HCA results confirm wobble in central London hospital market

Continued decline in inpatient numbers dented revenue across HCA’s central London hospital business in 2017.

HCA International, which comprises the Harley Street Clinic, the Portland Hospital, Princess Grace, the Wellington and HCA UK at The Shard, plus a handful of joint ventures with doctors and the NHS, reported a 0.8% drop in turnover to £470.5m for the year ended 31 December 2017.

The US-owned company said the fall was due to a 1.2% decrease in patient days to 96,042. Although lower than the 12% drop reported by HCA International in 2016, the figures confirm that declining inpatient admissions remain a trend across central London’s established private hospitals. Both Bupa’s Cromwell Hospital and the London Clinic have reported reduced revenue this year on the back of falling inpatient admissions, largely due to continued decline in international patient numbers.

HCA International’s figures were mitigated to some extent by a 12.5% increase in outpatient numbers to 276,515. It also managed to rein in costs, reporting an increase in administrative expenses of just 1.5% to £481.5m. The result, however, was that operating losses more than doubled to £10.9m.

A drop in investment income from £27.9m to £19.1m added to HCA’s woes and, together with a £6m provision for impairment recorded against investments, pushed pre-tax profit down a whopping 74% to £7.6m.

It was a similar story at HCA’s other central London business St Martins Healthcare. Turnover was down 14% to £183.3m for the business which operates the London Bridge, The Lister Hospital, Devonshire Street and a number of outpatient centres across London. Despite a 5.6% increase in outpatient visits to 131,244, revenue was impacted by a sharp decline in admissions from 7,740 to 6,414.

Operating expenses reduced from £181.3m to £160.2m, but the overall result was a 40% drop in operating profit to £23m.

Taken together, aggregate revenue for HCA’s two central London hospital businesses – the assets of its Harley Street Cancer Clinic transferred to HCA International at the end of 2016 – fell 6% to £653.8m.

Including non-London hospital businesses, clinics and primary care businesses, HCA reported total UK revenues of c£851m in 2017 based on Federal Reserve Government average exchange rates.