Key points

  1. Self pay numbers appear to have peaked and be on the decline.
  2. Experts warn against paying the private sector above the current tariff.
  3. There is limited spare capacity in the private sector and using it affects NHS staffing.

The latest (September) figures from the private sector’s own official source, the Private Healthcare Information Network, confirm yet again how limited has been the growth in private hospitals’ inpatient caseload – despite the soaring NHS waiting list.

The figures – for Quarter 1 of 2023, when the NHS was in the depths of perhaps the worst winter crisis – show a total of 227,000 patients paying for hospital care through a combination of private health insurance and “self-pay” forking out the hefty fees to escape NHS delays. This is an equivalent of less than 1 million per year.

The quarterly figure is just 29,000 higher than the equivalent for 2019, before the pandemic: and while this works out at a substantial 14.6% increase, it is also a pitifully small fraction of the 3 million-plus that have been added to the NHS waiting list over the same period.

Worse from the point of view of the private hospitals is that the apparent upward trend of the most profitable ‘self-pay operations’, which apparently leapt by 44% from 50,000 in Quarter 1 of 2021 to Quarter 2, has virtually flatlined since then.

The realities of the cost of living crisis, the inflated costs of private operations, and the limited scope of many private hospitals to deal with anything much more complicated than cataracts and hip and knee operations have left self-pay stuck around 70,000 per quarter for the past two years now.

Bubble burst? has now concluded that “the self-pay bubble in the UK seems to have reached its peak,” and adds “data from PHIN’s quarterly private market update shows in most English regions the number of self pay admissions declined year on year in Q1 2023, including in London which is the engine room for UK private care.”

The situation doesn’t look much better for caseload funded (less profitably for the private hospitals) from health insurance, with just 8,000 more patients treated in Q1 2023 compared with Q1 2019. However the graph for insured patients treated does show an upward trend, and has increased 26% since Q3 of 2021, to 156,000.

There are also worrying signs for the private hospitals in the latest PHIN figures for numbers of consultants working in the private sector, which has not risen above the 9,000 who were involved before the pandemic. Since 2,000 consultants work only in the private sector, that means just 7,000 (11%) of the 63,000 NHS consultants are working privately as well – despite the frustrations over NHS pay, pensions and staffing levels.

Of course the private sector is primarily an outpatient service, and the PHIN figures are only for patients treated in hospital: but the failure to profit from the problems of the NHS suggests the private hospital sector may have reached its peak demand, leaving only the largest and most prestigious London private hospitals to hoover up a lucrative trade from wealthy overseas patients.

This explains the continued clamour from private hospital bosses for stronger government measures to compel NHS leaders to refer more NHS-funded patients to fill their empty private beds and bolster profits (and the continued claims by Labour’s shadow health secretary Wes Streeting that the private sector has capacity to treat thousands more NHS patients).

Dangers of raising the tariff

However a recent report by the i newspaper have raised doubts as to whether the NHS would be able to secure access to this “spare” capacity without paying substantially above the current NHS tariff, or indeed whether there really is that much spare capacity at all.

The September 25 article by James Ball reports:

“independent experts i has spoken to have expressed major doubts about whether Mr Streeting’s solution can actually achieve that aim and cut waiting lists. They are warning that the use of private hospitals to take on routine operations like hip and knee replacements or cataract surgery could cost the NHS too much. ‘There is capacity, but is it there at the price that the NHS can afford?’ a leading health think-tank cautioned. There are also warnings that even if the extra funding could be found, it might actually make things worse.”

Private hospitals have been pressing for higher tariffs to be paid by the NHS, complaining that their costs had “grown by double-digit rates,” while the NHS tariff was only due to increase by 2.9 per cent.”

Now, according to the i report: “The experts argue that Mr Streeting’s scheme would, controversially, have to rely on paying private providers more than the NHS receives for exactly the same work.”

The i also notes, as we have repeatedly warned in the Lowdown, that greater use of private hospitals capacity “could exacerbate the staffing crisis that has helped swell waiting lists,” while to make matters worse “there is a fear that some of the extra capacity that Mr Streeting thinks is out there in the private sector, ready to be harnessed, is actually a chimera because hospital staff are being ‘double counted’.”

NHS has emergency care capability

But the problems would not even stop there. With private hospitals averaging less than 50 beds and most lacking ITU and any emergency services, experts and analysts including the Centre for Health in the Public Interest (CHPI) have warned of the private hospital sector’s dependence on NHS ambulance and emergency services to take charge when things go wrong – with an average of more than ten cases a week in 2021 – and the lack of any clear complaints procedure if there are any problems. CHPI has warned that some private hospitals were transferring more than one in every 250 of their inpatients to NHS hospitals.

The lack of private sector resources to tackle emergency situations was underlined recently by the coroner’s critical comments at the end of an inquest into a patient who died after a 14-hour wait for an ambulance to transfer him from the private Spire hospital in Norwich to the NHS-run Norfolk and Norwich university hospital – a few minutes’ drive away.

The local Healthwatch group told The Guardian: “This is the third inquest we are aware of in the last 12 months in similar circumstances where patients have faced long delays when being transferred from the Spire hospital to the Norfolk and Norwich university hospital.”

So if private hospitals were to take a greater share of the NHS waiting list caseload, almost inevitably including a more complex and vulnerable group of patients, there is the double danger that they might poach more of the staff needed to deliver care to NHS patients with even greater clinical need, and make further demands on over-stretched ambulance and emergency services.

Health service bosses around the country have been ignoring NHSE pressure and seeking ways to bring more elective care (and the funding for it) back in-house. Both NHS Providers and the NHS Confederation have warned the Commons Health Committee late last year of the consequences of greater reliance on private hospitals to tackle the waiting list.

Mr Streeting would be well advised to listen to these NHS experts when formulating his policy proposals rather than the private donors who have been among those funding him and his office.

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