Spire rides wave of demand for private healthcare

UK hospital group Spire Healthcare said strong demand from private patients avoiding NHS waiting lists sent its revenues higher in the first half even as Covid-19-related costs hit profits.

The London-listed group said that revenues in the six months to June 30 climbed 7 per cent to £598mn, driven by a 34 per cent rise in the number of patients choosing to pay for care out of their own pocket.

Private healthcare accounted for 73 per cent of revenues, up from 65 per cent in the year-ago period. The healthcare provider also generates some revenues via the NHS.

The increased willingness of patients to fund their own treatment has been a boon for UK private hospitals that historically have been more dependent on medical insurance to pay their customers’ bills.

“The revenue figure reflected the strong underlying demand that we had expected,” said Charles Weston, a healthcare analyst at RBC Capital Markets.

Chief executive Justin Ash said that attitudes towards private healthcare were changing in the UK. That has been partly driven by lengthening waiting lists at the NHS, which came under severe strain during the coronavirus pandemic, forcing the postponement of many routine treatments and operations. Waiting lists hit a record 6.8mn at the end of July.

Demand for Spire’s private family doctor, or GP, services rose 69 per cent in the first six months of the year. However, Spire said that profit was hit by £25mn of Covid-19-related costs during the first half, including staff and consultant absences as well as patient cancellations.

Spire’s pre-tax profit dropped to £3mn from £4.7mn in the same period a year ago.

Ash said there was a “big spike” in Covid-19 infections, including in Spire’s own workforce, following celebrations in June for the Queen’s jubilee.

“It was the toughest Covid-19 wave to hit us since 2020,” he said. “The good news is that business bounced back in August,” he added.

Shares in Spire, which has 39 private hospitals and eight clinics in the UK, were up 1.9 per cent in early afternoon trading. They have fallen about 5 per cent this year.