‘Planned 49% limit’ for NHS private patients in England

Mention of the NHS seems to result in a serious outbreak of irrationality amongst the commentariat, this week it’s because the new Health and Social Care Bill with contain a cap of 49% on the fraction of income an NHS hospital can earn from private patients (BBC news here). Clearly this represents end-times, privatisation of the NHS etc etc…

Currently most hospitals are limited to a cap of 2% income from private patients, although a quick search shows that the Royal Marsden already gets 26% (source), Christies 6% (source), Papworth 4.5% (source). These are not hospitals renowned for poor service to NHS patients.

The key point here is that 49% is a cap, not a target. Since only 8% of the UK population has private health insurance, amounting to 14% of health expenditure (source) it’s very difficult to see how NHS hospitals as a whole will reach anything like 49% of income from private patients. The current situation must be that private patients are largely (lets say 90%) serviced by entirely private hospitals – NHS hospitals will only pick up that trade if they offer something better. The area they will offer something better is in specialist care – which isn’t viable for a private system serving less than 10% of the population. The limit case is that NHS hospitals would get 14% of income from private patients and the private hospital sector would disappear, clearly this isn’t going to happen.

Private patients in the NHS wouldn’t be displacing publicly-funded patients from beds, if that were all they were doing then what would be the point for the patient? To get private patients an NHS hospital would need to build (or convert) private “wards”, this is what hospitals like the Royal Marsden do already. To do this they’d need a fair expectation that they could attract the custom otherwise they’d simply end up poorer.

I’ve had private medical care – I liked it a lot, I wish everyone could have it. The benefits I received were in getting rapid treatment for a non-emergency condition, having my own room for the run-up and post-operation and having consultations in a slightly more pleasant environment. As a family (unborn included) we continue to use the NHS for most of our medical care. As someone with private health insurance, I get to pay twice for some of my health care – I pay for NHS treatment which I don’t use, then I pay again for private treatment. I don’t resent this, I do resent the idea that my private care must be entirely separate from any public provision that is available – in that case why can’t I withdraw my contribution to the public system?

The figures on health expenditure in the private sector give some idea of the potential funding gap for the NHS – what we’d need to pay for a gold-plated NHS where, for example, there were no waiting lists and we all had private rooms (if that was medically appropriate). Currently the NHS gets £106billion per year, equivalent to 25p basic rate tax. Private health insurance appears to cost about 1.75 times as much per head therefore a crude estimate is a gold-plated NHS would cost  £185bn or 46p basic rate tax. This would put us at a level of spending that is equivalent to Switzerland and only exceeded by the US (source). It’s possible that you could do it for rather less but not if every attempt to change anything in the NHS is met by a hysterical and apocalyptic knee-jerk response. The important thing is patient care, not the institution that provides it. Providing a healthcare system isn’t simply a choice between the NHS or US-style system, you can see the range of systems here.

And before we get hoity-toity about people paying directly for health care – all the NHS does is launder the process of paying for health care. We pay tax to the government, the government funds the NHS – it isn’t some vast charity run on goodwill. Consultants and doctors in the NHS are really paid quite well, and in my experience individual consultants are working for both public and private sectors at the same time. It is rather offensive to the wide range of people in the private sector service industries to imply that the service they provide is somehow inferior because they are paid by the customer, not by the government.


More on this at NHS Vault (here), definitely worth reading.


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  1. The outcry about privatisation has nothing to do with a 49% limit. It’s to do with the selling of commissioning and provision to “any qualified providers”. The quacks are lining up gleefully to provide cut price junk medicine.

    • Nico (@nfanget) on December 28, 2011 at 10:06 am

    I’m not against the NHS making some money from private patients, I am however wary of how this will be implemented. The devil is in the detail, innit. If, for sake of argument, private patients are given priority over NHS patients for MRI scans, I would be strongly against this. If it is a way to provide specialist treatment to private patients, and ease the NHS cash flows, fine.

    I am extremely wary because of a case I have heard of a drug manufactured in an NHS hospital, which is sold at a loss to a pharma company that then resells it for profit. I am not against private participation and exchanges with and within the NHS, but I strongly oppose private manufacturing being subsidised that way.

    • on December 28, 2011 at 1:57 pm

    @David – I’ve not seen any mention of “any qualified providers” and “alternative” healthcare over this NHS story.

    @Nico – I believe MRI scanning is something which is already contracted out (to a degree), in the sense that the NHS pays external providers to do it and in some cases might tell you “if you pay X” then you can get scanned sooner (by the external provider). I hope at the Royal Marsden, which specialises in cancer treatment, paying as a private patient doesn’t get you treated sooner since my understanding is that cancer treatment is time sensitive.

    If the NHS is providing something to a pharma company at a loss who are then profiting on it then that’s stupid and they shouldn’t do it.

      • Nico (@nfanget) on December 28, 2011 at 2:26 pm

      Hi Ian, I took the MRI as an example off the top of my head, for all I know private companies might run better scanning clinics. There are already serious tensions between public and private in the NHS, for example with consultants having both NHS and private patients. To increase the amount of private work hospitals do will just further muddy the waters.

      Interesting points are made here: http://notsobigsociety.wordpress.com/2011/12/28/creating-a-two-tier-nhs/

      The already world-famous hospitals will get more money through this scheme, but the Middleofnowhereshire PCT won’t get any, thus furthering the funding gap and the postcode lottery.

      Not that there aren’t things that need improving in the NHS, the ongoing farce of the computer system and decaying 60s “temporary” infrastructure being just two of them. And yes, it is stupid what they do with this drug, but I inderstand it is that way because of some arcane managerial decisions.

    • James Evans on December 28, 2011 at 4:00 pm

    It seems to me that if private and NHS patients are treated in the same hospitals by the same staff then private patients are likely to demand preferential treatment of some sort. Indeed, if NHS hospitals offer paid-for services, would their customers (which would be the insurance companies rather than the patients) not expect something in return for their fees? If the insurance companies can’t deliver “better” care for claimants, even in NHS hospitals, how would they sell their product?

    Do hospitals with private wards, like the Royal Marsden, prioritise treatment across all their patients or do they have separate work queues for private and NHS wards? To an outsider this sounds like the sort of problem that must arise when scheduling any non-urgent treatment – there’s always a risk, unless you have lots of spare capacity, that a more pressing need will present itself and the non-urgent treatment will be postponed.

      • on December 28, 2011 at 5:15 pm

      Christies (see link in piece) is employing new staff in its private collaboration. I would expect other hospitals to do similar – I’d really hope that NHS hospitals (and their staff) would not need telling what their treatment priorities should.

      As a private patient I would pay simply to get my own room and better food with exactly the same treatment schedule. The benefit for a private customer is that they get expertise that simply isn’t available within the purely private sector, it’s similar to the benefits a business class traveller gets when flying trans-atlantic: same plane, same schedule – more space, better food.

      My view is that people should get treatment for life threatening conditions in a timely fashion, regardless of ability to pay. I *think* this is the case currently but I’m not entirely convinced particularly in the case of testing which could lead to indications of a life threatening condition where I think you can get tests more rapidly by going private.

      Non-urgent conditions I’d really like to see treated in similarly timely fashion (to me that means within a month from initial presentation) – this is what I think the goal of the NHS should be. This currently doesn’t happen, it did for me in the private sector and it was a revelation! This costs though, and one way of meeting the cost of that is to get people like me to pay more into the NHS.

    • Mark on December 30, 2011 at 9:25 am

    “in that case why can’t I withdraw my contribution to the public system?”

    Fine by me – as long as you’re happy not phoning 999 for an emergency ambulance anymore.

    I imagine the alternative will be an 0845 number to a call centre in Scotland where you’ll hold for fifteen minutes before being given a series of seven options. When you ultimately get through to the right department they’ll ask for your private healthcare account number and run a check to see if your payments are up to date before you even get a chance to start talking about anything medical.

      • HappyMouffetard on December 30, 2011 at 11:27 am

      I think, if you read the post, he says that he specifically says he does not resent paying the tax. Presumably, he would still, therefore, be allowed to use such services as necessary?

  2. @Mark

    Brilliant comment. The perfect answer to the ‘opt-out’ brigade.

    They can have low tax as long as they agree to have no 999 calls, no roads and to pay for schools.

    • on December 30, 2011 at 11:45 am

    @Mark, @David – I’m impressed by your enthusiasm for quote-mining to fit your preconceptions. As it is, my position is not “opt-out”, it’s closer to “top-up” which is what I wrote.

    Personally I think we *all* need to spend more on healthcare, it may be you can convince the electorate that you need to do that by direct taxation but to my knowledge no-one is making a serious attempt at that. And it does need to be coupled to a willingness to change the NHS to enable it to do things better for its patients, rather than treating it as a sacred cow which is prioritised above the service it provides to its patients.

    Interestingly your caricature of a private 999 service is somewhat similar to the position people in rural areas can find themselves now over out-of-hours GP services. And the only time I’ve ever been in an ambulance we paid (and were covered by insurance), because it was as a result of a traffic accident.

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