Huge rise in market share for 'big three' private operators

The latest edition of the Fitzhugh Directory of Independent Healthcare and Long-Term Care says the revenue increase - from 49.8 per cent of the market in 1997, to 59.4 per cent last year - is evidence that General Healthcare, BUPA and Nuffield Hospitals have established 'almost national chains'.

NHS paybeds and private patient units accounted for 17.5 per cent of the total market, down 0.1 per cent on the previous year.

William Fitzhugh, director of Health Care Information Systems, comments that it was the 'first time in a number of years' the NHS has failed to increase its market share.

Reasons could include the 'lack of a clearly defined government policy towards the NHS private patient revenues, lack of any new units coming on stream or efforts by some medical insurers to de-list or limit activity in the NHS units'.

'Whatever the reasons, perhaps it is time the NHS really got to grips with deciding what it wants to do about private patient revenues. Or perhaps this issue is too sensitive, requires decisions to be made and. . . will not be discussed in polite society in the hope it will go away, ' Mr Fitzhugh says.

The directory shows that profits continue to decline in the private medical insurance industry. Overall profits for five organisations surveyed fell from a high point of£166.4m in 1995 to£67.8m last year. In the same period, BUPA's profits fell from£99.2m to£51.9m.

Mr Fitzhugh said the shrinking role of private medical insurance is reflected by a continuing increase in the self-pay market, perhaps because 'more people are finding out that the cost of visiting a private hospital is relatively not as outrageous as they thought'.

But the long-term care sector has been hit hard by dependence on local authority funding, which is 'falling behind payroll cost increases'.

The Fitzhugh Directory: independent healthcare and long-term care: financial information 1999 - 2000. HSIS. 0181-995 1752.£240.