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Is Stealth NHS Privatisation Happening in Plain Sight?

NHS doctor David Oliver examines the evidence of ever-increasing use of provision from private healthcare companies that bring a profit motive to the service

A mobile MRI scanner provided by a private company at Basingstoke hospital. Photo: Stephen Frost/Alamy

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Is the NHS really being privatised on the quiet, before enough of us realise it?

It remains a taxation-funded, largely publicly-provided, universal, free at the point of use service, notionally based on need not the ability to pay, in line with its founding principles. And you can’t buy shares in the NHS – a million miles away from the situation in our privatised utilities and public transport providers.

International health system comparisons and league tables have consistently shown that the NHS is a leader in terms of efficiency, cost, equity of access, not financially charging patients, and not damaging them financially by the cost of care or avoiding care due to fear of cost.

That said, the World Health Organisation defines privatisation as occurring “where non-government bodies become increasingly involved in the financing or provision of health care services”. Use that yardstick and the situation warrants further scrutiny.

Services such as dentistry, community pharmacy, and eye testing have been provided by the private sector for many years without considerable pushback (although the recent crisis in the provision of NHS dentistry and a contract that makes it unviable for dentists to deliver at any kind of scale has raised doubts about this).

Support services such as catering, car parking, cleaning, security and maintenance, and records storage have been outsourced for years – although not without concerns regarding their value for money, quality, competence, or comparison with traditional in-house provision (not to mention NHS frontline staff being fined for parking at their own workplace and companies profiting from patients or their families visiting hospital).

Legislation in recent decades has created an internal market with a ‘purchaser-provider split’: the “any qualified provider” clause in Andrew Lansley’s 2012 Health and Care Act made it compulsory for the Government to put NHS contracts out to competitive tender. This has since been repealed with the creation of 42 “integrated care systems” and the Alternative Provider Medical Services Contract, enabling primary and community services to be bid for by non-NHS providers.

NHS trusts are also saddled with debts from the private finance initiative (PFI) for building and maintenance of facilities. In 2022, the Guardian found that 101 trusts owe £50 billion between them and several are spending more than 10% of their revenue on servicing PFI contracts. There are numerous ongoing disputes between NHS trusts and providers about the quality of the contractors’ work and plans when the contracts come to an end.

Despite all of this, respected health policy think tanks such as the King’s Fund have pointed out that notwithstanding the growth in clinical contracts being awarded to the private sector after the 2012 Act, they have often been of low value (with a total spend of only about 7 % of NHS expenditure).

Meanwhile, adult social care – including personal care at home or long-term care in residential and nursing homes – unlike the NHS, has long been rationed by highly restrictive eligibility assessment. It is far from universal and is also subject to means testing and personal payments. Cuts to local government funding, competing pressures on councils, repeated failures of government to provide social care funding solutions, and the crisis in the poorly paid social care workforce, have seen a growing gap between requests for support and provision.

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Earlier this month, it was reported by the director of the Centre for Healthcare in the Public Interest that private equity funds and US health corporations were taking more than £1 billion in profit annually from their stakes in care homes for older people and homes for looked-after children. These facilities are currently essential to service provision and represent a stable opportunity for return on investment.

It was also reported that half of the UK’s sexual assault referral centres were backed by private equity and that companies had made several millions in dividends during the past two years, not only from these centres but also from healthcare provision for people in custody and secure units.

Around one in three inpatient mental health beds, and the majority of addiction, drug and alcohol rehabilitation facilities, are now private sector provided. Local government cuts have also impacted capacity in such services.

This is despite a major evidence review this year in the Lancet, which found that research in the past 40 years had shown that an increasing aggregate of private sector provision has been linked with worse outcomes for patients. It concluded that the evidence for the benefits of privatisation was weak.

A review by the British Medical Journal last year of the literature on private equity investment had shown that a growing involvement of private equity in all healthcare settings was associated with higher and harmful costs to patients and “mixed to harmful” impacts on care quality.

The Guardian also reported this month that private hospitals are now carrying out 10% of all elective NHS operations (a record high). The biggest areas among the 1.67 million NHS-funded operations carried out in the private sector were in routine orthopaedic surgery, eye surgery and dermatology – a 29% increase in the numbers reported in 2019.

The Independent Health Provider Network praised the increasing access and choice for patients as helping to reduce waiting lists (as part of the NHS referral to treatment scheme).

The Centre for Healthcare in the Public Interest has also reported that cataract operations being conducted in the private sector are also being clinically coded as of higher complexity than those in the NHS – with more complex codes attracting a higher price.

Meanwhile, between 2019 and 2022, the proportion of British citizens taking out private medical insurance nearly doubled from 12% to 22%, bringing the UK more in line with other industrialised nations from a historic low uptake.

Again, the insurance industry is pleased with this progress. Last year, both Aviva and Axa celebrated the opportunities this provided and the growth in their market share.

We know that more than one third of patients having private sector surgery are now paying out of their own pocket, even without any personal insurance policy, and that this too has seen a steep rise in recent years.

The pandemic caused a sharp rise in privatisation tendencies.

The National Audit Office published a series of reports on pandemic procurement, showing tens of billions of pounds squandered on personal protective equipment – much of it unusable, on test and trace, apps, ventilators, and consultancy contracts often from unqualified and unsuitable commercial organisations with insufficient scrutiny and transparency and poor value for money. 

As Byline Times has reported on extensively, some of the individuals and organisations who won contracts had links to the Conservative Party or were known donors, with a ‘VIP lane’ created to facilitate this.


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The private hospital sector was also given an additional £2 billion of government money between 2020 and 2023 to help with pandemic elective care, but its activity continued to be dominated by private work.

There is also the issue reported by Byline Times of several MPs or peers holding shares in private healthcare providers, or private equity firms who fund them and lobbying on their behalf.

The private healthcare sector employs and poaches staff trained by the NHS and bears none of the training costs itself; selectively cherry-picking low-risk elective procedures it can monetise and avoiding acute, urgent or complex care – including the provision of emergency departments, intensive care, or inpatient care for sick older people.

It evades the degree of regulatory scrutiny the NHS must rightly meet. And it ships thousands of patients each year back to NHS hospitals when they develop acute complications that private hospitals are not staffed or equipped to deal with.

Analyses by the King’s Fund, the Nuffield Trust, Health Foundation, and even global consulting giants McKinsey, have shown that there is no inherent advantage in an insurance-based system with greater marketisation and profit motive compared to predominantly tax-based and publicly-provided systems.

Nor is it true that those systems do not exist outside of the NHS. Versions can be seen in Italy, Spain, Portugal, New Zealand, Canadian Provinces, Malta and Scandinavia – albeit often with less centralised political leadership and control.

Data from the British Social Attitudes Survey, the Health Foundation and Ipsos Mori has shown no public appetite, and no political mandate, for a change in the current tax-funded and notionally publicly-provided NHS model or its founding principles.

The same goes for support for an European-style insurance-based models (repeatedly touted by small state lobbyists from the Institute of Economic Affairs, the Adam Smith Institute, or columnists in right-wing publications who ignore the presence of perfectly decent, publicly-funded, models in their selected examples).   

Sadly, a major reason why so many more people are now feeling they must take out private insurance or use their savings to pay for treatment or consultations – and why the NHS itself is placing ever-growing volumes of business with the private sector – is the years of declining performance since 2010.

I believe the majority of the public wants the existing NHS model to work like it used to, in terms of access, waiting times, staffing, patient, and staff satisfaction – rather than a complex market involving multiple payers and competitive providers.

With a Labour government likely after the next general election, it would be good to see it openly defending the NHS’ founding principles – and to stop and reverse the expansion of the profit motive and markets in the service. I have seen no such commitments yet.

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