Spire hit by fall in NHS re­fer­rals and £27m com­pen­sa­tion pay­out

The Daily Telegraph - Business - - Business - By The Daily Tele­graph

Iain Withers SPIRE Health­care shares have dived on a dou­ble blow for the pri­vate hos­pi­tals group, with NHS re­fer­rals down and £27m hav­ing to be set aside for com­pen­sat­ing vic­tims of rogue breast can­cer sur­geon Ian Pater­son.

Shares in the FTSE 250 com­pany fell 18.6pc to 252.2p af­ter it re­vised down fore­casts for the full year fol­low­ing an abrupt fall in NHS re­fer­rals this sum­mer. The UK’s sec­ond largest pri­vate health­care provider said the drop in July and Au­gust had led to “sig­nif­i­cantly lower than an­tic­i­pated rev­enues” and it now ex­pects sec­ond-half rev­enues to be flat on the pre­vi­ous year, while mar­gins are fore­cast to be as much as 0.7pc lower at around 16.1pc.

The down­beat out­look came af­ter it said it would pay £27.2m in com­pen­sa­tion to around 750 pri­vate pa­tients who suf­fered at the hands of Pater­son.

Pater­son was jailed for 15 years in May on more than a dozen counts of wound­ing with in­tent and fur­ther wound­ing charges for car­ry­ing out un­nec­es­sary treat­ments on Spire and NHS pa­tients in the West Mid­lands be­tween 1993 and 2012. His sen­tence was in­creased to 20 years on ap­peal last month. A fur­ther 270 NHS pa­tients have sep­a­rately re­ceived £17.4m. Spire had been fac­ing civil pro­ceed­ings in the High Court next month.

Spire’s com­pen­sa­tion fund ate into half-year af­ter-tax prof­its, which were down three quar­ters to £8.9m for the six months to June. Rev­enues edged up 2.4pc to £481m.

Si­mon Gor­don, in­terim chief ex­ec­u­tive of Spire, told he be­lieved the level of com­pen­sa­tion be­ing of­fered to Pater­son’s vic­tims was a “good out­come for ev­ery­body”. He said he was “con­fi­dent” Spire had learned from its mis­takes and “gone fur­ther” in tight­en­ing checks and pro­cesses than had been rec­om­mended by an in­de­pen­dent re­port by in­ves­ti­ga­tors Verita three years ago.

He added: “You can never rule out the pos­si­bil­ity of a clin­i­cian do­ing some­thing they shouldn’t. But I have far greater con­fi­dence we will pick them up very early, share that in­for­ma­tion and come to a quick con­clu­sion on whether that con­duct can be ac­cepted in that en­vi­ron­ment.” NHS re­fer­rals were down due to a more “ag­gres­sive de­mand man­age­ment strat­egy” adopted at “fairly short or­der” by the pub­lic health ser­vice, he said.

Spire is hop­ing growth in its self-pay busi­ness, where pa­tients pay on de­mand rather than via health in­sur­ance, will make up for any short­fall in NHS cus­tom. “It is 20pc of our busi­ness and grow­ing sig­nif­i­cantly,” Mr Gor­don said.

A per­ma­nent chief ex­ec­u­tive to suc­ceed Garry Watts, who stepped back to his role of non-ex­ec­u­tive chair­man, is ex­pected by the end of the year.

Ian Pater­son, the jailed breast can­cer sur­geon. Spire has set aside £27m to com­pen­sate his vic­tims

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