Private medicine in the UK, where there is universal free healthcare, is a small Niche market. Private provision of services for patients who pay (or whose insurers pay) should be distinguished from private providers who are paid by the NHS for services which are, as far as the patients are concerned, free.
Contents
History
The Royal Commission on the NHS reported on private medicine in the UK in 1979. Their report included:
Expenditure on private health care in the UK in 1976 was estimated at £134 million not including abortions, long-term care, or dentistry. That was about 3% of total expenditure on health care in the UK. At that time about 2% of all acute hospital beds and 6% of all hospital beds in England were in private hospitals and nursing homes. The proportions in the rest of the United Kingdom were lower.
As part of a drive to extend the choice of providers available to patients, the Thatcher government aimed to expand the provision of private medical insurance by providing tax relief to people over-60.
Hospitals
They reported that there were 1,249 Registered Private Hospitals and Nursing Homes in the UK with 34,546 beds in 1977. These figures included 117 private hospitals with facilities for surgery. There were at that time 116,564 people aged 65 or over in residential accommodation provided by or on behalf of local authorities, compared with 51,800 patients in NHS hospital departments of geriatric medicine. About 73% of the beds were for medical patients, 15% for surgical, 11% for mental health, and 2% for maternity. There were then about 4,000 beds in the private sector occupied by NHS patients under the care of NHS doctors, about 0.8% of the total beds available to the NHS. About half of abortions were at that time performed in private clinics and nursing homes.
NHS Consultants who undertook private practice were permitted, if facilities were available, to admit their private patients to designated private beds (pay beds) of which there were then 4,859 in NHS hospitals or as day patients, or to see them as out-patients. 42.8% of all NHS consultants worked part-time, mostly because they undertook private practice. Part-time consultants on average derived about one third of their income from private practice. The Health Services Act 1976 established an independent Health Services Board to be responsible for the progressive withdrawal from NHS hospitals of pay beds. In 1979 the number had reduced to 2968 from a figure of 7188 in 1956. The Commission was told that the existence of private practice within the NHS facilitated and encouraged abuse, chiefly by patients avoiding waiting lists. Pay beds were at that time very controversial, but the view of the Commission was "We do not consider the presence or absence of pay beds in NHS hospitals to be significant at present from the point of view of the efficient functioning of the NHS."
Primary Care
1971/72 about 2% of general practitioners’ income was derived from hospital, local authority and non-NHS public sector work, and about 6% from private practice.
In 1977 some 11% of general dental practitioners' time was spent on work other than in the general dental service, probably mainly on private practice.
There were about 1.12 million subscribers to provident schemes in 1978, of whom 869,000 were members of group schemes. Subscriptions often cover more than one person and in 1978 a total of 2.39m people were covered.
Private income for NHS trusts
When NHS foundation trusts were established they were required to limit the proportion of their private income to the level it had been in 2006. For many this was zero. The average across England was 2%, but levels at teaching hospitals, especially in London, were considerably higher. 18 NHS hospitals in London run wards for private patients. The Health and Social Care Act 2012 permitted Foundation trusts to raise their private income to 49% of the total. Only The Royal Marsden NHS Foundation Trust, which hopes to raise 45% of its income from private patients and other non-NHS sources in 2016/7 and is trying to raise its income from paying patients from £90m to £100m, is any where near the 49% limit. Imperial College Healthcare NHS Trust and Moorfields Eye Hospital NHS Foundation Trust have both opened clinics in Dubai. There are some joint ventures between NHS trusts and private providers. HCA Healthcare has run a specialist private cancer unit in partnership with the Christie NHS Foundation Trust in Manchester since 2010. About 25% of patients using private services came from overseas.
NHS use of the private sector
The 1997 Labour Party manifesto made a specific commitment to end the Conservatives’ internal market in health care, but in government they retained the split between purchasers and providers of healthcare. In 2000 the Labour Government agreed A Concordat with the Private and Voluntary Health Care Provider Sector with the Independent Healthcare Association. The intention was to increase capacity, particularly in elective care, where private provision was used to bring down waiting lists, in critical care, and in intermediate care facilities. This was followed, in April 2002,by the introduction of prospective payment with nationally set prices for acute, elective activity under ‘payment by results’. Under patient choice patients could opt for treatment by a private provider paid by the NHS. The NHS Plan led to the development of independent sector treatment centres which provide fast, pre-booked surgery and diagnostic tests for NHS funded patients separating scheduled treatment from emergency care. These centres played a role in reducing the price paid for ‘spot purchases’ with private providers. Previously when the NHS had made use of the independent sector on an ad hoc basis, it often paid 40-100% more than the equivalent cost to the NHS. The NHS Improvement Plan: Putting people at the heart of public services, published in 2004 there was an expectation that the independent sector would supply up to 15% of NHS services by 2008, but this figure was not reached.
Rules to prohibit NHS consultants from charging "Top up fees" to NHS patients for extra services were clarified in 2008 to make it clearer that paying for chemotherapy treatment not available on the NHS would not prevent patients from subsequently accessing NHS treatments.
When the coalition government introduced what became the Health and Social Care Act 2012 it appeared to pave the way for a bigger role for private companies.
Mental Health
Private provision of psychiatric beds has been largely financed by the NHS, as few psychiatric patients have the means to finance their own treatment and health insurance does not often extend to mental health. 1700 beds were closed by NHS mental health trusts from 2011 to 2013. As a result, large numbers of patients are admitted in crisis to private institutions, often in remote locations. The cost is around £500 per day.
Any Qualified Provider
Any Qualified Provider was a government policy intended to encourage all NHS, private, third sector or social enterprise health service providers to compete for contracts on an equal footing.
Criticism
One of the criticisms of private care has been that private providers are not required to produce sufficient information about their services to permit comparison with NHS services. It is suggested that surgery in private hospitals may be dangerous because of inadequate equipment, lack of intensive care beds, unsafe staffing arrangements, and poor medical record-keeping.
Controversy
The issue of privatisation of health services was an issue in the United Kingdom general election, 2015. The government's position was that "Use of the private sector in the NHS represents only 6% of the total NHS budget - an increase of just 1% since May 2010." It is unclear what this statement meant. Some NHS services, such as dentistry, optical care and pharmacy, have always been provided by the private sector and, technically, most GP practices are private partnerships. All the drugs, supplies and equipment used by the NHS are privately provided. Taken together this amounts to around 40% of the NHS budget. In addition some NHS organisations subcontract work to private providers. The NHS accounts for 2013/4 show that £10 billion of the total NHS budget of £113 billion was spent on care from non-NHS providers. The main growth in private provision has been in mental health and community health services.