Hospitals in the UK Industry Market Research Report Now Updated by IBISWorld

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Through the National Health Service (NHS), the government is responsible for administrating the lion's share of hospitals nationwide and as a result, the size of the government grants that finance the NHS has a dramatic impact on total revenue in the Hospitals industry. Growth in health-care expenditure is forecast to continue into the future as the population both ages and expands, but the rate of that expenditure growth has been limited in recent years as the government wrestles to bring down national debt in the midst of economic downturn.

IBISWorld industry market research
Government budget cuts limit growth although demand is rising

Moderate growth is the dominant trend in the UK Hospitals industry. Revenue is expected to rise at a compound annual rate of 1.7% over the five years through 2013-14, and reach £68.5 billion in the current year. This growth has been stimulated by booming demand for the industry's services from an ageing, expanding population. Public expenditure on health care has necessarily risen to satisfy demand.

Through the National Health Service (NHS), the government is responsible for administrating the lion's share of hospitals nationwide. As a result, the size of the government grants that finance the NHS has a dramatic impact on total industry revenue. According to IBISWorld industry analyst Robert Scotton, “growth in health-care expenditure, which is forecast to continue into the future, is therefore promising for the Hospitals industry but the rate of that expenditure growth has been limited in recent years as the government wrestles to bring down national debt in the midst of economic downturn.” Westminster has also sought to pass some of its health-care burden on to the private sector as an inundated NHS struggles to cope with unprecedented demand.

In April 2013, the government implemented unprecedented reform of the NHS. Part of that reorganisation opened lucrative public contracts to general tender, giving private hospitals the opportunity to secure their revenue base. This provides welcome relief for private ventures, which have struggled since the economic downturn induced greater household frugality and made free public health care even more attractive. Scotton adds, “The government hopes that greater private sector involvement will inspire more industry competition, prompting efficiency measures and lower costs in NHS hospitals.” Sustained demand and cost-cutting measures are likely to bring private operators rising margins.

However, recent reforms and limits to NHS budget growth have injected sufficient uncertainty into the Hospitals industry to induce an anticipated 1.1% real-terms fall in industry revenue during 2013-14. The contraction is expected to be short-lived, though; industry revenue is forecast to return to moderate growth over the five years through 2018-19. However, industry expansion could be threatened by rising labour costs and potential government plans to reduce the NHS budget.

The Hospitals industry is considered to exhibit high concentration, with the largest four operators accounting for a combined market share of over 95%. IBISWorld includes all NHS Hospital Trusts under the National Health Service banner as one player, as they are publicly funded and represent the United Kingdom's public health-care system. The private hospital segment in the United Kingdom is relatively small, accounting for approximately 5.0% of total hospital activity. The top five private operators account for about 80% of all beds in the private sector between them.

For more information on the Hospitals industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.

IBISWorld industry Report Key Topics

Industry players provide medical, diagnostic and treatment services at both general and specialised hospitals. General hospitals include civilian and military hospitals, not-for-profit operations and university and prison hospitals. Specialised hospitals include mental health and substance abuse hospitals, hospitals for infectious diseases, maternity hospitals and sanatoriums. Medical nursing homes and ambulance transport services are not part of this industry.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalisation & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on many UK industries. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in London, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.co.uk or call (020) 3008 6568.

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Gavin Smith
IBISWorld
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