The British market for private mental health hospitals grew by 4.1 per cent to £1.8 billion in 2018, and could grow to £2.3 billion by 2023, according to the latest report on the sector from private sector analysts LaingBuisson: – but the main customer in the market is the NHS, accounting for 90 per cent of it.

Much of this money is flowing across the Atlantic, according the Financial Times, based on new research showing the shocking extent to which American-owned health companies have taken over the provision of key mental health services in England.

US companies now run about 13 per cent of inpatient mental health beds in England, according to according to research by Candesic, a healthcare consultancy.

Private hospital chiefs stung by threat to their NHS income

Half private

But in some areas, the proportion of US-owned mental healthcare facilities is much higher, such as  Manchester, where half of all mental health in-patients are admitted to a privately owned hospital and a “one in four chance of the bed being provided by an American-owned company”.

The imbalance is even more dramatic in child and adolescent mental health: recent reports reveal that no less than 44% of the £355m NHS spending on CAMHS care goes to private providers, and figures given in parliament last November again show how the private sector spend has grown by 27% over 5 years from £122m to £156m.

Mental Health: a stronghold of private provision

The Candesic report estimates that in Bristol, North Somerset and Gloucestershire, 95 per cent of all mental healthcare beds are owned by private providers, two thirds of these owned by US companies.

Locked in profits

The private sector domination is most complete in the provision of “locked ward rehabilitation”, in which in 2015 a massive 97% of a £304m market was held by private companies, the largest two of which are now US-owned, while 53% of all beds (locked and unlocked) for mental health rehabilitation are privately provided.

The Candesic report cited by the FT estimates that while about a quarter of NHS mental healthcare beds in England are provided by the private sector, a staggering 98% of these private facilities’ earnings come from the NHS.

The big companies include the Nasdaq-listed Acadia Healthcare, which owns the Priory chain of hospitals, and Cygnet Health Care, owned by the NYSE-listed Universal Health Services, which has services worldwide including acute hospitals in Puerto Rico and the US.

Cygnet in 2017 reported operating 2,400 beds across 100 sites, with over 6,000 staff.

In the summer of 2018 it also took over the Danshell Group, operating 25 units with 288 beds for adults with learning difficulties. While Cygnet Health Care recorded a loss of £9.4m on turnover of £121m in 2017, the Group as a whole reported a very healthy profit of £40m on turnover of £334m.

The Care Quality Commission has just rated the Priory’s Ellingham Hospital, in Attleborough, Norfolk, “inadequate” after it found that conditions, which included wards for children and adolescents, were “unacceptable”.

Desperate shortage of mental health care for young people


Another two of the 53 facilities owned by the Priory in England are rated inadequate and a further six require improvement, according to the CQC, though the Priory said it frequently “takes on the most difficult cases which other hospitals aren’t able or willing to treat”.

Cygnet, runs 140 services across the UK: it closed a psychiatric unit in Durham earlier this year, after the BBC’s Panorama filmed staff abusing patients.

It has since closed another hospital while a further five require improvement and three are rated inadequate by the CQC.

One mental health manager at the South London and Maudsley Foundation Trust told the FT the trust tries to avoid using private sector suppliers because they “inevitably keep the patients for too long as they have no incentive to encourage them to return to the community”.

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