Governments across have Europe have made arrangements to use capacity in the private sector and in the UK a deal with the UK government looks likely to lift some private providers out of financial trouble.

The Spanish government has taken powers under a royal decree to take over the management of private hospitals as part of its efforts to minimise he death toll from Covid-19, and the Guardian reports that this has promptly been done:

“In Spain, … the government announced sweeping measures allowing it to take over private healthcare providers and requisition materials such as face masks and Covid-19 tests. The health minister, Salvador Illa, said private healthcare facilities would be requisitioned for coronavirus patients, and manufacturers and suppliers of healthcare equipment must notify the government within 48 hours.”

And while NHS England has reportedly had to pay a hefty £300 per bed per day to block book private hospitals to help tackle the Covid-19 crisis, across Europe it appears private hospital chains have been more ready to respond, cancelling elective work to make facilities available for the fight to combat the virus.

Private sector journal Healthcare Business International reports a German hospital advisor:

The situation for German for-profit hospitals is highly unclear. In the main, they have now followed the advice of the Vereinigung (union) and dropped all elective work, so profits will erode.

“The government has given assurances that it will pay for capacity needed for COVID but probably this will not be very much. In my opinion, it would be completely politically unacceptable for such compensation to generate a profit margin. So margins have already dropped as electives are halted and if the government takes the capacity over there will be no profits for the duration.”

In France, too, private hospitals have cancelled 75% of elective operations and dedicated 20-60 beds per private hospital for Covid-19 cases – around 4,000 beds.

In Italy, with all private elective operations cancelled weeks ago, HBI reports the private sector as a whole has provided 2,621 beds and 270 ICU for COVID-19, of which the largest private operator Gruppo San Donato has provided around 800 regular beds and 100 ICUs, and number two Humanitas 317 beds and 32 ICUs.

Private hospital association president Dario Beretta told HBI: “This is not the time for ideological and sterile confrontations. Lombardy health is one, united and supportive in the emergency that affects all citizens.”

HBI sums up its overview of Europe warning that “The next six months might see no profits for for-profit hospitals as electives are halted and all COVID-19 work is done at zero margin, as making a profit from COVID-19 will be viewed as politically unacceptable – though higher bed utilisation than for-profits usually have could offset that.”

By contrast a British analyst discussed with HBI the financial benefits of NHS England’s block-booking deal in Spire Hospitals, whose share price has been sliding downwards despite increased earnings, in the aftermath of the scandal surrounding its rogue surgeon Ian Paterson: “Let’s say there are suddenly thousands of new COVID-19 cases and the NHS needs to access all of Spire’s capacity for those cases. You could make an argument that a private hospital working on an NHS tariff at 100% capacity is much better than doing PMI [private medical insurance] work at 50% capacity.”  

As the saying goes “war is terribly profitable”: and even an apparently “cost-only” contract that keeps beds full and private hospitals ticking over nicely during the epidemic can prove a financial filip to Britain’s private hospitals, which could emerge as one of the few sectors to survive the crisis intact.

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