According to the HSJ NHS England has invoked a ‘surge’ clause in its Covid contracts with private hospitals and given six private hospitals in London a week’s notice that their entire capacity is to be taken over by the NHS to ensure hundreds of urgent cancer operations can go ahead.
The surge clause allows the NHS to override the commercial priorities of private hospitals which would otherwise continue treating insured or self-pay private patients to keep income flowing in.
However the HSJ report suggests it’s likely the NHS will have to pay higher fees to BMI Healthcare which owns five of the hospitals and to Aspen Healthcare.
The change of attitude and harder line from NHS England comes amid unprecedented pressure on NHS beds and high levels of staff sickness absence, and just a week after the HSJ reported that private hospital chains BMI and Ramsay in Manchester, prioritising their profitable business, were “pushing back” against NHS requests that they take additional patients.
The private sector’s reluctance to forego its lucrative but non-urgent private patients undermined the NHS England hype about a “partnership” between public and private sectors.
The contracts that secured almost the whole capacity of the private acute hospital sector for NHS use last spring ended in December. Only 14 companies signed up for continued support for the NHS between January and the end of March.
From then a 4-year £10 billion framework agreement comes into force, encouraging NHS trusts use private beds in order to tackle the mounting delays in waiting list treatment – and raising concerns that it will divert resources out of the NHS while leaving thousands of NHS beds empty.
There was no mention of the ‘surge’ clause that has now been invoked in the pre-Christmas press release from Spire healthcare announcing the interim contract with NHS England which it had agreed along with 13 other independent providers.
The contract was to provide a “volume-based commitment” aimed at reducing NHS waiting lists “when the existing contract with NHS England (as varied on 13 August 2020) ends on 31 December 2020,” and “provide a smooth transition for NHS services in England from the current cost-based contract to the new NHS framework for purchasing additional activity from the independent sector.”
Spire were so delighted at the boost to their finances that they announced a £500 per person bonus for their staff to recognise their ‘outstanding contribution’ during the year – an example NHS England has sadly not been willing to follow.
Meanwhile the private sector continued with its own agenda of profit-seeking acquisitions and mergers, with the Priory Group of 450 mental health and addiction rehabilitation facilities across the UK being sold off by its US owners Acadia to Dutch buy-out firm Waterland. The sale, worth an estimated £1.1 billion, comes almost five years after Acadia acquired the Priory Group from Advent International for £1.3 billion.
Acadia now plans to focus on its US operations, while Waterland intends to combine Priory with MEDIAN, Germany’s largest provider of rehabilitation, neurology and orthopaedic treatments to create one of Europe’s main providers of rehabilitation and mental health services.
The Financial Times notes that the UK government’s cost-cutting in mental health over the past decade has benefited the private sector, which provides about a quarter of NHS mental healthcare beds in England. According to business analysts Candesic 98 per cent of the private facilities’ earnings come from the NHS.
The deal will be used to cut Acadia’s debt, so offloading the Priory Group even at a loss brought an increase in Acadia’s share price, which closed up 3.6 per cent on the Nasdaq index.
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