Prices really need to be capped if this market is to grow in volume

Paul Davies, Mintel

However, 48% are confident about the NHS providing more than adequate cover for future health needs.

The survey found that younger people (aged 20-34) are least likely to have faith in the NHS. Those aged over 55 seem happier with it.

Stagnant market

Despite widespread concerns, Mintel found the number of people taking out private health care cover is only slightly higher than in 1990.

The number of private medical insurance (PMI) subscriptions rose by 1.7% in 1999 to 3.31 million, covering 6.17 million people.

The main reason that more people have not opted for the private sector, according to the survey, is the high cost.

Some 58% of people with private health care cover think it is too expensive.

Growth in the PMI market has been driven by the company purchase sector.

Individual sales have started to decline.

Mintel found that almost three quarters of adults - including 58% of those who have private medical insurance - feel that PMI is too expensive.

Paul Davies, a financial consultant at Mintel, said: "The industry is endeavouring to offer lower-cost alternatives to comprehensive schemes, but prices really need to be capped if this market is to grow in volume."

More innovation

Peter Fermoy, communications manager for the Independent Healthcare Association, told BBC News Online: "More than just capping prices, the medical insurers have got to look for more innovation in their product range so that schemes are tailored to individual, rather than mass needs."

Mr Fermoy said that there had been a significant increase in the numbers of people using the private sector - but they were choosing to pay for one-off operations, rather than take out insurance.

In 1998, the numbers opting to pay for private care rose by 40% to approximately 160,000.

Mr Fermoy said the private sector had spare capacity to take on an extra 150,000 operations from the NHS per year.

Under the NHS plan, NHS hospitals will be able to farm out operations to the private sector.