London, 10 May 2023

LaingBuisson has published the 9th edition of its Private Acute Healthcare Central London Market Report.

The new report looks at the state of the market after the peak of the Covid-19 pandemic, calendar 2021 being the latest period for which complete financial data is available.

By the end of 2021, the overall Central London private acute healthcare market has returned to pre-pandemic levels. This has mostly been due to the rise in the number of self-pay patients, in part because of increased NHS waiting lists.

As predicted in previous editions of this report, the Covid pandemic has hit NHS Private Patient Units (PPUs) harder than the rest of the independent sector, with embassy patients not returning as quickly as expected, and some of the independent sector growth has likely come at their expense. Strong underlying growth is predicted for 2022 and forecast for 2023, though.

With new hospitals (such as Cleveland Clinic London) having come on stream in recent years, increasing the overall inpatient bed capacity by over 10%, competition for patients in this highly competitive market is fierce. This now begs the question; is this the time for the independent sector to shine in London or will the pressures of rising costs hamper the sector’s growth in future years?

Report author, Ted Townsend, said:

“While revenue growth has returned to the market, after a long period of drift even pre-Covid, the big issue continues to be a fight for market share, with increasing costs of employing or sharing revenue with consultants, not to mention staffing constraints, wage pressures and cost inflation, continuing to impact on the bottom line. And all of this is occurring at a time when profit margins have already been under pressure for some time. It may be that there will be some consolidation in the not-too-distant future.

“PPU growth is not guaranteed, with some hospitals vulnerable to the loss of a few consultants or the transfer of specialities to other hospitals, as well as limited capacity (e.g., access to ITU beds or theatres) or organisational cultures that are against doing private work. At least some PPU hospitals are starting to operate more commercially outside their hospital facility.”