Independent hospital group Spire Healthcare Group today announced an update on its contract with NHS England and provided a trading update.

Earlier this month Spire said it had been approached by NHS England (NHSE) to agree a new contract to provide a volume-based commitment aimed at reducing NHS waiting lists when the existing contract with NHS England expires at the year-end.

The new contract aims to provide a smooth transition for NHS services in England from the current cost-based contract to the new NHS framework for purchasing additional activity from the independent sector. It also allows for the continuation of certain vital services not covered by the NHS framework until the end of January 2021 and ensures the safe repatriation of patients and services back to their NHS trusts.

The new contract has a definitive end date of 31 March next year and can be terminated before this by NHSE with six weeks’ notice; the contract also allows NHSE to access further capacity, under certain conditions, in locations where there are a high concentration of Covid cases.

The new contract provides for payment by activity, based on NHS tariff, with minimum value underpins. This agreement will allow Spire to continue to treat private patients, while supporting the NHS through the winter months, and to transition smoothly to the NHS framework next April.

Spire Healthcare stated it is awarding £500 to all its staff not already on a bonus scheme. The £ 8million cost of this payment will be met by the company and not charged to the NHS.

Separately, while acknowledging very few Spire Healthcare staff were furloughed during the pandemic, the group has decided to refund all payments received under the furlough scheme back to the government.

Trading update

Since the interim results on 17 September, Spire Healthcare delivered a high level of NHS activity while private revenue recovered more quickly than anticipated due to a greater proportion of self-pay and more complex procedures. While the company expects to report a loss before tax for the full year, based on trading to end of November, the board now anticipates full-year 2020 adjusted operating profit will be significantly above the previous guidance of at least £30 million, but still materially below that reported in 2019 (£97.6 million).

The precise outcome will depend on final reconciliations with NHSE of the out-turn of the 2020 contract, which should be concluded in the first quarter of next year. The board anticipates 2020 year-end net bank debt position at the lower end of the £320-£360 million range.

Strong demand for private and NHS procedures has continued, which supports the company’s cautious optimism for 2021, although uncertainty remains due to the unpredictable impact of Covid-19 on patient volumes and costs. Spire stated it anticipates trading returning to 2019 levels next year, although it continues to remain challenging to set future expectations, and the group expects to publish its preliminary results for the year ended 31 December 2020 on 4 March 2021.

Spire Healthcare said it has treated more than 200,000 NHS patients since March.

Spire Healthcare chief executive Justin Ash said: “It has been an extraordinary year for the country’s healthcare professionals and I would like to pay tribute to the hard work and commitment of our colleagues during this very difficult period. They have shown the high levels of quality and professionalism that make Spire Healthcare an important partner to the NHS and we look forward to continuing to work with our NHS colleagues in responding to the pandemic.”

Date published: December 21, 2020

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