The private provision of NHS services has been controversial since at least 1990. Keep Our NHS Public, NHS Support Federation and other groups have campaigned against the threat of privatisation, largely in England. There is much less private provision in the rest of the UK.
Expenditure
The UK has the fifth largest share of healthcare financed through government schemes out of the 36 OECD member states. According to the Department of Health and Social Care a total of £9.2 billion was paid to private providers in England in 2018-9, or about 7% of the deparmental budget. This clearly does not include what is spent on primary care, nor spending on medicines or equipment. It was an increase of 14% compared to 2014-15. They report a further £3.43 billion paid to the voluntary and not-for-profit sector and to local councils. These figures are said by the Centre for Health and the Public Interest to be misleading. They calculate the proportion of the NHS budget spent on non-NHS providers as about 26%, about £29 billion. This is managed through 53,000 individual contracts. The official departmental figures distinguish between the ‘independent sector’, the ‘voluntary sector’, the ‘private sector’, and ‘local authorities’. The money paid to local authorities is intended for social care, which is largely privately provided. NHS England spent a further £830 million on social care directly in 2018-9. There is no definition of the ‘independent sector’ or the ‘voluntary sector’. Many private providers are registered charities. Furthermore only services directly commissioned by clinical commissioning groups are included. Services subcontracted by NHS trusts - most commonly elective surgery - are not included. £1.3 billion was spent in this way in 2018-9.
Primary care
Since the establishment of the NHS in 1948 most primary care - general practice, dentistry, opticians and pharmacy - has been provided by private contractors, whose staff are not NHS employees. General practitioners, like the other contractors, run businesses, but, unlike them, their income is almost entirely derived from the NHS under the General Medical Services Contract, they are covered by the NHS pension scheme and their services are free to registered patients. Initially the contracts for these private providers were managed by local Executive Councils. In the 1974 reorganisation they were replaced by family practitioner committees. In 1990 these were abolished and they were replaced by family health services authorities. They are now managed by NHS England which spent £14 billion on them in total 2018/19. £2.9 billion was spent on private dentistry in 2018-19, with about £2.5 billion spent on private optometry and pharmaceutical services, although this sum has been declining.
Hospital services
Campaigning is generally concentrated on hospital services. Large parts of the hospital estate which were previously designated as long-stay geriatric wards were closed in the 1980s and 90s. Such patients were moved to residential care or nursing homes, which are almost entirely privately provided. Previously homes were provided by local authorities but the funding regime was engineered in such a way as to make that unsustainable, Some is regarded as social care, which is means-tested. Continuing healthcare, though paid for by the NHS, is largely privately provided. NHS trusts spot purchasing from private providers, largely to meet NHS targets has risen from £645 million in 2013-14 to £1.3 billion in 2018-19. If a private hospital is a registered charity it is exempt from business rates although NHS hospitals are not. Ramsay Health Care UK runs 30 sites providing NHS-funded services. In June 2019 it provided 5,664 inpatient and 6,997 outpatient NHS-funded procedures. It announced in 2019 that NHS referrals had increased by 7.4% and it had benefited from an increase in NHS tariff prices. Independent providers are represented by the Independent Healthcare Providers Network, which stresses the importance of patient choice.
Ambulance services
In 2019 the Care Quality Commission reported that ambulance services were relying on private providers because of lack of capacity. Some firms had failed to obtain references or carry out criminal record checks and a lack of staff training was leading to serious patient harm. More than £92 million was spent in 2018/9 on private ambulances and taxis.
Mental health
According to John Lister 30% of all mental health spending in 2018-9 was in the private sector and in child and adolescent mental health services 44%. The boundary between healthcare, which is free, and social care, which is meanstested, is quite unclear in this area. The process of deinstitutionalisation, which involved the closure of the large asylums, meant the transfer of patients to community care, much of which is regarded as social care. In 2019 13% of inpatient beds in England were provided by American companies. According to the Candesic consultancy around £1.8 billion of the £13.8 billion spent by the NHS on mental healthcare in 2018, including non hospital services, went to the private sector. About 25% of NHS mental healthcare beds in England were provided by the private sector, and 98% of their earnings came from the NHS.
