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Private sector NHS opportunity estimated at £20bn

18 September 2012

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Private healthcare providers stand to net around £20bn from the government’s health reforms.

Corporate finance consultancy Catalyst said “landmark” contracts awarded to Circle, Virgin Care and Serco in the last year demonstrates “increasing recognition” from the public sector of the “necessity” to leverage the private sector’s more “efficient” delivery models to reduce costs in the NHS.

The report claims the introduction of GP commissioning and interest in alternative healthcare models to hospital care will require a higher proportion of services to be delivered by the private sector.

According to Catalyst, the private sector delivery of primary and secondary care services is at its “earliest stages” but predicts its involvement in the delivery of these services will increase between 20% and 40% by 2020.

“Despite many challenges, the private sector is increasingly providing healthcare services, whether paid for by the taxpayer or directly by consumers at the point of use,” said Justin Crowther, Director at Catalyst and co-author of the report.

“Whether this is to turn around underperforming hospitals, operate GP surgeries, deliver community services or create centres of excellence in areas such as pathology, [NHS] commissioners are increasingly using the skills and capital of the private sector.”