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Healthcare
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2024 Outlook: Healthcare
What trends are off the charts this year?
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Staffing challenges, along with the recently announced rise in the national living wage, will continue to challenge operators, but the more certain outlook in terms of inflation and interest rates should lead to increased investment and appetite for M&A activity across the health and care sectors.
Head of Healthcare, Barclays Corporate Banking
How to tackle waiting lists?
With a general election looming, it’s no surprise the Prime Minister has focused on reducing NHS waiting lists, which currently stand at just over 7.7 million people1 Addressing waiting lists, along with other systemic challenges such as pay disputes and industrial action, are likely to take centre stage in 2024 – and it’ll be interesting to see how the new Secretary of State for Health and Social Care tackles these issues.
I expect one way will be through the NHS working more closely with the independent sector. This could be by co-ordinating more effectively with care homes to help free up hospital beds or outsourcing more elective care treatments to private hospitals with the necessary capacity and expertise. The holy grail is more integrated, holistic and long-term strategies to solve these challenges, but these are unlikely to emerge over the next year. In the meantime, however, there are surely opportunities for private operators to demonstrate how they can support the NHS and drive change.
Solving the staffing conundrum
The healthcare sector is likely to face continued staff shortages amidst increasing demand. I think we’re all aware that the pressure on existing staff, coupled with ongoing disputes about staff levels, patient safety, burnout and pay in the public sector, is only likely to further exacerbate the industry’s recruitment and retention challenges. This is a complex issue which perhaps creates opportunities for those organisations that can help drive a longer-term strategic vision.
From what our customers tell us, medium-term solutions such as using agency staff and recruiting from overseas are possibly too costly to maintain over the long run. In the case of recruiting from overseas, there are also simply too many factors beyond our control for this to be a realistic long-term strategy. The issue of health sector staffing requires innovative approaches around how the NHS and independent sector can better share resources and avoid competing for the same talent.
It’s essential that the sector receives the necessary investment to grow and meet the demand for services from an increasingly ageing population and individuals with specialist health needs.
Head of Healthcare, Barclays Corporate Banking
M&A set to gain momentum
As we head into 2024 with the promise of a more settled economic environment offering more certainty, we’re likely to see a stronger appetite for M&A across healthcare – particularly within the property-orientated care home sector. We’re seeing larger care home operators already announcing plans to dispose of non-core assets, and, with interest rates set to be higher-for-longer, some real estate investors may well be rationalising their portfolios and assessing whether their assets are offering an adequate return on investment.
This churn of healthcare real estate should create lots of opportunities, particularly for care home operators with growth ambitions. With land values, raw materials and development costs remaining high, purchasing underperforming concerns may appear more attractive than developing new care homes. Increased levels of assets changing hands can bring net benefits – provided it results in improved quality care.
Key takeaways
Collaboration is key
With the NHS under pressure to reduce waiting lists, independent providers should explore new ways in which they could work more effectively with the NHS to tackle health challenges together.
Control the controllables
Longer-term workforce solutions, such as finding ways to attract people already in the UK, are key to solving some of the sector’s challenges. Providers need to increase their focus on training, double down on retention strategies, and address pressing issues such as pay and burnout.
Get your house in order
Preparation is key to ensuring providers can seize opportunities as they present themselves; this includes talking to their financial partners early to ensure they have support for their growth journey. It’s also essential that providers put fraud prevention measures in place to deal with this increasing threat, such as training for staff and setting up the necessary security procedures.
Keeping fraud front of mind
Fraudsters are as active as ever across the healthcare sector, impersonating our colleagues and attempting to defraud our clients. To help protect you and your business we have a wealth of resources available. You can view our quarterly fraud webinars and take a look at our other educational resources on our Fraud Protection Hub.
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