The Government’s plans to transfer a further #13 billion into the primary care sector could open up massive opportunities for the private sector to become involved in health care provision, according to accountants PKF.
Birmingham PKF partner Howard Voisey, who heads up the firm’s specialist medical sector in the West Midlands, noted it was the Government’s stated intention to bring treatment nearer to the patient.
He went on: "There will be a massive increase in the amount of money available to primary care trusts to pay for this more direct delivery.
"This means that GPs will have to look at growing their practices, joint ventures, mergers or collaborations in order to keep pace with the growing market and the demand for on-the-spot patient treatment.
"And because this potential for growth is not restricted to GPs practices this means that private sector firms will be able to set up major health centres which can offer some of the more straightforward treatments such as those in dermatology, arthritis and even provide operating theatres for simple operations."
The sums involved were as massive as the opportunities.
Mr Voisey said: "In 2005 the Government provided in the region of #18 billion to primary care, but by 2008 this will have risen sharply to #31 billion.
"There is a lot of scope for private enterprise within that #13 billion increase and the primary care medical marketplace is already receiving a lot of attention from the corporate finance and venture capital sector.
"Anyone can be a provider providing they meet PCT standards of care."
PKF is recognised as one of the UK’s leading advisers to the medical sector and a survey in the doctors’ trade bible GP magazine, found that it acted for the most GPs’ practices in the country. Nationally the firm acts for 520 GPs’ practices and more than 2,000 individual doctors. Across the Midlands, PKF advises more than 80 practices
Partner Malcolm Cook, regional head of corporate finance in the Midlands, said: "What we are seeing is the opportunity for a major ‘land grab’ for GPs and other private sector primary care providers.
"This is not an evolution in primary care, it is a revolution. GPs practices will not be able to promote organic growth quickly enough to keep up with the competition, and they must now start looking at cooperatives and joint ventures, mergers and also bringing in private equity to stimulate growth.
"It is likely that we will see considerable venture capital, private equity and quoted company activity in this sector as the dash for growth accelerates over the next two years.
"There will be terrific demands on capital for investment in land, premises, equipment, staffing, training and marketing as well as for mergers and acquisitions. This will require very carefully planned finances and those involved in primary care will have to develop and demonstrate a long term plan for growth and delivery."
Mr Voisey added: "In the constantly changing medical world, healthcare professionals need to rely on their financial advisers for sound accounting and taxation services as well as specialist advice on the financial implications of developments in healthcare.
"To survive and thrive in the next two years, GPs are going to need their financial advisers right by their side to ensure they understand the threats of the new scenario." and also make the most of the opportunities it provides."
"At PKF we have built up in-depth knowledge of the medical sector, we advise many GP practices and thus are able to provide statistical comparisons to other practices and also income tax projections."
"To survive and thrive in the next two years, GPs are going to need their financial advisers right by their side to ensure they both understand the threats the new scenario offers and also make the most of the opportunities it provides."