Medical Advisory Board, HBSUK
Up to 20 new players have entered the insourcing sector only in the last two years, a clear indicator of the attractiveness of the market, Charles Byrne, managing director of HBSUK, a UK insourcing provider, tells HealthInvestor UK. Notwithstanding the competition, the group’s revenue is expected to grow by up to five-fold by 2023.
HBSUK was established in 2012. Today the group works both in the NHS and in the private sector with its biggest single commercial customer being AXA Health, a major global player in health insurance.
In the last five years, the group’s revenue has grown 9 times to £6m and, according to Byrne, fast growth is expected to follow in the next couple of years – 400% in 2022/3 and significantly further again in the following year.
“Our big growth will come from our alignment to the NHS long-term plan,” he says. “Drivers for growth are high demand for our services, the seniority of medical doctors and the digital system we have designed, Virtual LucyTM.”
Insourcing is seen as the NHS deus ex machina, HealthInvestor UK understands. The ballooning NHS waiting lists in elective care following Covid-19 have led to significant market growth.
Charles Byrne, HBSUK Managing Director
“The problem pre-existed, however,” Byrne continues. “The Covid-19 pandemic just exacerbated it. As a result of the rising demand, exponential growth is expected in a number of markets, one of which is insourcing. Indeed, about 50-60% of that growth is likely to come from insourcing.”
According to the NHS’s Referral to Treatment standard, 92% of people waiting for elective treatment should wait no longer than 18 weeks from their referral to their first treatment. But today, lots of patients wait 52 weeks, 78 weeks, or 104 weeks, Byrne claims.
Indeed, as of January 2022, 6.1 million patients were waiting to start treatment and of those, 311,528 were waiting more than 52 weeks and 23,778 were waiting more than 104 weeks, NHS data show.
HBSUK aims to help with the waiting list in a traditional way, doing insourcing on the weekends and evenings, but also transferring some of the patients to a virtual pathway. “Looking at the NHS’s long-term plan, there’s a digital component to it aiming to reduce the burden. NHS says it will provide digital services and tools to give people more control over their own health. Virtual Lucy, which is our digital health platform does exactly that.”
As for competition, he says that although there are lots of new entrants, trusts tend to go with the providers that they know and trust, adding that there are probably five or six insourcing players in the UK, including HBSUK, that have been around quite some time. “Interestingly, lots of staffing agency companies have moved into insourcing because they’ve got a large database of clinical staff. But there is actually a VAT issue here – insourcing is a medical service and doesn’t attract VAT, whereas some staffing supply models do.”
The NHS has said it does not expect the waiting lists to get back to normal for two years. When NHS hospitals and trusts have a challenge, they have four choices, Byrne explains.
“They can do nothing, which is not really a choice. They can try to increase their own capacity internally at weekends, also known as waiting list initiative work, which is not very attractive to consultants. Or they can use outsourcing and insourcing services.
“The latter is typically less expensive. Also, because most of the private hospital infrastructure doesn’t have high dependency units, it can’t treat the highest acuity patients.”
Commenting on the staffing crisis, he concludes: “It is not going to be fixed overnight. And that’s another reason why the insourcing market is going to continue to grow for a long period, much longer than the two years that recovery has projected.”
To help with the nursing crisis, HBSUK is involved in international recruitment providing the NHS with nurses from partners in India, and the Philippines.
Date published: March 23, 2022