Highlights from LaingBuisson’s Private Acute Healthcare Central London Market Report (10th edition):

  • The central London private acute healthcare market has been valued at £2.02 billion according to new research by LaingBuisson, £2.41 billion when taking into account all of Greater London
  • Growth in central London independent hospitals has been driven by private pay patients – with revenue reaching an estimated £1.5 billion in 2022. This represents a 20% growth on 2021 revenues
  • NHS funding has fallen away for the second successive year – a 36% year-on-year decline. However total revenues from NHS funding in central London independent hospitals in 2022 (£75 million) remain well above pre-pandemic levels (£32 million)
  • NHS Private Patient Unit revenues reached £406 million – a 25% increase on 2021. Income remains below pre-pandemic income levels of £414 million in 2019

The London private acute healthcare sector is booming according to the latest report by healthcare market intelligence specialists, LaingBuisson. The new report presents the first complete picture of the health of the London market as it transitions away from a period focused on adapting to the challenges of the pandemic.

LaingBuisson analysis shows a market that grew 17.6% across central London in calendar year 2022 (the latest period in which complete financial data is available). This is despite an expected decline in revenue derived from the NHS, which dropped 36% to £75 million. However, increases in private patient incomes of over 20%, driving revenue from the private patient segment to over £1.5 billion, meant that overall revenue growth reached £2 billion in central London and nearly £400 million across Greater London independent hospitals.

This growth is expected to be sustained but on a slowing trajectory. Revenues for 2023 are estimated to be around 10% up on 2022 – leading to a potential central London market value of £2.2 billion in 2023, and growth of 9.7% forecasted for 2024. These projections – built around industry estimates – reflect a confidence in the sector that the market demand will continue to increase in line with historically higher rates that existed prior to 2015.

Private health insurance continues to account for the largest share of revenues, but the growth of self-pay in recent years is significant. It is now the second-largest source of revenue for the London market – growing nearly 19% year-on-year in 2022. Embassy revenues have begun to grow again after falling during the pandemic – reaching £337 million in 2022, but still £48 million below its pre-pandemic peak.

Director of Research & Content at LaingBuisson, Tim Read said:

“LaingBuisson’s new research confirms what we’ve been hearing from those on the ground working in private healthcare – that demand for private acute healthcare in London is booming. This is no longer about revenue growth driven by a post-pandemic rebound in people accessing services they weren’t able to during lockdown, or from private hospitals accessing NHS funding to provide additional capacity to the NHS. Instead, it appears to be a return to demand-led organic growth driven by individuals – and LaingBuisson forecasts this growth to continue, albeit at a slower rate.

“London’s private healthcare ecosystem is not comparable to the rest of the country due higher levels of PMI coverage and high earners willing to pay for ultra-premium services. Meanwhile revenues from international travellers and the high concentration of top tier NHS private patient units ensures that the London private market remains less exposed to political headwinds derived from exposure to a higher NHS-funded revenue base and instead reflects confidence in the pure private pay market.”