Privatisation #1 How private patient income is expanding in NHS Trusts
An article in The Times on New Year's Day 'NHS in dash for private cash' reported that the Royal Marsden in London will earn 45% of its income from private patients and other non-NHS sources this financial year and wants to raise its income from private patients to £100m.
The Coalition's Health and Social Care Act (2012) removed the limitations on private patient income previously imposed on Trusts, but in order to soothe Liberal Democrat fears about the clear expansion of privatisation they created Section 164.
This is the '49%' rule which means that almost half of an NHS Trusts' income can be earned through the private patients and non-NHS sources referred to in The Times article. The 'dash' is very uneven, with some Trusts generating large amounts and others none, or seemingly none, in some cases.
"An NHS foundation trust does not fulfil its principal purpose unless, in each financial year, its total income from the provision of goods and services for the purposes of the health service in England is greater than its total income from the provision of goods and services for any other purposes."
In August 2014, a little over a year on from the implementation of the Act The Guardian reported that private patient income was increasing in what was seen as 'creeping privatisation'.
Here are the comparisons given in that article with an update from the accounts for the year end March 2016:
Trust 2010-11 2013-14 2015-16
UCL £7.3m £10.3m £21.4m
Moorfields £16.1m £21.3m £23m
Papworth £4.9m £6.4m £7.45m
Royal Surrey £3.6m £4.6m £4.9m
C'sea & Westm'r £10.7m £13m £17.4m
Some of the largest private patient incomes shown in the March 2016 accounts are in London Hospitals; the Royal Brompton is just over £39m, Moorfields is £23m as above, Great Ormond Street is £47.88m and the Royal Marsden is £83.1m.
Some Foundation Trusts have set up their own private companies within the Trusts, which compete with the traditional private sector for their clients, often boasting that their service benefits from its close working relationship with the established NHS hospital with which it is associated.
The Westminster Unit of Guys and St Thomas' Private Healthcare, for example, starts the introduction to its services with "The Westminster Unit is available to private patients, assuring them of expert clinical care in comfortable surroundings, secure in the knowledge that all the technical expertise of Guy’s and St Thomas’ NHS Foundation Trust is available should it be required." (our emphasis).
Almost all of the Trusts which offer private healthcare claim that the income from their private patients is used to support their NHS services. But it seems likely that the reverse is true, as Trusts must divert resources towards those who can pay.
One trust which shows no private patient income on the March 2016 accounts is The Christie in Manchester. The Christie set up a joint venture in September 2010 with Health Care of America (HCA) which means that the income the Trust receives is shown as profit share rather than income from private patients.
The Christie is also one of two specialist cancer centres which will run proton beam therapy units. These are paid for from government funding of £250m with an additional £20m in charity fundraising. This raises the question of whether the Christie/HCA private patients will also have access to this treatment. And if so, how will it be accounted for? What are the true costs to the NHS of offering these expanded private services?
With increasing waiting lists for treatments across hospitals in England, with the double shock last week of the deaths in the Worcestershire Royal Infirmary and the Red Cross being called in to respond to the 'humanitarian crisis' in the NHS, these are questions which need urgent answers. It isn't just about the money received - it is a question of the use of resources. Doctors, nurses and other clinical staff are required for these expanding private facilities whilst the NHS services literally next door in most cases struggle to fill their rotas.
NHS England proposes to give preferential access to capital funding to those trusts that beat their financial targets. We think it likely that the Trusts which are most successful at expanding their non-NHS income will then, paradoxically, become eligible for the most additional public funding - through Transformation and capital funding.