Spire Healthcare has 39 hospitals and over 50 clinics and medical centres across England, Wales and Scotland. It operates a network of private GPs and provides occupational health services to over 800 corporate clients. In 2023 it was the leading private provider, by volume, of knee and hip operations in the UK. It also delivers a range of private and NHS mental health, musculoskeletal and dermatological services.
The company was founded in 2007 and is a public company with shares traded in the UK. The company's revenue is from personal medical insurance (PMI) patients, NHS patients and self-paying patients. The company is benefitting from the massive NHS waiting lists and is listed on the NHS England framework contract for purchasing additional activity from the independent sector. The company is expanding in GP services, chronic disease management, and occupational health services. In 2022 and 2023 the company made a number of acquisitions, most recently in October 2023, Vita Health Group.
Last updated: April 2024
Strategy
Spire was formed through the buy-out of 25 BUPA hospitals in 2007 by the UK private equity firm Cinven. The hospitals were rebranded as Spire Healthcare and a further 11 hospitals were added in 2008. The company has continued to grow and diversify via acquisitions of companies, and now has 39 hospitals and over 50 clinics, plus a GP service, mental health, and occupational health services.
The hospital business remains central to Spire Healthcare, but the company management is investing in new services that are designed to attract new patients and meet more of their healthcare needs. In its annual results 2023 report, Spire Healthcare's management states that it “wants to take a more proactive role in its patients’ care before and after a stay in hospital. More than that, the Company wants to be with people throughout their whole healthcare journey.”
To this end, Spire has acquired several companies. The most recent was Vita Health Group in October 2023, which has contracts with 16 NHS integrated care boards and more than 200 corporate clients. Vita Health provides services in mental health and wellbeing, which extends Shire’s business.
Spire Healthcare acquired Vita Health Group for £74 million from Archimed, a private equity fund. Vita Health began business as RehabWorks in 1987 as a provider of physical and mental health programmes in the UK. In 2015, the French investment company, Archimed, bought Rehabworks and Workplace Wellness, bringing them together as Vita Health Group. In 2017, Archimed added Crystal Palace Physio Group, a specialist physiotherapy service provider with a series of physiotherapy clinics in London, to the Vita Health Group.
The company had both a corporate business, providing wellbeing and physiotherapy services to businesses, and a number of contracts with NHS organisations, providing mental health services, particularly counselling services, and dermatology.
In December 2022, Spire acquired The Doctors Clinic Group (DCG), a private GP service and occupational health companies, Soma Health and Maitland Medical. Spire has restructured into two units - Spire Occupational Health (Soma Health and Maitland Health) and London Doctors Clinic (LDC).
In 2023, Spire focused the LDC business in London and South East England, and closed four LDC clinics in Manchester and Birmingham. The company has since opened five new clinics in its target areas in London of Bank, Chiswick, Fulham, Hampstead and Islington. Spire expects the company to be profitable in 2024.
Together, Spire’s original GP business and LDC now constitute a large, nationwide private GP network with 18 rapid access LDC clinics in Greater London and Spire GPs in most of its hospitals, which together deliver around 8,000 GP appointments each month.
Spire is currently opening new clinics across the UK, with 10 planned. The first of the clinics was opened at Abergele, North Wales in January 2024. Some of the clinics will follow an ‘outreach’ model, opening close to existing hospitals and enabling the Group to move some of its outpatient functions and minor treatments away from its hospitals. Other clinics are planned in areas where Spire does not currently have a presence.
Spire Healthcare's revenue is derived from three major sectors: personal medical insurance (PMI); the NHS; and self-paying customers. In 2020 and 2021, Spire's revenue was highly dependent on the NHS as the Covid-19 pandemic closed its hospitals to PMI and self-paying patients for several months. As the pandemic eased, Spire experienced a massive increase in self-pay patients driven by the growing NHS waiting list, which stood at over 7 million by early 2023. In 2023, revenue from self-pay increased due to increased prices but self-pay admissions and outpatients procedures reduced by 6.3% versus 2022 and the overall SP market declined.
In the company's first half 2023 results, the company's management noted that Spire plans to move towards becoming an integrated healthcare provider, with services in primary care, diagnosis, occupational health and long-term condition management.
Spire's private GP service, which began in 2017, grew by 46% in 2022, cashing in on people's difficulties in getting an NHS GP appointment. The company saw increased demand for its private GP services during H1 23, with the number of GP appointments up by 41% and revenue by 45% like for like in H1 23 compared to the prior year period across DCG and Spire Hospital GP services.
The company continues to expect a major growth opportunity in those patients who self-pay, however it also plans on continuing to be a 'partner' for the NHS. The company is listed on NHS England's framework for additional capacity (see Contracts).
Spire opened new hospitals in Manchester (costing £67m), Bushey (£23m) and Nottingham (£60m) in early 2017, as well as five additional operating theatres at existing facilities over the previous two years.
In early 2021 Ramsay Healthcare launched a bid to acquire Spire Healthcare. However, several of Spire's leading shareholders opposed the takeover, including Fidelity International and Toscafund Asset Management, and in June 2021 urged other investors to reject Ramsay's offer of 240p per share, which valued the company at around £1 bn. The opposition forced Ramsay to increase its offer to 250p per share and £1.2 bn. The reason for the opposition to the original offer notes Toscafund was that "operating conditions in the private healthcare market [in the UK] are set to be strong for some years to come." Toscafund continued to oppose the increased offer for the same reasons - it undervalued the company. However, the board of Spire unanimously recommended it to shareholders and many supported it.
The merger was rejected by shareholders in late July 2021.
Financials
Spire Healthcare was floated on the stock exchange in July 2014 valued at £850 million.
For 2023, Spire Healthcare reported revenue of £1,359 million, up from £1,198.5 million in 2022. The company made a profit of £27.9 million, up from £8.2 million in 2022. Revenue growth was 8.3%, driven by increased private treatment; private revenue was up by 14.5%
Spire has expanded its GP services through the acquisition of The Doctor’s Clinic Group in December 2022, as well as entering the fast-growing occupational health sector, with the acquisition of Maitland Medical and Soma Health as part of the same transaction. In October 2023, Spire acquired Vita Health Group from Archimed, a French private equity firm, for £74 million.
Spire's NHS work saw strong growth in 2023, and in the period ahead, the company expects there to be increased commissioning.
In 2023, private admissions grew by 3.6% compared to prior year to £959.7 million. PMI revenue grew by 14.3% compared to 2022 to £615.7m. Volume of PMI patients, including admissions and outpatient procedures, was up 10.1% compared to 2022. Self-pay revenue was up year-on-year by 1.8% to £344.0 million, however self-pay admissions and OP procedures reduced by 6.3% versus 2022. The overall self-pay market declined, according to Spire's management.
Spire received NHS work via the Government's Elective Recovery Taskforce and associated framework contracts. NHS revenue grew in 2023 by 15.5% to £341.1 million compared to 2022,. The company increased referrals through the electronic referral system (eRS). Overall NHS volumes, including admissions and outpatient procedures, were up 6.1% on 2022 with admissions up 9.4%. Orthopaedic volumes were up 14% and now comprise around 58% of all Spire NHS referrals.
The private proportion of total revenue during 2023 was 70.6% (FY22: 73.1%), 72.3% of hospital revenue (FY22: 73.2%).
The average revenue per case (ARPC) rose by 6.3% to £3,381. Compared to FY22, PMI ARPC was up 5.1% to £2,896, self-pay up 10.1% to
£4,356 and NHS up 8.4% to £3,392.
At the end of H1 22, the Group announced that it has signed a new four-year agreement with Bupa, to provide services to its UK health insurance customers through to March 2026. Since the year end, similar contract renewals have been signed with Aviva and Vitality, both over three years.
In 2022, Spire moved back to engagement with NHS GPs and local commissioners to maximise referrals via the electronic referral system (eRS).
In October 2017, Mediclinic International, a South African company, put in an offer to acquire Spire International for £1.3 billion in cash and shares. This offer was rejected by Spire in November 2017.
In May 2021, Ramsay Healthcare, an Australian company, put in an offer to acquire Spire for £1 billion. Opposition from leading shareholders, however, led to the failure of this takeover bid by July 2021. The shareholders said the two offers, the second an increase on the first offer, undervalued the company.
Contracts
Elective care contracts
NHS patients are sent to Spire hospitals via the e-referral system. The company is listed on the framework for outsourcing care listed by NHS Shared Business Services.
Vita Health Group contracts
Vita Health Group was highly active in tendering for NHS contracts in the areas of mental health, physiotherapy, and dermatology.
Mental Health
Vita Health Group provides IAPT (Improving Access to Psychological Therapy) talking therapy services under NHS contracts in eight areas in England. The company is often known as VitaMinds in this area of work.
VitaMinds were awarded this contract at the start of 2023 and it began in April 2023. The company took over from Nottinghamshire Healthcare NHS Foundation Trust, which took the decision not to re-tender for the contract in 2022. VitaMinds provides the Let's Talk Wellbeing service, which primarily supports adults in the city and south of the county with anxiety disorders and depression.
Basildon, Brentwood, Billericay & Wickford
Vita Health won this contract in April 2019 for delivery of IAPT services in this area.
Bristol, North Somerset & South Gloucestershire
Vita Health won this 10 year contract in May 2019 and it began September 2019. The contract is for the provision of IAPT services and was valued at £77.6 million. At the time of the contract award campaigners expressed concerns over the ownership structure of the company.
This contract to provide IAPT services began in May 2020. It was due to end April 2021, but was ongoing in April 2024.
Leicester, Leicestershire & Rutland
This contract to provide IAPT services began in April 2021 and is due to end March 2026. The contract is worth £59.7 million.
This five year contract to provide IAPT services worth £24.1 million began in August 2022 and will end in July 2027.
West Essex: Harlow, Uttlesford & Epping Forest
This contract to provide IAPT services began in August 2021 and will end in July 2028. The contract is worth £21.9 million.
This contract for the provision of IAPT services began in April 2020 and was due to end in March 2022, however this appears to be still going (April 2024).
The contract was shared with Concern Group, Derbyshire Healthcare NHS Foundation Trust, and Trent Psychological Therapy Services Ltd.
This contract is to provide adult psychological services in the Kent and Medway area. The contract started in April 2020 and was due to end March 2021, but contract still seems to be ongoing (April 2024).
This contract is shared with North Kent Mind, Addaction, Faversham Counselling Service, Concern Group.
Physical Health
Vita Health Group has contracts with the NHS across the UK to provide physiotherapy and MSK services. The company has contracts for services in the following areas:
Dermatology
Vita Health Group has contracts with the NHS to provide community dermatology services in Southport, Formby & South Sefton, Calderdale, and Coventry & Warwickshire.
Previous Contracts
Covid-19 contracts
In March 2020, Spire was part of the deal with the government for using all its premises and staff for NHS patients during the Covid-19 pandemic. NHS England block-booked almost the entirety of the private hospital sector’s services, facilities and nearly 20,000 clinical staff for the foreseeable future to help cope with the surge of covid-19 patients. The agreement only covered England and added around 8,000 hospital beds, nearly 1,200 more ventilators, more than 10,000 nurses, 700 doctors and 8,000 other clinical staff. This deal, which means the NHS is paying all operating costs for the hospitals, has been a lifeline for the company, as the lockdown meant that no private work was possible.
In June 2020, a £5 billion deal to extend the March deal to help the NHS clear the backlog of work was agreed by NHS England and the private hospital companies, however this was blocked by the Treasury. The Treasury did not believe the deal represented good value for money and that the evidence was not substantial. The block-contract basis of contracts with private providers continued, however, as NHS England prepared a new four-year framework contract for increasing capacity. In December 2020, the leading private providers, including Spire, were reported to be in advanced talks with NHS England over a new three-month outsourcing contract, which aims to provide a ‘smooth transition’ to the four year framework contract, which began at the end of March 2021. Spire was reported to be signed up to the NHS Increasing Capacity Framework contract by June 2021, which is valued at £10 bn over four years.
In October 2020, the HSJ reported that Spire was the recipient of the second largest contract for staff and capacity from NHS England, according to a series of contract award notices, however the time period of 2020 this covered is unclear. The contract with Spire amounted to £345.9 million.
These block contracts have been criticised after leaks revealed that the capacity paid for by NHS England at companies such as Spire and Circle/BMI was very under-utilised. HSJ reported that two-thirds of the private sector capacity that was block-purchased by the NHS at a cost of an estimated £400 million a month went unused by the NHS over the summer, despite long waits for operations.
In January 2022, Spire Healthcare became one of ten independent providers which signed a contract to provide extra capacity for the NHS under a three-month deal if Omicron leads to unsustainable levels of hospitalisations or staff absences. The deal, agreed by Sajid Javid, the health secretary, will mean the providers are paid to be on standby, with the NHS ordered to pay the private hospitals up to £270m, even though they may not treat any NHS patients in return. Leaked letters showed that Amanda Pritchard, head of NHS England, raised grave doubts over the contract, which instructed the NHS to pay private hospitals £75m to £90m a month from NHS England funds for the next three months. The deal could mean the NHS has to pay independent hospitals up to £525m if they did end up treating any NHS patients.
The agreement also includes Practice Plus Group, Nuffield Health, Circle Health Group, Ramsay Health Care UK, Healthcare Management Trust, One Healthcare, Horder Healthcare, Aspen Healthcare and KIMS Hospital.
Concerns
Enforcement actions and Violation Tracker
Using the website Violation Tracker, a UK wide database of enforcement actions brought against companies by government regulators in England, Scotland, Wales and Northern Ireland, as of January 2023, Spire Healthcare has 3 enforcement actions from 2016-2022. The database is readily accessible and can be searched by the public for up to date information on enforcement actions.
Care Quality
In May 2018, a CQC report found that two in five private hospitals are failing to meet safety standards. The private hospital sector was warned by Jeremy Hunt, the then Health Secretary, to put its house in order if it wished to partner with the NHS. Of major concern is that some private hospitals currently avoid liability by saying a clinician is not an employee if something goes wrong. In addition, a clearer process is needed for managing a patient if their health deteriorates in private care and they have to be transferred to the NHS in an emergency.
The breast surgeon Ian Paterson, convicted in 2017 of of multiple charges of wounding with intent due to his botched operations, worked within several Spire hospitals. In 2017, Spire settled all current and known claims against the company relating to his practice at Spire. Spire paid £28.7 million in relation to this settlement, plus related costs, of which £26.1 million has been paid.
The report of the Independent Inquiry which was set up following the conviction and imprisonment of Ian Paterson, was published in February 2020. Spire Healthcare was criticised for not doing enough to follow up Paterson's patients. As a result of this criticism, in December 2020, Spire began a recall of 5,500 patients. Earlier in 2020, senior coroners in Birmingham launched new inquests into 23 of Paterson’s deceased patients at the request of West Midlands Police.
In the company's 2019 annual report, it noted that five of its hospitals are now rated ‘Outstanding’, up from three in 2017, and 85% are rated ‘Good’ or ‘Outstanding’ by the CQC or regional equivalents.
In February 2011 MP Ian Duncan Smith called for an inquiry into the death of a patient with bowel cancer at Spire’s Roding Hospital in Essex in 2009. The patient died of a heart attack and questions have been raised over the hospital’s resuscitation procedure. Furthermore, the patient’s death was recorded as carcinoma of the colon rather than heart attack, and it was only due to information from a nurse who had worked at the hospital that the true nature of the patient’s death came to light.
Financial Stability
Over the years the financial stability of Spire Healthcare has been questioned. The company has massive debts and as it leases several of its properties, it is subject to rent increases and disputes. In 2023, the company's debts were £315.7 million, up from £250.1 million in 2022. However, this is considerably lower than the £1.3 billion worth of debt in 2013.
Price-fixing
In mid-2020, the Competition and Markets Authority (CMA) fined Spire Healthcare and six ophthalmologists a total of over £1.2m for illegal price fixing at the Regency Hospital in Macclesfield. Spire Healthcare Ltd and Spire Healthcare Group plc were fined £1.2m while the six consultants received fines of between £642 and £3,859after admitting they had agreed to fix self-pay fees for initial consultations at £200 over a two-year period.
