This time last year the UK's private health industry was on a roll. The number of people covered by medical insurance (6.5 million) was at a record high, with many more dipping into their own pockets to “go private”. Today the future is not so rosy. The economic turmoil, combined with a better, faster NHS, means that private medical insurance (PMI) is looking like an unnecessary luxury that may feature high on any family or company's cost-cutting list.

Ten years ago it was NHS waiting times that were the main driver for people turning to the private sector, but delays have plummeted. In the Nineties patients of mine were regularly waiting up to 18 months to have a cataract operation; today some of them are operated on within a fortnight.

Indeed, as of New Year's Eve, at least nine patients out of ten living in England should be seen and treated within a maximum of 18 weeks for a range of non-emergency treatments for problems such as cataracts, arthritic hips and hernias - a target that was a key reform in the 2004 NHS Improvement Plan, and one the service looks set to achieve (the situation is different in Scotland and Wales, although it is hoped that both will follow suit over the next few years). So why have PMI, or raid your savings, if there is no longer a queue to jump? Well, just as the future was starting to look bleak for consultants enjoying the fruits of the lucrative private sector, along came a saviour in the form of hospital-acquired infections. Fear of contracting MRSA and C.difficile has overtaken lengthy waits to become the main reason people turn their backs on the health service.

Private hospitals throughout the UK have managed to control hospital-acquired infections much more efficiently than those in the NHS and many remain MRSA-free. But the threat posed by a stay in your local district general is nothing like as bad as the recent hype suggests. An otherwise healthy patient admitted for a planned operation in a decent NHS hospital would have to be on the ward for around 15 years to stand a more than evens chance of succumbing to MRSA. Still so scared?

Of course waiting times and infection rates are not the only attractions of the private sector. Others include being able to choose your consultants, having more time to talk to them and knowing that it will be them who treats you rather than one of the more junior minions. Then you can book your appointment to suit your diary and, if you need a stay in hospital, have your own room with a TV and that all-important en-suite bathroom. But even some of these benefits are now being fast eroded.

The NHS Choose and Book scheme - available at a GP practice near you - allows patients to choose their hospital and consultant (in theory from almost anywhere in the country) and even the date and time of the appointment. And, if you require treatment as an in-patient, many NHS hospitals will allow you to upgrade to your own “amenity” room from as little as £50 a night.

Stumping up around £3,000 to have your baby at the Portland Hospital in London will be beyond the reach of most pregnant women, but how about your own private room at one of the UK's leading teaching hospitals for less than a tenth of that? The NHS maternity unit at the Oxford Radcliffe will accommodate you and your new baby in one of the en-suite rooms on the private 7th floor for £145 a night (including “superb views and co-ordinated bed linen”).

And even if you are insured to the hilt, there are many circumstances where you probably wouldn't want to be in a private hospital. As a general rule the sicker you are the more likely you are to require the type of acute back-up that simply isn't available in most private hospitals. Suffice to say that your odds of surviving a cardiac arrest at the hands of the dedicated medical crash team in your district general are likely to be much higher than that in a typical private unit where there may be only one doctor available.

So should you ditch the private health policy and put the funds to better use? Well, if you can easily afford the premiums, or are one of the majority of insured people who are part of a company scheme (for the moment anyway) then I would stick with it. PMI is a great back-up that gives you added flexibility and a nigh-on guarantee that you will get your own loo. But if you, or your family, are struggling to meet the costs and it is compromising other important aspects of your day-to-day life, then it would be one of the first things that I would cut back on. Here are a few options worth considering to ensure that you get value for money and the very best out of the NHS.

You can cut back your level of cover. Insurance providers have come up with a range of options that allow you to slash the costs. Axa's Retirement Essentials covers treatment for key conditions that commonly affect older people - heart and eye problems, joint replacements and hernia repairs - at around half the price of a normal policy. While Bupa's Select Heart and Cancer Policy just covers the UK's two biggest killers for a similar reduction. And most providers will offer reduced premiums in exchange for an “excess”, such as claiming only for problems that can't be dealt with by the NHS within six weeks.

Or you can cancel your cover completely and take the hit on your pocket if you need to pay for private treatment. Seventy-five per cent of privately insured people in their early thirties, and 85 per cent of those in their early fifties, make at least one claim over a five-year period. But most of these won't require major treatment and the costs of the premiums (around £45 a month for a typical 40-year-old on a top-of-the-range product) need to be offset against the costs of paying for treatment yourself. Can you justify paying £500 a year in premiums for treatment that you may never require, or would you prefer to stump up £2,000 for that private arthroscopy should you injure your knee? And don't forget, you can always have the surgery on the NHS free if you can't afford it.

If you do go down the self-fund route, either to top up NHS treatment (something that is becoming increasingly acceptable) or picking up the bill at a private hospital, then be prepared to haggle. It can be tricky talking money with a specialist, but if you need investigations or treatment and you want to go privately, then contact the consultant's secretary and ring round to compare prices. The variation in charges for MRI scans, blood tests and ECGs (see graphic) sums up the scale of the differences in prices that people are being charged across the UK. To cap it all, the cheapest MRI unit at Cheltenham has some of the most up-to-date equipment (including an open scanner for claustrophobic patients), so cutting costs doesn't mean you have to cut corners. Similar discrepancies can be found in the packages offered for operations such as hysterectomies - I made two phone calls to inquire about an all-inclusive price for a patient of mine and was quoted £5,600 at one hospital and £4,500 at another two miles down the road. Both involved the same consultant gynaecologist.

If you depend solely on the NHS then make the most of the Choose and Book initiative (www.chooseandbook.nhs.uk). It is still difficult for patients to obtain reliable information on finding the best specialists and hospitals for their condition, but it is something the NHS is working on through new initiatives such as the NHS Choices website (nhs.uk). Meanwhile, ask your GP to point you in the right direction.

Lastly, if you or a member of your family takes regularly prescribed medicines for a long-term condition such as asthma, then buy a pre-payment certificate (PPC). GPs are being encouraged to prescribe no more than a month's supply of medicine at a time, meaning a typical asthma patient on two inhalers would save around £70 a year in prescription charges if he or she bought an annual PPC (£102.50) entitling the patient to unlimited “free” prescriptions. Call 0845 8500030 to order yours.

Mark Porter is a GP in the Cotswolds and presents Radio 4's Case Notes. He is married with two teenage daughters and was appointed MBE for services to medicine in 2005. If you have a question for Dr Mark Porter e-mail him at
drmark@thetimes.co.uk

Explore Health

• Expert Advice

• Health Features

• Mental Health

• Alternative Medicine

• Child Health

• Health Club