The hotpot of an ageing population, extreme funding pressures, the onset of GP commissioning and the migration of care out of hospitals is creating huge opportunities for the private sector in the provision of healthcare services, concludes a new report by corporate finance advisors Catalyst.

Increasing private provision of primary and secondary National Health Services, particularly with the roll out of Clinical Commissionin Groups and alternatives to traditionally expensive hospital care, is carving out a market worth a potential £20 billion to the sector, experts forecast in the report.

It claims that "landmark contracts" awarded to private groups Circle, Virgin Care and Serco illustrate the increasing recognition from the public side of the fence that using the private sector’s investment skills and efficient delivery models is a crucial element of slashing costs while boosting the quality of healthcare at the same time. 

According the report, the government will need to access the capital investment potential of the private sector and utilise of alternative models of healthcare delivery centred on the community and home instead of hospital-based care, and it stresses that there is an "opportunity for financial investors to invest in the earliest stages of this shift". 

"Areas such as primary care, community health services and commissioning support services are potentially worth billions of pounds," it claims.

The shift of some secondary healthcare services into the community is estimated to be worth £8-£8.5 billion in England, and experts believe that the private sector could deliver up to 20%, or around £2 billion, by 2020. 

£1.3bn of commissioning support?

The report also predicts that when CCGs take over the purse strings next year, taking on responsibility for £80 billion of NHS services in England, they will start buying commissioning support services worth an estimated £1.3 billion.

"Reforms across the NHS combined with the need for greater efficiencies represent increased opportunities for the private sector to provide more NHS funded services," said Robert Breedon, Partner at law firm Wragge & Co.

However, there is also strong opposition to the increasing involvement of private companies in healthcare delivery. 

The British Medical Association, for one, has long voiced its concerns over the commercialisation of the NHS, launching a campaign back in 2009 called 'Hands off our NHS' to highlight the short-comings of market-based reforms and warning that service providers need to work together and not compete with each other for business.

On the other hand, a report by the Office for Health Economics, published back in February, concluded that competition can help the integration of care in the NHS, and there is no evidence that it would hamper it.