Surgical admissions by independent hospitals have hit a record high - driven by NHS admissions rather than spending by private patients - according to a new report.

Analysts Laing and Buisson’s study, Private acute medical care UK market report 2012, estimated private and voluntary hospitals will admit some 1.64 million patients for surgical treatments in 2012, based on performance in the first six months of the year.

This represents around 14.5 per cent of total surgical admissions in UK hospitals.

In 2011, NHS admissions to the independent hospitals totalled £1.08bn, up a real terms increase of 5.2 per cent.

The analysts warned the research underlined the need for the independent sector to grow its private patient customer base as its NHS surgical activity begins to mature.

It said: “This new report highlights that activity has been driven by increased NHS admissions, as spending on acute medical care by private patients has been flat since 2005.

“Stronger competition for private patients, and efficient delivery of increased (low margin) NHS work represent a challenging picture for hospitals.”

Other highlights from the report include:

  • NHS admissions to independent hospitals totalled around five times the £205m spent by the NHS on acute private care in 2003. The report said revenues generated by independent acute medical hospitals and clinics were £4.14bn in 2011, a modest 0.7 per cent real terms increase on 2010.
  • Hospitals’ private patient revenues (£3.06bn) fell back by 3 per cent overall in 2010 and 2011, though its income from the NHS grew strongly again to reach a record high of £1.09bn
  • Of the estimated 1.64 million surgical admissions dealt with by independent hospitals 1.2 million were treated as daycases, and 400,000 on an overnight basis
  • Good growth in self-pay spending by individuals since 2008, up 14 per cent in real terms in the last three years, has helped soften a sharp fall in payouts from private medical insurers in 2010 and 2011 (down 6 per cent in real terms overall).

Laing and Buisson consultant Philip Blackburn, the report’s author, said: “Independent acute medical hospitals are carrying out more activity than ever before, but their funding dynamics confirm a sector that looks to have crucial pinch points coming up.

“The report also picks up a subtle trend of provider diversity within the market as insurers explore non-hospital provision for some treatments.”

He added: “While this new research suggest that there are opportunities for private self-pay in the short term, in the longer term performance of the NHS, as its reforms unfold, remains a great unknown.”

Laing and Buisson said the estimated real growth of 3.5 per cent in NHS private patient revenues in 2011-12 was the first significant increase since Labour imposed a cap on private income in 2003-04.

The consultants published a report in January which revealed the UK’s private acute healthcare industry shrank in 2010 for the first time in at least three decades despite continued growth in its NHS-funded business.

The 2011-12 edition of the Laing’s Healthcare Market Review, estimated £7.2bn was spent on private acute care in 2010 – a real terms fall of 1.5 per cent from the previous year.

According to the report, it is the first contraction of the market for private hospitals, specialists, and NHS private patient units since Laing and Buisson’s records began in 1980.