Spire cements future vision in five-year strategy

Spire Healthcare has cemented its plans, first mooted last month, for three targets to help achieve its desired status as the UK’s ‘go-to’ independent provider by 2022, with an 80% private-pay business alongside a 100% quality rating and £200m EBITDA.

The group saw a 14% increase in self-pay revenue last year and expects its double-digit growth to continue. Meanwhile, NHS business has slowed and is expected to rise by 2% over the next five years. The company is predicting a more ‘benign’ environment going forward for its PMI growth, which it forecasts will increase by 3% annually until 2022.

Underpinning Spire’s financial targets, is a detailed plan to grow its private business through a number of operational strategies across all its healthcare sites, as well as investment in service improvements to bring about maximum patient satisfaction.

These include plans to ‘digitise the patient journey’ with upgrades to its electronic booking and discharge services,  a ‘forensic’ use of data to drive ‘continuous improvement’ and a ‘rigorous’ internal inspection policy.

‘Quality will be the key to future success’, said Spire’s CEO Justin Ash, who told delegates at its 2018 Capital Markets Day event that the group is aiming for ‘robust clinical governance’ ‘that goes beyond’ the standards set by the Care Quality Commission (CQC).

The independent healthcare sector sits within an increasingly ‘rigorous’ regulatory environment and funders are ‘beginning to differentiate on quality’, he said.

As such, Spire reports ‘significant’ investment in specialist clinical job roles across its organisation to help drive quality, and wants to see 100% customer satisfaction rates across its healthcare sites, as well as Good or Outstanding CQC ratings.

Some 70% of Spire’s sites are currently rated Outstanding or Good by the CQC, but the regulator’s recent report, published in early April, said ten out of 31 Spire sites inspected require improvements.

‘Excellent clinical outcomes drive propensity to recommend and reputation .. a strong reputation for quality strengthens Spire’s position with private and public funders … and consultants enhance their own reputation by practicing at high quality facilities,’ said Ash.

Despite Spire’s 7.4% fall in EBITDA to £150m in 2017, as softening NHS demand impacted its business in the second half of last year, the group says its five-year plan is underpinned by the ‘strong market positions’ currently enjoyed by its existing sites – including St Anthony’s, Nottingham and Manchester hospitals.

Spire’s confidence in meeting its targets is also supported by the growing demand for private treatment, spurred on by the continuing hike in NHS elective surgery waiting lists.

Patients are also more ‘informed’ about their treatment options with at least 23% of the UK population willing to consider going private, said the group.

NHS business currently makes up around 30-35% of Spire’s revenues and although it intends to prioritise the private side of the business going forward, it remains confident it can respond positively to any changes in demand from NHS patients in the next five years.

From 2019, however, it plans to be ‘selective’ when it comes to NHS work.

The group will also be tightening the reins on planning new capacity in the next five years, having lost some of its ‘strategic focus’ recently due to distractions with its new build facilities.

Instead, its main focus will be implementation its 80%, 100%, £200m target across all its sites.

‘My key message is we’ve got strong positions overall and in our local markets and that’s an advantage we should and will play to going forward,’ said Ash.