Hospitals making losses on treating private patients - report

Some hospitals are losing millions of pounds on treating private patients, an investigation has found.

A report by think tank, the Centre for Health and the Public Interest (CHPI), found one hospital trust made a loss of £18 million between 2010 and 2016, while three others also made "significant" losses.

It said that although there is clearly money to be made from treating private patients in NHS hospitals, the overall impact remains unclear.

A total of nine hospital trusts made a loss on the treatment of private patients in some or all the years from 2010/11 to 2015/16.

Its investigation also found some are failing to receive payment for some of the services that they have provided.

The think tank said the total value of bad debts written off for all private patients treated at NHS Foundation Trust hospitals was £1.77 million in 2014/15 and £1.81 million in 2015/16.

When the Health and Social Care Act was passed in 2012 the treatment of private patients was expected to become a significant source of NHS hospital trust income.

The CHPI said while this has not happened in any significant way, the continuing squeeze on NHS funding could lead to it becoming more important.

Its report, based on official sources, Freedom of Information requests to all 153 acute hospital trusts, and interviews with hospital staff, found the total amount generated by the NHS from treating private patients increased from £511 million in 2012/13 to £596 million in 2015/16.

But it said NHS hospital trusts differ widely in the way they set the prices they charge private patients.

Some have no agreed procedure for setting prices, while others negotiate prices with private insurance companies. This leads to wide variations in the prices charged to private patients and has not been proven to cover all direct and indirect costs.

The CHPI said 10 private patient units - mainly based in London - account for nearly 60% of the £596 million generated by the NHS from the treatment of private patients.

For four of these hospitals, private patient income makes up more than 10% of their income.

It said the NHS has set aside 1,142 beds for private patients, while a further 150 NHS beds are estimated to be occupied by private patients at any one time.

The report's author Dr Sarah Walpole questioned whether these beds could have made a difference while hospitals have been under great pressure this winter, if they had been available for NHS care.

"Raising the limit on the amount that hospital trusts can make from private patients was seen as an easy win for a Government seeking to slow spending on the NHS," she said.

"However, six years later we find that it is not possible to say whether the NHS benefits financially from devoting resources to the treatment of private patients.

"Given that the resources that are being devoted to private patients are significant, in terms of beds and staff, and that NHS income from private patients is predicted to grow by 6% a year till 2020, it is important to determine whether treating private patients represents a net financial gain for the NHS."