A landmark NHS deal on paying private healthcare firms to provide care is in the balance as profit-making companies threaten to pull out if caps are placed on their ability to get paid
Private hospitals are demanding more money from the NHS to help the Government bring down waiting lists.
Sir Keir Starmer’s landmark deal with private healthcare firms is at risk of collapse as they threaten to pull out in objection to a cap on the amount they can earn from the NHS. Campaigners have branded the move “profiteering” and are demanding the Government use the funds to build up in-house NHS capacity instead of paying profit-making firms to deliver care.
The Times has reported that the Independent Healthcare Providers Network, which represents the private sector in dealing with the NHS, has warned Health Secretary Wes Streeting they will walk away from the deal if their earnings potential is capped.
Cat Hobbs, director of We Own It, said: “This is exactly why the government should be investing directly in expanding NHS capacity. Why is the government putting the future of patient care at the mercy of the private sector? The NHS was invented to sidestep this kind of chaos and profiteering.
“The government must invest at scale to get back what we’ve lost over the past decade – the most successful healthcare system in the world. This is a major reason why this government was elected, because people believed they would defend and expand the NHS.”
Talks are ongoing concerning the deal with private hospitals which would be the biggest increase in NHS outsourcing since the hated 2012 Tory reforms which saw David Cameron ’s austerity government open the NHS up to the private sector. The latest deal was hailed by ministers as key to the Labour government’s plans to hit a target of 92% of patients waiting less than 18 weeks for routine operations. Mr Starmer insisted in January it would be a “dereliction of duty” not to use private capacity to bring down waits.
The row reportedly comes after NHS England insisted outsourcing totals for private hospitals must be capped due to “the need for the NHS as a whole not to spend more than the resources it has available”.
The proposal would see hospitals obliged to accept patients who chose them for treatment but the NHS acknowledged some patients would face a longer wait as private hospitals delayed treatment to avoid breaching the local cost cap. Ministers had reportedly accepted the necessity for such cost controls for 2025/26.
Dr John Puntis, co-chair of Keep Our NHS Public, said: “Labour is right to reconsider giving generous amounts of public money to the private sector for developing its capacity to treat NHS patients. The Blair-Brown government put the NHS back on its feet and markedly improved performance and public satisfaction. This was achieved by increasing funding to meet need, addressing the social determinants of health including poverty, and having a strong focus on public health.
“These lessons should be applied once again to tackle not just huge waiting lists and badly missed targets but also the crisis in acute care. There is no room for further mistakes given striking increases in people too sick to work, highlighting that if the health service fails, the economy will also fail.”
The IHPN represents firms such as Bupa, Circle Health Group and Care UK and its chief executive David Hare told the Times the current plans were “completely unworkable”.
Previous outsourcing drives have seen private hospitals cherry pick relatively simple – and profitable – procedures while leaving the NHS to pick up the pieces when complications occur. They remove simple procedures such as cataract, hip and knee operations from the NHS – which are used to train NHS surgeons up for the more complex procedures which the health service has to carry out. They also contributed to a “brain drain” of medics from the NHS to the private sector.
Ms Hobbs said: “If there is useful spare private capacity the Government should encourage NHS Trusts to buy it so that more patients can be seen. This has happened in Maidstone and Tunbridge Wells where the NHS Trust has bought out a private hospital and can now deliver more.”
The annual rate of NHS funding rises – to keep pace with the ageing population – slowed from 6% under Labour to only 2% under the Conservatives, according to an analysis by the Institute for Fiscal Studies (IFS). The annual rise average since the NHS was founded is around 4% which is still low by European standards.
The 2012 Health and Social Care Act was the brainchild of then-Health Secretary Andrew Lansley fragmented the NHS while ushering in the private sector and an era of “competition” between health bodies. Last year’s landmark Darzi review on the state of the NHS said these reforms caused “lasting damage” and were “without international precedent”.
Before that New Labour had funded 100 new NHS hospitals with controversial Private Finance Initiatives (PFIs). Around £13 billion was borrowed for these but the NHS repayment bill was over £80 billion. Even when fully repaid, the public does not own the hospitals.
Health Secretary Mr Streeting has been open about his desire to use profit-making firms to bring down the NHS backlog.
The NHS waiting list hit a record high in September 2023 with 7.8 million treatments following a steady upward trajectory since 2010 when the Tories came to power and it stood at 2.5 million. It has now fallen for four months in a row and stands at 7.5 million appointments.
A spokesman for the Department of Health and Social Care said: “This proposal is still subject to consultation, and conversations are ongoing between NHS England and independent providers. The government is committed to giving patients real choice and control over their care, including the option of being treated by the independent sector on NHS terms.”
