As pressure grows on the NHS, will we see a long awaited boom in the private healthcare sector?
A recent analysis by Pulse, the GP magazine, has highlighted the extent to which private healthcare businesses are benefitting from the funding and resources issues within the NHS. It reports on:
- The 3.7 million NHS patients on a waiting list for treatment – the highest level since December 2007.
- The private GP companies that are extending their services to take advantage of the problems that patients are facing in booking GP appointments.
- The increase in NHS funded patients volumes at the major private hospital businesses:
- BMI Healthcare reported a 2.3% overall increase in inpatient and day cases, and a 13.5% rise in its NHS caseload, ‘with waiting list pressure and patient choice driving the increase’.
- Spire has seen revenue and patient volumes increase by 30% and 20% respectively in the past five years, citing the ‘NHS funding gap’ as a key driver.
- Nuffield Health reported a 15% increase in hospital revenue between 2013 and 2015, and an 11% increase in procedures from 185,000 to 206,000 since 2013. It says: ‘The NHS .... financial challenge ...will further drive a willingness for individuals and organisations to pay for services.
- Circle reported an increase in revenue of 15% in 2015 and 32% in 2014, and patient volumes rose 8% in 2015 and 9% in 2014, stating: ‘We anticipate increasing patient demand, tighter public finances… and a shift towards more integrated healthcare".
There's no doubt that without the throughput delivered by NHS funded patients, many private hospitals would be in dire straits. The falling numbers in the insured population have to some extent been offset by growth in the self pay market. Many hospitals are now investing heavily in offline and online promotion of their self pay/fixed price surgery schemes. But the numbers don't yet compensate for the fall in insured patient throughput. So, the NHS has provided a safety net.
A mixed economy in healthcare
Currently it is estimated that around 25% to 30% of patients in private hospitals are NHS funded. We now have a mixed economy of healthcare provision in the UK. And a mixed population in most private hospitals which makes it difficult for providers to differentiate their service offering to private and NHS patients.
Private patients (and insurers) are paying more, in many instances, than the NHS for the same service. So, how can providers differentiate their service to the private patient and deliver a "two tier" service that delivers a demonstrable benefit to the patient who is paying their own way?