Private medical insurance (PMI) provides an annual £2.5bn boost to the economy through speeding up diagnosis and treatment, reducing sickness absence and increasing workplace productivity, new research for Bupa by WPI Strategy has shown.
The Healthy Workforce, Healthy Economy paper launched in the House of Commons and reveals both the direct economic impact of workplace private healthcare provision as well as the savings it makes for the NHS.
Of the total £2.5 billion economic boost, £1.2 billion is generated through reduced sickness absence, while £1.3 billion comes from tackling "presenteeism" where employees are at work but underperforming due to ill-health.
Powering the SME engine
The research looks at the impact on SMEs in detail, of which there were 5.7 million operating in 20251. It shows that PMI delivers an average of 22 fewer sickness absence days and 24 additional days’ worth of productivity, resulting in £14,700 in additional Gross Value Added (GVA) per small business every year.
With SMEs often lacking the scale to absorb the impact of long-term employee illness, access to private healthcare acts as a critical safety net. The paper estimates that if sickness absence was reduced by just one day per employee through better health support, the SME sector alone could generate an additional £2 billion for the UK economy annually.
Aligning with government’s national growth priorities
As the government seeks to increase economic growth, Bupa’s Healthy Workforce, Healthy Economy paper argues that workforce health must be treated as a primary economic lever.
By reducing the burden on the NHS, PMI saves the public health sector an estimated £4.2 billion every year. This is the equivalent to 100 days of GP appointments or 15 million Accident and Emergency visits. Helping employees to return to work faster puts PMI at the heart of the national effort to increase participation and productivity at work.
Chris Carroll, CEO for Bupa Global, India and UK, said: “A healthy workforce is the foundation of a growing economy. In commissioning the Keep Britain Working review, the government has rightly recognised that tackling health-related economic inactivity is an essential priority. The good news is that private healthcare makes a measurable difference in keeping the UK well and in work, supporting businesses of all sizes to prosper, increasing access to healthcare and easing pressure across healthcare systems.
“At Bupa we know early intervention changes health outcomes. We are reinvesting our profits to fund healthcare innovation, personalised interventions, fast diagnosis and access to world-leading facilities, clinicians and treatment options. We stand ready to work with government, employers and healthcare providers to boost the health of our workforce and our economy.”
Sebastian Rees, Head of Health for the Institute for Public Policy Research (IPPR), said: "This research is a timely and welcome contribution to one of Britain's most pressing policy debates: how to restore the health of a workforce that lags well behind our international peers. It puts hard numbers on the economic and productivity gains delivered by employer supported healthcare, from faster access to diagnosis and treatment to reduced absence and higher workforce productivity. We hope it serves as a wake-up call for government and employers alike to invest seriously in keeping Britain's workforce healthy and productive.”
Patrick Milnes, Head of Policy – People and Work for the British Chambers of Commerce, said: "Businesses of all sizes are struggling to find and keep the skilled people they need, and rising sickness absence is making that challenge even harder. Employers want to help, but they need accessible, high quality workforce health support to respond effectively. A new partnership with government is essential to unlock the talent the economy is currently losing, and this research can play a key role in informing this important conversation.”
Ben Harrison, Director of the Work Foundation – Lancaster University, said: “Stemming the flow of people leaving the UK workforce due to ill health remains an urgent priority. Once someone leaves work due to a health issue, it can become increasingly difficult to support a sustainable return to employment, meaning early intervention and prevention are key. Government and employers have a joint responsibility to deliver on the ambition to 'Keep Britain Working’ and must work together to ensure the potential benefits of new employment rights and the ongoing work led by Sir Charlie Mayfield supports change in those sectors where it is needed most.”
Read the full Healthy Workforce, Healthy Economy paper.
1 Business statistics, House of Commons Library
About the research
To find the annual GVA boost from reduced absenteeism and presenteeism, WPI Strategy have looked at the eight leading causes of workforce absenteeism. The analysis considers only the number of cases where time is a factor in either workforce absence, or productivity. WPI Strategy then estimated the average time saved (either reduced absence or increased productivity) per case due to faster access to treatment, and then calculated the per worker benefit of this faster treatment in terms of absenteeism and presenteeism and scaled this up by the current national uptake of PMI. This estimates the total number of days saved through absenteeism and presenteeism. This is uprated by weighted GVA figures to get the annual GVA impact of PMI due to the impact of faster access to treatment on absenteeism and presenteeism.
To calculate annual NHS savings, WPI Strategy queried NHS cost datasets covering various treatments including GP appointments, outpatient activity, Accident and Emergency attendance, admitted patient care, and dental care. After establishing average per-user costs per treatment type, WPI Strategy then estimated the number of patients who use private healthcare for each particular treatment. WPI used this data to find the increase in cost to the NHS of treatment in the counterfactual scenario where these individuals used the NHS rather than private healthcare.
