The return of PFI – will the NHS pay a higher price for new hospitals?

Reports
Written By Dr Mark Hellowell

This report analyses the financing structure of the new Private Finance 2 scheme and finds that it is likely to increase costs to the NHS. Restructuring the balance of debt and risk capital would increase the rate of return to private investors by 15% compared to the original Private Finance Initiative.

The report also notes that private finance is ‘the only game in town’ for the NHS following unprecedented reductions in government capital spending and that a marketised healthcare system introduces perverse incentives for providers to pursue large-scale investments as a means of increasing their claim on the resources in the local health economy.

Dr Mark Hellowell

Dr Mark Hellowell is a Lecturer in Global Health Policy at the University of Edinburgh. His research focuses on the public/private sector interface in healthcare financing and service provision. He has advised a number of international agencies, including the World Bank, on the evaluation of public-private partnerships for health services, and has acted as special adviser on private finance in public infrastructure to the House of Commons Treasury Select Committee.

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