University Hospital Dorset (UHD) NHS Foundation Trust based in Bournemouth and Poole has launched a tender seeking a private healthcare company as a long-term joint venture partner in order to substantially increase its private work and help pay for its ongoing £550 million refurbishment and upgrade process.
In the tender documents, the Trust notes that income is needed as:
“The capital charges [from the £550m investment] are significant, and part of the payback is to expand profitable private work.”
Documents in the Trust’s tender advertised on Find-a-tender note that a joint venture partner will need to have a successful track record of “partnerships within NHS Trust settings” and “working with insurers and self payors.” Any partner must operate using UHD facilities and produce income for UHD “through a transparent profit-share model.”
All services would be within scope of the partnership except for cardiology, which is covered by a separate joint venture contract with the Dorset Heart Clinic.
At present, UHD carries out a limited amount of private work, including in a dedicated unit at Royal Bournemouth Hospital, but this brought in income of just £3.1 million in 2024/25. The documents note that UHD could have developed more private patient work in-house but the “Board is open to a joint venture as a way of best achieving the opportunity.”
The Trust’s operational plan 2025/26 notes that the Board and Trust Management Group supports a 5-fold increase in private patient work, as at present UHD has a lower-than-expected private patient income for a Trust of its size. UHD also believes that Dorset ‘represents a significant growth market for private care’ as it is currently under-served by the private healthcare sector.
The Trust expects to have a new private patient unit available by the end of 2026/7 at its Poole site, although private care will continue to take place across all sites, including Bournemouth Hospital.
The tender lists a contract with the total value of £125 to £150 million to start 1 March 2026 and last 10 years to 2036, with a possibility of an extension to 2041. This level of investment is substantial.
UHD has reported that its estimated deficit for the end of 2025/26 is £25.4 million if it cannot find further savings. It had agreed a break-even plan with NHS England.
Private patient units (PPU) are common in NHS hospitals, but apart from in London, they have brought in limited amounts of income for the Trusts and in some cases may actually be a drain on the hospitals’ finances. The most successful PPUs all of which are in London have invested over many years to build up their businesses and continue to invest in new facilities.
The most successful is the Royal Marsden, with income from its PPU of £181.4 m in 2024/25, but other London Trusts have large incomes including Guy’s & St Thomas’s at £69.9 m in 2024/25, and Moorfields Eye Hospital at £44 m in 2023/24. All have opened new sites in recent years, targeting central West London – the hub of private medicine in the UK. Outside of London, NHS trusts have generally prioritised NHS facilities, rather than PPUs, according to research carried out by Latchmore Healthcare, which has been a barrier to improving PPU income.
In an article in The Lowdown last year, John Lister outlines the argument against hospital trusts investing in PPUs, noting the lack of money that the Trust’s have to invest and the preponderance of more important things to spend any ‘spare’ cash on before being investing in PPUs, including infrastructure to ensure the safety of NHS patients.
Furthermore, investigations of PPUs in the past, including in 2018 by Unison, have found them to be underused and it is possible that many run at a loss. With less than transparent financial details available, researchers over the years have found it difficult to determine just how much income PPUs bring in and more importantly how much profit they actually make for the hospital trust.
Determining how much to charge a private patient is difficult and requires specialist knowledge of the private medical insurance (PMI) industry. Research of PPUs by Latchmore Healthcare found that “PPUs typically realise prices from PMI 10-20% below private hospital groups. Billing PMI requires specialist skills, and our audits have shown under-billing of 10-20+ %.”
Building up activity in NHS PPUs can also be a tricky marketing situation as the Royal United Hospitals Bath Foundation Trust found back in 2023. The concerns surrounded a marketing campaign produced by Sulis Hospital Bath, which the trust acquired from Circle Health Group in 2021.
Sulis Hospital Bath posted an advert on its Twitter account which said: “Why wait for surgery?”. Concerns about this advert were expressed by a local consultant, Healthwatch and Centre for Health and Public Interest (CHPI). CHPI director David Rowland told HSJ: “To encourage queue jumping in this way runs counter to the founding principles of the NHS”.
NHS England has encouraged the use of PPUs to generate income for many years. Most recently in 2022, NHSE published guidance that encouraged NHS trusts to grow their private patient activity in the wake of covid. It said: “Trusts should continue to actively explore and develop opportunities to grow their external (non-NHS) income… Private patient services continue to be a significant source of material opportunity in the NHS.”
At the time the guidance was published Sally Gainsbury, senior policy analyst at the Nuffield Trust, said the guidance was “capitalising” on the surge in people paying for private treatment during the pandemic. Adding that, “scarce NHS capacity should be focused and prioritised on treating NHS patients and bringing these unacceptable waits down, not capitalising on the growth in the private treatment market on the back of this unprecedented backlog of care.”
Since 2022, the waiting lists have lengthened and Trusts struggle to contain them and infrastructure issues have increased, including many hospitals in need of urgent repairs. The finances of Trusts are precarious and NHS England continues to demand major savings in costs. In light of the situation it seems an unlikely time to consider investing heavily in PPUs.
Dear Reader,
If you like our content please support our campaigning journalism to protect health care for all.
Our goal is to inform people, hold our politicians to account and help to build change through evidence based ideas.
Everyone should have access to comprehensive healthcare, but our NHS needs support. You can help us to continue to counter bad policy, battle neglect of the NHS and correct dangerous mis-infomation.
Supporters of the NHS are crucial in sustaining our health service and with your help we will be able to engage more people in securing its future.
Please donate to help support our campaigning NHS research and journalism.
