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UK NHS reforms create £20bn opportunity for private sector

Report from Catalyst says NHS reforms pave way for healthcare companies

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The private sector is inline for £20bn worth of business opportunities in the UK due to reforms to the country's NHS, according to a report published by Catalyst.

The corporate financial advisers claim that the introduction of GP commissioning and an increase in alternatives to hospital care, as outlined in former Health Secretary Andrew Lansley's Health and Social Care Act, mean a higher proportion of healthcare services will be delivered by profit-motivated businesses.

“[T]he role of the private sector is increasing,” said the report. “If this is combined with the removal of barriers to higher participation, such as in primary care removing practice boundaries and goodwill on GP practices, investment would be boosted and the opportunity for the private sector to build business with scale will be considerable.”

This has already been seen in NHS contracts awarded to companies such as Virgin Care, which recently signed a £500m deal with NHS Surrey to deliver community services across much of the county from 2012 to 2017.

Agreements made between the NHS and both Circle and Serco were also highlighted by Catalyst as a sign of things to come, with Circle taking over responsibly to deliver a full range of NHS district general hospital services in Hinchingbrooke Healthcare NHS Trust, while Serco has a three-year £140m contract to provide community health services for NHS Suffolk.

Future developments predicted by Catalyst include increasing moves into primary care, with healthcare cutbacks influencing the government's decision on how to manage GP services in England that cost £8.3bn in 2009-2010.

“[O]perators such as multi-practice groups like The Practice or Virgin Care are growing and private providers are estimated to be generating annual revenues of £185m, currently 2.2 per cent of the addressable market,” said the report.

Moving secondary health services into a community setting, as seen with Serco's efforts, are also predicted to be an area for private companies to take advantage of.

This market is thought to be worth £8bn to £8.5bn per year, and the private sector is estimated to deliver up to 20 per cent, or around £2bn by 2020.

A further market worth £1.3bn is also thought to be untapped in commissioning support services for newly created clinical commissioning groups, which are due to take over from primary care trusts and strategic health authorities from April, 2013.

Responding to the report, shadow health secretary Andy Burnham told the Guardian the report was "concrete proof that the great NHS carve-up is well under way”.

He continued: “The government opened the floodgates with a Health Act that places a market free-for-all at the heart of the health. Since then, they have ordered the open tendering of community services, creating the conditions for private firms to pick off lucrative services."

Burnham also referenced the decision from the Conservative-led coalition government to replaced Andrew Lansley with Jeremy Hunt as Health Secretary.

"Worse still, in Jeremy Hunt we now have a health secretary who bent over backwards in his last job to promote powerful private interests and, in his own back yard, encouraged the handing over of NHS community services to Virgin. The NHS is not at all safe in Mr Hunt's hands."

18th September 2012

From: Healthcare

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