Private health firms report big increases in NHS work

Spire Healthcare, Circle and Ramsay Health all released their half yearly results last week.

Spire’s total revenue from the NHS in the six months to 30 June was £116.9m - 29 per cent higher than the £90m it made from the sector during the same period in 2013. 

Its NHS volumes - measured in the form of total inpatient and day case discharges - also increased from 36,900 for the first six months of 2013 to 45,900 in 2014, a 24 per cent rise.

The company said the growth in its NHS presence was driven by the Choose and Book electronic appointment booking system and locally commissioned contracts.

At Circle’s private hospitals in Bath and Reading NHS patient volumes were up by 52 per cent and 235 per cent respectively.

• Circle’s Hinchingbrooke contract losses approach £5m limit
• Big jump in private share of NHS community services market
• Private providers turn away trust’s elective referrals

Revenues at Bath were up by 32.5 per cent and at Reading by 60 per cent, with the majority of the increase coming from extra NHS work.

Circle chief executive Steve Melton told HSJ: “When we open up new capacity [and] new services we find they fill very quickly.”

He said this was partly a function of “pressures on the NHS… in capacity terms” and that where hospitals were in breach of the 18 week limit, NHS patients were making “proactive choices to find their treatment elsewhere”.

Ramsay Health reported that its NHS admissions also grew in the first half of the year, although it did not disclose the size of the increase.

While NHS admissions at Spire and Circle private hospitals have increased, both companies’ reported that the UK political environment had the potential to impact their businesses.

Spire flagged changes in political conditions and “policies that may reduce the volume of activity with the NHS” as principal risks to the company.

Circle said “political uncertainty” in the run up to the general election “could create some delay in the procurement of NHS services”.

Mr Melton said he expected there would still be opportunities for his company, irrespective of who was in government after the election.

He said that to continue meeting patient need the NHS had to “embrace significant change” and “take advantage of the very best… that the private and third sectors can offer”.

However, Mr Melton said that recent decisions including the abandonment of the George Eliot Hospital Trust competition suggested the nature of NHS procurement was changing.

“I think that’s just one example of a number… you’d be able to pick out that probably signals a change of political guidance to the NHS, which I interpret to be ‘why do these projects one by one… when perhaps that isn’t going to be on the scale required to solve the NHS’s problems?’”

He said he was encouraged by Sir David Dalton’s review of “hospital chains” and other provider forms which had the potential to “tackle failing hospitals on a much bigger scale than perhaps one off procurements”.