiting times for elective surgery have translated into slower growth for private health insurance and more people taking a `wait and see approach' with the NHS, and cutting back on private health insurance which is generally viewed as a luxury rather than an essential. The outlook for the UK private healthcare market is positive with growth anticipated across all five market sectors. Although the NHS is being better funded by central government and is undergoing reform, these reforms are enabling the NHS to take a partnership approach with the private healthcare sector, and new areas of healthcare that have traditionally been dominated by the NHS, e.g. primary care, are likely to open up more to the private sector in years to come. The private healthcare sector as a whole is forecast to grow overall by 23% between 2004 and 2008.