Telegraph2 Oct 2017 14:44
NHS Partners Network is the trade body for private partners of the NHS. Its chief executive, David Hare, says its members have been feeling the squeeze.
�Year-on-year the amount of referrals from the NHS is flat, whereas previously it was enjoying 3-4pc annual growth,� he says.
Spire has been hit particularly hard as NHS referrals account for almost a third of its �926m annual revenues. The drop will lead to �significantly lower than anticipated revenues� for the full-year, the firm said last month, while margins will be as much as 0.7pc lower at around 16.1pc.
Dan Mahony, at investor Polar Capital, says Spire � which declined to comment for this article � is paying for being �over-reliant on particular procedures�, namely hips and knees, but he says it is far from alone.
�We invest globally and try to go where legislation is going in private providers� favour,� he says. �Three to four years ago it was the UK, with the NHS�s push towards �choose and book� that gave patients the option of private. Now the pendulum is swinging back a bit.
***It will swing back in time.�***
HCA is continuing to expand in the UK, with a private wing to an NHS hospital to open soon in Birmingham, while it is investing in complex therapy areas such as cancer treatment facilities.
It helps that HCA gets virtually none of its revenues from NHS referrals. Revenues from private medical insurance � the mainstay for most private healthcare providers � is going up �modestly� as it captures share in a falling market.
HCA also has great hopes for the �self-pay market� � where patients who are generally uninsured pay for treatments on demand. It�s an area where the firm is seeing �double digit growth�, according to Coombs, and was one of the few bright spots in Spire�s numbers last month as well.
NHS Partners Networks � which this week made a formal offer to the NHS to utilise its private facilities during the coming winter rush for 380,000 procedures � says the self-pay segment of the market is likely to be boosted by the slowdown in NHS referrals.
�As waiting times push out, those who can, will pay for operations,� he says.
Julie Simmonds, analyst at Panmure, questions how long the NHS�s purge on elective procedures can continue: �These patients will need treating at some point, therefore I would see the current downturn as a timing issue rather than something that is likely to be sustained.
�Once waiting lists reach critical levels it is likely that referrals will pick up again � probably in response to a specific injection of funding.�
http://www.telegraph.co.uk/business/2017/10/01/private-healthcare-market-going-reverse/
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