• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
Presentation of Health Care Markets in UK
 

Presentation of Health Care Markets in UK

on

  • 519 views

Mr. Mike Parish, Chief Executive, Care UK

Mr. Mike Parish, Chief Executive, Care UK

Statistics

Views

Total Views
519
Views on SlideShare
518
Embed Views
1

Actions

Likes
0
Downloads
18
Comments
0

1 Embed 1

http://www.slideshare.net 1

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Presentation of Health Care Markets in UK Presentation of Health Care Markets in UK Presentation Transcript

    • Mike Parish Chief Executive SITRA Finnish Study Trip
    • Care UK Group Health and social care with a public services focus General Health Care Residential Care Services Learning Disabilities  Focused on high quality care in most appropriate Community Care Services ISTCs care setting Mental Health  Social Care − care for people with complex needs in residential and community settings − 3,500+ care home beds for older people − 1,000+ specialist care places − 123,000 hours/week domiciliary care  Health Care − primary care, diagnostics and surgery for NHS patients − 7 specialist hospitals − 40+ primary care locations 2
    • Financial Performance Revenues (Actuals) EBITDA (Actuals) 450 £437 80 £409 400 70 4% 350 22. £342 181 £61 R: £58 159 60 CA G .3 % 300 9 £276 104 : 25 £52 Y0 50 GR -F A 9C (£ in Millions) 01 (£ in Millions) 250 60 FY Y0 £40 40 -F £199 01 200 £169 18 FY £32 14 30 £141 150 £24 £115 5 250 256 £19 £98 238 216 20 100 £81 181 £13 156 £10 £11 136 50 115 10 81 98 0 0 (1) (1) FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 LTM FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 LTM Social Care Health Care Note: (1) LTM as of Mar-31-2010; Not re-stated for IFRIC 12 yet. IFRIC 12 adjustments, which are entirely non-cash, are currently being finalised and will be provided in the OM. 3
    • Key Market Attributes Attractive Market Dynamics Care UK Demographic ageing leader Market Increasing Leading provider of outsourced demand Increasing consumer awareness Health services Improving treatment techniques Diversified model Largest private provider operating in funded market Sizeable well- 3rd largest EU Health economy both Social and Health Care segments Provision of publicly funded Health services key policy for all political parties service quality Leading ratings on service quality and High patient satisfaction metrics Outsourcing UK well behind EU comparisons trend Increasing recognition of quality and cost effectiveness of outsourcing High proportion of long-term platform Robust contract underpinning Diverse portfolio of freehold real estate assets Changing care requirements Ageing demographics ownership Increasing demand for dementia- Strategic Established management team focused Residential Care beds Acquired by management and Bridgepoint Increasing demand for Home Care Long term strategic commitment Notes: (1) Homes valued represent 35% of FY09 EBITDA. 4
    • UK Health Market Highlights  UK Health market is the 3rd largest in Europe  About 87% of total Health spending is publicly funded (general taxation) – highest proportion among top five EU Health markets  Rise in public expectations and growing consumer power Health Care Social Care  Large publicly funded market (£100bn)(1), commissioned  Largely publicly funded market (£40bn)(5), commissioned through a devolved structure of 152 Primary Care Trusts(2) through a devolved structure of 350 Local Authorities(2)  Outsourcing to private providers began in 2000s, but <3%  80% outsourced to private providers(2) of market currently(3); potential for significant growth  Ageing demographic-driven demand  Demographic trends and improved technology / − Number of 85+ year olds expected to increase by 30% treatments driving demand in the next 10 years(6)  Public policy to provide universal Health services that are  Means-tested, retreat of public sector from funding and generally free of cost at the point of need provision  Unprecedented increase in public funding over the last decade, but not supported by increased productivity(4) − Funding coming under intense pressures  Need for efficiency will drive outsourcing  Choice for elective surgery now embedded in legislation Sources: (1) HM Treasury, Laing & Buisson (2) Department of Health (3) LEK Consulting (4) King’s Fund (5) Laing & Buisson (6) Management estimates. 5
    • Public sector / general taxation funding  UK is the 3rd largest Health market in Europe 2010E Total Health Spending − UK Health spending has caught up in recent (£ per capita) 5,014 years but still below other major economies such as France, Germany and US 3,192  Public sector accounts for 87% of total Health 2,775 expenditure in the UK 2,338 2,071 1,994 − Higher than the European average and nearly double the weighting of US public sector 530  While funding is expected to come under pressure, demographics will continue to drive growth in demand UK France Germany Italy Spain CEE USA  Rise in public expectations and trend towards greater Note: Focus on the top five Health markets in Europe. Converted at an exchange rate of GBP 1.00 = USD 1.53. consumer choice Source: Economist Intelligence Unit. 2010E Health Spending 2006 Public Spending (% of GDP) (% of Total Health Spending) 16.0% 87.3% 79.7% 77.2% 76.9% 75.6% 71.2% 11.6% 10.3% 10.6% 9.7% 9.0% 45.8% 6.7% UK France Germany Spain Italy CEE USA UK France Italy Germany Spain Europe USA Note: Focus on the top five Health markets in Europe. Note: Focus on the top five Health markets in Europe. Source: Economist Intelligence Unit. Source: World Health Organisation. 6
    • Healthcare also mainly delivered by public sector  High proportion of Social Care outsourced to private providers but limited historic private sector participation in Health Care, although now increasing rapidly Health Care Social Care 100%= £140bn Dentistry Primary Care Acute Medical / Surgical Elderly + PD(1) Domiciliary MH + LD(1) £6bn £33bn £64bn £13bn £11bn £13bn 100% 0.2% 90% 3.0% 80% 3.1% Public / 3rd Sector 5.5% Supply 70% 60% 40.4% 50% 3.9% Independent 23.2% GPs 40% 6.3% 4.7% 30% Private Supply 20% 4.0% 10% 5.1% 0.5% 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Note: (1) Elderly + PD, elderly and physically disabled care homes; MH + LD, mental health and learning disability hospitals and care homes. Source: Laing & Buisson. 7
    • Spending Is Outstripping Productivity  Government expenditure on the UK NHS has grown at 8% CAGR in nominal terms under Labour(1), boosting UK's total Health Care spending as a percentage of GDP by nearly three percentage points(2), to 10%  Real demand for NHS services expected to continue growing at 3% annually(3), driven by: − Demographic trends: aging population coupled with increasing life expectancy  Greater dependency on Health services during old age − Improvements in clinical outcomes, technology, patient safety and quality standards − Greater speed of access to hospital and Primary Care services (vastly improved over the last decade)  Despite the vast increase in resources, NHS productivity has declined with higher pay costs absorbing more than half of the increase in financial resources since 1997(4) Sources: (1) HM Treasury (2) King’s Fund. (3) Senior NHS Executive, as quoted by LEK Consulting. (4) King’s Fund. Government Expenditure on UK NHS Change in Quality-adjusted Productivity Net Expenditure UK NHS (£bn) 80 R: 8% 60 CAG 122 110 % Change 40 90 20 66 0 49 43 (20) 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Productivity Volume of Input Volume of Output 1996/97 1999/00 2002/03 2005/2006 2008/2009 2010/11 Note: Inputs refers to resources required to provide care (staff, medicines, supplies). Outputs refers to the volume of activities that the NHS carries out. Note: 2008/09 estimated, 2010/11 planned. Productivity refers to the ratio between inputs and outputs. Source: HM Treasury. Source: King’s Fund. 8
    • Starting to see provider plurality  In the 1980s and 1990s, the public / private mix in Social Care looked similar to where Health Care is today  Current market dynamics indicate that Health Care will see a similar shift, trend already evident − UK well behind EU comparators on use of outsourcing (UK <3% vs. 20% in France and Germany) − Assuming 20% outsourcing, UK Health Care market opportunity would be £20bn Health Care Social Care (% of Outsourcing) Residential Care (Number of Beds / % of Independent Sector Beds) 8.0% 600,000 7.0% 6.7% 450,000 96% Level of Outsourcing (% of Total) 300,000 94% 6.0% 91% 88% 84% 77% 150,000 61% 5.0% 0 1990 1995 2000 2005 2010F 2015F 2019F 4.0% 2.4% Independent sector Public sector 3.0% % of outsourcing 2005 2010 2015 are 2.0% hC 2.0% ealt Learning Disabilities 80% 85% 88% ry H 1.5% 0.8% nda Care Seco ealth ary H Home Care 1.0% 0.5% Prim 77% 83% 88% 0.0% Mental Health 20% 30% 37% 2005 2010 2015 Source: LEK Consulting. Source: LEK Consulting, Laing & Buisson. 9
    • Shifting care and demand management – better, cheaper 10
    • Where to next? The Lansley years…..  Funding − Committed to funding through general taxation without direct payment − Guaranteed real terms spending increases − Cut NHS administration cost by a third  Structure − Establish independent NHS board − Create “Independent Reconfiguration Panel” − Introduce Market Economic Regulator  Choice and plurality − Patient choice of registered GP and of any approved NHS provider − Strengthen GP role as expert guide and commissioner − Improve patent information on quality ratings − Greater involvement of independent an voluntary providers  Shifting care − Improved hospital discharge / reduced stays, community based services − 24/7 Urgent Care Centres in all areas − Support for elderly people to stay at home 11
    • 12