Private hospitals set to mirror NHS changes Private hospitals close to deal to cut beds Private hospitals aim to remedy beds surplus

BY MARTIN WHITFIELD

Four large private hospitals in London are believed to be close to an agreement which could cut the number of beds and lead to increasing specialisation.

The deal mirrors many of the changes made by the National Health Service in London and is seen as a response to a surplus of private hospital beds in the capital.

BMI Healthcare, a subsidiary of the French company Generale des Eaux, owns three hospitals involved in the talks - the Harley Street Clinic, the Portland and the Princess Grace.

The 267-bed Wellington Hospital, the other unit included in the discussions, is owned by Columbus Health Corporation of the US.

Both companies confirmed that discussions were taking place on operating the hospitals under "joint management" but refused to reveal further details.

All four hospitals offer a full range of acute services at the upper end of the private market. Observers believe that one objective of the joint venture would be to offer specialist cardiac care, cancer treatments or obstetrics at just one or two sites.

Such changes could produce significant savings as well as allowing the hospitals to build up reputations for expertise in specific fields.

More than a dozen private hospitals in London are in fierce competition for insurance clients as well as an increasing volume of NHS work under contract.

Income from overseas patients, which initially made up a considerable proportion of the earnings of private hospitals in the capital, has been in steady decline.

William Laing, of Laing and Buisson health consultants, said the level of bed occupancy in London was below the average for Britain of 49 per cent. "The London market is the biggest and the most competitive. Its size allows for greater specialisation," he said.

Several reports suggest that occupancy rates for some hospitals in the capital could be as low as 30-35 per cent, with more competition coming from the expansion of pay beds within the NHS.

Health service managers, who have gained experience of the commercial market in negotiating competitive prices for surgery, have found profitable opportunities to exploit what many believe to be an "over-bedded" sector.