For Whose Benefit? NHS England’s contract with the private hospital sector in the first year of the pandemic

Sid Ryan, David Rowland, David McCoy & Colin Leys | October 7, 2021 | Featured, Reports


For Whose Benefit? NHS England’s contract with the private hospital sector in the first year of the pandemic

This report analyses the government’s use of the private hospital sector to alleviate the burden on the NHS during the first year of the COVID pandemic. Under this strategy, NHS England purchased access to practically the entire private hospital sector at the outset of the pandemic, in a series of contracts that would run between March 2020 and March 2021.

However, this research shows that none of the goals outlined for the deal were achieved to a significant extent. Almost no COVID patients were treated in the private sector and NHS funded activity in the private sector fell significantly, and much further than in NHS Trusts. While underutilisation of the purchased capacity was a persistent feature of the contracts, successive renegotiations to cut costs and reduce the amount of capacity purchased left the NHS unprepared for the worst effects of the second COVID wave.

Meanwhile, the 26 private hospital companies benefited significantly from the deal, as the secure, government backed guarantee of their operating costs protected the sector from losses caused by the pandemic, private healthcare was allowed to continue even when the NHS was under the greatest strain and the sector is now in a position to capitalise on the pent-up demand for healthcare.

The deal has not been as transparent as originally promised, with the total cost undisclosed but estimated to be between £2bn-£5bn and inquiries from CHPI, journalists and MPs frustrated. This report raises serious concerns about the strategy employed by NHS England, value for money for the taxpayer and accountability of government.

Key Findings:

  • Despite Government claims that the contract with the private sector would help prevent the NHS being overwhelmed, no more than 1 private hospital bed was occupied by a COVID infected patient for 59% of the contract. In total private hospitals delivered 0.08% of COVID care.
  • The highest number of private hospital beds occupied by COVID patients on any one day was just 78. An estimated 8000 private hospital beds were made available to the NHS under the contract.
  • In 2019 the year prior to the pandemic private hospitals carried 526,000 elective procedures (for example, hip, knee and cataract surgery) on NHS patients but only 291,000 during it, a reduction of 45% and a shortfall of 235,000 operations.
  • The overall amount of NHS funded activity in the private hospital sector – including outpatient appointments – fell by 43% under the contract.
  • The contract with the private hospital sector was renegotiated to allow private hospitals to treat increasing numbers of private fee-paying patients prior to the peak of the pandemic in January 2021 when the NHS was under greatest strain.
  • Government and NHS England have refused to publish the full contracts or disclose exactly how much was paid to private hospital companies but estimates range from £2 billion to £5 billion.

The report recommends that the Department of Health and Social Care answer the following questions:

  • Exactly how much was spent by the NHS on purchasing services from private hospitals during the first year of the pandemic, and what did the NHS receive in return?
  • Why were the private hospitals allowed to continue performing non-urgent elective care when the NHS was under the greatest strain, and why was the amount of purchased capacity reduced before the widely predicted second wave of the pandemic?
  • To what extent did the contract protect the interests of the private hospital companies rather than those of the NHS?

For Whose Benefit? NHS England’s contract with the private hospital sector in the first year of the pandemic

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About the authors

David Rowland

David Rowland is CHPI's Director. He joined the organisation in 2019 after over a decade of working in senior policy positions within the healthcare regulatory sector. For David's full bio see our People pageSee all posts by David Rowland

David McCoy

David McCoy is a co-chair of CHPI and Professor of Global Public Health at the Centre for Primary Care and Public Health at Queen Mary University London and a medical doctor. He is a Fellow of the UK Faculty of Public Health.See all posts by David McCoy

Colin Leys

Colin is an emeritus professor at Queen’s University, Canada, and an honorary professor at Goldsmiths, University of London. Since 2000 he has written extensively on health policy. He is co-author with Stewart Player of Confuse and Conceal: the NHS and Independent Sector Treatment Centres.See all posts by Colin Leys