Spire Healthcare has seen private medical insurance (PMI) revenue grow 15.6% year-on-year as it returned to profit amid increased demand for its services.
According to interim results for the first half of this year, the private hospital group saw PMI revenue reach £306.6m, while it also eliminated losses, returning a £12.7m profit after tax over the period compared to a £600,000 loss in H1 2022.
It also announced it is planning up to 10 new clinics around the country.
PMI revenue up
A key driver of the return to profit was continued growth in revenue.
Group revenue was up 13.1% on the same period of last year – to £675.5m from £597.9m which Spire said was driven by strong demand for its services, with overall activity increasing in the period compared to prior year, with admissions up by 7.4% to 141,347.
The group attributed PMI revenue growth to an increase in referrals and the reported marked growth of the insurance market, which has continued into H2 2023.
Volumes of PMI patients, including admissions and outpatient procedures, were up 12.5% on H1 2022.
Self pay revenue also grew 2.5% to £178.4m with volumes maintained at levels significantly higher than pre-Covid levels. The group added that in line with its strategy to increase the acuity of its services, some high volume but lower value work has been substituted for higher complexity, high value work.
NHS revenue also increased 17.1% to £170.5m in the first six months of this year compared to last year amid increasing referrals through the group’s electronic referral system.
Lower Covid costs
But the group added its performance in the first half of this year also benefitted from significantly lower costs connected to Covid than it saw particularly in the first four months of the corresponding period of last year.
And while spiralling inflation and staff challenges beset the UK healthcare sector over recent months, the group reported it has been able to resource its current growth efficiently, and grow profits, despite cost input inflation, through pricing, revenue growth and savings programmes.
The period also saw investment in new clinics and the ongoing integration of The Doctors Clinic Group (DCG) – a provider of occupational health and GP services acquired towards the end of last year – has been performing in line with management’s expectations.
New clinics and advertising campaign
Looking ahead, the group revealed it is targeting 10 new medical clinics to meet the growing healthcare needs in communities and remains on target to open the first of these clinics at Abergele, North Wales, during the second half of the year. It is planning to open a second clinic at Harrogate before the end of 2023.
This month has also seen the group develop a new advertising campaign focusing on patients’ desire to get back to their lives by having their health conditions diagnosed and treated – “the sooner you’re better, the better”.
Elaborating on performance in the second half of this year, Spire said the period has started in line with expectations, with the group continuing to deliver operational and financial progress in line with its plans, with sustained growth in revenue, and earnings before interest and tax (EBIT) margin.
Strategy is working
Justin Ash, CEO of Spire Healthcare, said: “Our strategy is working, as this strong set of results demonstrates, with top-line momentum and strong profit growth.
“Our investments in a high quality service, partnerships with PMI providers and the NHS, and a compelling self-pay proposition, meant we treated a record number of patients in the first half of this year.
“Our efficiency programmes are on track, and we continue to manage mix to focus on treatment areas most appropriate for our acute hospital environment. This is enhancing our margin.
“In line with our strategy to develop adjacent services, we acquired The Doctors Clinic Group last year and the business is performing well. Demand for easily accessible private GP services continues to soar and our occupational health services are a key platform for employers seeking to retain staff and support their health needs.”
Ash added UK healthcare is entering an era of renewed choice as demand for healthcare diagnosis and treatment remains strong.
“By continuing to invest in innovative services, expanded facilities, technology, and our brilliant workforce, Spire is ideally positioned to meet this demand,” he concluded.