Savills plc

12/01/2020 | Press release | Distributed by Public on 12/01/2020 03:43

Independent hospitals prescribed to ease pressure on NHS

The strain that the Covid-19 pandemic has placed on our NHS has been one of the most significant challenges it has faced in its history. Furthermore, with the immediate focus being on care for those with Covid and getting through the pandemic, waiting lists for other treatments have grown significantly.

In fact, waiting list data from NHS England reveals that the proportion of patients waiting six or more weeks for diagnostic tests and procedures jumped from around 3 per cent in February 2020 to 58 per cent in May as a result of the pandemic, both directly and indirectly. It has since fallen to 38 per cent but will take time to get back to pre-Covid levels.

As a result of this increasing pressure, independent hospitals have been called upon to provide a much needed lifeline for the NHS with the Government willing to pay private operators up to £10 billion over the next two to four years in order to reduce waiting lists for patients.

While this is not a new concept, with Spire Health, one of the UK's largest independent hospitals, seeing 30 per cent of its revenue come from the NHS in 2019, it is a solution that we expect to increase in order to help the NHS clear the Covid-19 inter-related backlog of cases.

With the NHS facing a greater level of challenges such as reduced funding and space issues, we have seen private operators bounce back faster from the depths of the March lockdown, and crucially they have additional spare capacity in place to take on more cases.

For example, in August independent hospitals were carrying out around 48 per cent of the number of joint operations, whereas the NHS performed just 18 per cent.

While the mounting pressure on hospitals resulting from the Covid-19 pandemic is having an immediate impact on waiting lists and has tipped demand into the independent sector, the Prime Minister's announcement in October confirming plans to complete 40 new hospital projects across England, will inevitably be positive in the long term.

Four are awaiting final business case approval, while another six are set to be delivered by 2025. In addition, Trusts have been given seed funding to develop their plans for the second phase of the Health Infrastructure programme, which covers 25 hospitals that are set to be delivered between 2025 and 2030. Geographically, the South West looks set to benefit the most with 11 out of the 40 being in the region.

For the private hospital sector, rising NHS demand will help support the sector's revenues throughout 2021 and in turn, we expect this to bolster investor demand for hospital real estate in the near term, while in the long term the Government funding for 40 new hospital projects will generate opportunities for developers.

Further information

Contact Craig Woollam

Contact Savills Healthcare