Private sector recovery

By a staff reporter

Private healthcare has been given a positive diagnosis in the latest LaingBuisson research into the sector.

The healthcare consultancy’s figures show that revenues generated by independent sector providers in the 12 health and care market segments it monitors as part of its annual Healthcare Market Review exercise stood at £44.3bn in 2013-14 (£40.5bn in 2012-13).

Despite continuing rough terrain for independent sector involvement in the UK health and care sectors, growth in these markets outstripped the previous year.

Growth was positive in each of the major market slices which LaingBuisson has reported on in the past year, apart from homecare which saw a small drop.

The main growth driver through­out has been outsourcing of publicly-paid services and, to a lesser extent, a resurgence of privately-paid healthcare as Britain emerges from the recession.

With a general election fast approaching in May, LaingBuisson looked at how markets have shifted since the Coalition Gov­ernment came to power, comparing 2014 – or the latest available year – with 2009 as the last full year of the former Labour administration.

The weighted average share of healthcare markets – totalling more than £100bn a year – which is outsourced from the NHS to independent sector IHA William Laingproviders for profit and not-for-profit combined rose from 4.8% in 2009 to 7.0% in 2014.

In contrast, the private-pay share of healthcare markets dropped from 5.9% in 2009 to 4.8% in 2014.

LaingBuisson said this was driven by the recession as private demand proved vulnerable to drops in disposable income; for example, in medical insurance, privately-paid elective surgery and private dentistry.

Chief executive and report author William Laing (pictured right) said the sector was ‘on the cusp of a period of renewed opportunities for independent healthcare providers’ as general economic health slowly improved.

Despite ongoing political arguments over the role of private providers in delivering NHS services, and the high-profile breakdown of the Circle/Hinchingbrooke contract, prospects looked ‘reasonably positive’.

These were driven by a broad direction of change towards pluralism in public healthcare markets, stronger self-pay demand and a surge in overseas demand for UK based – primarily London – hospitals.

 LaingBuisson’s Healthcare Market Review, 27th edition, sponsored by GVA Health Property Advisers, £765. Phone: 020 7923 5396