The Competition and Markets Authority has today cleared a major acute trust to partner with a US company to build a new hospital, after finding the region would benefit from more competition between private providers.

University Hospitals Birmingham Foundation Trust can now proceed in its deal with American private company HCA Healthcare to build a £65m new hospital on trust land.

HCA Healthcare said the 138 bed specialist hospital, to be built at the trust’s Edgbaston campus, will accommodate both NHS patients and HCA private patients.

This would include 66 private beds, run by HCA Healthcare, and 72 NHS beds, run by the trust, a new radiotherapy unit and operating theatres.

An HCA spokeswoman said the company will meet the capital costs of building the hospital, subcontracting the development to healthcare property firm Prime.

According to contract notice, published in July, HCA Healthcare would lease the land from UHB and manage services at the site. UHB would then lease beds back off the company for NHS patients.

Further details of the partnership have yet to be released. But in a statement last month the trust’s executive medical director, Dr Dave Rosser, said that as well as providing much needed new capacity the deal would create a new revenue stream for trust.

In its decision, CMA said there was no need for a formal review of the hospital on competition grounds.

The unit was likely to increase competition as HCA Healthcare did not currently operate a hospital in the area, the regulator said.

There were 15 other private hospitals in the West Midlands, some of which did not face enough competition for patients, the CMA said. The new hospital was expected to capture between five and 10 per cent of the private healthcare market in the area.

“The CMA considers that the new private patient unit may increase the competition that these private hospitals face in this area.”

HCA Healthcare has reached similar arrangements with other NHS trusts in the past.

In February, the company reached a 25 year agreement to open a £38m dedicated private cancer unit at Guy’s and St Thomas’ Foundation Trust’s new cancer centre.

UHB is facing severe capacity problems, despite moving to the new build Queen Elizabeth Hospital in 2010.

The trust did not provide comment before publication.