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Independents' Day

Private companies see profits double while NHS waiting lists increase

Exclusive A major Pulse investigation has revealed that private companies are boosting their profits by up to 100% as the health service struggles to cope.

An analysis of company reports and statements from all the major private hospital chains that make their figures available shows all have boosted their revenues this year.

They say they are gaining from the plight of the NHS, with patients more likely to pay for their care to avoid lengthening NHS waiting lists, which have led to 3.7 million NHS patients wait for treatment – the most since December 2007.

The investigation – the most comprehensive since the introduction of the Health and Social Care in 2012 – also shows that local commissioners are paying hundreds of millions to private hospitals and that hospitals have also boosted their income from private work.

It comes as Pulse yesterday reported that one private GP firm is expanding its service which promises to deliver a GP to patients’ doorsteps in 90 minutes for £120 – one of a number of companies taking advantage of long waiting times for GP appointments.

GP leaders say the Government is undermining the NHS in favour of the private sector through ‘scandalous’ underfunding, and ‘sleepwalking’ us towards a US-style health insurance system.

A recent survey of private healthcare industry leaders concluded the ‘self-pay’ market could grow by 10-15% a year over the next three years.

The Pulse investigation found that companies are looking to expand services to take advantage of waiting lists.

For example:

  • BMI Healthcare says it more than doubled its profits last year, reporting a 2.3% overall increase in inpatient and day cases, and a 13.5% rise in its NHS caseload, ‘with waiting list pressure and patient choice driving the increase’.
  • Spire, which runs a network of 38 private hospitals, has seen revenue and patient volumes increase by 30% and 20% respectively in the past five years, and expects to see this trend continue. Its 2015 annual report cites the ‘NHS funding gap’ as a key driver and says that, with funding constraints forecast to continue, ‘the independent sector can help to bridge the gap’.
  • Nuffield Health – which is not-for-profit – reported a 15% increase in hospital revenue between 2013 and 2015, from £457m to £525m, and an 11% increase in procedures since 2013 from 185,000 to 206,000. It says: ‘NHS is facing an unprecedented financial challenge which will force significant changes. This will further drive a willingness for individuals and organisations to pay for services.’
  • Circle reported an increase in revenue of 15% in 2015 and 32% in 2014. It also said patient volumes rose 8% in 2015 and 9% in 2014, with its annual report stating: ‘Pressures facing healthcare are expected to grow. We anticipate increasing patient demand, tighter public finances… and a shift towards more integrated healthcare.’

In August, BMI announced a new ‘general medical admissions service’, which will enable GPs to refer patients quickly for private treatment for a ‘broad range of conditions and illnesses’. The company’s lead for the new service Wouter Van Den Brande tells Pulse it has been introduced in response to the ‘many enquiries received from our patients… who want a viable alternative to queuing to get into an NHS site’.

Meanwhile, other companies who focus on winning NHS contracts have reported problems with the approach.

CareUK says total revenue declined by £5.8m (1.7%) in 2015, but elective procedures rose 10.3%. The decline, it says, came from ‘losses from early termination of a significant but loss-making out-of-hours GP contract in April 2015 and loss of the Sussex/East Surrey OOH contract in March 2015’.

Virgin Care, meanwhile, posted a £9.15m loss in 2014/15 following a £9.9m loss in 2013/14.

GPC chair Dr Chaand Nagpaul says the rise in private use ‘represents a clear diversion of funds out of the NHS and into the private sector’.

Dr Nagpaul says: ‘In many cases private providers will cherry-pick low-risk patients, adding further strain onto impoverished NHS hospitals caring for patients with greater morbidity. This is unfairly undermining the NHS in favour of the private sector.’

BMA council member and former RCGP chair Professor Clare Gerada, who led much of the GP opposition to the 2012 reforms, says: ‘I am afraid that we are sleepwalking into US health system.’

But a DH spokesperson said: ‘This Government was the first to ensure that doctors, not politicians, make decisions about who provides care. In fact, the rate of growth in use of the private sector as a proportion of the NHS budget remains slower than it was before 2010. On the back of a strong economy, we are giving the NHS the £10bn it asked for to fund its own plan for the future.’

David Hare, chief executive of NHS Partners Network - which represents private health companies - said: ’Independent hospitals play a vital role in keeping NHS waiting times low during a time of huge service pressures.

’NHS patients are also increasingly choosing to be treated at private hospitals, paid for at NHS prices, to NHS standards and free at the point-of-use.’

Please note - the figures for Nuffield Health were originally wrongly given as a 37% increase in procedures. We are happy to clarify this was an 11% rise.

Readers' comments (6)

  • EFT's

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  • It is just that this Government likes to give jobs to its natural friends and rather hates the public sector which it thinks has caused the public deficit which was actually caused by the criminal misconduct of the Banks. The main reason for privatisations in the NHS, on which the Government refuses to comment, is cuts in funding which drive the expensive and disastrous commissioning system to look for savings and appears to think that the private firm will do the same job for less money but the private firm will spend even less money on the service provision than you think because of having to keep its shareholders and Directors happy. Then look at the routine patient transport service in Sussex. This was given to a private transport firm which failed to attend on day one with the necessary vehicles and staff causing patients to miss or be very late for their Hospital appointments, and so passed the contract on to another firm which did attend but this effort bankrupted the second firm. So now the Hospitals are calling cabs to collect the patients for their hospital appointments and to return them home afterwards and the first private firm is paying the cab bills. What the Secretaries of State have done is to dump us all in this low level market in which back-handers, clinical incompetence and commercial incompetence can flourish. A local MP seems to think this routine patient transport service is going to be brought back into the NHS but the money offered was not enough for the previous Ambulance Service provider to continue providing it, which I offer as evidence of severe underfunding.

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  • Has everyone forgotten that GP practices are basically publicly funded private enterprises?

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  • don't blame the private sector

    the state has made a choice (backed up by the taxpayer and patient support groups) not to increase funding for healthcare at the same time as demanding better performance and changing T&Cs at will. many groups including think tanks such as the King's fund have pointed out that if demand increase by 4% a year but funding is close to 0% per year the difference can't be made up with re-organisation, 'innovation' and staff cuts - quality will go. This what is happening right now - longer waiting times and let's be honest rationing of care. With STPs having to find 20% reduction things will only get worse. The private sector is just taking on opportunities that have arisen because of the actions of the state. It's ultimately up to the public if they want to pay for the services they say they want - you can't blame the private sector for this.

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  • Vinci Ho

    Injustice is often down to poor distribution of resources rather than actual lack of resources .
    Again , things are not quite what they seem . The arguments are perhaps more complex than being perceived . But as I always said (actually Confucius said): Every matter has its root and consequence , every event has its beginning and end . You only really get 'the right way' if you have realised the order of sequence .
    What is the root here ? Who is responsible for the root?
    (1)If you starve a NHS provider (GP or acute trust) the tools , hence resources , to do its job for you , it will ,of course, has to look somewhere else to increase its income for survival , common sense. Thanks to Health and Social Care Act to give a green light to go somewhere else for money.
    (2) The acute trust will give some 'priority' to patients who are willing to pay. Customer service . If ALL the money earned is truly re-injected back into NHS , the question only remains whether that has really helped e.g. the waiting time on NHS.?A balance needs to be struck . Do we see that balance happening ?Cynically , the left wing ideology can say this is Robin Hood tax to supplement the NHS but is that really HOW this should happen?
    On the other hand , those who paid for this priority also would want to say ,' I paid tax as well' and why should I be double-charged?
    (3) Argument on cherry picking by private hospitals is not new . And it is always down to the NHS tariff system on how providers are rewarded . Yes, statistics(lies , damned lies) on waiting time can come down using their help . But clearly 6 months waiting for a reducible inguinal hernia means very differently to same waiting for a badly needed hip replacement .
    (4) Again , thanks to HSCA , GP is CCG and CCG is GP by default . The real label is actually 'Scapegoat Shield' to block all arrows from the public for the dishonest government . As I said , we are only Toy Soldiers running between well starved resources and waiting time as well deliberately encouraged rise in demands . The juice sequeezed out of us is a cocktail of various political brownie points for the politicians.
    (5)Step by step
    Heart to heart
    Left, right, left
    We all fall down
    Like toy soldiers

    Bit by bit
    Torn apart
    We never win
    But the battle wages on
    For toy soldiers

    Perhaps , whether we like it or not , one will have to redefine the telos and ethos of our NHS taking into account of conflicting notions of virtues to be honoured and rewarded , after all . This cannot be done with no honesty to people .

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  • Anonymous | Pharmacist27 Oct 2016 11:18am

    GPs privately funded, true.

    However they cannot charge renumeration at market rates nor set the terms and conditions of their own work. I'd call these two pretty essential for true private work.

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