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NHS hospitals report a loss on treatment of private patients

Nine hospitals have made a loss on the treatment of private patients between 2010-11 and 2015-16, new research has revealed.

The report, ‘NHS treatment of private patients: the impact on NHS finances and NHS patient care,’ by the Centre for Health and Public Interest (CHPI), found that for four of these hospitals the losses were significant, and one trust made a loss of £18m over the six-year period.

Following the passing of the Health and Social Care Act in 2012, the treatment of private patients was expected to become a significant source of income for NHS hospital trusts, however, the study found that there has not been a significant growth in private activity or income within the NHS.

Despite this, it warns that “the continuing squeeze on NHS funding could lead to the treatment of private patients becoming more important, with a potentially significant impact on the availability of care for NHS patients.”

The NHS has 1,142 beds set aside for private patients, and it is estimated that a further 150 beds are occupied by private patients at any one time.

The report, based on official sources, Freedom of Information requests to all 153 acute hospital trusts, and interviews with hospital staff, found that since 2012 there has only been a small increase in the total income generated by the NHS through treating private patients.

In 2012-13 the NHS saw an income of £511m from treating private patients, which increased by just £85m in 2015-16.

The median hospital trust income for 2015-16 was just £769,000, and around a third of hospitals reported no income from private work whatsoever.

However, the author, Dr. Sarah Walpole, also argue that there is “a clear lack of accounting costs” which “makes it impossible to tell how much, if any net revenue has been derived from this activity.

Just 10 private patient units, mainly based within London NHS hospitals, accounted for almost 60% of the £596m generated by the NHS from the treatment of private patients, and the report reveals that for four of these hospitals, private patient income makes up more than 10% of their income.

Some hospitals failed to receive payment for some of the private services that they have provided, with the total value of bad debts written off for all private patients treated at NHS Foundation Trust hospitals adding up to £1.8m in 2014-15 and £1.8m in 2015-16.

The report also found a wide variation in the prices that NHS hospitals charge private patients, with some having no agreed procedure for setting prices, while others negotiate prices with private insurance companies.

Consequently, there are “big differences” between these prices and the national tariff paid by NHS commissioners for NHS patients.

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