Guest Blogspot: Do private patients in the UK help or harm the NHS?

Private medicine like private education and first-class travel can stir up feelings of resentment between the “haves” and “have-nots”. A short blog like this one has no possibility of uniting stereotypical politicians from the left and right wings of politics.

This article sets out to discuss what is best for NHS patients with the funds available and whether the performance of the NHS is helped or harmed by private patients.  Whether there are other questions of conscience or principle that should override decisions based purely on medical outcomes within the NHS is a matter for each reader to decide according to his own values. This blog does not aim to discuss conflicting views that are purely political such as:-

  • The unfairness of queue jumping or of the privileged receiving better services.
  • A belief that a person should be entitled to pay for the best for his or her family and loved ones as a fundamental human right, possibly involving considerable sacrifice.
  • The view of some doctors that they should have the freedom to offer their services to whomsoever they wish.

The most obvious non-political starting point is to look at the effect of private patients on the funds available to treat each NHS patient. This article is aimed at seeking common ground about which experts of different political persuasions may be able to agree despite opposing political dogmas.

The way in which private payments for medical services operate varies enormously between countries. For this reason whether private payment helps or hinders may well vary from country to country. An analysis relating to the impact on the NHS must be specific to the UK. The systems in other countries need to be studied separately because their differing arrangements may lead to conclusions that do not apply in the UK. For example, in France individuals are often required to pay a proportion of their treatment costs. The main role of French private insurance is to provide cover for co-payments. In some countries there are important gaps in free healthcare with certain people or conditions not being covered.  Private payments may be used to plug these gaps. Some healthcare systems abroad such as those in Germany, Holland and Switzerland make medical insurance compulsory for certain sections of the population and so whether the premiums should count as tax or private medical coverage is debatable. In some countries private medicine is funded mainly by insurance but in others such as Mexico out-of-pocket expenses or charities play a relatively important role.

The total expenditure of the NHS in the UK is around £125bn per annum, corresponding to an average of close to £2,000 per person. All but a very small proportion of this expenditure is funded from central government taxes. Income received from patients and insurers in connection with NHS services amounts to only about £2.0bn, which is less than 2% of NHS expenditure. The NHS really is generally free at the point of delivery. The total of around £2.0bn paid by the private sector for NHS services comprises mainly the payments listed in Table 1.

Table 1: Principal payments from patients and insurers relating to NHS services

Private treatment in NHS Hospitals £0.5bn
NHS prescription charges £0.5bn
Charges for NHS Dental Services £0.8bn

The cost of healthcare funded privately (i.e. not by the NHS or other public funds) in the UK is about £30bn per annum. An approximate breakdown of this private expenditure is given in Table 2.

Table 2: Breakdown of total UK healthcare spending by patients and insurers

Long-term care or nursing provision e.g. for elderly and infirm. £10.0bn
Private medical treatment in a private hospital (including fees of consultants & medical staff)   £5.0bn
Products except medicines e.g. corrective spectacles, contact lenses, hearing aids, first aid, pregnancy tests, wheelchairs.   £3.5bn
Over-the-counter medicines   £3.0bn
Private dentistry   £2.5bn
Payments relating to NHS Services (see Table 1)   £2.0bn
Cosmetic surgery (largely uncovered by NHS)   £2.0bn
Care of mentally ill   £1.0bn
Private General Practitioners   £0.5bn
Drugs prescribed privately   £0.5bn
Total £30.0bn

The payments made to the NHS by the private sector are clearly not on a scale that could in themselves justify private medicine. Patients going private do nevertheless help the NHS financially because of a reduction in the NHS’ workload. About 15% of hospital admissions are covered by private medical insurance, a large enough number to have important practical cost benefits to the NHS.

The final issue to consider is whether the attention received by private patients results in a reduction in the standard of treatment received under the NHS. The fact that the NHS gains financially from private patients who effectively pay tax for a service that they elect not to use fully is not the end of the story. Money alone does not guarantee the best medical outcome.

Analysis of Table 2 suggests that private sector healthcare spending in the UK, although large, is predominantly on activities which cannot credibly impact on the core of the NHS. The only important exception is private medical treatment in private hospitals (including fees of consultants & medical staff). The spend of £5.0bn breaks down as to £3.2bn for the hospitals and £1.8bn for fees to surgeons, anaesthetists, consultants and other physicians.   The doctors with private patients in private hospitals are typically also senior medical staff in local NHS hospitals. Whilst consultants vary greatly in their views on private medicine, on average it provides about a third of their income. The NHS controls the availability of NHS employed consultants to take on private work.  A survey conducted for the Office of  Fair Trading showed that a consultant’s NHS hospital may impose a constraint on the amount of private work that the consultant could undertake in a given week or month. However, the Office of Fair Trading notes in this context that 27% per cent of consultants indicated that there were no such constraints on their private practice and a further 28% of consultants did not know whether there were any constraints on the amount of private work they could undertake. Top consultants may spend much of their time on private patients and on difficult or interesting NHS cases. The result may be that most NHS patients are treated by less experienced, more junior doctors than their private counterparts. In some cases private patients may even be under the care of consultants when NHS patients are managed by GPs. The argument that the money paid for private medicine will result in the recruitment of more doctors to compensate does not fully answer the charge. The best doctors will continue to rise to the top and may still move away from routine NHS cases.

The comment is sometimes made that private medicine rides on the back of the NHS. This is true but irrelevant to whether or not NHS patients benefit. It could equally be said that the NHS rides on the back of the well off, because they pay more tax and rely less on the NHS.

In the UK private medicine offers a very incomplete medical service. Private GPs tend to service primarily overseas visitors who do not qualify for NHS treatment. In general, the Public do not find private GPs worth paying for, because they are not perceived as better doctors. Private hospitals do not normally handle emergencies. In areas where strong multi-disciplinary teams are required such as intensive care NHS hospitals generally do best, because private hospitals do not have the systems in place to coordinate a sufficiently large number of specialists and stand-ins.

Most medical research in hospitals is done within the NHS, even when it is funded by commercial interests like pharmaceutical companies. The main reason is that NHS hospitals can handle a wider range of situations and have access to a broader and larger pool of patients. The attractions of research are a factor in helping to keep top consultants within the NHS.

A healthcare system should be flexible enough to recognise that exceptions exist to most dogma. For instance, research and expertise are not always greatest in the NHS. An example is the use of the Gamma Knife, a procedure for stopping brain tumours from growing, which was introduced to Britain by a private hospital, the Cromwell owned by BUPA. The Gamma Knife is an alternative to conventional brain surgery with a superior track record in many circumstances.

In deciding whether private medicine benefits the NHS, the key issue is whether the financial benefits of private medicine to the NHS are great enough to compensate for the reduction in the NHS focus of consultants. I do not know the answer to this key question because consultants vary and are affected differently. The issue cannot be resolved through political dogma. There is also uncertainty over what consultants would negotiate if their private practices were eroded. Private medicine has always been an important source of income for most consultants throughout the history of the NHS. As of now I have no major evidence against the approach to private medicine embodied in the Health and Social Care Act and fully accept that most decisions should be taken on their merits with a minimum of political preconceptions.

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About Barbara Arzymanow

Barbara Arzymanow is a Research Fellow at 2020health and is a founding director of an independent healthcare consultancy firm. She has been an investment analyst specialising in Pharmaceuticals for 25 years, prior to which she carried out academic medical research in university laboratories. Her experience, obtained entirely from outside the pharmaceutical industry, gives her a unique, political perspective independent of commercial lobbies. She has extensive experience in financing the biotechnology industry, which is vital for the long-term standing of medical research in the UK. She has always been inspired by the scientific excellence within the UK and would like to see collaborations between industry, the NHS and academia strengthened. For more information about Barbara's research and writings including submissions to Government Departments please visit http://www.researchideas.co.uk . Barbara also tweets as @barbararesearch .
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