Covid halves trusts’ private earnings
NHS Private Patients Barometer
The third annual NHS PPU Barometer provides a snapshot of performance and valuable insights into the impact of Covid-19 on the sector. Its author Philip Housden reports.
The NHS PPU Barometer is a unique measure of trading performance and of the confidence levels of the management teams of trusts’ private patient services.
Completed as an online survey by 28 trusts during August 2021, all regions are represented with the exception of the North-west.
The highest number of returns came from London and south-west regions with seven and there were five responses from trusts in the southern Home Counties.
The 28 trusts accounted for approximately £336m revenue in 2019-20, which was 50% of the total NHS PPU market that year of £673m.
Both these values are comparable with the £349m of revenues and 53.3% of the market in last year’s second Barometer.
Individual comments from trust managers confirmed that this significant reduction from the long-term average was due to the prolonged and ongoing impact of Covid-19 throughout the year.
Given the dramatic impact of the pandemic on the NHS and its capacity, the Barometer first asked: ‘What is your trust’s overall position at the moment with regards to treating patients privately, now or in the near future?’
CHART 1
Results show that 62.1% of responding trusts agreed with the statement that their trust was ‘Committed to re-instate private patient services to reduce waiting/access times and increase revenues/reduce costs’ and this was a 6.1% points increase from the 56% agreement in 2020.
Only 3.4% of responding trusts in contrast preferred the statement choice for their trust that it ‘Doesn’t feel it is appropriate to be treating – or planning to treat – private patients at this time’, and this is a decrease from the 8% reported last year.
Trust managers reported two main factors linked to Covid-19 as the principal causes of reduced private patient income.
The first is clinical priority-setting: private patient activity was possible through the pandemic in many/most trusts, but only in so far as clinical urgency allowed within NHS priority guidance.
As one manager put it: ‘We reduced all PP activity in line with national NHS priority guidance, so were still able to operate on patients deemed urgent enough. This did reduce our activity significantly.’
The second is capacity constraints: in many trusts, physical capacity for private patients has been redirected towards the NHS’s efforts to increase volume throughput recognising the lengthening waiting times and waiting lists.
An example of this is one trust reporting: ‘We have access to NHS beds for procedures, but the PP unit is still in use by the NHS currently. No timeline to re-instate dedicated PP beds until pandemic truly under control.’
The Barometer asked for details of the changes to capacity in terms of inpatient and day-case beds, outpatient clinics, diagnostic services and operating theatres. And it asked whether these were presently fully closed to private patients or partly or fully open within the trust.
CHART 2
As can be seen from chart 2, trusts’ responses this year show that, for each category, more than 67% of trusts report being partially or fully re-open for private patients – up from 65% last time.
Access to diagnostic services fares best with 96.4% (was 84%) either fully or partly open to private patients.
However, access to inpatient beds remains most restricted, with 32.1% of trusts sharing that their facilities remain closed to insured and self-pay patients while only 17.9% are fully open.
Experience varies widely; consider these summaries from managers in different trusts:
‘PPU beds were repurposed as part of the Covid response. A new PPU ward will be made available December 2021 with just a small inpatient offering to start. It will likely be closer to February when capacity more fully resumes.’
‘The PPU was scheduled to re-open Sept/Oct 2021. However, winter pressures may mean it will not be operational until Spring 2022.’
‘Only offering PP theatre procedures at weekends and with limited capacity since Spring 2021.’
‘Currently no plans to re-open services and any decision is likely to be months away.’
CHART 3
The Barometer then asked: ‘What is your forecast for private patient services revenues for the full financial year 2021-22 when compared with last year 2020-21?’
The purpose of this question was to gain an insight into how present restrictions on private patient capacity are likely to impact the future recovery of revenues.
Although many trusts shared that they were expecting increases this year, this needs to be put into context given the significant reductions in income delivered in 2020-21.
As can be seen from the chart, over one-third (37.5%) expect outturn for this year to be a broadly roll-over position, with a further 25% predicting growth of between 10% and 20%, and the most bullish commenting that their trust was ‘looking to restore 95% of 2019-20 activity – keeping alignment with NHS restoration targets.’
In contrast, 20.9% predict further private patient income reductions of more than 10%, with nearly half of these expecting a 50% or more fall.
One manager stated: ‘The capacity pressures imposed by the recovery of elective care and the growing waiting lists will have a reducing impact on the growth of private patient activity.
‘The anticipation of a third wave of the pandemic and ensuing winter pressures on capacity will also impinge on the rate of recovery or private patient activity.’
35% growth
In London, five of the top ten highest-earning NHS trusts responded to the Barometer – six in 2020. There is a marked spread of forecasts for 2021-22: three of these five predict growth of over 20%, with one of the three suggesting greater than 35% growth.
The other two shared their views that income would fall; in one case by between 10-20% and the other over 50%.
CHART 4
The survey also again asked for a ranking of 15 factors identified as potentially most likely to help deliver the re-opening of presently closed or restricted NHS private patient services.
Those with the most impact ranked #1, the least impactful ranked #15, with the weighted average scores shown in chart 4.
The three highest average weighted scores for 2021 were the same as last year. The importance of trust executive support has been further emphasised with a rise from third to first, chiming with the similar results consistently reported from consultant user surveys.
Open support from consultants for return of onsite private patient services ranks second, followed by designation of ‘protected green pathways’ for private patients. Unsurprisingly, the requirement for maximising trust capacity rose from 5th to 4th place.
Flexible job plans
Noticeable decliners were common NHS-wide governance enabling consultants more flexibility in job plans to blend NHS and private patients – down to 7th from 4th – and reducing concerns over practising privileges/patient safety concerns with the independent sector – down to 11th from 9th.
CHART 5
Private patient service managers in trusts were also asked a set of topical questions related to the management of patient complaints raised because of the recent highlighting of this in the Paterson Report.
In the first, 20 of 26 trusts answered ‘yes’ to the statement ‘Private patient complaints are managed and resolved following the NHS patient processes’.
The second question asked whether private patient complaints were resolved using alternative processes. Nine trusts, approximately one-third, said they were. As one manager put it: ‘We follow NHS PALS complaints process with the right to appeal to ISCAS at stage 3 if unresolved.’
Third, a clear majority of 16 of 26 trusts confirmed that their trust private patient service did not use the Independent Sector Complaints Adjudication Service (ISCAS), but one trust shared that ‘the trust is aware of ISCAS and is updating processes to include this as services resume.’
Finally, 20 trusts responded to the question regarding their lack of awareness of ISCAS with 11 (30.4%) saying they would be keen to know more or subscribe to ISCAS in the future.
Philip Housden (right) is managing director at Housden Group commercial healthcare consultancy