The continuing challenge of UK healthcare reform means a rapidly changing sector. Rising public expectations combined with a growing and ageing population adds pressure to healthcare services. whilst reacting to changing legislation and reduced government funding presents care homes, dentists and GP’s with enormous challenges. Increasingly, healthcare professionals need to react quickly by understanding where their business is now, how changes will affect them and how to move to safer strategic ground.
Healthcare Sector: Key challenges
This is a volatile sector where operators face strong potential demand for services. There will be 15.7m over 65 year olds by 2031 (a 50% increase in 20 years) and high uncertainty about the impact this will have. Fundamental challenges are outside the operators’ control and uncertainty about policy at a national and local level, hampers business planning. This volatility can be seen in successful operators having to adapt and focus on operating profitably, whilst at the same time, high profile businesses in the sector have collapsed.
Dentist practices seem to be facing the “perfect storm”: an increased regulatory burden, serious human resources issues, and their biggest customer – the NHS – set to make further budget cutbacks. Competition between practices is rising, both for good staff and NHS contracts. Scarcer contracts are resulting in multi-practice consolidation, funded by business investors who are bringing commercial acumen to the table.
The profession is straddled between traditional care for a community and needing to balance business risk and reward. Demand is increasing, with 24% more NHS consultations since 1998 and the average person seeing a GP twice as often as a decade ago (linked in the main to an aging UK population). Ability to meet that demand, profitably, is problematic, as GP’s and nurses reach retirement age and are not replaced in sufficient quantities. Also, at the same time, the cost of running a practice has increased. Practices have seen their income eroded since the high point in 2005/6, whilst their tax liabilities and pension costs have risen.
Healthcare sector advice
We advise doctor, dentist, GP, and pharmacy practices, as well as care homes and a number of sector-dependent clients. We work closely to find solutions to industry issues, utilising our expertise in everything from business strategy and corporate finance, to audit and tax advice. In particular, we can help you to:
- Set-up/start your first business or acquire an existing business
- Benchmark business performance
- Mitigate risk with alternative business structures
- Provide detailed tax mitigation advice for you and your business
- Produce management information to help monitor and improve business performance
- Advise on how to maintain or increase probability, reduce business risk and ultimately increase capital value.