Healthcare market resilience: insights from the 2024 Trading Performance Survey
The UK healthcare sector continues to demonstrate its resilience and growth potential, as revealed in our 13th annual Healthcare Trading Performance Survey.
3 minutes to read
The report focuses on nearly 80% of the corporate care market, with over 100,000 care beds across 781 UK towns and cities, representing around a fifth of the market. The report presents an improvement in many KPIs tracked, including an average occupancy level of 88.3%, up from 86.4% in 2023. Average weekly fees have grown approximately 10% to £1,182pw. However, we have also seen EBITDARM begin to trend positively again at 26.2%.
Market resilience: occupancy levels and growth
Occupancies seem to have returned to or are, in some cases, trading above pre-pandemic levels. Northern Ireland emerged this year as the region with the most significant year-on-year growth, with an approximate change of 6.4%, closely followed by Wales at 4.8%.
Demographic shifts: who are the residents?
Regarding the composition of residents, most across all sampled regions fall into the over-85 bracket. The statistics suggest that the average age of residents is between 79 and 86. Diving deeper, the percentage share of the over-85s is far greater in private pay/self-funded settings than in local authority homes, potentially attributed to a changing wealth profile amongst the ageing demographic and funding eligibility.
Understanding the changing demographic composition is vital for tailoring care services and anticipating funding needs. The growing prevalence of over-85s in private pay settings underscores the importance of wealth planning and evolving care models
Fee growth trends
All care average fees across the UK are up 11%. While there is still a substantial variance in levels between local authority and private pay fees, private pay average weekly fees saw the most significant growth at 10%. London has benefited from the most considerable increase in the year at 14.3%.
This year, the overall funding split has remained in line with other years, presenting a reasonably even split between private pay and local authority.
Property costs per bed fell slightly to £3,751, representing a 1% decrease on the year, and food costs per bed have risen to £2,221, a circa 13% increase. Total utility costs per resident, whilst increasing, are not growing as rapidly this year.
EBITDARM as a percentage of income has grown in the past year to 26.2%. While not a huge increase, it is a move in the right direction for the sector. The sector's ability to minimise margin compression through prolonged challenges and now show upward trends reinforces confidence in the long-term viability of healthcare as an asset class.
The regional differences in fee growth highlight the need for localised strategies, particularly in high-growth areas like London, where rising fees may create opportunities for premium care services.
A positive outlook for healthcare investment
To summarise, the trends in this year's report have again validated the positive sentiment amongst those involved with healthcare. The sector has shown remarkable resilience and continues to do so. Staffing costs will, of course, always be an area of focus, more so as we look to the extent to which operators can pass this on to residents via average weekly fees. Inflationary pressures seem to be moderating, and with the stabilising of the economy and investors ramping up activity, we can say that the sector is well-positioned for further growth. Healthcare's fundamental drivers remain and have demonstrated their ability to support the industry in tough times.
Explore the 2024 Healthcare Trading Performance
Dive deeper into the trends driving healthcare market resilience. Read the full report to explore actionable insights and growth opportunities.