Paid for by the NHS, treated privately

John Appleby in the BMJ (2015;350:h3109 ) looks at how much non-NHS providers contribute to NHS care. Paid for by the NHS, treated privately. The effects on medical education are not his concern, but they may well be to all of us approaching our last decades of life. Rationing by “Any purchaser/Provideris short termism of the worst kind. I wonder what the different Specialist Royal Colleges said when they (if they) were consulted?

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).


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


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).


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


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.


  1. Department of Health. Working for patients. Cm 555. HMSO, 1989.
  2. Health and Social Care Information Centre. Hospital episode statistics, admitted patient care, England 2013-14. 2015.±activity±2013%2f14&sort=Relevance&size=10&page=1&area=both#top.
  3. Health and Social Care Information Centre. Hospital outpatient activity—2013-14. 2015.±outpatient±activity±2013%2f14&sort=Relevance&size=10&page=1&area=both#top.
  4. Duckett S. Does it matter who owns health facilities? 2001.±html
This entry was posted in A Personal View, Medical Education, Rationing, Stories in the Media on by .

About Roger Burns - retired GP

I am a retired GP and medical educator. I have supported patient participation throughout my career, and my practice, St Thomas; Surgery, has had a longstanding and active Patient Participation Group (PPG). I support the idea of Community Health Councils, although I feel they should be funded at arms length from government. I have taught GP trainees for 30 years, and been a Programme Director for GP training in Pembrokeshire 20 years. I served on the Pembrokeshire LHG and LHB for a total of 10 years. I completed an MBA in 1996, and I along with most others, never had an exit interview from any job in the NHS! I completed an MBA in 1996, and was a runner up for the Adam Smith prize for economy and efficiency in government in that year. This was owing to a suggestion (St Thomas' Mutual) that practices had incentives for saving by being allowed to buy rationed out services in the following year.

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