You\'re in safe hands Greater London Midlands South East South and West North Wales Scotland

August 3, 2016 | Author: Ronald Goodwin | Category: N/A
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You're in safe hands

Greater London

Midlands

1.

Bishops Wood Hospital Northwood

29. The Droitwich Spa Hospital Droitwich Spa

2.

The Blackheath Hospital Blackheath

30. The Foscote Hospital Banbury

3.

Chelsfield Park Hospital Orpington

31. The Manor Hospital Bedford

4.

The Clementine Churchill Hosptal Harrow

32. The Meridien Hospital Coventry

5.

The Garden Hospital Hendon

6.

The Kings Oak Hospital Stepney Green

7.

The London Independent Hospital Croydon

8.

Shirley Oaks Hospital Croydon

9.

The Sloane Hospital Beckenham

33. The Nuneaton Private Hospital Nuneaton

47

34. The Park Hospital Nottingham 35. The Priory Hospital Edgbaston

48

36. The Sandringham Hospital Kings Lynn 37. The Saxon Clinic Milton Keynes

49

South East

38. Three Shires Hospital Northampton

10. The Chaucer Hospital Canterbury

South and West

11. The Chiltern Hospital Great Missenden

39. Bath Clinic Bath 40. The Hampshire Clinic Basingstoke

12. The Esperance Hospital Eastbourne

41. The Harbour Hospital Poole

13. Fawkham Manor Hospital Longfield

22

14. Goring Hall Hospital Worthing

42. The Ridgeway Hospital Swindon

25

23 21 28

15. The Paddocks Hospital Princes Risborough 16. The Princess Margaret Hospital Windsor

43. Sarum Road Hospital Winchester

27

44. The Winterbourne Hospital Dorchester

24

26

45. Mclndoe Surgical Centre East Grinstead

33

17. The Runnymede Hospital Chertsey

35

18. The Shelburne Hospital High Wycombe

34

19. The Somerfield Hospital Maidstone

32

29

20. Mount Alvernia Hospital Guildford

46

North 42

21. The Alexandra Hospital Cheadle 22. The Manchester Lifestyle Hospital Manchester 23. The Beardwood Hospital Blackburn

44

31 36

37 30

15 6 5 11 4 7 9 18 1 2 13 39 16 17 19 38 8 3 45 40 20 43 14 12

10

Wales 46. Werndale Hospital Carmarthen

41

24. The Beaumont Hospital Bolton

Scotland

25. Chatsworth Suite Chesterfield 26. The Highfield Hospital Rochdale

47. Albyn Hospital Aberdeen

27. The South Cheshire Private Hospital Crewe

48. Fernbrae Hospital Dundee

28. Thornbury Hospital Sheffield

49. Ross Hall Hospital Glasgow

Information Memorandum relating to the acquisition of a controlling interest in General Healthcare Group Limited in the United Kingdom.

The UK independent acute care market is attractive and the market outlook positive.

Market characteristics include: Consumer demand for high-quality, timely healthcare services Continuing strong demand for high-quality care and aftercare, generally available in shorter timescales within the private sector; Increasing involvement of private sector in NHS healthcare provision The Government has stated that the independent sector will provide up to 15% of elective surgery procedures on behalf of the NHS (equating to approximately 14million procedures a year) by 2008. This would effectively more than double the volume of the total UK private acute healthcare market; Resilient PMI demand Historically, PMI has been a resilient sector, underpinned by significant product development; Self-pay outlook Continuing demand for self-pay treatment, with growth potential in areas that fall outside normal PMI/NHS cover, e.g. cosmetic surgery and obesity management and treatment; Treatment trends Improvements in medical technology and practice driving opportunities, such as MRI and CT scanning; Demographic trends Ageing population likely to result in increased demand for acute healthcare; and Increasing healthcare provision likely to stimulate demand Historical evidence suggests that, instead of satisfying demand, increasing NHS expenditure stimulates further demand and expands the market creating additional opportunities for private healthcare provision.

Contents

Section 1 – Highlights Section 2 – UK healthcare market information Section 3 – GHG property information

Disclaimer: Forward-looking statements Certain statements are included in this information memorandum which are not historical facts and which may express or imply expectations of future events or results. These statements may include financial objectives, plans, expectations and/or estimates. Forward-looking statements are generally identified by the words “expects”, “anticipates”, “believes”, “intends”, and similar such expressions. All forward-looking statements involve a number of risks, uncertainties and other factors, and Netcare cannot give assurances that such statements will prove correct. Risks, uncertainties and other factors that could cause actual events or results to differ from those expressed or implied by the forward-looking statements include, without limitation, delays in the regulatory processes, changes in the economic or political situation of South Africa, the UK and/or any other relevant jurisdiction, changes in the healthcare industry within these countries and the performance of Netcare post the GHG acquisition. Although Netcare’s management believes that the expectations expressed in such forward-looking statements are reasonable, investors and shareholders are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Netcare. These could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements

The acquisition of a controlling interest in General Healthcare Group Limited

Information memorandum

Section 1 Highlights

1.

Highlights

2

1.

Highlights

3

1.

Highlights

4

1.

Highlights

Investment highlights GHG is a leader in the UK private hospital market  A leading franchise with long established relationships with clinicians, insurers and other stakeholders  Extensive nationwide network of 49 hospitals  Stable existing business with c. 20% market share delivering good top line growth (c. 6% 3-year CAGR) and

good margins (26% EBITDA margins) Good growth potential from NHS outsourcing  NHS dramatically increasing purchasing procedures from private sector with first tranche worth £2 billion

over 5 years  Expected to be increased with further contracts to 730,000 procedures per year by 2010 from 155,000 in 2004

Experienced strategic partner in Netcare  Ability to deliver operational improvements to GHG business using best practice from Netcare’s South African

operations  Experience from winning NHS contracts with Netcare UK  GHG + Netcare UK allow the new entity to take advantage of both the private market and opportunities from

NHS reforms Property development upside  Significant asset backing from the property portfolio of 32 freeholds and 10 long leaseholds with additional

property development opportunities not included in business plan  Property development expertise delivered by L&R and Brockton with significant experience in UK healhcare

sector

5

1.

Highlights

6

1.

Highlights

7

1.

Highlights

8

9

The acquisition of a controlling interest in General Healthcare Group Limited

Information memorandum

Section 2 UK healthcare market information

2.

UK healthcare market information

2.1

Introduction

2.1.1

Overview of the UK healthcare market

The independent sector is an integral part of the UK healthcare market providing both services and funding across the spectrum of healthcare provision. Primary care in the UK is provided, for the most part, by the National Health Service (“NHS”) through general practitioners (“GPs”) and Accident & Emergency (“A&E”) departments. Following initial contact, a patient may then be referred to a NHS or independent hospital/clinic for a diagnostic test, outpatient consultation and/or elective procedure (“acute care”). In 2004A, independent acute provision was worth approximately £4.8bn; the constituent parts of the market are shown in the figure below. Chart 1.

Acute healthcare market (2004A) (£bn) (Total: £91.5bn)

Chart 2.

Independent acute care market (2004A) (Total: £4.8bn)

13%

3%

8% 86.6

50%

4.8

26%

Independent acute hospitals Consultants fees NHS private patients Mental health Other

Independent acute healthcare market Public acute healthcare market

Independent acute hospitals includes hospitals with overnight beds, acute day surgery facilities and abortion clinics. Excludes cosmetic surgery clinics, which, though considered hospitals by the Healthcare Commission (“HCC”), are typically small establishments that perform non-invasive procedures “Other” includes fertility, screening and rehabilitation services Excludes laser eye surgery and renal dialysis clinics Source Laing & Buisson (2005-2006)

UK acute care market includes NHS expenditure and private healthcare in 2004A, but excludes consumer expenditure on medical goods not purchased on NHS prescriptions and therapeutic equipments including spectacles, contact lenses and hearing aids. In 2005E, the market was estimated at £96bn (an 8.6% increase over 2004A) Source Laing & Buisson (2005-2006); OHE Compendium (2005-2006)

As illustrated above, independent provision of acute care currently represents only 5.3% of the total market and is therefore a niche premium service purchased by patients either out of their own funds (“self pay” patients) or through private medical insurance (“PMI”). This service is differentiated from NHS provision in many aspects of patient experience, including, inter alia, infection control, waiting lists, clinical outcomes, and physical comfort. The market is growing, driven by the demand for premium levels of care from an ageing and increasingly affluent population and by independent operators developing new services to address consumer demands. Acute care constitutes 24% of the total independent healthcare market. The majority of independent acute care is funded by PMI.

1

2.

UK healthcare market information

Chart 3.

Independent care market (2004A) (Total: £20.4bn)

Chart 4.

Independent acute care by payor type (2004A) (Total: £4.8bn)

3% 7% 2% 9%

10.0%

4.5%

19.5%

24%

66.0%

55%

Acute sector Long term care of elderly and disabled Long term care of mentally ill Long term care of learning disabled General practice Dentistry

Private medical insurance Self-pay NHS / PCTs Foreign & third party

Note General Practice and Dentistry are all GP and dental services supplied outside NHS contracts Source Laing & Buisson (2005-2006)

Note PMI includes patients covered by TPA schemes Independent acute care as defined in the note to chart 2 above, including mental health Source Laing & Buisson (2005-2006)

GHG is a leading provider in the independent acute healthcare sector by beds, revenues, profit and numerous other metrics. Chart 5.

UK independent hospital groups (by beds) (current) (Total: 9,773) 20%

25%

2% 2% 3% 8% 17% 9% 14% GHG

Nuffield

BUPA

Capio

HCA

Classic

Covenant

Aspen

Others

Source GHG, Laing & Buisson (2005-2006), Healthcare Market News (March 2006) Source GHG, Laing & Buisson (2005-2006), Healthcare Market News (March 2006)

Its core business is to provide hospital and medical care services to patients with PMI or those willing to finance the cost of acute healthcare themselves.

2

2.

UK healthcare market information

2.1.2

International comparison

Following the expansion in NHS funding, public healthcare expenditure in the UK is now in line with other G7 countries. However, the UK still lags in private funding, at 1.2% of GDP against a G7 average of 3.0% of GDP, even when compared to other countries with comprehensive state provision. The most significant factor in this deficit is the historically low level of PMI penetration in the UK. Chart 6.

G7 healthcare expenditure as a proportion of GDP (%)

Chart 7.

15%

PMI as a proportion of total health spending (2003A) (%)

40 35

12%

30 25

9%

20 15

6%

10 3%

5

Note Data is 2005E for UK, 2003A for G7 countries, except Japan (2002A) Source OECD Health Data 2005, OECD (Paris, 2005); OHE Compendium (2005-2006)

UK

Spain

New Zealand

Germany

Canada

Switzerland

Private

France

US

Japan

Italy

UK

Canada

France

US

Germany

Public

Netherlands

-

Source Laing & Buisson (2005-2006)

Lower levels of expenditure and years of under-investment in healthcare in the UK are apparent in comparisons of available capacity and surgical outcomes, which are illustrated opposite. Given the limits imposed upon the future growth of Government expenditure beyond 2008E (discussed later), meeting the healthcare delivery standards of international peers will depend, in part, on an increase in independent provision and private expenditure.

3

2.

UK healthcare market information

Table 1.

Selected healthcare metrics and outcomes: UK vs. European comparators

Metric

UK

European average

UK as % European

Available capacity Operating rooms per thousand people MRI scanners per million people Surgical procedures per thousand people

5.1 5.2 81.5

10.1 8.4 83.8

51% 62% 97%

Capacity utilisation Surgical procedures per operating theatre

16.0

8.3

192%

Clinical outcomes Five-year cancer survival rate (all cancers) Cerebrovascular disease mortality per 100,000

47% 66.8

54% 61.7

86% 108%

Note European average for Denmark, Finland, France, Germany, Italy and Sweden, except cerebrovascular mortality for which data is only available for Denmark, France, Germany and The Netherlands Capacity utilisation is defined as operating rooms per thousand people/surgical procedures per thousand people Cancer survival rates for women only; cerebrovascular disease mortality rates for men only Source Frost & Sullivan (2002); OECD Health Data 2005, OECD (Paris, 2005); Cancer Research UK; Benedict Irvine and David G. Green, “International Medical Outcomes: How does the UK compare?” (Civitas, February 2003)

2.2

Demand

2.2.1

Historical and projected market revenues

The market for acute independent hospitals (including revenue from acute medical and surgical inpatient, outpatient and day cases) is valued by Laing & Buisson (“L&B”) at £2.4bn. Levels of growth have been consistently high since 1994A, at a CAGR (1994A-2004A) of 8.6%. Chart 8.

Independent hospital revenue (1994A-2004A) (£bn)

Chart 9.

2.4

Independent revenue growth and proportion of total health expenditure (%)

14% 12%

2.0

CAGR 94A-04A: 8.6%

10%

1.6 8% 1.2 6% 0.8 4% 0.4

2% 1995A

2004A

2003A

2002A

2001A

2000A

1999A

1998A

1997A

1996A

1995A

1994A

-

1998A 2001A 2004A Independent acute revenue grow th Independent acute as % of total

Note Independent acute care in chart 9 uses OHE compendium definition; the proportion is somewhat lower under L&B’s definition but presents a similar historical trend Source Laing & Buisson (2005-2006); OHE Compendium (2005-2006)

4

2.

UK healthcare market information

The high rates of growth achieved in the 1990s were driven by the increasing penetration of PMI, which was caused by increasing wealth and dissatisfaction with the NHS. PMI penetration, although still growing, has slowed since the beginning of the decade, but independent hospital revenue growth has continued to grow at over 7% per annum, supported by: •

moderate growth in insured lives;



increased incidence and complexity of treatment (due to ageing demographics and medical advances);



healthcare cost inflation passed through to PMI subscribers;



growth of self pay (and, in particular, for certain “lifestyle” treatments); and



increased NHS funding of independent care.

KeyNote projects the total independent healthcare market (of which the acute medical inpatient hospitals segment accounts for roughly 50% of total market revenues), to grow at a CAGR of 12.2% between 2006E and 2010E, as shown in chart 10 below. Independent acute providers have benefited from both continuing growth in private-funded acute care and, since 2002A, from substantial increases in publicly-funded care, a growing proportion of which has been provided by the independent sector. KeyNote market revenues and forecasts (2001A-2010E) (£bn)

Chart 11.

10

5 CAGR 06-10: 12.2%

8

4

PMI Note Includes all private acute healthcare subsectors included in L&B, but adds other niche markets including laser eye surgery Source KeyNote (October 2005)

Self-pay

2010E

2006E

2010E

2009E

2008E

2007E

2006E

2005E

1

2004A

2

2003A

2

2002A

4

2009E

3

CAGR 01-06: 10.5%

2001A

CAGR 06-10 8.2%

2008E

6

Forecast market growth by payor (2006E-2010E) (£bn)

2007E

Chart 10.

NHS

Note Only independent acute medical inpatient hospitals (£2.4bn in 2004A), approximately 50% of the total independent acute market Further breakdown of NHS growth is shown in chart 19 below Source GHG Management estimates

5

2.

UK healthcare market information

Management has made its own assessment of growth in the independent acute inpatient hospitals market based on its view of the development of PMI (including schemes run by third party administrators (“TPAs”),1 self-pay and NHS markets (including new central procurement programmes). Management’s total forecast CAGR (2006E-2010E) is 8.2%, with market revenues expected to increase from £3.4bn in 2006E to £4.6bn by 2010E, slightly less aggressive than KeyNote’s forecast rate for the broader market. Management’s forecast is based upon: •



revenues from privately-funded patients (PMI and self-pay) growing at a CAGR (2006E2010E) of 6.4%, slightly below historical rates based on the assumption that PMI/TPA penetration growth slows; –

PMI case volumes growing at 1% per year through a combination of moderate growth in the number of insured lives (primarily driven by the expansion of TPA schemes) and increased incidence of treatment;



revenue per case growing at 5% per year, reflecting further new procedures and techniques and the continued ability of hospital providers to pass cost increases onto PMI providers. Total PMI revenues are therefore expected to grow at 6% per year;



slightly higher growth of 7% per year in the self-pay segment reflecting growth in cosmetic, fertility and obesity surgery; and the NHS segment increasing from £1.0bn to £1.5bn, driven by Wave 2 diagnostic and elective ISTCs. This segment is described in detail in section 2.2.5.2.

2.2.2

Macro demand drivers

The UK acute care system is forecast to experience a significant rise in the total volume of cases completed over the next decade. Frost and Sullivan, for example, predicts that the number of surgical procedures performed each year will increase by 14% between 2001A and 2008E, in line with other countries.2 This increase is the result of demographic changes and improvements in medical technology (including the quality and availability of diagnostic techniques). The Government is committed to expanding the role of the independent sector in healthcare provision further. In addition, increasing demand for premium levels of care and for treatment options not funded by the NHS, combined with growth in disposable incomes, should ensure that the independent sector benefits disproportionately from these greater total case volumes. 2.2.2.1

Demographics

Population ageing has important implications for expenditure on healthcare provision. Although this issue has already attracted much attention, in reality growth in the UK population over the age of 65 has been modest to date (from 9.1m in 1991 to 9.7m in 2005A; 16% of total population, at 0.5% per year), because of the high mortality of the two world wars. The demographic structure is now at an inflection point and will change substantially in the near future: there are forecast to be 12.7m people over 65 (20% of total population, growing at 1.7% per year) in 2021E and 16.3m by 2036E (25% of the population, growing at 1.7% per year).

1

TPA schemes are medical expense funds managed by a third party, typically on behalf of a large employer, to procure large volumes of medical services for employees. The employer pays for these services as they are incurred but has access to advantageous rates through TPA and avoids the administration costs charged by PMI operators. GHG operates such a scheme, administered by Medisure. This subsection of the PMI market is referred to as “self-insured” by some commentators, but should not be confused with self-pay 2 Frost and Sullivan, “Key Trends and Indicators in European Hospital Markets, 2002” (2003)

6

UK healthcare market information UK population breakdown (1981A-2071E) (millions)

30%

3.5

25%

3.0

20%

2.5

15%

2.0

10% 3

1.5

5%

0.5

2036E

65-75 years

75-85 years

85+ years

% population

Birth

2031E

2026E

2021E

2016E

2011E

2006E

2001A

0% 1991A

-

1.0

Source Laing & Buisson (2005-2006)

85+

6

4.0

75-84

9

35%

65-74

12

4.5

45-64

15

40%

HCHS expenditure per capita by age (2002/03A) (£000)

16-44

18

Chart 13.

5 to 15

Chart 12.

Under 5

2.

Note Data relates to England only Source OHE compendium (2005-2006)

The Hospital and Community Health Services (“HCHS”) expenditure per capita on healthcare for those over 85 is 12 times higher than for those aged 16 to 44. The Institute for Fiscal Studies has estimated that the increase in public sector healthcare spending due to demographic change alone is 0.6% per year in real terms.3 Applied to the independent acute medical/surgical care sector (valued at £2.4bn in 2004A), this implies an £88m (3.7%) real increase in the size of the independent sector between 2004A and 2010E solely due to the increased clinical needs of an ageing population. 2.2.2.2

Advances in medical technology

Medical technology and healthcare practices continue to advance rapidly, as new technologies are introduced and existing technologies and techniques are extended. This increases the range of treatments available, typically drives up procedure cost and supports the demographic-driven demand by contributing to greater longevity. GHG has experienced a prolonged trend towards increasingly complex operations and has also benefited from high growth in certain areas, notably orthopaedics and obesity, as a result of the introduction of new procedures. Both trends have led to increases in revenue per case. 2.2.2.3

Improvements in diagnostic quality and availability

The range and the availability of diagnostic technologies has improved dramatically over recent years. Growth in the three key advanced diagnostic imaging technologies, MRI, CT and PET, for example, has averaged around 10% per annum over the last five years.4 This has increased

3

Carl Emmerson, Chris Frayne and Alissa Goodman, “Pressures in UK healthcare: challenges for the NHS” (Institute for Fiscal Studies) (May 2000)” 4 Hospital Activity Statistics: http://www.performance.doh.gov.uk/hospitalactivity/data_requests/imaging_and_ radiodiagnostics.htm

7

2.

UK healthcare market information

demand for treatment of ailments that previously may have gone undetected and untreated. Diagnostics is a bottleneck for NHS treatment, which is why the Government has announced a procurement wave expected to add over 30% more MRI scans than currently undertaken.5 2.2.2.4

Epidemiological and lifestyle developments

The incidence of a number of lifestyle diseases such as obesity, diabetes (linked to stress and weight) and alcohol-related conditions is increasing, with direct implications for healthcare costs. Demand for treatments for these and related conditions is being driven towards the independent sector, as in some cases treatment is not always easily available or is limited in the NHS. 2.2.2.5

Shift in consumer preferences

Demand for healthcare is also driven by changing consumer preferences as people become aware of new or alternative treatment. This is most relevant in the areas of in vitro fertilisation (“IVF”) and cosmetic surgery. Guidance from external authorities and pressure for the NHS to ration resources and not to commit them to such areas ensure that the demand for these services is largely fulfilled by independent providers.6 For example, around 75% of IVF cycles are currently performed by independent clinics.7

2.2.3

PMI and TPA demand

2.2.3.1

PMI and TPA overview

Patients with PMI are generally treated in independent sector hospitals. There are currently 3.6m PMI subscribers in the UK with policies covering close to 6.6m people (approximately 11.0% of the population) and around one million more whose treatment is covered by TPA schemes (a total 12.7% penetration). From a hospital operator’s perspective, PMI and TPA share similar characteristics, and GHG considers them together in its management reporting. In 2004A, 65% of subscriptions to PMI and TPA were paid for by corporates on behalf of their employees.8 Figure 1 overleaf illustrates the treatment pathway for PMI patients. PMI providers have limited influence over the choice of consultant or hospital: the GP chooses the consultant, and the consultant and patient select the hospital. PMI providers cannot restrict the level or cost of treatment, as clinicians make treatment decisions based on medical needs, although most insurance policies have restrictions on benefit levels, particularly for outpatient cover, so patients may in some cases be required to fund part of their treatment. Hospitals bill the PMI provider for the patient’s use of its facilities – operating theatre, medical equipment, nursing staff, accommodation – and consultants bill the PMI provider separately for their services. The guarantee of fully comprehensive insurance covering the broadest range of hospitals and treatment types is a key attraction of PMI products.

5

Management estimates and Hospital Activity Statistics For example, National Institute for Health and Clinical Excellence (“NICE”) guidance limiting NHS IVF treatment to those aged 23 to 39 (see NICE, “Fertility: assessment and treatment for people with fertility problems” (February 2004)) 7 Laing & Buisson (2005-2006) 8 Laing & Buisson (2005-2006) 6

8

2.

UK healthcare market information

Figure 1.

Funds flow and patient pathway under PMI procedures

Funds flow

Premiums

Patient

PMI provider

PMI pays hospital directly

Hospital

Or patient pays hospital and is reimbursed Consultants fee

Consultant PMI provider informed

Patient pathway

PMI provider has limited influence over hospital choice

Referral to consultant

GP – GP informed patient has PMI

Admission to hospital

Successful treatment

Discharge

– Diagnostic testing – Admission as inpatient or outpatient

Funds flow Patient pathway Information flow

Source GHG

PMI-funded treatment accounted for around 66% of independent acute healthcare revenues in 2004A. The market is relatively concentrated, with BUPA and AXA PPP having a combined market share of 63.4%. The effect of the concentration of PMI provision is limited by the small number of large independent hospital providers on whose geographic coverage and quality of care they depend. Revenues have grown significantly and margins have been maintained, for both insurers and independent hospitals, even as healthcare costs have risen. Initiatives such as network products have allowed larger hospital operators to offer discounts to PMI providers in return for significantly higher volumes.9 Smaller groups and solus hospitals who lack the wide geographical coverage required for this product are less competitive. Chart 14.

Leading PMI providers by subscription income (2004A) (%) 13.9% 3.3% 3.4%

41.1%

7.0%

9.1%

22.3%

BUPA

AXA PPP

Norw ich Union

Standard Life

First Assist

WPA

Others

Source Laing & Buisson (2005-2006)

2.2.3.2

Demand

After a period of strong growth in the late 1980s, PMI membership has remained stable over recent years. However, since the mid 1990s, membership of TPA schemes has grown rapidly, reaching 13.2% of the total persons covered by 2004A, driven by the greater availability of information on

9

Network products are policies that restrict patients to a reduced range of hospitals in exchange for lower premiums

9

2.

UK healthcare market information

alternative programmes and the perception that TPA is less expensive than traditional PMI providers. Together, the number of people covered under PMI and TPA schemes grew at a CAGR of 1.1% between 1994A and 2004A. Chart 15.

People covered by PMI and TPA schemes (m) (1985A2004A) CAGR 94-04 1.1%

8 7

Chart 16.

0.5 Claims ratio

Premium and claim per person covered (£) (1985A2004A)

89%

81%

79%

78%

CAGR 85-94 3.0% 0.4

6 5

0.3

4

CAGR 85-04: 8.3%

0.2

3

CAGR 8504: 7.6%

2 0.1 1 1985A

1990A 1995A 2000A People covered - PMI People covered - PMI + TPA

2005A

1985A

1990A 1995A 2000A Premium / person covered Claims / person covered

2005A

Note Claims ratio is the value of claims incurred as a proportion of subscription income PMI schemes only Data is not yet available for 2005A Source Laing & Buisson (2005-2006)

Note Dip in 1993 due to re-estimation of BUPA’s ratio of subscribers to people covered Data is not yet available for 2005A Source Laing & Buisson (2005-2006)

Between 2000A and 2004A, total PMI premiums (excluding TPAs) increased at an average of 5.6% per year, with premiums per subscriber growing slightly more rapidly at 5.9% per annum.10 The ratio of claims expenditure as a percentage of premiums improved slightly from 79% to 78% over the period, as premium/subscriber growth has exceeded claims/subscriber growth, which has produced an improvement in margins for PMI providers. Claims per person covered, a proxy for PMI per case spending in independent hospitals, has grown at 6.2% per year, which demonstrates the consistent growth in funding available to independent acute operators. Growth in premiums is expected to remain robust as a result of: •

continued demand for premium levels of care beyond what is available on the NHS, supported by marketing from BMI and other operators illustrating the differentiation between NHS and independent sector treatment;



continued inflation in healthcare costs and acceptance by policyholders of consequent rises in the costs of PMI. Demand is relatively inelastic as most policies are a corporate benefit that cannot easily be removed;

10

Laing & Buisson (2005-2006). Excludes TPA schemes because data is not available

10

2.

UK healthcare market information



rising wealth and disposable incomes. The decision to purchase PMI (or receiving it from employers) is closely linked to disposable income.11 As disposable incomes continue to rise, PMI uptake and consequent demand for private healthcare is projected to follow; and



product innovation, with PMI providers bringing more flexible products to the market emulating successful international models. For example, PruHealth’s new product aimed at younger subscribers achieved coverage of 30,000 lives in its first year of operation.

KeyNote predicts growth in PMI revenue to continue at around 5-7% per annum, to reach around £4.4bn in 2010E, and forecasts claims ratios to remain constant.12

2.2.4

Self-pay demand

2.2.4.1

Self-pay overview

In 2004A, 225,000 patients purchased their own care (“self-payors”). Self-payors agree fees with their chosen hospital and consultant, which the patient settles directly, as the figure below illustrates. As in the PMI segment, the hospital usually has no economic interaction with the consultant.13 Figure 2.

Process and funds flow for self-pay patients

Funds flow

Patient pays hospital directly

Patient

Hospital

Consultants fees

Consultant

Patient pathway

GP

Referral to consultant

Admission to hospital

Successful treatment

Discharge

Funds flow Patient pathway

Source GHG

The self-pay market is divisible into two principal sub-segments. •

Some patients not covered by PMI choose to finance their own treatment to avoid lengthy waits for NHS treatment and receive premium levels of care. These patients are frequently the affluent elderly who have lost employer-provided PMI upon retirement and for whom insurance premiums have become unattractively expensive. The elderly’s increasing affluence and expectations for rapid care combine to persuade more to finance their own care when required. For those with sufficient disposable income, self-pay is an increasingly popular alternative to waiting (in pain) for conventional procedures.



Self-payment for treatments that are not generally funded by the NHS or covered by PMI policies such as cosmetic surgery, obesity surgery and fertility treatment are increasingly popular. These patients are typically affluent young aged 20-45 who prefer to save for medical expenses more flexibly.

11

12 13

C. Emmerson, C. Frayne, A, Goodman, “Pressures in UK Healthcare: Challenges for the NHS” (Institute for Fiscal Studies) (2000) note that 40% of people in the richest 10% of the population are privately insured, compared with under 5% of those in the bottom 40% KeyNote (October 2005) In some cases where the cost is fixed before admission to a specified scheme the hospital charges the patient for consultants’ fees and subsequently reimburses the consultant

11

2.

UK healthcare market information

2.2.4.2

Demand

In 2004A, an estimated 19.5% of independent acute care revenues came from self-payors, a market worth around £470m per year at that time.14 After a decline during the 1980s and early 1990s resulting from the increasing popularity of PMI, this proportion has been stable over the last few years, while the revenues it generates have increased in line with overall market growth. Both sub-segments are likely to see substantial increased future demand. •

Patients choose self-pay to avoid waiting times in the NHS, restrictions on their ability to access PMI (typically due to age or pre-existing medical conditions)15 and increasing concerns over rates of infection and cleanliness.



Demand for lifestyle treatments has grown very strongly over recent years, driven by the introduction of new procedures and surgical techniques, the growing acceptance of such treatments in society and the expectations and wealth of consumers.

One exciting area in the second sub-segment is the development of cosmetic surgery. The UK market (chart 17 below) has grown by 30.7% in three years, to reach £251m in 2004A (including non-surgical procedures), as the variety and efficacy of techniques have increased and changes in consumer attitudes have encouraged more people to consider cosmetic surgery.16 The British Association of Aesthetic Plastic Surgeons (“BAAPS”) estimates that the number of procedures performed by its members increased by 34.7% in 2004/05A, and acute care providers are experiencing significant volume increases.17 Further strong growth is projected until 2008E.18 Chart 17.

Development of the UK cosmetic surgery market (2004A-2008E) (£m)

300

12%

250

10%

200

8%

150

6%

100

4%

50

2%

-

1999A

2000A

2001A

2002A

2003A

2004A

Market value (LH)

2005E

2006E

2007E

2008E

Grow th (RH)

Note Excludes non-surgical cosmetic surgery (£74.3m in 2004A) The reduced growth in 2002A is attributed by KeyNote to the economic uncertainty following the collapse of the dotcom market and the events of 11 September 2001 Source KeyNote, “Cosmetic Surgery” (September 2004)

14 15

16 17 18

Laing & Buisson (2005-2006) Pre-existing conditions – those diagnosed before any policy takes effect – are typically genetic conditions like multiple sclerosis or cystic fibrosis, or identified chronic conditions like rheumatoid arthritis or heart disease KeyNote, “Cosmetic Surgery” (September 2004) http://www.baaps.org.uk/ (16 January 2006) KeyNote predicts growth of around 10% per annum from 2004. In 2003, Mintel estimated growth at closer to 20% per year until 2008 (Mintel International Group, “Cosmetic Surgery, Market Intelligence” (January 2003))

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Management has been building facilities and developing the skills to provide more of these lifestyle treatments, which it expects to be significant sources of future growth. GHG is already one of the largest providers of cosmetic surgery services in the UK, providing services to customers it attracts directly (e.g. through its recently launched Inhance brand) and allowing other providers to access its operating theatres. GHG has also developed fixed-price surgery packages across a wide range of procedures to appeal to self-pay patients.

2.2.5

NHS demand

2.2.5.1

NHS funding overview

The third primary funder, the NHS, procures independent sector treatment for NHS patients through spot purchase arrangements and, increasingly, through fixed-term contracts. This accounted for 9.8% of independent acute care revenues in 2004A.19 Independent sector services are commissioned locally by Primary Care Trusts (“PCTs”) or NHS Hospital Trusts, which tender to selected local hospitals. Typically, the procedures are standardised for patients with no or few medical complications, to enable operators to quote a small margin above the NHS tariffs. Figure 3.

Process and funds flow for NHS referrals

Funds flow

NHS pays hospital directly

NHS / PCT

Private hospital

Consultants fees

Consultant

Patient pathway

GP

Referral to NHS consultant

Admission to private hospital

Successful treatment

Discharge

Funds flow Patient pathway

Source GHG

Independent acute care revenues paid by the NHS have grown consistently at a CAGR of 12.1% from 1994A-2004A. BMI has a lower emphasis on NHS funding than its competitors; while NHSfunded treatment represented 9.8% of the total independent acute market in 2004A (compared to 7.1% in 1994A), it typically accounts for only 6-7% of BMI revenues.

19

Laing & Buisson (2005-2006). May include a small amount of revenue from Wave 1 outsourcing

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Chart 18.

NHS purchase of acute medical/surgical services (1994A-2004A) (£m)

250

12% 10%

200

8% 150 6% 100 4% 50

2%

-

1994A

1995A

1996A

1997A

1998A

1999A

NHS purchase of acute medical / surgical (LH)

2000A

2001A

2002A

2003A

2004A

Percentage of total hospital spend (RH)

Notes Excludes NHS purchases of mental healthcare services Total hospital spend is defined as independent acute hospital revenue (£2.4bn in 2004A) Source Laing & Buisson (2005-2006)

2.2.5.2

Demand

Publicly-funded independent sector revenue is expected to increase sharply over the next few years driven by new methods of formalised outsourcing that are expected to supplement the continued growth of traditional NHS procurement. In January 2004, John Reid, then Health Secretary, introduced the target of the independent sector providing up to 15% of elective NHS surgery by 2008E, an ambition reaffirmed in later NHS literature.21 Procurement to date has been primarily through spot purchasing. Management expects that levels of spot contracting will continue over the next few years, as Trusts endeavour to meet future waiting list and volume targets. Despite the recent publicity surrounding waiting list reductions, waiting times are expected to remain a key area of focus. Therefore, in addition to continued historical demand, the Government is seeking to add incremental purchasing through three key policies. ISTC contracts The ISTC programme announced in June 2002 will be the largest contributor to NHS procurement from the independent sector. The first phase (“Wave I”) of the contracts, awarded between September 2003 and September 2005 to seven operators managing 24 ISTCs, is worth £2bn of revenue over five years. Currently, eleven facilities are operated by six providers, primarily new market entrants, many from outside the UK.22 The second phase of the contracts currently being tendered has two major components. •

21

22

Diagnostics: In 2004A, the NHS began to outsource diagnostics procedures such as CT and MRI scans through formal contracts, and issued a pre-qualification questionnaire in 2005A for diagnostics contracts worth £1bn of revenue over five years. Provision is divided into seven

John Reid, Today programme BBC Radio 4 (12 January 2004), reported in press articles the following day, including “Private ops on NHS may reach 15%: Minister foresees big rise in contracts to beat waiting lists” The Guardian (13 January 2004); DH, “NHS Improvement Plan” (June 2004) Due to variations in definition and changes in ownership, there are numerous estimates of the number of DTCs and ISTCs in the UK

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regions, in addition to a separate PET scanning contract, worth on average around £30m of revenue per year (with minimum volume guarantees). Announcement of preferred bidders is expected by the end of April 2006. •

Wave II electives: Contracts for elective surgery worth £2.5bn of revenue over five years for 24 locations are also in the process of being tendered.23 This procurement wave is expected to involve both Wave I providers and incumbents who have re-engineered their cost structures to offer these services. The outcome of the first of these tenders is expected towards the end of 2006B.

Between Waves I and II, the Government tendered for two large, guaranteed volume General Supplementary (“G-Supp”) Contracts for a range of orthopaedic procedures to be undertaken in existing independent facilities, to reduce waiting lists. G-Supp 1 contracted Capio and Nuffield to provide 25,000 procedures through 2004A and 2005A for a total value of £65m (GHG declined to bid). G-Supp 2 contracted for 13,700 procedures worth £54m over six months in 2005 to GHG (5,200 procedures and 3,800 outpatient assessments), Nuffield (5,000) and BUPA (3,500). Extended Choice Network The Government plans to introduce the Extended Choice Network (“ECN”), a system of negotiated procurement contracts with selected independent providers, to address waiting lists. ECN is estimated to be worth approximately £150-£200m of incremental revenue per year to the independent sector.24 This is expected to have only limited impact on historical levels of spot contracting as this is used to address short-term imbalances between local supply and demand while ECN will offer a longer-term substitute for publicly-owned capacity. The Patient Choice Agenda (“Choose and Book”) First suggested in 2001A and confirmed by later policy documents, Choose and Book gives NHS patients the right to choose from four hospitals selected by their PCTs, which may include an independent provider if it can match NHS tariffs. By 2008E, choice will be from any hospital, including independents that can meet the tariff. Demand is expected to increase substantially as patients become more aware of their entitlements. This is difficult to quantify, but if only a small proportion of NHS patients exercise their rights it will add significant demand: a 5% take up, for example, equates to 0.4m additional operations (inpatient and day case) in independent hospitals each year. L&B forecasts that the NHS could account for at least £1bn of independent sector revenues by 2008E based on announced contracts, with Choose and Book, which is difficult to quantify, providing significant additional upside to projections.25 Management estimates that this could, in fact, be up to £1.6bn, as shown below.

23 24 25

Plus one tender in Stracathro, Scotland Based on the information in the pre-qualification questionnaire Laing & Buisson (2005-2006). Excludes inflation

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Chart 19.

Potential market for NHS outsourcing (2003A-2011E) (£bn)

1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 2003A

2004A

Spot purchasing / ECN Diagnostics Wave 1

2005A

2006E

2007E

Wave 1 ISTC Diagnostics Wave 2

2008E

G Supp 1 Wave 2 ISTC

2009E

2010E

2011E

G Supp 2 Assuming ISTCs renew ed

Note Based on announced contracts only Excludes the impact of Choose and Book Excludes inflation Assumes 50% of the estimated £150m ECN contract value and 20% of diagnostic Wave 2 (£20m) is completed by the end of 2006E Dotted box indicates additional outsourcing requirements if the 2-year renewal options in existing programmes are exercised Source Management estimates based on Laing & Buisson (2005-2006)

GHG has already developed good relationships with NHS Trusts and PCTs over many years and is actively working to capitalise on the increased NHS demand through its newly-formed Amicus division.

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2.3

Differentiation of the private sector

2.3.1

Key areas of differentiation

Private healthcare is significantly different to NHS-funded treatment. A recent MORI study showed that the key factors determining whether a patient chooses an independent provider are cleanliness, waiting times, quality of care, and environment. Independent hospitals are perceived to be superior on all of these criteria. Chart 20.

Key criteria for care choice (% respondents) (2005A)

60 50 40 30 20

Choice of consultant

Choice of appointment date

Consultant reputation

Convenience / proximity

Treatment with dignity

Operation success rate

Hospital reputation

Cleanliness

-

Waiting time

10

Note Survey conducted by MORI on behalf of the Department of Health (“DH”) in 2005A, based on a sample of 1,276 UK residents aged over 40. Respondents were asked to identify two or three key criteria that affected their choice of hospital for treatment or an operation Source MORI (January 2006)

Cleanliness and infection control: Cleanliness and the risk of infection in NHS hospitals has become the most important differentiator for consumers following press articles highlighting, in particular, the prevalence of MRSA in NHS hospitals. BMI has a very impressive record on cleanliness and infection: MRSA infection, for example, is significantly more prevalent in NHS hospitals than in BMI facilities. Table 2.

Cleanliness and infection control: NHS vs. independent operators NHS

Cleanliness and infection control MRSA bacteraemias Chlostridum difficile infections GRE infections

GHG

쎭쎭쎭쎭쎭쎭쎭쎭쎭쎭쎭쎭쎭쎭쎭

쎭쎭쎭쎭쎭쎭쎭쎭쎭쎭쎭쎭쎭쎭쎭

Instances Rate per bed

Instances Rate per bed

7,212 44,489 620

6.57% 40.52% 0.56%

5 20 0

0.22% 0.87% 0.00%

Source DH mandatory surveillance schemes (2004), GHG (2005)

Waiting times: The average time between initial GP referral and successful operation in BMI hospitals is 1.5 weeks. A meaningful comparison to the NHS is impossible, as there are no equivalent published statistics. However, despite the much-publicised improvements to mean waiting times, the data below suggest that there is a considerably greater wait for treatment under the NHS, especially as the data below is often cumulative. For example, a patient who needs an outpatient appointment with a specialist followed by an MRI scan followed by an average inpatient treatment would wait for 32 weeks; for a hip replacement this could rise to 51 weeks.

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Table 3.

Waiting times: NHS vs. independent operators NHS

Median waiting times (weeks) For outpatient appointment with a specialist For MRI scan For inpatient treatment (average) For trauma and orthopaedics For cataract surgery For cardiac surgery For hip replacement

6.8 17.5 7.5 9.5 13.0 13.1 26.6

Note By comparison, cumulative BMI wait is 1.5 weeks. Data is not available by specialty Source Chief Executive’s Report to the NHS: Statistical Supplement - December 2005; DH HES Online (http://www.hesonline. nhs.uk/Ease/servlet/DynamicPageBuild?siteID=1802&categoryID=193; British Health Journal (January 2006); GHG

Clinical outcomes and quality of care: Independent hospitals generally provide a higher quality of care, higher clinical staff to patient ratios and a wider range of treatments. Table 4.

Clinical outcomes and quality of care: NHS vs. independent operators

Clinical outcomes and quality of care Operation performed by Diagnostic technology

NHS

GHG

Consultant or their junior staff Limited MRI, CT, PET

Consultant only Unlimited use and immediate access Any chosen including off-label drugs e.g. Herceptin

Drugs offered

NICE approved only

Note Treatment options are only available to PMI patients where their policies permit it Source GHG

Access to consultants: Independent patients may choose their consultant, will typically be operated on by that consultant and will typically receive three consultations over the course of their treatment. In contrast, in NHS hospitals patients may well be operated on by junior medical staff and often do not have the same degree of continuity of relationship with either consultant or registrar. Table 5.

Access to consultants: NHS vs. independent operators

Access to consultants Average time with consultant Choice of consultant Continuity of consultant

NHS

GHG

15 minutes No No

30 minutes Yes Yes

Source GHG estimates

Patient comfort and environment: Independent hospitals have predominantly single, ensuite rooms with televisions, radios and telephones, a choice of meals and unrestricted visiting hours.

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Table 6.

Patient comfort and environment: NHS vs. independent operators

Patient comfort and environment Private room Ensuite room Choice of menu Patient experience Excellent Excellent or very good

NHS

GHG

Sometimes Sometimes Sometimes

Yes Yes Yes

42% 78%

62% 92%

Source GHG, “Exceeding Patient Expectations report by HWA Consulting” (January 2006); Healthcare Commission, “Patient survey report 2004” (2004)

2.3.2

Impact of increased NHS investment

2.3.2.1

Key Government policies

Since 2000A, the Government has committed to significant real increases in spending on public healthcare in the UK, to improve the NHS and bring UK spending into line with its European peers. The real growth rate in healthcare expenditure has increased from approximately 1 – 5% in the period 1985A to 2000A to 6-8% in the period since 2000A. Furthermore, the Government has indicated it expects 7% real annual growth until 2008E. In 2004/05A, NHS expenditure amounted to £69.4bn; this is projected to increase to £92.6bn by 2008E.26 Chart 21.

Real NHS spending (£m) and year-on-year growth (%) (1983/84A-2007/08E)

100

CAGR 98/904/5: 6.8%

CAGR 04/507/8: 7.4%

80

60

10%

8%

6%

CAGR 83/4-98/9: 3.0%

40

4%

20

2%

83/84A

87/88A

91/92A 95/96A NHS spend (£m) (LH)

99/00A Grow th (%) (RH)

03/04A

07/08E

Source King’s Fund (2005)

This investment has accompanied several policy initiatives designed to improve clinical outcomes and patient experience: •

targets have been set to reduce waiting lists and improve access to care;



three key health areas have been identified – cancer, heart disease and mental health; and



numerous initiatives have focused on improving accountability and efficiency, and specifically addressed issues like MRSA infection rates.

26

Public Expenditure Statistical Analysis 2005 (April 2005). Data differs from OHE Compendium (chart 1 above) due to differences in definition

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Funding increases have improved NHS service levels, as patient volumes have increased and waiting times declined. The Government has, on the whole, met its waiting list targets. Waiting times for both inpatient and outpatient appointments have fallen: mean inpatient waiting times are around one third lower than in 2001/2002A at 7.5 weeks (October 2005), and only 46 patients had been waiting over six months for treatment as of February 2006.27 NHS admissions and finished consultant episodes (“FCEs”) volumes have increased at CAGR of 3.3% and 2.8% respectively over the last five years, as shown in the charts below. However, waiting list reductions are largely attributable to the outsourcing of treatment to the independent sector.

2

20

-

-

Number of FCEs (m)

1987/88A

2003/04A

40

2001/02A

4

1999/00A

60

1997/98A

6

1995/96A

80

2004/05A

8

2003/04A

100

2002/03A

10

2001/02A

120

2000/01A

12

1999/00A

140

1998/99A

14

NHS acute beds (1987/88A2004/05A) (000s)

1993/94A

Chart 23.

1991/92A

Number of NHS FCEs (1998/99A-2004/05A) (million)

1989/90A

Chart 22.

Admissions (m)

Source DH HES Online http://www.hesonline.nhs.uk/Ease/servlet/DynamicPage Build?siteID=1802&categoryID=193

Source DH website: Hospital Activity Statistics http://www.performance.doh.gov.uk/hospitalactivity/data_ requests/beds_open_overnight.htm

With falling average length of stay (“AVLOS”) and increases in day surgery in the NHS, there is reduced need to invest in incremental NHS capacity to support increased volumes. Bed numbers declined steadily in the period before 1998 and have since stabilised. The Government has undertaken an unprecedented capital expansion of hospitals, with several recent new hospitals built through Private Finance Initiative (“PFI”) schemes. In most cases, though, these have merely served to replace capacity and in some schemes have actually reduced supply.28 While funding was 49% higher in 2004/05 than in 1998/99, there were only 14% more FCEs: the NHS thus appears to be a fixed capacity enterprise, with facilities already utilised at close to capacity (compared to international peers). There is little evidence of recent funding increases improving productivity. The King’s Fund reports that the majority of the increased funding has been absorbed by unit cost inflation in salaries, drugs and supplies and insurance against malpractice. It concluded that in 2005/06E only 13% of the increase in NHS expenditure was likely to flow through to increased patient services, the remainder being absorbed by cost increases.29

27 28

Chief Executive’s Report to the NHS: Statistical Supplement - December 2005; NHS press release 3 February 2006 Management estimates that the 900-bed PFI-funded Norfolk and Norwich hospital, for example, replaced 1,200 beds in the local area

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The implication for the independent sector is positive. The NHS has been unable to add substantial capacity to date, and is likely to find it difficult to build on or even maintain the recent service improvements as growth in real spending will fall to c.2% per year after 2008E. Government therefore has little choice but to utilise the independent sector to assist meeting these targets, through continued spot purchasing and ISTC procurement.30 Furthermore, many NHS Trusts are struggling to remain financially secure despite the high levels of recent investment. Press reports have suggested that the NHS deficit could be as high as £1bn, with around two thirds of trusts closing wards.31 Management believes that this might offer opportunities for independent providers to develop private-public schemes to manage failing trusts. 2.3.2.2

Impact on independent sector

Some industry commentators have predicted that the improving NHS will make it difficult to attract new subscribers to PMI policies and limit the future growth of the independent acute market. GHG Management believes that this is a fundamental misunderstanding of the independent healthcare market and product. The graphs below show the consistent growth of insured lives and independent hospital market revenues over a 17-year period in which operation waiting times have declined substantially. Chart 24.

PMI subscriptions (m) vs. waiting lists (weeks) (1988A2004A)

8

45

7

40 96-99: 89-95: 1.7% 0.0%

6

00-04: 0.3%

Chart 25.

Independent hospital revenue (£bn) vs. waiting lists (weeks) (1988A-2004A) 45

3.0

40 2.5

00-04: 10.0%

35

30

2.0

30

35

5 25

25 4 3

1.5

89-95: (13.0%)

20

20 1.0

15 96-99: 4.2%

2 1 1988A

00-04: (9.5%)

10

1998A

5 1988A

2003A

PMI subscribers (m) (LH) Mean inpatient w aiting time (w eeks) (RH)

10

89-95: 9.4%

0.5

1993A

15

96-99: 8.2%

5 -

1993A

1998A

2003A

Independent acute hospital revenue (LH) Mean inpatient w aiting time (w eeks) (RH)

Note PMI subscribers includes people covered under TPA schemes Growth rates are CAGRs Source Laing & Buisson (2005-2006); King’s Fund (2005) based on “Expenditure on Health and Personal Social Services 2005” (December 2005) available at http://www.parliament.the-stationery-office.co.uk/pa/cm200506/cmselect/cmhealth/736/736-iii.pdf

29 30 31

King’s Fund Briefing, “Where’s the money going?” (January 2006), extending the estimates in King’s Fund (2005) See Financial Times article “NHS faces spending squeeze” (17 January 2006) for details BBC News website (19 January 2006): http://news.bbc.co.uk/1/hi/health/4624888.stm

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Although identified as a differentiating factor in section 2.3.1 above, in fact there seems to be little or no relationship between waiting lists and popularity of PMI. Mean inpatient waiting times declined by approximately 57% between 1989A and 1995A, coinciding with a period of relatively high growth in NHS spending (chart 21). Improvements in levels of NHS services had no adverse impact on the PMI or independent healthcare markets, as market and GHG revenues demonstrated consistent growth. Management believes that this is because waiting lists is only one of the many criteria when selecting independent treatment. Also, as noted above, cumulative waiting times still remain substantially inferior to the independent sector, for which rapid treatment is standard. GHG’s product offering is, and will remain, noticeably differentiated from the NHS, and Management expects the impact of increased NHS expenditure to have very limited impact on its core business. In fact, the additional expenditure is more of an opportunity than a threat: independent operators, including GHG through its Amicus brand, are seeking to develop products to meet the incremental NHS demand.

2.4

Supply structure

2.4.1

Evolution of capacity

Despite the growth of independent sector healthcare demand, capacity has steadily declined, though the total number of facilities increased in 2004A and 2005A, to reach 212 with over 9,500 beds, as the first wave of ISTCs has been established.32 Chart 26.

Independent acute medical/ surgical hospitals and beds (000s) (1995A-2005A) CAGR 1995-2005: (0.7)% CAGR 2000-2005: (1.2)%

250

Chart 27.

14

12

12

10

200 10 150

CAGR 1995-2005: (2.0)% CAGR 2000-2005: (0.9)%

Revenue per independent hospital (£m) and bed (£000s) (1995A-2005A) 300 250

CAGR 1995-2005: 9.4% CAGR 2000-2005: 11.0%

8

200

6

150

8 6

100

CAGR 1995-2005: 10.8% CAGR 2000-2005: 10.7%

4 4 50

1995A

2000A

2

2

-

-

2005A

50 1995A

Hospitals (LH) Beds (000s) (RH)

100

2000A

2005A

Revenue / hospital (£m) (LH) Revenue / bed (£000s) (RH)

Notes Capacity as at 1 January 1981 to 1996 and mid year thereafter. Excludes day surgery places, beds in NHS PPUs and ISTCs Recent supply shifts are difficult to measure due to changes in classifications Source Laing & Buisson (2005-2006)

32

Recent trends are also distorted by changes in categorisation. There are a further 83 day-surgery only clinics. Laing & Buisson (2005-2006)

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The number of conventional independent acute hospitals and beds has fallen by 7.0% and 9.7% respectively since 1999A. This supply reduction has primarily resulted from closures of small solus hospitals that were excluded from PMI networks or over-reliant upon large NHS contracts that were not renewed. Reduced bed requirements as AVLOS declined and an increase in the proportion of day case and outpatient procedures due to advancements in medical technology and changing patient preferences diminished the need for capacity. Most importantly, the rising costs of regulatory compliance, particularly of providing 24-hour Resident Medical Officer (“RMO”) cover on a small number of beds, has made a number of hospitals financially unviable. Steadily declining capacity combined with revenue growth implies an increase in revenue per hospital and per bed, shown in chart 27 above. Revenue per bed grew at a CAGR of 10.8% between 1995A and 2005A, driven by a combination of price growth and increases in the complexity of surgery (revenue per procedure), occupancy improvements (in particular, the effect of insurer networks), and growth in revenue generated by day case or outpatient procedures that do not require the same investment in bed capacity. Outside of the ISTC programme, only limited growth in independent hospital capacity is expected.

2.4.2

Competitive landscape

For-profit companies operate 70% of independent sector beds, with the remainder operated by charitable groups. The UK independent hospital sector experienced significant consolidation during the late 1990s and early 21st century, creating a market where five operators own around 75% of for-profit capacity. Over the last five years (and despite the improvements to the NHS noted above) leading independent operators have all demonstrated strong revenue growth, typically 8 – 10% per annum excluding acquisitions, and stable EBITDAR margins. All have benefited from increases in case load, a shift in case mix to more complex, higher margin procedures, and increased pricing. Data for 2005A reported to date continues to show these positive trends. The following section summarises the leading operators; further information will be made available in due course. Table 7.

Key independent hospital operators: financial and operational statistics

Provider Hospitals (current) Beds (current) Financial KIPs Revenue (2004) (£m) Revenue growth (00-04 CAGR) Reported EBITDAR (2004) (£M) Reported EBITDAR growth (00-04 CAGR) Reported EBITDAR margin (2004) Revenue/Bed (2004) (£000) EBITDAR/bed (2004) (£000) Staff KPIs Revenue/employee (2004) (£000) Staff costs/employee (2004) (£000) Staff costs/bed (2004) (£000)

BMI Nuffield

USP

Abbey

49 2,476

42 1,656

BUPA 25 1,395

Capio HCA UK 21 839

6 768

3 155

6 121

544.9 8.3% 155.7 4.3% 28.6% 240.3 68.6

455.9 16.9% 59.5 8.8% 13.1% 269.9 35.2

464.1 11.6% 85.9 14.5% 18.5% 291.9 54.0

188.7 9.5% 34.6 3.0% 18.3% 229.9 42.1

272.1 26.4% 65.6 49.4% 24.1% 372.8 89.9

46.6 27.4% 11.6 31.7% 24.9% 312.9 78.0

17.7 12.3% 3.8 74.7% 21.2% 146.4 31.0

71.5 24.1 80.6

51.8 17.2 89.4

71.6 25.3 103.1

47.7 15.3 73.7

91.8 29.6 120.2

84.6 25.9 96.0

65.1 21.5 48.3

Note UK divisions only of international operators (Capio, HCA and USP) Hospital and bed numbers are taken from Healthcare Market News (March 2006), adjusted to remove ISTCs and DTCs for BUPA and Capio Source Publicly available company accounts; Healthcare Market News (March 2006)

Several larger operators have increased capacity. Market consolidation is likely to continue, as larger operators continue to build new hospitals and acquire smaller chains and standalone facilities, particularly from not-for-profit operators. A merger among some of the leading players is also possible, although this would be subject to competition authority approval.

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2.

UK healthcare market information

BMI BMI is a large independent acute care operator. It has grown revenues at a 9.1% CAGR between 2000A and 2005A. BUPA BUPA manages its hospitals division at arms length from its PMI division. In July 2005, it disposed of its Classic Hospitals portfolio of nine smaller units to Legal & General Ventures, stating that it was to focus on operating larger, more profitable hospitals. BUPA has an aggressive expenditure plan, with over £100m earmarked for investment in its portfolio of 25 hospitals over the next three years on new diagnostic technology (specifically MRI scanners), a major upgrade of Parkway Hospital and other facility expansions. BUPA did not win any ISTC Wave 1 contracts, although its Redwood Diagnosis and Treatment Centre solely carries out NHS work. BUPA is now focused on achieving a significant share of further NHS outsourcing. It secured 3,500 operations under G-Supp 2 and in November 2005 accommodated 200 NHS patients in its Murrayfield Hospital in Edinburgh as part of a £1.35m project to meet orthopaedic operations deadlines. In 2005A, NHS-funded patients represented 14% of inpatient and day case episodes. Nevertheless, a significant proportion of revenue growth derives from self-pay patients: in 2004A, its cosmetic surgery division grew revenues by 32%, for example. BUPA’s hospital division reported EBITDAR margin was between 17% and 18% in 2003A and 2004A, though Management believes margins were diluted by the less profitable Classic Hospitals portfolio. The division achieved underlying revenue growth of 9% and operating surplus growth of 21% in 2005A. Nuffield Established in 1957, Nuffield has grown through both acquisitions and new developments to become the largest not-for-profit hospital group in the UK, with 42 hospitals and 1,656 beds. Nuffield has given considerable focus to winning a large share of NHS procurement. It has also attempted to position itself closer to its for-profit competitors and to this end has been introducing a more commercial approach to its pricing and standardising its price list. Nuffield’s margins lag its peers: its reported EBITDAR margin was 13.1% in 2004A, below an average of 20.0%. Notably, Nuffield enjoys certain benefits (business rates and VAT) from its not-for-profit status. Capio UK Capio AB is a pan-European acute healthcare services operator. In the UK, Capio provides acute care hospitals (21 hospitals, 839 beds), psychiatric care clinics under the Capio Nightingale banner (7 clinics), additional diagnostics services through Capio Diagnostics UK and an ophthalmic clinic (Capio Eye acquired in July 2005). Capio’s acute care portfolio consists mainly of the hospitals acquired as part of Community Hospitals Group, purchased in April 2001 for £292m. Like Nuffield, Capio UK has recently given increased attention to securing NHS volumes, particularly through ISTCs. It secured a contract to run eight ISTCs in June 2004 for c.95,000 orthopaedic operations. Three of its existing facilities are being converted from servicing purely private patients to providing ISTC services. Total UK revenue growth (including psychiatric and other operations) was 13.8% in 2005. Classic Hospitals Classic Hospitals, the fifth-largest independent hospital operator in the UK, was formed in July 2005 when Legal and General Ventures acquired nine hospitals from BUPA for £84m. The Group operates 313 beds (including 13 ICU beds) and employs over 2,000 staff. LGV intends to pursue a buy and build strategy, and to expand its cosmetic surgery operations, which at the time of the acquisition accounted for 2% of total revenues. Financial data for Classic Hospitals is not publicly available.

24

2.

UK healthcare market information

HCA UK HCA UK operates six hospitals with 768 beds in London. The UK operations are a smaller part of an international group, HCA Inc, a US public hospital group with a market capitalisation of over £12bn. The UK subsidiary was built through acquisition, most notably of St Martin’s Healthcare (three London hospitals bought for £86m in June 2000). HCA is focused on serving the market in central London. It also provides a particularly high concentration of high acuity operations (it has the highest proportion of ICU beds amongst the leading operators), and recently invested in significant additional oncology capacity that has driven revenue growth. It also derives a high proportion of revenues from wealthy overseas patients. It generates the highest per-bed revenues of any provider (over £370,000 per bed in 2004A), and a reported EBITDAR margin of 24.1%. USP/Aspen Healthcare USP is the UK subsidiary of the US-listed United Surgical Partners International, which entered the UK acute healthcare market with the acquisition of Aspen Healthcare in April 2000. The group currently operates three hospitals with 159 beds and nine operating rooms, and an oncology clinic in London developed in 2003A. The subsidiary achieved revenue of £46.6m and reported an EBITDAR margin of 24.9% in 2004A. USP generates a particularly high proportion of revenue from self-pay patients (39% in 2005A, up from 30% in 2003A). This was caused, in part, by a greater focus on cosmetic surgery: in 2002, this specialty accounted for 7% of revenue: by 2005A, it had reached 21%. This particularly highlights the growth opportunities available in cosmetic surgery. Abbey Hospitals Abbey Hospitals entered the market in 1997, acquiring 4 hospitals from Independent British Healthcare plc and a further independent hospital. An additional leasehold hospital was added in March 1999. Covenant Healthcare acquired Abbey Hospitals in June 2002, and subsequently acquired Transform Medical, the largest provider of cosmetic surgery in the UK, in October 2002. The combined group was purchased through a management buy out backed by Phoenix Equity Partners for £25m in July 2002, and has been owned by Electra Partners since January 2005, when it was purchased for £170m. Abbey currently operates 6 hospitals with around 120 beds located primarily in the north west of England and Scotland. It also operates a diagnostic and outpatient centre in Liverpool. The hospitals are smaller than competitors’ (average of 20 beds per hospital), leading to different operational characteristics.

2.4.3

Other acute healthcare providers

2.4.3.1

NHS Private Patient Units

Private Patient Units (“PPUs”) are dedicated private patient wards in NHS hospitals permitted to charge revenue for the treatment of PMI or self-pay patients. Trusts can only admit private patients if this does not adversely affect treatment provided to state-funded patients. There are currently 79 NHS PPUs in the UK with 1,275 beds.33

33

Healthcare Market News (March 2006)

25

2.

UK healthcare market information

Chart 28.

NHS private patient income (£m) and market share (%) (1990A-2004A)

450

18%

400

16%

350

14%

300

12%

250

10%

200

8%

150

6%

100

4%

50

2%

NHS private patient income (LH)

2004A

2003A

2002A

2001A

2000A

1999A

1998A

1997A

1996A

1995A

1994A

1993A

1992A

1991A

-

1990A

-

Market share (%) (RH)

Note Market share defined as NHS private patient revenue/(NHS private patient revenue plus revenue of independent hospitals) Source Laing & Buisson (2005-2006)

NHS revenue from private patients has grown steadily since 1990A. During the 1990s, PPUs were thought to represent a threat to the independent sector, and their share of private market revenues climbed until 1997A, reaching 15.7%. However, their share has consistently declined since, to 11.4% of the private market in 2004A, and industry commentators now view PPUs as peripheral providers with limited impact on major independent operators. PPUs are not a significant threat to independent hospital groups because: •

the units are based in NHS facilities, so hospitals cannot differentiate the patient experience and standard of care from that of publicly-funded NHS patients;



PPUs are typically small and therefore usually excluded from PMI networks;



PPU capacity is capped to prevent private treatment affecting the core public activities; and



PPUs are being employed to reduce NHS waiting lists rather than treat private payors.

In fact, PPUs may represent an attractive opportunity for independent operators. A small number of operators already manage PPUs on behalf of NHS Trusts, such as Capio, which manages the PPU at the Gloucestershire Royal Infirmary. 2.4.3.2

ISTCs

ISTCs are independently owned and operated facilities that provide NHS-funded treatments to reduce NHS waiting times under five-year contracts, often with a high proportion of guaranteed revenues. They are generally focused upon providing standardised surgical procedures such as cataract surgery, typically through day cases or short inpatient stays. Management does not consider these facilities a significant threat to BMI’s core business, for the reasons outlined below. •

There is no overlap in payor type: BMI predominantly treats private patients, while ISTCs are aimed exclusively at NHS patients. Management has seen no impact from Wave 1 ISTCs on its hospitals.

26

2.

UK healthcare market information



ISTCs are designed to provide high volumes of standardised operations with clearly defined care pathways and few opportunities for patients to choose surgeons. Although there is some overlap with the surgical procedures performed by independent hospitals (e.g. orthopaedics), ISTCs are not intended to treat patients requiring more complex or bespoke procedures, or patients for whom treatment poses a higher risk. These patients are typically referred to the local NHS District General Hospital.



ISTCs cannot provide sufficient differentiation for fee-paying patients, who would be treated alongside NHS patients in the same facilities. The standards of service (levels of comfort, waiting times, flexibility of appointments and availability of chosen consultants) are below the acceptable requirements for the premium independent sector. Patients treated in an ISTC may not receive treatment from an NHS consultant. Due to the principle of “additionality”,34 and because ISTCs provide a low cost model, operations are often performed by non-consultant staff or overseas surgeons.



ISTCs are obliged to fulfil their contracted NHS caseload first, so cannot always guarantee consultants available capacity or private patients immediate treatment, which are the core requirements of independent provision and the most significant differentiators to the NHS.



ISTCs have not yet been accepted into PMI networks. To date, insurers have not adapted their products to include the ISTC pathway to avoid cannibalising their core PMI membership.

Like PPUs, ISTCs are fundamentally NHS operations, and so, like PPUs, will not adversely affect premium independent providers. In fact, they may even be beneficial for the independent sector. The diagnostics procurement is expected to increase volumes across the entire market, as GPs currently tend to restrain people from diagnostic procedures as they understand facilities are not available. As discussed, diagnostic capacity is an important driver of demand for surgical treatment.

34

Additionality requires ISTC operators to obtain permission from the NHS to use its employees (to prevent cannibalisation of existing NHS treatment capacity) or to source additional manpower from elsewhere. This frequently necessitates flying in doctors from overseas

27

The acquisition of a controlling interest in General Healthcare Group Limited

Information memorandum

Section 3 GHG property information

3.

GHG property information

Bishops Wood Hospital Description BMI Bishopswood Hospital is located within the grounds of Mount Vernon NHS Hospital. The hospital is registered as an Acute Private Hospital with the National Care Standards Commission to provide overnight accommodation for 42 medical and surgical patients and Class 3B/Class 4 Laser. An outpatients facility with 6 consulting rooms including one for ophthalmic assessment are available for confidential patient and paediatric consultations. Treatment, service and care provision includes; General surgery and medicine, orthopaedics, ear nose and throat, plastic surgery, oncology, ophthalmics and physiotherapy. Bishopswood Hospital has an agreement with Mount Vernon Hospital to treat paediatric patients. The hospital facilities and decoration were attractive and to a high standard and wheelchair access was available. Car parking facilities were adequate. Address: Rickmansworth Road Northwood Middlesex HA6 2JW

Key statistics Number of beds Operating theatres

42 3

MRI scanners PET scanners CT scanners

0.5 0.5 0.5

Year of opening Last inspection Tenure

1991 01-Dec-03 Long Leasehold

The Blackheath Hospital D escription BM IBlackheath Hospitalis registered w ith the Healthcare Com m ission to provide acute m edical and surgicalcare to patients over3 years ofage. Services provided include G eneralSurgery,Ear,Nose and Throat,Urology,O rthopaedics, G ynaecology,Term ination ofPregnancy,O phthalm ology and G eneralM edicine.The hospital registration includes W inchesterHouse,w hich is the dedicated O utpatients Departm ent.This building is a shortw alk from the m ain hospitalsite. Public transportlinks to the area are good and there is lim ited carparking available in the hospital grounds. Key statistics Address: 40 42 Lee Terrace Blackheath London SE3 9UD

Num berofbeds

69

O perating theatres

4

M RIscanners PET scanners CT scanners

1.0 0.0 1.0

Year ofopening Lastinspection Tenure

1984 01-Jun-05 Freehold

2

3.

GHG property information

Chelsfield Park Hospital Description Chelsfield Hospital is an acute hospital that forms part of BMI Healthcare and provides pre and postoperative care for adults and children age 3 years and over within the 50 bedded in patient unit. to com e]

Address: Bucks Cross Road Chelsfield Kent BR6 7RG

Outpatient procedures and consultation is provided for adults, with paediatric consultation only being provided for children within the outpatient department. The hospital caters for a number of surgical specialities that are listed in the patient guide. The hospital also has an assisted conception service. There are three operating theatres and high dependency beds for critical care level 2 patients. There are a number of onsite support services including radiology, physiotherapy and pathology. There are car-parking facilities on site and the hospital is has access to public transport, the underground rail line and bus routes being approximately a 15-minute walk away. Key statistics Number of beds Operating theatres

50 3

MRI scanners PET scanners CT scanners

0.0 0.0 0.0

Year of opening Last inspection Tenure

1982 25-May-05 Freehold

The Clementine ChurchillHospital D escription The BM IClem entine Churchillis a 141-bed surgical/m edicalin and day patientfacility w ith a w ide range ofdiagnostic and outpatientservices. There is a Consulting centre incorporating a m inorprocedure unit,diagnostic im aging,and cardiology and audiology departm ents.The consulting centre also incorporates a health centre, physiotherapy and neurophysiology Departm ent.There is a M acm illan Breastservice;Colorectal& Urologicalcare facility and a fullrange ofsupportservices such as pharm acy and pathology. Key statistics Address: Sudbury Hill Harrow London HA1 3RX

Number of beds O perating theatres

5

140

M RIscanners PET scanners CT scanners

1.0 0.0 1.0

Year ofopening Lastinspection Tenure

1980 17-Jan-05 Freehold

3

3.

GHG property information

The Garden Hospital Description BMI Garden Hospital is registered with the Healthcare Commission to provide acute hospital care for medical and surgical patients over 18 (eighteen) years. [to come]

Outpatient services are provided in a separate building with nine consulting rooms and two treatment rooms. At the time of inspection the hospital Executive Director (ED) was on extended leave and an acting ED was covering with the support of the Director of Nursing. The hospital is situated in a residential area, public transport links were available but required a 10–15 minute walk to access them; car parking is available on site.

Address: 46–50 Sunny Gardens Road Hendon London NW4 1RP

Key statistics Number of beds Operating theatres

30 2

MRI scanners PET scanners CT scanners

0.0 0.0 0.0

Year of opening Last inspection Tenure

1993 04-Aug-05 Freehold

The Kings Oak Hospital D escription The Kings O ak Hospitalis partofBM IHealthcare. Itis a purpose-builtacute private hospitalproviding 52 beds and a com prehensive range ofinpatientand outpatientservices.Itis located w ithin the grounds ofThe NHS Chase Farm hospital site in Enfield.The NHS Chase Farm Hospitalprovides a num berofclinicaland non-clinicalservices to the Kings O ak Hospital. The hospitalis accessible by public transport,and carparking is available. Address: Chase Farm Hospital(north side) Enfield M iddlesex EN2 8SD

Key statistics Num berofbeds O perating theatres

52 2

M RIscanners PET scanners CT scanners

0.0 0.0 0.5

Year ofopening Last inspection Tenure

1992 05-Jul-04 Long Leasehold

4

3.

GHG property information

The London Independent Hospital Description

[to come]

Address: 1 Beaumont Square Stepney Green London E1 4NL

The hospital has 80 beds; 3 theatres’; designated recovery and TSSU department. There is also a dedicated 4-bedded high dependency unit and a 6-bedded intensive therapy unit (ITU), able to care for level 2 and 3 patients. The hospital is also part of the local ITU network. In addition, there is 24-hour Clinical Intensivist cover to assist Nursing team. Services provided included general and orthopaedic surgery, cardiac investigation, cardiac surgery, cardiac catheterization, children’s surgery, and chemotherapy. The hospital has a radiology and scanning department on-site, offering MRI, CT and ultrasound facilities. The pathology laboratory is CPA accredited and there is a physiotherapy department on site along with a pharmacy. Key statistics Number of beds Operating theatres

80 4

MRI scanners PET scanners CT scanners

1.0 0.0 1.0

Year of opening Last inspection Tenure

1986 11-Feb-05 Freehold

Shirley Oaks Hospital D escription Shirley O aks Hospitalopened in l986 and is partof BM IHealthcare. Itis a purpose builtgeneralhospital,registered w ith Healthcare Com m ission for50 beds to provide acute hospitalcare forelective surgicaland acute m edicalpatients.Allroom s have piped oxygen and suction,en-suite facilities,satellite TV and telephone. A fullrange ofdiagnostic im aging,physiotherapy,pathology and pharm acy supports a range of surgicalspecialties including orthopaedics,gynaecology,ophthalm ology,colorectal,general surgery and urology.The hospitalhas fourtheatres,a recovery suite and sterile services departm entand a high dependency unit.M edicaltreatm ents ranging from Endoscopic Investigation to Fertility Treatm ents and Health Screening. Address: Poppy Lane Croydon Surrey CR9 8AB

Key statistics Num berofbeds O perating theatres

50 4

M RIscanners PET scanners CT scanners

1.0 0.0 0.0

Year ofopening Lastinspection Tenure

1986 18-Oct-04 Freehold

5

3.

GHG property information

The Sloane Hospital Description The hospital is situated in a residential area and is registered to provide outpatient, acute inpatient and day-care surgical care and some medical care to the local population. [to come]

Public transport links are close to the hospital; car-parking facilities are available.

Key statistics

Address: 125 Albemarle Road Beckenham Kent BR3 5HS

Number of beds Operating theatres

60 2

MRI scanners PET scanners CT scanners

0.0 0.0 0.0

Year of opening Last inspection Tenure

1981 24-Dec-04 Freehold

The Chaucer Hospital D escription The BM IChaucerHospitalis a purpose builtfacility situated in a quietresidentialarea on the outskirts ofCanterbury.Itis easily accessible by road and public transportis available nearby. There are good carparking facilities on site. Atthe tim e ofinspection the hospitalw as in the process ofrefurbishing.The firstphase ofthe refurbishm enthad justbeen com pleted and a num berofrefurbished patients room s w ere view ed by inspectors;the patientaccom m odation had been im proved,itappeared com fortable and included som e very nice features.

]

Address: Nackering Road Canterbury KentCT4 7AR

The ChaucerHospitalprovides a range ofservices on an outpatient,in patientorday care basis, covering a variety oftests and surgicalprocedures.The Hospitalhas over200 contracted staff w ho have qualifications relevantto theirpositions.There are m ore than 100 consultants w ho have been granted practising privileges to carry outprocedures atThe Hospital.According to the Statem entofPurpose,The ChaucerHospitalservice objective is to provide quality and value in the provision offacilities foradvanced surgicalprocedures,togetherw ith safe,friendly,professional care w ithin a com fortable environm ent. Key statistics Num berofbeds O perating theatres

60 3

M RIscanners PET scanners CT scanners

1.0 0.0 0.0

Year ofopening Last inspection Tenure

1982 27-Sep-04 Freehold

6

3.

GHG property information

The Chiltern Hospital Description The Chiltern Hospital is a member of the nationwide BMI Healthcare group. The responsible person for the hospital is Mr K McGuckin. An application has been received from Mr R Lye to be the registered manager of the hospital. The hospital has 66 beds and provides acute surgical and medical services for inpatient, outpatient and day case patients. Diagnostic and treatment services such as imaging, pathology and physiotherapy are offered. The hospital has a 5-bedded high dependency unit and provides medical cover 24 hours a day with consultants from a wide range of specialities practicing at the hospital. The hospital also offers chemotherapy services to patients and an In Vitro Fertilisation service. Key statistics Address: The London Road Great Missenden Bucks HP16 0EN

Number of beds Operating theatres

75 3

MRI scanners PET scanners CT scanners

1.0 0.0 1.0

Year of opening Last inspection Tenure

1982 06-May-04 Freehold

The Esperance Hospital Description The Esperance is a private establishment, registered as an acute hospital under Part Two of the Care Standards Act 2000. The hospital delivers a wide variety of private healthcare services including health screening, diagnostic treatments, physiotherapy and general surgery. The Esperance is situated to the south of Eastbourne town centre with easy access to road services. There is limited designated parking to the side of the buildings. The main entrance to the front of the building has steps or a ramp for level access.

Address: Hartington Place Eastbourne East Sussex BN21 3BG

The service is part of the BMI Group of health care providers. The person responsible for the day-to-day management of the establishment is Mr D Irvine, who is the Registered Manager with the Healthcare Commission. The responsible individual on behalf of the company is Mr I Thompson. Key statistics Number of beds Operating theatres

50 3

MRI scanners PET scanners CT scanners

0.0 0.0 0.0

Year of opening Last inspection Tenure

1987 28-Feb-03 Freehold

7

3.

GHG property information

Fawkham Manor Hospital Description Fawkham Manor Hospital is a part converted part purpose built facility situated in a quiet rural area. There is road access and good on site parking. Public transport is limited. A range of services were provided on an outpatient, in patient or day care basis covering a variety of tests and surgical procedures. Facilities included diagnostic imaging, physiotherapy and pharmacy. The primary treatment focus for BMI Fawkham Manor was elective surgery.

Address: Manor Lane Fawkham, Longfield Kent DA3 8ND

Fawkham Manor Hospital had recommenced the treatment of children for certain elective surgical procedures from April 2004. Arrangements were being made, in agreement with the Registered Manager, to show the admission of up to only 8 children, aged 3 years or older as a condition of registration for BMI Fawkham Manor. It was also noted that the categories of registration for the hospital failed to show the use of an Intense Pulsed Light as well as lasers in the hospital and this will be amended on the certificate of registration. Key statistics Number of beds

39

Operating theatres

2

MRI scanners PET scanners CT scanners

0.0 0.0 0.0

Year of opening Last inspection Tenure

1980 29-Sep-04 Freehold

Goring HallHospital D escription G oring HallHospitalis a private establishm ent,registered as an acute hospitalunderPartTw o of the Care Standards Act2000.The hospitaldelivers a w ide variety ofprivate healthcare services including health screening,diagnostic treatm ents,and physiotherapy,and generalsurgery. G oring HallHospitalis situated to the w estofthe tow n ofW orthing.There is parking available to the frontofthe building.Access to the m ain frontentrance is via a series ofsteps,alternative level access is provided.

Address: Bodiam Avenue W orthing W estSussex BN12 5AT

The service is partofthe BM Igroup ofhospitals.The person responsible forthe day-to-day m anagem entofthe establishm entis M rT W alkerw ho is registered w ith the Healthcare Com m ission as m anager.The responsible individualon behalfofthe com pany is M rIan Thom pson. Key statistics Num berofbeds O perating theatres

52 3

M RIscanners PET scanners CT scanners

1.0 0.0 0.0

Year ofopening Lastinspection Tenure

1994 10-Nov-04 Freehold

8

3.

GHG property information

The Paddocks Hospital Description The Paddocks Hospital is part of the nationwide BMI Healthcare group of hospitals. It has 30 beds, which are divided, between two wards. The hospital also has facility for two high dependency beds. The hospital also offers consulting rooms, radiology, physiotherapy and pharmacy services. The responsible person for the hospital is Mr K. McGuckin. An application by Mr A Robertson for registered manager is in the process of being submitted. Address: Aylesbury Road Princes Risborough Buckinghamshire HP17 0JS

A wide range of surgical specialities are offered at the hospital, which works in partnership with its sister hospital, the nearby Chiltern Hospital. Many of the services offered at the hospital, including the roles of specialist staff are shared with the Chiltern Hospital and this is reflected in some parts of this report. Key statistics Number of beds Operating theatres

30 1

MRI scanners PET scanners CT scanners

1.0 0.0 1.0

Year of opening Last inspection Tenure

1985 23-Jun-04 Freehold

The Princess MargaretHospital D escription The Princess M argaretHospitalis an 80-bedded hospital,w hich is partofBM IHealthcare.The hospitalis situated w ithin one m ile ofthe centre ofW indsor.

Address: 42 O sbourne Road W indsor Berkshire SL4 3SJ

O ver200 consultants use the facilities atthe hospitalw hich includes three operating theatres,an outpatients departm ent,an endoscopy unitand an oncology unit.ResidentM edicalO fficers (RM O )provide 24 hourcover.The hospitalhas a tw o-bedded High Dependency Unit.Patients are cared forin single room s w ith en-suite facilities,TV and telephone.The hospitalalso has a diagnostic im aging departm ent,a pharm acy,a pathology departm entand a physiotherapy unit. The hospitalalso provides a travelclinic. Key statistics Num berofbeds O perating theatres

80 3

M RIscanners PET scanners CT scanners

1.0 0.0 1.0

Year ofopening Lastinspection Tenure

1980 10-Nov-04 Freehold

9

3.

GHG property information

The Runnymede Hospital Description The Runnymede Hospital opened in February 1992 and was constructed as a purpose-built acute care general hospital. The hospital has 52 inpatient beds, 2 high dependency rooms, 3 operating theatres, a recovery suite and sterile services department. The consulting suite consists of 7 outpatient rooms, 2 treatment rooms, physiotherapy and imaging departments. Address: Guildford Road Ottershaw Chertsey KT16 0RQ

The Runnymede Hospital is physically linked by a short corridor to St. Peter’s Hospital and arrangements have been made for a number of services to work in partnership with Ashford and St. Peter’s Hospitals NHS Trust. Key statistics Number of beds

52

Operating theatres

3

MRI scanners PET scanners CT scanners

0.5 0.0 0.5

Year of opening Last inspection Tenure

1992 11-May-05 Long Leasehold

The Shelburne Hospital D escription The Shelburne Hospitalis partofthe nationw ide BM IHealthcare G roup and w orks in close liaison w ith Buckingham shire Hospitals NHS Trust. The building itselfis approxim ately fouryears old and is linked to the W ycom be G eneralHospital. Itoffers acute care and caters fora variety ofclinicalspecialities.The hospitalis registered for31 inpatients and currently offers services only to those patients aged over16 years.Physiotherapy and radiology are also available on site. Key statistics Address: Q ueen Alexandra Road High W ycom be Buckingham shire HP11 2TR

Num berofbeds O perating theatres

31 3

M RIscanners PET scanners CT scanners

0.5 0.0 0.5

Year ofopening Last inspection Tenure

2000 12-M ay-04 Long Leasehold

10

3.

GHG property information

McIndoe Surgical Centre Description The McIndoe Surgical Centre is a private establishment, registered as an acute hospital under Part Two of the Care Standards Act 2000. The hospital delivers a wide variety of private healthcare services including aesthetic plastic, reconstruction and scar revision surgery, maxillo facial surgery, ear, nose and throat surgery, ophthalmology, gynaecology, urology and general surgery. Specific clinics run in orthodontics, vasectomy, treatment for sleep disorders and female incontinence. Other treatments include laser, physiotherapy and occupational therapy.

Address: Holtye Road East Grinstead West Sussex RH19 3EB

The McIndoe Surgical Centre is situated to the east of East Grinstead town centre in the grounds of the Queen Victoria Hospital NHS Trust. There is limited designated parking to the side of the building. The main entrance to the front of the building has level access. Since the last inspection the hospital has entered into a management agreement with BMI, a large corporate provider. Key statistics Number of beds Operating theatres

21 2

MRI scanners PET scanners CT scanners

0.0 0.0 0.0

Year of opening Last inspection Tenure

1999 10-Jan-05 na (managed only)

Mount Alvernia Hospital D escription M ountAlvernia Hospitalis located w ithin w alking distance ofcentralG uildford.Parking is lim ited on site.How everstreetparking is also available around the hospitalatpay and display bays. The hospitalis registered for90 beds,offering acute m edical,including chem otherapy,general surgicalcare and palliative care forpatients.The hospitalis also registered to undertake prescribed techniques using Class 3b and Class 4 lasers.The hospitalhas three operating theatres and full supportservices,including pharm acy,pathology,radiology and physiotherapy.There is also a large outpatientunit. Address: Harvey Road G uildford Surrey G U1 3LX

Key statistics Num berofbeds O perating theatres

76 5

M RIscanners PET scanners CT scanners

0.0 0.0 0.0

Year ofopening Lastinspection Tenure

1935 20-Jan-05 Freehold

11

3.

GHG property information

The Somerfield Hospital Description The Somerfield Hospital is comprised of a group of converted buildings situated close to the London Road near the centre of Maidstone. There is good road access and on site parking is available. A bus route runs close by. The Hospital provides a range of services on an outpatient, in patient or day care basis covering a variety of tests and surgical procedures. The provision of PET (Positron Emission Tomography) scanning from a mobile unit was commenced in November 2003. Patient accommodation is provided in single and double rooms, some of which have en suite facilities. There are over 155 members of staff who have qualifications relevant to their positions. In addition, there are consultants who have been granted ‘practicing privileges’ to carry out procedures at the hospital.

Address: 63 - 77 London Road Maidstone Kent ME16 0DU

According to the ‘Patient’s Guide’, The Somerfield Hospital aims to provide quality and value in the provision of facilities for advanced surgical procedures together with safe and friendly professional care. Key statistics Number of beds Operating theatres

48 2

MRI scanners PET scanners CT scanners

1.0 0.0 0.0

Year of opening Last inspection Tenure

1989 28-May-04 Freehold

The Alexandra HospitalCheadle D escription The BM IAlexandra Hospitalis located nearto Cheadle village centre,Stockportand is close to m otorw ay links.The establishm entis purpose builtand offers 170 in-patientbeds spread over2 floors.

Address: M illLane Cheadle Cheshire SK8 2PX

The Hospitaloffers a fullrange ofm edicaland surgicaltreatm ents and has an active out-patients unitand separate consulting suites.There is on-site Pharm acy,Pathology and Diagnostic Im aging. Treatm entby laseris available and used forthe purposes ofO phthalm ology,Colposcopy and G eneralSurgery.M edicaltreatm ents include O ncology,Respiratory M edicine and Rheum atology. Paediatric services are available forchildren aged overone yearand are supported by registered sick children s nurses.Surgicalspecialities include interalia,cardio-thoracic surgery,ENT,general surgery,gynaecology,neurology,oral/m axillo-facialsurgery,orthopaedic surgery and vascular surgery.There is a suite of seven operating theatres.Sterile services are provided by an off-site facility thatcom plies w ith the latestNHS guidance fordecontam ination.The intensive care unitis located adjacentto theatres and provides care atlevel3.The Hospitalem ploys nursing and allied health professionals w ith the appropriate qualifications and experience to supportthe m edicaland surgicaltreatm ents offered. Key statistics Number of beds O perating theatres

7

170

M RIscanners PET scanners CT scanners

1.0 0.5 1.0

Year ofopening Lastinspection Tenure

1981 17-Jan-05 Freehold (partLeasehold)

12

3.

GHG property information

The Manchester Lifestyle Hospital Description BMI the Alexandra Hospital Victoria Park is an acute hospital facility providing 25 inpatient beds and outpatient services. The hospital is part of a corporate provider of acute services that has establishments throughout the country. CARE assisted conception services has a facility within the hospital and this is going through the process for registration with the NCSC.

Address: 108–112 Daisy Bank Road Victoria Park Manchester M14 5QH

The hospital provides accommodation in 20 single en suite rooms, the other 5 places being provided in shared accommodation. The hospital provides acute surgical and medical care, carrying out patient choice initiatives for the NHS and privately funded care. There is a theatre suite that comprises of 2 theatres and anaesthetics rooms and a recovery area. There are no critical care or high dependency beds at the hospital The hospital is a converted extended detached premises that is situated close to the centre of Manchester within easy walking distance of local bus services. Parking is provided for visitors within the grounds. Key statistics Number of beds Operating theatres

25 3

MRI scanners PET scanners CT scanners

0.0 0.0 0.0

Year of opening Last inspection Tenure

2005 26-Jan-03 Freehold

The Beardwood Hospital D escription

Address: Preston New Road Blackburn Lancanshire BB2 7AE

Beardw ood Hospitalis situated w ithin easy reach of Blackburn Tow n Centre on the m ain Preston to Blackburn road.Registered to provide m edicaland surgicalcare to adults and m inor/day surgery to children overthe age ofthree years,Beardw ood Hospitalis part ofthe BM IHealthcare group,w hich ow ns,oroperates 48 acute surgicalhospitals throughoutthe UK.Beardw ood Hospitalhas been in existence for30 years and has been developed overthe years to provide the services ofan acute hospital.The hospitalnow provides 31 single bedroom s,each w ith en suite facilities,tw o m ajor,and one m inor,operating theatres and a physiotherapy and radiology departm ent.The hospitalalso provides surgicalservices forchildren overthe age ofthree years.Beardw ood Hospitalprovides Consultants w ith a num berofprivate consulting room s w ithin its new ly refurbished and fully equipped outpatients departm ent.Beardw ood Hospitalis situated w ithin easy reach ofBlackburn Tow n Centre on the m ain Preston to Blackburn Road. Registered to provide m edicaland surgicalcare to adults and m inor/day surgery to children overthe age ofthree years,Beardw ood Hospitalhas been in existence for30years and has been developed overthe years to provide the services ofan acute hospital.The hospitalnow provides 31 single bedroom s,each w ith en suite facilities,tw o m ajor,and one m inor,operating theatres and a physiotherapy and radiology departm ent.The hospitalalso provides surgicalservices forchildren overthe age ofthree years.Beardw ood Hospitalprovides Consultants w ith a num berofprivate consulting room s w ithin its new ly refurbished and fully equipped outpatients departm ent. Key statistics Num berofbeds

31

O perating theatres

3

M RIscanners PET scanners CT scanners

0.0 0.0 1.0

Year ofopening Lastinspection Tenure

1959 26-Nov-04 Freehold

13

3.

GHG property information

The Beaumont Hospital Description The Beaumont Hospital is part of the BMI group of hospitals. It is situated within the Lostock district of Bolton, close to Bolton golf course and Lostock railway station. Accommodation is provided within a converted Edwardian House with a large purpose built extension attached. The consulting rooms, outpatient’s and offices operate from the house, with the main clinical activity of the hospital delivered from within the extension. Car parking is provided for patients and staff. Address: Old Hall Clough Lostock, Bolton Lancashire BL6 4LA

The hospital undertakes a range of surgical procedures, and also offers physiotherapy, health screening, radiology (imaging), and pathology. The hospital has its own on-site pharmacy service. Resident medical officers are available within the hospital over the 24- hour period. The hospital employs suitably qualified practitioners to deliver care. This includes medical, nursing and those from allied professions. Key statistics Number of beds Operating theatres

34 3

MRI scanners PET scanners CT scanners

1.0 0.0 0.0

Year of opening Last inspection Tenure

1983 24-Sep-04 Long Leasehold

Chatsworth Suite D escription The Chatsw orth Suite opened in June 1990 and is located in the grounds ofthe Chesterfield and North Derbyshire RoyalHospital. Itprovides predom inately pre and postoperative care foradults w ithin the in patientunit,follow ed by outpatientcare foradults,w ith paediatric consultation being the sm allestclientgroup .The adjoining NHS Trustperform s surgery,radiology and pathology services,w hich is notsubjectto regulation and inspection underthe Care Standards Act2002. The Chatsw orth Suite is operated by BM IHealthcare,w hich ow ns oroperates 46 acute surgical hospitals across the UK and has been in existence forover30 years. Address: Top Road Calow Chesterfield S44 5BL

Key statistics Num berofbeds

16

O perating theatres

1

M RIscanners PET scanners CT scanners

0.5 0.0 0.5

Year ofopening Lastinspection Tenure

1990 23-Jun-04 Leasehold

14

3.

GHG property information

The Highfield Hospital Description The Hospital offers a range of clinical specialties and includes ENT surgery, general surgery and ophthalmic surgery using laser. The Hospital has it’s own High Dependency Unit supported by Qualified Nursing staff, and a Resident Medical Officer. The Hospital also offers a range of diagnostic imaging, including MRI and mammography. Physiotherapy and health screening are also available. Pharmacy services are provided on site, whilst pathology services are contracted out to a local NHS Trust. Costs for treatment are covered by health insurance or by individually negotiated packages of care. Address: Manchester Road Rochdale Lancashire OL11 4LZ

Key statistics Number of beds Operating theatres

57 3

MRI scanners PET scanners CT scanners

1.0 0.0 1.0

Year of opening Last inspection Tenure

1969 10-Nov-04 Freehold

The South Cheshire Private Hospital D escription South Cheshire Private Hospitalis housed in a purpose builtsingle storey building.The Hospitalis located in the grounds ofLeighton Hospital,an NHS establishm ent,and is a partnership hospital w ith the M id Cheshire HospitalNHS Trust(M CHT).

Address: M iddlew ich Road Leighton Crew e CW 1 4Q P

South Cheshire Private Hospitalhas contractualarrangem ents w ith the M CHT forthe provision of severalservices thatare detailed in the body ofthis report.The South Cheshire Private Hospitalhas access to Leighton Hospitalvia a controlled entrance link corridor.There is a designated entrance and carparking to the frontofSouth Cheshire Private Hospitalin the grounds ofLeighton Hospital,w hich are sign posted. Allbedroom s have private w ashing and toiletfacilities,telephone,television and piped oxygen and suction.There is a nurse callsystem in allin patientbedroom s and areas.There is an assisted bath and assisted show eravailable forpatientuse.The establishm enthas a day room available for patientuse and there is a sm allpatio area w ith seating offthis room .The establishm entdoes not adm itchildren underthe age of3 years. Key statistics Num berofbeds O perating theatres

32 2

M RIscanners PET scanners CT scanners

0.5 0.0 0.5

Year ofopening Lastinspection Tenure

1989 15-Jan-04 Long Leasehold

15

3.

GHG property information

Thornbury Hospital Description BMI Thornbury Hospital is situated in the Fulwood area of Sheffield, approximately three miles to the west of the city centre and is accessible for all major routes and the motorway network. It is registered for 77 beds, of which 73 are single en-suite accommodation and there are 2 double Critical Care Unit rooms. The hospital is set back from a main road in its own grounds and carparking facilities are available. It has recently undergone a major refurbishment programme. The hospital offers an extensive range of inpatient and outpatient services including a wide range of surgical procedures and diagnostic tests. A purpose built MRI and CT Scanning Unit, situated adjacent to the main hospital building opened on 15 September 2003. Address: 312 Fulwood Road Fulwood Sheffield S10 3BR

Key statistics Number of beds

77

Operating theatres

4

MRI scanners PET scanners CT scanners

1.0 1.0 1.0

Year of opening Last inspection Tenure

1991 20-Jul-04 Freehold

The Droitwich Spa Hospital D escription The Droitw ich Spa BM IHospitalis a m odern,purpose built,private hospitalsituated in the centre ofDroitw ich tow n. The hospitalhas 46 in-patientbeds;three operating theatres,a high dependency unitand an endoscopy suite.O therdepartm ents situated atthe hospitalinclude im aging,pathology, outpatients,physiotherapy,and pharm acy.There is a qualified m edicalpractitioneron site atall tim es.The hospitalundertakes general,gynaecological,orthopaedic and ear,nose and throat surgicalprocedures.O thernon-invasive services are available atthe hospitalsite these include health screening,a fitness centre,a naturalbrine pooland a facility forphysicalrehabilitation. Address: StAndrew s Road Droitw ich W orcestershire W R9 8EA

Carparking facilities are available.Services are notprovided forchildren underthe age of three years. Key statistics Num berofbeds O perating theatres

46 3

M RIscanners PET scanners CT scanners

1.0 0.0 0.0

Year ofopening Lastinspection Tenure

1985 25-Aug-04 Long Leasehold

16

3.

GHG property information

The Foscote Hospital Description The hospital provides an inpatient service for people over the age of sixteen. The hospital has sixteen single patient rooms with en-suite facilities. The patient rooms are on two floors and are accessible by a lift. The main access to the hospital is via a ramp enabling access for everyone. There is a small amount of parking out the front of the hospital. Additional parking is available in the residential area adjacent to the hospital. The hospital offers a range of surgical procedures, diagnostic imaging, endoscopy and physiotherapy to private patients who are self-paying or insured. The facilities available include an operating theatre with lamina airflow and two out patient consulting rooms. The hospital is managed by BMI Healthcare on behalf of Foscote Court (Banbury) Trust Ltd. Address: 2 Foscote Rise Banbury Oxfordshire OX16 9XP

Key statistics Number of beds Operating theatres

16 1

MRI scanners PET scanners CT scanners

0.0 0.0 0.0

Year of opening Last inspection Tenure

1981 09-Jun-04 na (managed only)

The Manor Hospital D escription The M anorHospitalis a partofthe BM IHealthcare group,w hich ow ns oroperates 46 acute surgicalhospitals across the UK. The M anorHospitalis situated on the village ofBiddenham ,justoutside Bedford Tow n.The M anor Hospitalhas 23 single room s and tw o double room s forinpatientcare.There is one operating theatre,a m inoroperations theatre,outpatients departm entw ith five consulting room s,im aging departm entw ith X-ray,ultrasound and m am m ography and the supportofpharm acy and physiotherapy.The hospitaloffers a w ide range ofm edicalsurgicalspecialistconsultantservices. Key statistics

Address: Church End Bedford Bedfordshire M K40 4AW

Num berofbeds O perating theatres

25 1

M RIscanners PET scanners CT scanners

0.0 0.0 0.0

Year ofopening Lastinspection Tenure

1982 16-Oct-04 Freehold

17

3.

GHG property information

Walsgrave Hospital (Coventry) Description The nine-bedded unit provides surgical services to fee-paying patients using NHS facilities and staff within the Walsgrave NHS Trust Hospital. Key statistics

Address: Clifford Bridge Road Walsgrave Coventry CV2 2DX

Number of beds Operating theatres

48 7

MRI scanners PET scanners CT scanners

0.5 0.0 0.5

Year of opening Last inspection Tenure

1989 05-Feb-04 Long Leasehold

The Nuneaton Private Hospital D escription The Nuneaton Private Hospitalis a 24-bed facility thatcurrently provides a range ofsurgical procedures,including cosm etic,orthopaedic,urology and ophthalm ic surgery foradultpatients and predom inantly ENT surgery forchildren overthe age ofthree years.Treatm ents are provided forpatients attending as an inpatient,day patientoroutpatient.A physiotherapy and radiology departm ents provide treatm entand investigations forinpatientand outpatients.Pathology and pharm acy services are contracted through the G eorge Elliot,and W alsgrave NHS Hospitals Trusts. Som e additionalspecialistsupportservices are provided by the localNHS trusts. Key statistics Address: 132 Coventry Road Nuneaton W arw ickshire CV10 7AD

Num berofbeds O perating theatres

24 2

M RIscanners PET scanners CT scanners

0.0 0.0 0.0

Year ofopening Lastinspection Tenure

1988 02-Aug-04 Freehold

18

3.

GHG property information

The Park Hospital Description The Park Hospital is situated on the outskirts of Nottingham, adjacent to a country park.

Address: Sherwood Lodge Drive Nottingham Nottinghamshire NG5 8RX

It is registered for 92 beds and offers medical and surgical treatment to adults and children over the age of 3 years. The Hospital has a day case unit, outpatient consulting rooms, endoscopy department and physiotherapy service. Hospital facilities include an intensive care unit, theatre with decontamination unit, pathology and radiology departments. There is a wide range of surgical specialities offered including general surgery, orthopaedics, gynaecology, neuro-surgery, cosmetic and cardiac surgery. In patient care is provided in single ensuite rooms, and patients have access to a comprehensive selection of meals from the hospitals catering department, which will also cater for special diets. The Hospital has accreditation with the Health Quality Standard as well as Clinical Pathology Accreditation. The Hospital has been awarded the National British Safety Council and Investors in People Awards. Key statistics Number of beds Operating theatres

92 5

MRI scanners PET scanners CT scanners

1.0 0.0 1.0

Year of opening Last inspection Tenure

1983 24-Aug-04 Freehold

The Priory Hospital D escription The Priory Hospitalis ow ned and operated by G eneralHealthcare G roup. The Priory Hospitalcom prises of120 beds,including 6 intensive care beds.Ithas 5 m ain operating theatres,a pharm acy,pathology laboratory,physiotherapy and outpatientdepartm ent.The Priory Hospitalprovides a range ofinvestigative,diagnostic,m edicaland surgicaltreatm ents forpatients attending as outpatients,day case orin-patients.In vitro fertilisation services are also provided at the Hospital.Paediatric services are provided to children from the age ofthree years. The Priory Hospitalare now providing the facilities fora dialysis service operated by the local NHS Trust. Address: Priory Road Edgbaston Birm ingham B5 7UG

Key statistics Number of beds

120

O perating theatres

6

M RIscanners PET scanners CT scanners

1.0 1.0 1.0

Year ofopening Lastinspection Tenure

1982 09-M ar-05 Freehold (partLeasehold)

19

3.

GHG property information

The Sandringham Hospital Description This hospital is situated on the outskirts of Kings Lynn, adjacent to the Queen Elizabeth NHS Trust Hospital. It is located at the side of the Queen Elizabeth Hospital with car parking to the front of the building. It has 35-registered inpatient beds and is arranged on two levels with an outpatient department. Young persons between the age of 13 and 16 are treated for routine surgical procedures. Other services provided include two operating theatres, fertility services, radiology, physiotherapy and chemotherapy. A number of services are contracted from the local NHS Trust, including estates and maintenance. Key statistics Address: Gayton Road Kings Lynn Norfolk PE30 4HJ

Number of beds Operating theatres

35 2

MRI scanners PET scanners CT scanners

0.5 0.0 0.5

Year of opening Last inspection Tenure

1990 28-Jan-04 Long Leasehold

The Saxon Clinic D escription The Saxon Clinic is partofthe nationw ide BM IHealthcare group and offers acute surgicaland m edicalservices forinpatients,day patients and outpatients.The hospitalhas 40 beds w ith patients able to access diagnostic and treatm entservices,w hich include im aging,pathology and physiotherapy. Key statistics Address: Chadw ick Drive Eaglestone W est M ilton Keynes M K6 5LR

Num berofbeds O perating theatres

40 2

M RIscanners PET scanners CT scanners

1.0 0.0 1.0

Year ofopening Lastinspection Tenure

1986 23-Apr-04 Freehold

20

3.

GHG property information

Three Shires Hospital Description Three Shires Hospital is managed by BMI Healthcare. The Acute Hospital is situated within a quiet part of the town of Northampton, near to a main route.

Address: 67 The Avenue Cliftonville Northampton NN1 5DR

The hospital is registered for a total of 54 beds, and both day case and longer stay patients are admitted. Single rooms with en suite facilities are provided, and there is a 4-bedded unit for postoperative high dependency care patients. In addition to en suite facilities, rooms are equipped with nurse call system, telephone, and satellite TV. There are three operating theatres and plans to expand these facilities. In addition there are out patient and X ray departments. The nearby NHS Trust provides some services under contract. Consultants with practicing privileges (covering a wide range of specialties), Registered Nurses, and Registered Physiotherapists deliver clinical care. Twenty-four hour Resident Medical Officer cover is provided by a medical agency. The hospital has achieved HQS (Health Quality Service) accreditation, and is recognized as a BUPA Approved Breast Care Unit and as a BUPA Bowel Centre. The hospital is currently undergoing upgrade and expansion. Key statistics Number of beds Operating theatres

54 3

MRI scanners PET scanners CT scanners

0.0 0.0 0.0

Year of opening Last inspection Tenure

1982 15-Aug-05 na (joint venture)

Bath Clinic D escription Bath Clinic is operated by BM IHealthcare. The Hospitalis currently registered to provide 75 inpatientbeds although som e ofthese room s have been converted forotherpurposes.There are three operating theatres,pathology services, physiotherapy,diagnostic im aging and an outpatientconsulting suite.The hospitalprovides generalsurgicalprocedures,m edicalinterventions,chem otherapy,paediatric services and endoscopy. A new M RIscannerhas been recently installed. Key statistics Address: Claverton Dow n Road Com be Dow n Bath BA2 7BR

Num berofbeds O perating theatres

75 3

M RIscanners PET scanners CT scanners

1.0 0.0 1.0

Year ofopening Lastinspection Tenure

1982 23-Feb-04 Freehold

21

3.

GHG property information

The Hampshire Clinic Description The Hampshire Clinic is part of the BMI group of hospitals and it is registered for 65 beds. It is based on the outskirts of Basingstoke and within easy reach of the M3 motorway. It provides level 2 critical care facilities, hydrotherapy and a wide range of medical and surgical treatments for adults and children over three years of age. All patient rooms are single occupancy with en suite facilities. Outpatient facilities are provided on the ground floor with inpatient facilities including theatres located on the first floor. A passenger lift is in place enabling patients to access all areas without the negotiation of steps. Address: Basing Road Basingstoke Harts RG24 7AL

In the Outpatient Department, although the waiting area is communal, patients are seen in single consulting rooms. Patients admitted to the inpatient unit are allocated single rooms with en suite facilities. En suite facilities include either a shower or bath. Should patients require critical care facilities this may be provided in a three-bedded bay or a single room with curtain screening provided to facilitate privacy when necessary. Key statistics Number of beds Operating theatres

65 4

MRI scanners PET scanners CT scanners

0.0 0.0 0.0

Year of opening Last inspection Tenure

1984 03-Aug-05 Freehold

The Harbour Hospital D escription The HarbourHospitalis operated by BM IHealthcare and is currently registered for40 inpatient beds.O ne ofthe bedroom s has been designated forChem otherapy.The Hospitalhas tw o operating theatres,a physiotherapy departm ent,and diagnostic im aging facility.The hospital provides a range ofservices,w hich include;generalsurgicalprocedures,m edicalinterventions, chem otherapy,paediatric services,health screening and endoscopy.The Hospitalcontracts w ith the localNHS Trustforthe provision ofotherservices. Key statistics

Address: StM arys Road Poole DorsetBH15 2BH

Num berofbeds O perating theatres

40 3

M RIscanners PET scanners CT scanners

1.0 0.0 0.0

Year ofopening Lastinspection Tenure

1996 27-Jan-04 Freehold

22

3.

GHG property information

The Ridgeway Hospital Description The Ridgeway Hospital is part of the BMI Group of Hospitals. The Hospital offers general surgery, outpatient paediatric care, outpatients, diagnostics and physiotherapy including a sports injury clinic. The Hospital also provides facilities for an open MRI scanner.

Key statistics

Address: Moormead Road Wroughton Swindon SN4 9DD

Number of beds Operating theatres

50 2

MRI scanners PET scanners CT scanners

1.0 0.0 0.0

Year of opening Last inspection Tenure

1984 19-Jul-04 Freehold

Sarum Road Private Hospital D escription Sarum Road Hospitalis an independenthospitalregistered for48 beds.The hospitalis located on the outskirts ofW inchester.The hospitalcom prises ofan old house converted and extensively extended overm any years and now consists of48 in patientbeds,2 operating theatres,outpatient departm ent,physiotherapy departm ent,radiology departm ent.The range ofservices include; orthopaedic surgery,gynaecology,Neurology,Urology,ENT,O ral,O phthalm ic,Plastic,Brest, Colorectaland G eneralSurgery,G eneralm edicine,G astroenterology,ChestM edicine, Endocrinology,Derm atology,Cardiology,Health Screening,Pharm acy etc.The hospitalcan provide care and treatm entto children betw een the ages of3 years 18 years and are adm itted as inpatients fora variety ofsurgicalprocedures. Address: Sarum Road W inchester Ham pshire SO 22 5HA

Since the lastinspection the hospitalhas com pleted a m ajorrefurbishm entprojectthathas resulted in an increase ofinpatientbed and alterations to the size ofseveraldepartm ents and relocation ofotherareas.Allinpatientroom s have being fitted w ith upgraded en-suite facilities. Follow ing the lastinspection a new Executive Directorhad been appointed and an application to registerthe m anagerhad been received.The inspectors took the opportunity to carry outthe fit person registration interview during the course ofthe inspection. Key statistics Num berofbeds O perating theatres

48 2

M RIscanners PET scanners CT scanners

0.0 0.0 0.0

Year ofopening Last inspection Tenure

1975 27-M ay-04 Freehold

23

3.

GHG property information

The Winterbourne Hospital Description The Winterbourne Hospital opened in 1982 and is part of BMI Healthcare. The Hospital is located on the southern outskirts of Dorchester. The Hospital offers outpatient and inpatient medical and surgical care, radiology, health screening, physiotherapy, pharmacy, pathology and fertility services. There is adequate parking at the front of the Hospital.

Address: Herringston Road Dorchester Dorset DT1 2DR

The plans to increase the facilities available with the provision of new theatres, increased outpatient facilities and relocation of office accommodation have been implemented with phase one nearing completion. Key statistics Number of beds Operating theatres

38 2

MRI scanners PET scanners CT scanners

0.0 0.0 0.0

Year of opening Last inspection Tenure

1982 21-Jun-04 Long Leasehold

Werndale Hospital Description Werndale Hospital is part of BMI Healthcare. Our commitment is to quality and value, providing facilities for advanced surgical procedures together with friendly, professional care. Werndale Hospital has 28 beds with all rooms offering the privacy and comfort of en-suite facilities, satellite TV and telephone. The hospital has one theatre, a day care unit and an intensive care unit.

Address: Bancyfelin Carmarthenshire SA33 5NE

These facilities combined with the latest in technology and on-site support services, enable our consultants to undertake a wide range of procedures from routine investigations to complex surgery. This specialist expertise is supported by caring and professional medical staff, with dedicated nursing teams and Resident Medical Officers on duty 24 hours a day, providing care within a friendly and comfortable environment.

Key statistics Number of beds Operating theatres

28 1

MRI scanners PET scanners CT scanners

1.0 0.0 0.0

Year of opening Last inspection Tenure

1990 n/a Freehold

24

3.

GHG property information

Albyn Hospital Description Albyn Hospital is part of BMI Healthcare. Located in the west end of Aberdeen, Albyn Hospital is the only independent hospital serving Grampian and the North of Scotland. A wide range of consultant specialists practise at Albyn Hospital, supported by an experienced team of professionals including duty doctors resident in the hospital to provide 24 hour medical cover. Clinical Support services available on site include Laboratory, Imaging, Pharmacy, Physiotherapy and Audiology.

Address: 21-24 Albyn Place Aberdeen AB10 1RW

The Hospital also provides Health Services including Counselling, Private GP Service, and Travel Health.

Key statistics Number of beds Operating theatres

44 2

MRI scanners PET scanners CT scanners

0.0 0.0 0.0

Year of opening Last inspection Tenure

n/a n/a Feudal

Fernbrae Hospital Description Fernbrae Hospital is located in the west end of Dundee, in one of the city’s conservation areas. A partially listed building, it has an enviable view over the River Tay and the banks of north-east Fife. Serving the people of Tayside, Angus, Perthshire and Fife, the hospital is easily accessible and parking is available at the front and rear of the building. The building has been a private nursing home / hospital for over 75 years and is now part of BMI Healthcare, a leading provider of private acute healthcare in the UK with nearly 50 hospitals nationwide. Address: 329 Perth Road Dundee DD2 1LJ

A wide range of surgical procedures are carried out from routine investigations to complex surgery including major joint replacements. Over 100 consultants have admission rights and they receive support from a team of resident medical officers.

Key statistics Number of beds Operating theatres

26 1

MRI scanners PET scanners CT scanners

0.0 0.0 0.0

Year of opening Last inspection Tenure

1992 n/a Feudal

25

3.

GHG property information

Ross Hall Hospital Description Ross Hall Hospital is part of BMI Healthcare. Our commitment is to quality and value, providing facilities for advanced surgical procedures together with friendly, professional care. Ross Hall Hospital has 101 beds with all rooms offering the privacy and comfort of en-suite facilities, satellite TV and telephone. The hospital has four theatres, one minor procedures theatre, five bed intensive care unit and a high dependency unit. These facilities combined with the latest in technology and on-site support services, enable our consultants to undertake a wide range of procedures from routine investigations to complex surgery. This specialist expertise is supported by caring and professional medical staff, with dedicated nursing teams and Resident Medical Officers on duty 24 hours a day, providing care within a friendly and comfortable environment.

Key statistics Address: 221 Crookston Road Glasgow G52 3NQ

Number of beds Operating theatres

101 4

MRI scanners PET scanners CT scanners

1.0 0.0 1.0

Year of opening Last inspection Tenure

1983 n/a Feudal

26

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