Figures released last week showing almost 5 million people are waiting for hospital treatment in England, with more than 430,000 waiting more than a year, are – even allowing for the impact of the pandemic – something of a national disgrace. But they also signal a useful income stream for the private health sector over the next few years while the backlog is cleared.

The pandemic is certainly turning into a ‘win win’ situation for private operators. Employing staff trained at public expense within the NHS, some of these companies are in the fortunate position of being paid to help the health service reduce its waiting lists, while also potentially earning more per head from a growing number of patients desperate to jump the NHS queue by ‘going private’.

Working on those waiting lists has considerable PR benefits for private contractors too – just look at the websites of Circle, Spire and Transform and you’ll see how they all talk up their input during the pandemic – and the sector is understandably keen to forge new kinds of public/private healthcare partnerships, given the vast sums up for grabs from the taxpayer.

Last month, commenting on the latest waiting list figures, Independent Healthcare Providers Network chief executive David Hare told market intelligence agency Laing Buisson that, “The NHS and the independent sector will build on this extraordinary [backlog] partnership to give NHS patients access to the best possible NHS care, free at the point of use.”

Commercial operators already have a very strong presence within the health service: they’re responsible for a third of all hip operations and a quarter of knee replacements, as well as more than 20 per cent of gastroenterology, trauma and orthopaedic NHS treatments. That’s over 500,000 non-urgent NHS operations and procedures in total.

And they’re hoping for more. As the Guardian discovered last year, the head of one of the key, long-standing beneficiaries of the government’s taxpayer-funded healthcare largesse – Serco’s Rupert Soames – has privately suggested that the pandemic could go “a long way to cementing the position of private sector companies in the public sector supply chain”.

Labour Party research, released earlier this month, shows that during the past decade non-NHS healthcare providers banked £96bn-worth of health service funding. The annual figure rose from £8.4bn in 2010 to £14.4bn in 2020, the latter representing almost 12 per cent of the NHS’ total operating budget.

However, the picture isn’t always as rosy as the private sector might have you believe. The Lowdown noted last month that some independents were actually being propped up by the NHS – almost half of Spire’s total revenue in 2020 came from the NHS, for example, as did the bulk of Ramsay Health’s UK income – while a recent report from Laing Buisson found that nearly half the profit in the UK independent sector has disappeared since 2014.

And while it’s true that NHS surgeons were pleading with chancellor Rishi Sunak in April last year for extra funding to pay for treatment in private hospitals (and are still pleading), the billions spent and often wasted elsewhere on private contracts to support the health service during the pandemic – to run the underperforming NHS Test & Trace operation, for example – have been well documented by the National Audit Office.

Concerns remain about the private sector capacity block-purchased by NHS England last year. Documents leaked to HSJ in December show that only a third of this capacity was used by the health service over last summer, despite reportedly costing around £400m a month simply for access to facilities, rather than how much work was actually carried out. HSJ quoted one senior health service manager who questioned the value of the public/private deal, and said, “The national contract for private sector capacity was for the company shareholders, not for NHS patients.”

However useful the block-purchase deal was to the NHS, it ended last August, triggering a resumption of routine elective care in private hospitals employing NHS staff while the health service was still dealing with the pandemic. This led several senior NHS clinicians in January to lobby medical directors at London’s acute hospital trusts, urging them “not to support” staff working in the private sector, according to HSJ. One clinician allegedly accused doctors working in the independent sector as “taking the piss and walking off with the money”.

Sadly, the cynicism of that clinician appears justified when considering the sometimes dodgy ethics and lack of transparency revealed almost daily in media coverage of the NHS’ relationship with the private sector.

Only last week, for example, the Guardian uncovered potential tax scams by recruitment agencies supplying staff to NHS Test & Trace call centres and testing sites, and also to the Lighthouse lab in Milton Keynes. The alleged tax-dodging involves the use of ‘mini umbrella companies’, often fronted by directors in the Philippines – an arrangement that HM Revenue & Customs suggests can often be fraudulent and which deprives the taxpayer of millions each year.

And with £10bn now on offer under an NHS England framework agreement based on a list of 90 approved private companies, taxpayers hoping for some transparency must surely be concerned by news the government is reluctant to reveal details of £2bn-worth of covid-19 contracts awarded since March 2020 – some to suppliers with financial links to the Conservative Party.

Profit levels are a particular concern, as the government seems to be claiming services were provided at ‘cost price’, but annual accounts for individual suppliers suggest work was often supplied on a ‘cost plus’ basis.

With the government presenting an ‘always open’ door to commercial interests lobbying for NHS work, monitoring the costs and the performance of those private contractors has never been more essential, but with the use of judicial reviews (currently the most effective way of holding the government to account) now under threat – as flagged up in last week’s Queen’s Speech – it’s currently uncertain how this monitoring can continue. A worrying scenario, and a strong argument for reducing, not expanding, the NHS’ links with the private sector.

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