Revenues from independent health providers stepping into bridge gaps in the NHS have grown by 5% over the past year, according to the latest figures from LaingBuisson.
Figures published today by the healthcare consultancy revealed that revenues generated by independent sector (non-statutory) providers across 12 core health and care market segments grew by 5% in2015 to reach £42.2bn (2014: £40.3bn).
This latest research, published in the twenty-eighth edition of the LaingBuisson Healthcare Market Review, said that the persistence of calls for efficiencies in health expenditure is leading to continued outsourcing of publicly funded services.
Growth was led by private acute healthcare, up 8% to £7.8bn.
This was driven by recovering private demand as well as NHS ‘choose and book' patients opting to receive NHS paid treatment in independent hospitals).
This was followed by care homes for older people (driven by privately paying residents) and mental health hospitals (up 4% as as the NHS's own in-house mental health hospital capacity continues to decline).
Residential care for younger adults suffered losses in private revenues (down 5% to £2.8 billion).
However,service providers balanced their losses here with revenue gains from supported living services which most local authorities prefer over residential care.
Speaking at a launch event hosted by report sponsor Bilfinger GVA, William Laing, chairman of LaingBuisson said: ‘Most independent sector health and care providers are highly exposed to public policy change, whether directly in terms of the NHS approach to outsourcing NHS clinical services, or indirectly through policy initiatives such as National Living Wage.
"Austerity has brought major challenges to some segments, in particular care homes and home care for older people, where prices on offer to independent partners have been driven below sustainable levels, but good operators with prudent borrowing are confident they can weather the storm."
He added: "‘Looking to the future, independent sector operators believe that they have an important role to play in the transformation of UK health and social care from its fragmented, hospital-based present to an integrated, community-based future, which is the consensus goal of policymakers.
"While the regulatory changes of recent years mean that they can now compete on a reasonably level playing field with NHS in-house providers, they are being held back because the Conservative government still sees internal reform of the NHS as the more politically acceptable solution to the efficiency challenge for the NHS, rather than strong encouragement of more competition and outsourcing to the independent sector.
Further reading
NHS needs internal competition - LaingBuisson
NHS outsourcing up but private healthcare down - LaingBuisson
