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Booming private healthcare companies race to benefit from chaos in the NHS

·5-min read
NHS waiting lists private healthcare - Jacob King/PA Wire
NHS waiting lists private healthcare - Jacob King/PA Wire

With almost 200 beds, a small army of medics, state-of-the-art equipment and views of Buckingham Palace, almost no expense has been spared at London’s newest hospital.

But the eight-storey Cleveland Clinic London is a private, not public, medical centre – and just one of several that have opened across Britain as yawning NHS waiting lists create an opportunity for independent healthcare providers.

“The opening of our London hospital was an eventful moment,” says Brian Donley, chief executive of the new facility.

“We are excited to be bringing our unique model of care to the UK and since the hospital opened, we’ve seen strong demand for our services.”

Cleveland is one of several independent healthcare organisations launching new services just as demand is beginning to boom.

Private providers say they have seen a huge influx of business as delays to procedures such as cataract surgeries, hip replacements and knee replacements become more common across the country.

According to NHS figures released last week, the number of people in England waiting for routine hospital treatments rose to a record 6.7m in July, with ministers admitting that the figures will become even worse before they get better.

This is driving an ever-larger number of patients towards private providers, who are opting to pay from their own pocket for operations and diagnostics rather than sit in the queue.

The number of self-paying procedures has increased to around 70,000 per quarter from an average of 50,000 per quarter before the coronavirus pandemic, according to the latest available data from the Private Healthcare Information Network.

Overall, the number of self-funding patients last year rose to 258,445, an increase of 58,770 compared to 2019.

David Furness, policy director at the Independent Healthcare Providers Network, says this is driving “dramatic growth” at private hospitals and clinics.

“In particular, people are looking to self-fund their own care and that's happening across the country, in all different specialties,” he says.

“Our members are reporting that there's considerable growth, in some cases 40pc above pre-pandemic levels, and they are expecting that to continue in the context of very long waits for NHS care.

“There’s absolutely the capacity to offer that to people - so we think there's every sign that this upward trend will continue.”

Spire, the UK’s second largest private healthcare provider, says it is currently experiencing record demand from self-funding patients.

The company’s income from these customers increased by 63pc during 2021 when compared to two years earlier.

That amounted to a total of £292m - the first time self-funding patients have represented more than one quarter of revenues.

Justin Ash, Spire’s chief executive, says: “With the impact of Covid-19 and rising NHS waiting lists, we are seeing more people eager to have a consultation and access high-quality care as quickly as possible.”

Meanwhile, in fortuitous timing for businesses, several new private healthcare facilities have opened just as backlogs at the NHS have been turbocharged by the pandemic.

These sites were already in train before Covid struck and typically take three to four years to complete, says Henry Elphick, a senior adviser at property giant Savills, but they are now poised to do a roaring trade.

He estimates that Cleveland Clinic’s new London hospital could have set the US non-profit provider back by around £1bn.

Yet with 184 beds, it increased the capital’s private capacity by around one fifth when it opened – and NHS delays will generate plenty of demand for its services.

“The guys who started building three or four years ago have hit a sweet spot,” Elphick says, “and those with the existing capacity are finding they are full up for the first time in years.

“But we think there is probably enough structural demand from waiting lists to last for the next seven years, so it is a very good time to be building extra private capacity.”

Alongside the Cleveland Clinic, other sites to open this year include a purpose-built eye hospital opened by private equity-owned SpaMedica in Doncaster.

HCA, another American non-profit, is set to open the brand new £100m Harborne Hospital in Birmingham later this year.

Elsewhere, Spire recently completed a £3.7m modernisation of Bushey Hospital in north London and Circle Health, the UK’s biggest private hospitals provider, has invested in a multi-million pound expansion of several hospitals including Werndale, near Camarthen in Wales, and Albyn Hospital in Aberdeen.

Many of these upgrades tend to focus on ramping up the number of operating theatres available via simple extensions, says Elphick, rather than seeking to add beds.

This is because, unlike their NHS equivalents, private hospitals do not have A&E departments and relatively few procedures require overnight stays.

Instead, the main limiting factors on operations are the number of doctors and theatre capacity.

“People are building on capacity to existing hospitals rather than entirely new ones because it is faster and cheaper,” he says.

“At the moment, they are looking for anywhere where they can expand patient throughput – and with high demand, they will make good money.”

And it is not just British firms on the hunt for space, he adds. “The Americans, the Germans, the Turkish - they are all looking.”

With waiting lists still climbing, it means the Cleveland Clinic is unlikely to be the last foreign healthcare provider to make a big bet on Britain.