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07.11.13

Private business ‘likely to continue’ in NHS

Private and independent hospitals are moving towards more mixed provision, research from LaingBuisson suggests.

A new report, Private Acute Medical Care 2013, shows that the income generated from treating NHS patients grew by 7.5% in real terms to reach £1.2bn in 2012. This represents 27.5% of total hospital incomes during the year, and is projected to grow to nearly 29% in 2013.

While private patient business is described as “persistently static”, there is no shortage of additional private patient capacity, the report states. NHS trusts are also developing and expanding their private patient services.

Healthcare economist and author Philip Blackburn said: “Funding dynamics for independent acute hospitals continue to move in one direction, as mixed provision is now a common business structure for many privately owned hospitals.

“More hospitals are looking at fresh NHS business opportunities from Clinical Commissioning Groups (CCGs) under ‘any qualified provider’ and this upward momentum is likely to continue in the near term as CCGs look to the private sector for innovative delivery and competitive drivers. Independent sector providers are attracted to growth developments as long as their cost structures can support a continued funding shift towards (lower margin) NHS business.

“Though NHS budget pressures have led to restrictions on NHS treatments across Trusts, and NHS resources are increasingly stretched – particularly in A&E – private healthcare demand continues to have a flat profile overall, albeit yet to benefit from UK economic growth.

“With these potential price drivers in mind, though times may be much tougher for some hospital groups in the short-term, perhaps there will be few other better times to attract new private patient customers into the market.”

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