By Douglas Shepherd
The big issue for private healthcare in London continues to be the fight for market share, according to a leading market commentator.
Ted Townsend said the increasing costs of employing or sharing revenue with consultants, plus staffing constraints, wage pressures and cost inflation, continued to impact the bottom line.
Revenue growth had returned to the market after a long period of drift, even pre-Covid, and with profit margins under pressure ‘it may be there will be some consolidation in the not-too-distant future.’
Mr Townsend, author of just-released LaingBuisson’s Private Acute Healthcare Central London Market Report (9th edition), saw possible problems ahead for the NHS’s private patient units (PPUs) too.
He added: ‘PPU growth is not guaranteed, with some hospitals vulnerable to the loss of a few consultants or the transfer of specialities to other hospitals, as well as limited capacity – for example, access to ITU beds or theatres – or organisational cultures that are against doing private work.
‘At least some PPU hospitals are starting to operate more commercially outside their hospital facility.’
The report says the Covid pandemic hit PPUs harder than the rest of the independent sector, with embassy patients not returning as quickly as expected, and some of the independent sector growth had likely come at their expense.
With new hospitals, such as Cleveland Clinic London, having come on stream in recent years and increasing the overall inpatient bed capacity by over 10%, competition for patients in this highly competitive market is described as ‘fierce’:
‘This now begs the question: is this the time for the independent sector to shine in London or will the pressures of rising costs hamper the sector’s growth in future years?’
The report looks at the state of the market after the peak of the Covid-19 pandemic, calendar 2021 being the latest period for which complete financial data is available.