Independent sector providers could take a 50 per cent share of the market for NHS community services by the end of the decade, according to market analyst LaingBuisson.
NHS trusts accounted for 69 per cent of the total £9.75bn spent on community services in 2012-13.
The report, shared exclusively with HSJ, predicts this share could drop to less than half by 2020, due in part to a growth in home healthcare spending and increased opportunities for non-NHS providers to bid for larger “pathway” based contracts.
The Primary Care and Out of Hospital Services report said: “Provided the emerging outsourcing culture in the NHS is not eliminated by any politically driven reversion to ‘NHS first’ policies, it seems very likely that with continued retendering the share of the broadly defined community health services market provided by the NHS will drop to around 50 per cent or below by the end of this decade.”
It added: “In addition to straightforward retenders of community health services en bloc, there will also be further opportunities from pathway contracts along the lines of recent musculoskeletal contracts, with substantial elements of community health activity, as more sophisticated commissioning approaches spread among clinical commissioning groups.”
The analyst’s report puts the share of the £9.7bn NHS funding of community health services in England paid to non-NHS providers in 2012-13 at 31 per cent.
Within that overall share, for-profit providers accounted for £1.77bn, or 18 per cent, of total community services spending.
Not for profit providers, including public service mutuals, comprised £1.26bn (13 per cent) of total spending, the consultancy’s figures show.
The report predicts that the market share of for profit providers will rise above 20 per cent by 2018, while that of not for profit providers rises above 15 per cent.
It said: “With continued growth of home healthcare spending and some contract wins for core community health services, as well as pathway contracts, it is likely that the for profit and not for profit market shares will rise over the course of the next 2-3 years to over 20 per cent for for profit providers and over 15 per cent for not for profit providers, leaving in-house NHS providers with less than 65 per cent nationally.”
LaingBuisson’s forecasts come despite some high profile setbacks for the independent sector in 2014. Among these, as the report noted, in September the largest community services contract yet to be put out to tender was won by an all NHS consortium of Cambridgeshire and Peterborough Foundation Trust with Cambridge University Hospitals Foundation Trust, which was selected as the preferred bidder for a five year deal to provide older people’s care worth £800m.
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