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| 1 | Executive Summary | 1 |
| 2 | INTRODUCTION | 3 |
| 2.1 | Definitions | 3 |
| 2.2 | Methodology | 4 |
| 2.3 | UK Economy | 5 |
| 2.3.1 | Overview | 5 |
| 2.3.2 | Interest Rates | 7 |
| 2.3.3 | Inflation | 8 |
| 2.3.4 | Exchange Rates | 8 |
| 2.3.5 | Taxation | 9 |
| 2.3.6 | Household Income And Consumer Expenditure | 10 |
| 2.3.7 | Manufacturing Output | 11 |
| 2.3.8 | Services | 12 |
| 2.3.9 | Investment | 12 |
| 2.3.10 | Forecasts | 13 |
| 2.4 | Exchange Rates | 14 |
| 2.5 | Abbreviations | 14 |
| 3 | Regulation | 16 |
| 3.1 | Overview | 16 |
| 3.2 | Community Care Act 1993 | 16 |
| 3.3 | Care Standards Act 2000 | 17 |
| 3.4 | Royal Commission On Long Term Care For The Elderly | 17 |
| 3.5 | Mental Health Bill 2000 | 18 |
| 3.6 | Human Rights Act 1998 | 18 |
| 3.7 | Minimum Wage Directive | 18 |
| 3.8 | Working Time Directive | 19 |
| 4 | Private Healthcare Market | 20 |
| 4.1 | Market Size And Trends, 1996-2000 | 20 |
| 4.2 | Market Segmentation, 1996?2000 | 21 |
| 4.3 | Forecast Market Segmentation, 2001?2005 | 23 |
| 5 | Independent Care Homes For the Elderly | 26 |
| 5.1 | Market Overview And Trends, 1996?2000 | 26 |
| 5.2 | Market Segmentation | 28 |
| 5.2.1 | Nursing Homes | 28 |
| 5.2.2 | Residential Homes | 31 |
| 5.3 | Factors Affecting Demand | 33 |
| 5.3.1 | Demographic Changes | 33 |
| 5.3.2 | Government Policy | 35 |
| 5.3.3 | Funding | 37 |
| 5.4 | Forecast Segmentation, 2001?2005 | 38 |
| 6 | Independent Acute Hospitals And Clinics | 40 |
| 6.1 | Market Overview And Trends, 1996?2000 | 40 |
| 6.2 | Market Segmentation | 42 |
| 6.2.1 | By Type Of Treatment | 42 |
| 6.2.2 | By Region | 44 |
| 6.2.2.1 | Number Of Hospitals | 44 |
| 6.2.2.2 | Number Of Beds | 45 |
| 6.2.3 | Funding | 46 |
| 6.3 | Factors Affecting Demand | 48 |
| 6.3.1 | Overview | 48 |
| 6.3.2 | PMI | 48 |
| 6.3.3 | Government Policy And National Health Service Reforms | 51 |
| 6.4 | Forecast Segmentation, 2001?2005 | 53 |
| 7 | Independent Care for the Mentally Ill | 55 |
| 7.1 | Market Overview And Trends, 1996?2000 | 55 |
| 7.2 | Market Segmentation | 56 |
| 7.2.1 | Long Term Care | 56 |
| 7.2.2 | Acute Care | 59 |
| 7.3 | Factors Affecting Demand | 62 |
| 7.3.1 | Government Policy | 62 |
| 7.4 | Forecast Segmentation, 2001?2005 | 63 |
| 8 | Private Treatment IN NHS Hospitals | 65 |
| 8.1 | Market Overview And Trends, 1996?2000 | 65 |
| 8.2 | Factors Affecting Demand | 67 |
| 8.3 | Funding | 68 |
| 8.4 | Forecast Segmentation, 2001?2005 | 69 |
| 9 | Opportunities For Suppliers | 71 |
| 9.1 | Overview | 71 |
| 9.2 | Independent Care Homes For The Elderly | 71 |
| 9.3 | Independent Acute Hospitals And Clinics | 73 |
| 9.4 | Hospital Construction | 74 |
| 10 | Purchasing Strategies | 77 |
| 10.1 | Overview | 77 |
| 10.2 | Independent Care Homes For The Elderly | 77 |
| 10.3 | Independent Acute Hospitals And Clinics | 78 |
| 10.4 | Independent Care For The Mentally Ill | 78 |
| 10.5 | Private Treatment In NHS Hospitals | 79 |
| 11 | Industry Structure | 80 |
| 11.1 | Overview | 80 |
| 11.2 | Independent Nursing And Residential Homes For The Elderly | 80 |
| 11.3 | Independent Acute Hospitals And Clinics | 80 |
| 11.4 | PMI | 81 |
| 11.5 | Company Profiles | 82 |
| 11.5.1 | The British United Provident Association | 82 |
| 11.5.1.1 | Overview | 82 |
| 11.5.1.2 | Business Profile | 83 |
| 11.5.2 | Four Seasons Health Care | 85 |
| 11.5.2.1 | Overview | 85 |
| 11.5.2.2 | Business Profile | 86 |
| 11.5.3 | General Healthcare Group | 87 |
| 11.5.3.1 | Overview | 87 |
| 11.5.3.2 | Business Profile | 88 |
| 11.5.4 | Nuffield Nursing Homes Trust | 89 |
| 11.5.4.1 | Overview | 89 |
| 11.5.4.2 | Business Profile | 90 |
| 11.5.5 | PPP healthcare | 90 |
| 11.5.5.1 | Overview | 90 |
| 11.5.5.2 | Business Profile | 91 |
| 11.5.6 | Western Provident Association (WPA) | 92 |
| 11.5.6.1 | Overview | 92 |
| 11.5.6.2 | Business Profile | 92 |
| 11.5.7 | Westminster Health Care Group | 93 |
| 11.5.7.1 | Overview | 93 |
| 11.5.7.2 | Business Profile | 95 |
| 12 | MAGAZINES | 96 |
| 13 | Trade Associations | 98 |
| List of Tables | |
| 1. Economic Indicators On The UK Economy, 1995-2002 | 7 |
| 2. UK Market For Private Healthcare, 1996-2000 | 20 |
| 3. UK Market For Private Healthcare, By Sector, 1996-2000 | 21 |
| 4. Forecast UK Market For Private Healthcare, 2001-2005 | 24 |
| 5. Forecast UK Market For Healthcare, By Sector, 2001-2005 | 25 |
| 6. UK Market For Independent Care Homes For The Elderly, By Sector, 1996-2000 | 26 |
| 7. Places In UK Independent Care Homes For The Elderly, By Sector, 1996-2000 | 27 |
| 8. Comparison Between The Price Of Independent Healthcare And Local Authority Care, By Sector, 2000 | 28 |
| 9. UK Market For Independent Nursing Homes For The Elderly, By Type Of Provider, 1996-2000 | 29 |
| 10. Places In UK Independent Nursing Homes For The Elderly, By Type Of Provider, 1996-2000 | 30 |
| 11. Occupancy Rates In Private And Voluntary Nursing Homes For The Elderly In The UK, 1996-2000 | 30 |
| 12. UK Market For Independent Residential Homes For The Elderly, By Type Of Provider, 1996-2000 | 31 |
| 13. Places In UK Independent Residential Homes For The Elderly, By Type Of Provider, 1996-2000 | 32 |
| 14. Occupancy Rates In Private And Voluntary Residential Homes For The Elderly In The UK, 1996-2000 | 33 |
| 15. Actual And Forecast Population In England And Wales, By Age Group, 1994-2031 | 34 |
| 16. Proportional Importance Of The Actual And Forecast Population In England And Wales, By Age Group, 1994-2031 | 35 |
| 17. Funding Of Residents In Independent Care Homes For The Elderly, By Type Of Funding, 2000 | 38 |
| 18. Forecast UK Market For Independent Care Homes For The Elderly, By Sector, 2001-2005 | 38 |
| 19. UK Market For Independent Acute Hospitals And Clinics 1996-2000 | 40 |
| 20. Independent Acute Hospitals And Clinics, In The UK, By Number Of Hospitals And Beds, 1985-2000 | 42 |
| 21. UK Market For Independent Acute Hospitals And Clinics, By Type Of Treatment, 1996-2000 | 43 |
| 22. Regional Distribution Of Independent Acute Hospitals And Clinics In The UK, 1980 And 2000 | 44 |
| 23. Regional Distribution Of Beds In Independent Acute Hospitals And Clinics In The UK, 1980 And 2000 | 46 |
| 24. Funding Of Treatment In Independent Acute Hospitals And Clinics, By Type Of Funding, 1996 and 2000 | 47 |
| 25. UK Value Market For Private Medical Insurance, 1996-2000 | 48 |
| 26. UK Market For Private Medical Insurance, By Number, 1996-2000 | 49 |
| 27. Customer Profile Of The UK Private Medical Insurance Market, By Type Of Policy, 2000 | 50 |
| 28. Regional Analysis Of Market Penetration By Private Medical Insurance In Great Britain, 1999 | 51 |
| 29. Forecast UK Market For Independent Acute Hospitals And Clinics, 2001-2005 | 54 |
| 30. UK Market For Independent Care For The Mentally Ill, By Type Of Care, 1996-2000 | 55 |
| 31. Independent Places For The Mentally Ill In The UK, By Type Of Care, 1996-2000 | 56 |
| 32. UK Market For Independent Long Term Care Homes For The Mentally Ill, By Sector, 1996-2000 | 57 |
| 33. Places In Independent Long Term Care Homes For The Mentally Ill, By Sector, 1996-2000 | 58 |
| 34. Funding Of Residents In Independent Long Term Care Homes For The Mentally Ill, By Type Of Funding, 2000 | 58 |
| 35. UK Market For The Acute Care Of The Mentally Ill, 1996-2000 | 59 |
| 36. Regional Distribution Of Independent Acute Care Hospital Beds In The UK, 2000 | 60 |
| 37. Funding Of Residents In Independent Acute Hospitals For The Mentally Ill, By Type Of Funding, 2000 | 61 |
| 38. Major UK Operators Of Acute Care For The Mentally Ill, 2000 | 62 |
| 39. Forecast UK Market For Independent Care For The Mentally Ill, By Type Of Care, 2001-2005 | 64 |
| 40. UK Market For Private Treatment In NHS Hospitals, 1996-2000 | 65 |
| 41. Regional Distribution Of Beds In NHS Private Patient Units In The UK, 2000 | 66 |
| 42. Forecast UK Market For Private Treatment In NHS Hospitals, 2001-2005 | 69 |
| 43. Expenditure On Supplies By Care Homes For The Elderly In The UK, By Product Sector, 1996-2000 | 72 |
| 44. New Construction Output In The Healthcare Market, By Sector, 1996-2000 | 75 |
| 45. Regional Distribution Of PFI Hospital Schemes, 2000 | 75 |
| 46. Market Shares In The UK PMI Market, 2000 | 82 |
| 47. Financial Summary Of BUPA, 1995-1999 | 84 |
| 48. Turnover Of BUPA, By Segment, 1995-1999 | 85 |
| 49. Financial Summary Of Crestacare, 1994-1998 | 86 |
| 50. Financial Summary Of General Healthcare Group, 1997-1999 | 88 |
| 51. Financial Summary Of Nuffield Nursing Homes Trust, 1995-1999 | 90 |
| 52. Financial Summary Of PPP healthcare, 1997-1999 | 91 |
| 53. Financial Summary Of Western Provident Association, 1995-1999 | 93 |
| 54. Financial Summary Of Westminster Health Care Group, 1996-1999 | 95 |
| List of Diagrams | |
| 1. UK Market For Private Healthcare, By Sector, 2000 | 23 |
MSI estimate that the value of the UK private healthcare market has increased by some 10 percent during the review period. However, the 1999 level of £9 536 million (15 353 million) increased by less than 1 percent to £9 579 million (16 093 million) in 2000. MSI believe that this was mainly due to the decline in the value of the UK market for care homes for the elderly.
The largest sector within the private healthcare market was the market for care homes for the elderly throughout the review period. This sector represented some 65 percent of the total market in 2000. However, due to the lack of fees from the NHS and local authorities, the market declined in 2000.
The value of the independent acute hospitals and clinics sector reached a level of £2.16 billion (3.63 billion) in 2000. This represented an increase of 16 percent compared with 1996. MSI believe that this growth rate is largely due to the increase in the number of self-paying patients, as a result of the long waiting lists in the NHS.
The UK market for independent care for the mentally ill increased by some 15 percent during the review period.
MSI believe that this increase was due to the long term trend towards the closure of NHS hospitals and homes for the mentally ill, and the subsequent use of the independent sector to treat the mentally ill.
MSI believe that the value of private treatment in NHS hospitals has increased by as much as 24 percent during the review period. Indeed, the value of the market increased by 5 percent to £309 million (519 million) in 2000 alone. This is due to an increase in the number of private patient units in public sector hospitals, as a result of the continuing problems faced by the NHS.
MSI believe that demand for private healthcare in the UK is affected by a number of factors. These include:
MSI believe that the private healthcare sector will increase by some 8 percent in real value terms between 2001 and 2005. It is expected that the market will increase modestly in 2001 and 2002. However, after this point the market will increase by some 7 percent between 2002 and 2005.
The market for care homes for the elderly is expected to recover slightly during the forecast period. Although there is likely to be a further decline in 2001 and 2002, MSI believe that the market will increase by 4 percent between 2002 and 2005. This is due to the impact of the contraction of the market, as well as an increase in fees from local authorities. In addition, the increasingly elderly population will continue to stimulate demand.
The value of the market for independent acute hospitals and clinics is expected to increase by 20 percent between 2001 and 2005. MSI believe that this growth in value will occur as a result of the increased opportunities presented by the Concordat between the public and the private sectors. It is expected that this will also have an impact on the market for private treatment in NHS hospitals, which MSI believe will also increase during the forecast period.
MSI believe that the market for independent care for the mentally ill will increase by some 10 percent in real terms during the forecast period. This is largely due to the increased closures of NHS homes and hospitals, as well as the growing prevalence of drug and alcohol related illnesses in society. Mounting pressure on the government to provide adequate care to people with mental illnesses will also lead to increased expenditure on services from the independent sector.
Text © 2001 MSI
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Last updated by Duncan Nottage 5th May 2001