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Difficult times for UK private sector health and social care, delegates warn

The private sector health and social care market in the UK faces significant challenges, according to delegates at the HealthInvestor UK conference in London today.

In an online vote, more than 70% of attendees agreed with the statement: “It’s a difficult market, but there are opportunities in places” with only 5% saying that it was “business as usual” in the private sector.

Circle Health chief executive Paulo Pieri said the private hospital sector faces problems across a range of fronts, including declining NHS referrals and staff shortages.

“If you look at that whole picture, you have to think where does innovation and change come to address those problems?” he said.

“Circle is looking at three areas to address those macro-level issues. Capitated budgets are one option. We say to government for a fixed sum we will manage your healthcare in particular areas better. By doing so we can invest more in that specialism and that’s saving £20 to £30 million a year in terms of overall spend and is bringing better outcomes and spend.

Developing rehabilitation services to reduce NHS bed blocking is another area of opportunity for the private hospital sector. “Acute hospitals are not being used for their original purpose, they are just warehousing patients now,” said Pieri. “We’re building a 100-bed rehabilitation hospital in Birmingham, the first of its kind.”

Pieri added that Circle saw significant growth in privately-funded patients who were making online self-referrals. “Our self-pay numbers are increasing by 30-40% a year and that is driven by a huge increase in web appetite by customers, probably because of the stress in the NHS sector,” he said.

In the care home sector, the lack of alternatives to traditional models of provision came under fire from Nick Sanderson, chief executive of Audley Group.

“The development of good-quality alternatives for an ageing population in a country that’s crying out [for them] is pretty paltry,” he said.

Avnish Goyal, chair of Hallmark Care Homes agreed that more needed to be done to develop and “future proof” the sector.

“We’ve got to continue to strive for what is fit for the future. That’s where some of the challenges lie in out sector. We have assets that are overleveraged, which is what causes the problems and gives us bad press,” he said.

Meanwhile Julian Evans of Knight Frank pointed out that with £1.3 trillion of unmortgaged property in the over-55s market, there was likely to be no shortage of investors wanting a part of the UK care sector, with growing interest from ultra high net worth individuals, as well as more traditional sources. He added that there was an investment trend away from nursing care homes to residential care facilities.

Posted on: 08/11/2018

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