Plan to boost NHS private services
PPU Watch
Compiled by Philip Housden
NHS trusts across England are being encouraged by NHS England/Improvement (NHSE/I) to ‘actively explore and develop opportunities to grow their external (non-NHS) income in the new financial year’.
Its Revenue Finance and Contracting Guidance for 2022-23 says NHSE/I will work with them to ‘identify and scale up NHS export opportunities and support development of private patient opportunities to generate revenue.’
The guidance, updated on 13 April, accompanies the planning rules published in December 2021, which set out the health service’s priorities for the 2022-23 financial year.
This should be no surprise, because increasing the amount of commercial income is reflected in the aspirations of the NHS Long Term Plan.
The private patient market is worth around £7bn a year, of which the NHS generated pre-Covid £675m in 2019-20, falling back 44% to £380m in 2020-21.
As highlighted many times in Independent Practitioner Today, most recently last month – see ‘How to Boost PPUs’ – it is estimated the NHS share of the private patient market in England could be increased by up to £1bn a year while also ensuring alignment with core NHS services.
This can be achieved by:
Setting a national framework, enabling collaboration between trusts across regions and Integrated Care Systems (ICSs);
Cross-pollinating already successful examples that build on the strengths of leading trusts, such as identifying the higher morbidity and complex insured patients, often by default treated by the NHS for no charge.
Through such joined-up thinking and working the NHS, it could become a notable brand in this sector.
Political sensitivities
Of course, as press coverage has shown, these changes must be achieved in a way that reflects the sensitivities and political aspects of delivering private health services within a publicly funded health environment.
What is clear is that the NHS is currently in no position to divert workforce capacity to increasing its private healthcare business over the capacity already existing within hospital providers.
This means the real focus needs to be on substitution. Many patients with private health insurance cannot utilise this if they require procedures that many independent hospitals are unable to provide, such as ITU or very specialist equipment.
Additionally, insured patients are admitted to hospitals via the non-elective pathway into an NHS-funded bed and therefore are not able to utilise their insurance policy, particularly for non-complex surgical interventions.
In both these examples, the taxpayer is subsidising the insured sector at a time when public funding is stretched.
Enabling trusts to work together is the key and NHSE/I recognises this in its guidance stating that trusts will still be expected to grow non-NHS income ‘where appropriate’ while core NHS services should continue to be the ‘focus and priority’.
In picking up these themes, Chris Bown, most recently chief executive of London North-West University Healthcare NHS Trust, told Independent Practitioner Today: ‘It will be important, I believe, that ICSs fully consider what this guidance might mean for their systems as part of the overall recovery programme.
‘There are clearly risks if not implemented well, but we must not dismiss this guidance, as there are opportunities for the NHS – for example, financial – and its patients through greater choice.’
NHS England said in a statement: ‘Work continues with systems and organisations on financial plans for 2022-23.’
Bath unit starts private GP service
A new private GP service has been launched by Sulis Hospital Bath, the NHS-owned ex-Circle Hospital acquired by Royal United Hospitals Bath NHS Foundation Trust last year.
The hospital provides services for private and NHS patients across Bath, Bristol, Somerset and Wiltshire and has 28 en-suite bedrooms, 22 day-case and five ambulatory care beds, nine consulting rooms, four operating theatres, endoscopy, cardiology and intervention suites.
Private patient revenues of £585,000 were reported for 2020-21, down 34% from £882,000 the previous year to only 0.16% of total trust revenues.
But this total can be expected to increase significantly in the forthcoming 2021-22 accounts due to be published in the summer.
NHS hospital publishes its long overdue accounts
University Hospitals of Leicester (UHL) has finally published annual accounts for 2019-20.
These were delayed from June 2020 when it became clear there was a £46m hole in its 2018-19 financial position, meaning it was unable to sign off the next year’s accounts.
The publication finally enables a full picture for NHS trusts private patient revenues for that year. UHL reports income of £2.8m, which is £298,000 up on estimates used in analysis I have reported in this journal.
This income is 0.3% of the Trust’s total revenues and fully in line with those from the previous six years dating back to 2013-14, which have always been between £2.8m and £3m.
The annual accounts for 2020-21 are yet to be published but according to a trust spokesperson it is anticipated these and the annual report will be ready in the summer.
Philip Housden is a director of Housden Group