I am pleased to report a fourth successive year of outstanding performance by Spire Healthcare. Our already excellent clinical metrics continue to improve. Patient and consultant satisfaction levels reached new heights. And our dedicated staff reported record levels of engagement. Despite a challenging economic environment, this outstanding clinical performance was reflected in our financial figures. Revenues increased 4.8% to £674.0 million, EBITDAR was up 10.8% from £169.8 million to £188.2 million and, thanks to improving efficiency and utilisation, our EBITDAR margin also rose by 1.5 percentage points to 27.9%.
"Visiting our hospitals I see highly motivated teams delivering outstanding patient care – an impression borne out by the levels of satisfaction in our services expressed by both patients and consultants.”
Spire Healthcare Chairman
Spire is a well run business. These outcomes have been achieved through the skill, dedication and hard work of our management team and staff and reflect the benefit of our long-term major investment programme. During the year we invested a further £44.0 million on a mixture of upgrading existing facilities and new developments.
The NHS is the bedrock of healthcare provision in the UK: it represents some 94% of the market and, rightly, plays a critical role in the provision of healthcare. By comparison, private healthcare forms a small part of the sector, but we believe the long-term private healthcare market is growing, driven by the macro forces of a growing and ageing population, higher consumer expectations, an increasing demand for quality healthcare and the needs of employers to maintain healthy, productive workforces. During the past year there has been much discussion of the Health and Social Care Bill: there still is. As the bill has passed into law, reforms are being implemented in the NHS. The future of healthcare in the UK must address issues of capacity, affordability, quality and choice.
Providing care for NHS patients accounts for nearly 20% of our business revenue. The future of private healthcare in the UK must include ever closer co-operation with the NHS, utilising spare capacity to address demand bottlenecks and provide services that the NHS is not able to provide. Whilst privately funded care will always remain at the core of our proposition, we believe that there are great opportunities to assist the NHS in more areas for the most efficient private healthcare providers.
Competition Commission review
In April 2012 the Office of Fair Trading (OFT) decided to refer the market for private healthcare to the Competition Commission for a market investigation over concerns about certain features of the market including barriers to market entry and information on prices and the quality of services for patients. We are already committed to the provision of comprehensive and comparable clinical information through our participation in the Hellenic Project – a collaboration between independent hospital groups. We believe that we offer good value for money. Our hospitals compete, either with other independent providers or with NHS hospitals that offer private treatment.
As we invest in new hospitals we add to competition in that area. And we maintain open and transparent relationships with consultants and referrers based on the quality and value of our services.
Cosmetic surgery hit the headlines during 2011 as a result of the PIP breast implant scandal. Spire ceased using these implants in 2010 in accordance with the MHRA’s advice.
We have contacted women who received PIP implants at a Spire hospital to offer them a free consultation and, if they choose, free removal and replacement. We have gone further than many other providers to ensure that every patient is given the support they need. At Spire, the patient’s best interests are always paramount. We offer both cosmetic and reconstructive surgery services, and will continue to do so as we believe it is an area of increasing patient demand. We are aligned with the Safer Cosmetic Surgery group of leading cosmetic consultants who are dedicated to raising standards within the industry. Our business Spire Healthcare is a national brand of local hospitals. We continue to invest substantially in developing our range of services, so we can effectively meet patient and consultant demands at our local hospitals, clinics and nationwide.
We are focused on developing acute and chronic services. Giving GPs and consultants the confidence to refer and treat their acute patients and undertake complex procedures in our facilities is not just a matter of investing in state-of-the-art facilities, it is directly linked to establishing trust in the skills of our staff.
As I have visited our hospitals this year I have been particularly struck by the sense of pride, engagement and ownership I see in all our staff, from receptionists to theatre staff, ward nurses to housekeepers. We empower our hospitals to establish direct relationships with local consultants and GPs, working with them and the NHS to deliver the best healthcare for our communities.
By bed numbers, Spire is the second largest private hospital group in the UK. Our aim is not to be the largest, but to be the best. My sense is that we are.
The past year has seen considerable change and uncertainty within the UK healthcare system. The future will be every bit as challenging. Demand for the best healthcare is almost limitless, while the ability for the marketplace as a whole to satisfy that demand is severely constrained by pressures on the public purse. An enormous opportunity lies within this gap. I believe the combination of these fundamentals, the excellence of our operations, the clarity of our vision, and the quality of our management and staff mean that we are ideally positioned to deliver quality healthcare to more patients.
Chairman, May 2012