Feature Data Briefing

Paid for by the NHS, treated privately

BMJ 2015; 350 doi: https://doi.org/10.1136/bmj.h3109 (Published 10 June 2015) Cite this as: BMJ 2015;350:h3109
  1. John Appleby, chief economist, King’s Fund, London, UK
  1. j.appleby{at}kingsfund.org.uk

John Appleby looks at how much non-NHS providers contribute to NHS care

Central to the 1990 reforms of the NHS was the idea that by separating purchasers of care from providers, with the purchasers holding the money (but no services) and the providers services (but no money), the transactions that would need to take place would drive up quality and efficiency.1 Health authorities would be active purchasers of care on behalf of their resident populations. And in this “internal market” there would be freedom to shop around for the best deals from any organisation willing to supply, whether state owned or independent sector.

There have been several reboots of the original idea since then. Internal market 2.0 from the 2002 Labour administration emphasised patient choice and encouraged more private providers of NHS secondary care through financially favourable contractual terms. Internal market 3.0—the reforms of the last government’s Health and Social Care Act—reasserted the basic market model with a twist of EU procurement law and revamped commissioning staff (I characterise).

Nevertheless, the central theme remains. So, after a quarter of a century of purchasers having the freedom to purchase from, or patients the ability to choose, NHS or independent sector providers what’s happened? How many patients is the private sector treating on behalf of the NHS?

Unfortunately, NHS data systems (hospital episode statistics) have only recently started to produce some decent figures on this. As figure 1 shows, over the seven years since 2006-7, the proportion of NHS patients treated by non-NHS providers has risen from around 0.5% (73 000) to 2.6% (471 000) of all inpatient episodes (which totalled over 18 million in 2013-14). For outpatient care (fig 2), the proportion treated by non-NHS providers has risen faster—from 0.2% (123 000) to 5.5% (4.5 million).

Figure1

Fig 1 NHS inpatients treated by NHS and non-NHS organisations, 2006-7 to 2013-142

Figure2

Fig 2 NHS outpatients treated by NHS and non-NHS organisations, 2006-7 to 2013-142 3

In terms of the type of inpatient activity carried out by non-NHS providers (and ignoring audiology, where it is 34%, but on very low numbers), trauma and orthopaedics top the list at around one in eight episodes of care (fig 3). For inpatient work 88% of the market is covered by seven private providers, with Ramsay Health Care accounting for a quarter of all non-NHS provider inpatient episodes (fig 4).

Figure3

Fig 3 Percentages of NHS inpatients treated by NHS and non-NHS providers by specialty, 2013-142

Figure4

Fig 4 Non-NHS market share of inpatient activity paid for by the NHS, 2013-143

As a proportion of the NHS’s total secondary care activity, the contribution of the non-NHS sector has been and remains very small. But it could grow. If rates of growth since 2006-7 continue over the next 20 years, non-NHS providers could account for one in five of all outpatient attendances and approaching one in 10 inpatient episodes paid for by the NHS. But is the observed rate of growth genuine? Some of the observed growth in non-NHS activity is likely to be the result of better reporting rather than actual growth in work done. If so, predictions for the next 20 years should be based on a lower rate of growth.

And even if non-NHS providers were to increase their share of NHS paid work, would this matter? (How much does it matter that general practice and community dentistry are non-NHS services?) As Duckett suggests, ownership of the means of production isn’t really the issue.4 What matters for the quality of patient care and the efficiency with which it is delivered applies regardless of ownership: the quality of management, the incentives organisations and individuals face, the regulatory environment, etc.

Notes

Cite this as: BMJ 2015;350:h3109

Footnotes

  • Competing interests: I have read and understood BMJ policy on declaration of interests and have no relevant interests to declare.

  • Provenance and peer review: Commissioned; externally peer reviewed.

References

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