Private Patient Units and NHS Facilities

The usual justification that trusts provide for establishing a private patient unit is that the income from the unit will benefit NHS patients. However, there is ample evidence that this is not the case and that to generate more revenue most District General Hospitals would be better increasing the numbers of NHS patients they treat rather than establish a more capital intensive PPU. In September 2012 an article in Health Service Journal [1] healthcare analysts from Candesic say:

PPUs, however, currently compare unfavourably with private hospital groups in a number of important areas. It is often thought that optimal management of a PPU requires a commercial mindset rarely found in the NHS outside of the chief executive’s suite. In our work, we found PPUs often misprice their services and some services are even unprofitable.

Our research shows revenue per bed in PPUs is generally half or less than that of comparable private hospitals. The greater number of medical rather than (higher revenue) surgical patients is a factor but the disparity mainly is down to low utilisation and reflects the relatively low priority in management’s attention.

The article says that the main reason trusts are poor at running PPUs is that “the NHS habit of scheduling procedures to suit the staff rather than the patient tends to prevail”, in other words, PPUs are run like paid-for NHS services rather than like private hospitals.

If Foundation Trusts are making less revenue on private beds than they do on NHS beds, as suggested by Candesic, this raises the question of why these trusts have established their private patient units. Comments in several trust’s Forward Plans give some insight. Moorfields Eye Hospital in the Commercial Division section of its Annual Report says [2]:

The strategy for growth continues to focus on the creation of additional surgical capacity at the main City Road hospital to meet the requirements of the new consultant cohort, on providing a more comprehensive range of outpatient diagnostic services and, in time, on introducing Moorfields Private services in our NHS satellite locations.

That is, the trust is locating its additional private surgical capacity at the main City Road hospital “to meet the requirements of the new consultant cohort”. Other trusts have said that a reason for their creating a PPU is because of demand from their consultants. For example, Poole Hospital says in its Forward Plan [3]:

Private Patient Unit – The Board have agreed to invest £0.5m in additional and dedicated capacity to treat private inpatients separately within the Trust. The new centre will open in August / September 2012 and will enable the Trust to meet increasing demand from consultants who wish to admit patients to Trust managed facilities.

Interestingly, the trust’s Annual Report (which is intended for the public) phrases this slightly differently [4]:

will enable the trust to meet increasing demand from consultants, and patients, who wish to benefit from private patient facilities managed by the trust

(there is an inclusion of “demand” from patients in this version). In neither statement is there a mention of the “benefit” the trust will get from the facility, and the implication is quite clear that the unit is being created for the benefit of consultants.

The University Hospitals Bristol trust board approved the establishment of a PPU in September 2012. The board papers [5] list the issues surrounding the establishment of such a unit. In a table outlining the advantages and disadvantages of a range of options for a hypothetical option of removing all private patient activity the trust says that the effect would be:

Adverse impact on relationship with consultancy body at a time when consultant engagement is critical

Again, this indicates that the trust is meeting a demand from consultants who wish to have private patients.

The University Hospitals Bristol news letter to the local GPs in May 2012, the Medical Director of Dorset County Hospital says [6]:

With the private patient income cap being removed this year we are looking at the potential development of a private patient ward within the Trust. The senior medical staff are keen to support this and there is a wider potential income benefit to the hospital.

The statement that “senior medical staff are keen to support” the establishment of a PPU indicates that the “potential income benefit” is for the consultants rather than the trust.

Another source of the contention that PPUs are created for the benefit of consultants comes from the Charity Commission. In 2007 the Commission rejected the application [7] by Salisbury FT to register Odstock Private Care Limited (OPCL) as a charity. Amongst the reasons for the rejection was that part of the reason for setting up OPCL was to benefit the consultants and so there was a lack of public benefit:

A consideration in setting up Odstock had been to ensure that the needs of consultants in performing private patient work were met.

A common justification for trusts treating private patients is that the income from private treatment funds NHS facilities. However, there is plenty of evidence that the opposite is true: NHS facilities are used by private patients and without these NHS facilities the trust will not get the private business. The most overt case of this is outlined later in this report [8], where The Christie is planning to build a new private patient ambulatory clinic above the proton beam therapy unit (PBTU), a facility that will be funded with up to £150m of public money. The implication is clear that the new unit is for private patients to have access to the new facility. The Board papers in January 2012 say [9]:

We continue to work closely with University College London Hospitals (UCLH) and the Department of Health to assist the DH with their Proton Beam Therapy strategy. However the majority of the work undertaken to date remains ‘frozen’ awaiting a positive indication from the DH. The intention remains to locate the new Christie Clinic Ambulatory Centre above the PBTU and design considerations are ongoing.

Other trusts’ literature indicates that private patients have complete access to NHS facilities. For example, The Bournemouth Private Clinic at Bournemouth Hospital says on its website [10]:

The Royal Bournemouth Hospital benefits from some of the most modern clinical equipment including one of the latest specialist CT scanners in the country. Private patients who receive treatment within the Trust have access to the full range of clinical facilities (including ITU if necessary) as well as the expertise of the specialist clinical teams.

Frimley Park make a similar statement. In their private patient brochure [11] they say:

Thanks to our location within Frimley Park Hospital, our patients have access to the most up-to-date technology, treatments and scanning facilities.

Cambridge University Hospitals have a private patient unit called the Cambridge Heart Clinic, and the trust says [12] on its private patient website that the unit is attached to a “world famous” NHS hospital:

We provide high quality care to private patients in a dedicated cardiology centre based within the world famous Addenbrooke’s Hospital. […]

In summary, our patients receive world-class specialist care and the very highest standards of service, combined with the confidence of being in a leading University NHS hospital.

Clearly the selling point of this facility is that it is attached this “world famous” NHS hospital, rather than the private facilities it offers.

The Dudley Group have a private unit to deliver dermatological services of a low clinical value that NHS commissioners no longer fund:

The clinics are run out-of-hours by our plastic surgeons and offer efficient, safe, consultant-delivered treatment for many procedures, including those no longer available on the NHS. Conditions we will treat include: moles, seborrhoeic warts, tattoos, torn earlobes and botox injections for excessive sweating. Private patients have the reassurance of a team of NHS consultants and state of the art facilities with access to a range of diagnostics. This unit emphasises how private patients will have access to NHS consultants and facilities.

Even the trust with the largest private patient income, The Royal Marsden, says that their private patients benefit from their NHS facilities:

Private patients have full access to all the hospital’s facilities, including the latest linear accelerators for radiotherapy and robotic techniques for surgery.

The Royal Marsden also has an innovative facility called the CyberKnife [13] that was funded through charity donations. The trust’s charity declared:

a £4.1 million appeal that ensured the purchase and installation of CyberKnife

However, this facility, paid for from charitable funds, features in two of the three editions of the trust’s magazine for private patients [14] so the trust is clearly encouraging private patients to request this facility.

Further, The Royal Marsden have recently developed new facility called the Centre for Molecular Pathology [15]. This £18m facility is funded through a £4.3m donation from the trust’s charity, and with funding from the Department of Health, National Institute for Health Research and The Wolfson Foundation (a charity). This facility is also advertised as one of the trust’s “outstanding private facilities for patients” and that through the Centre for Molecular Pathology [16]:

Consequently, we can offer our patients early access to the very latest diagnostic techniques and treatment available – administered by one of the very best cancer care teams in the world today.

Again, this is private patients benefiting from publicly funded facilities and not the public benefiting from facilities bought by private patient revenue.

The Clatterbridge Centre for Oncology (CCO) have recently advertised for a joint venture partner in the Official Journal of the EU. Within this Expressions of Interest [17] document for the offer is the following statement:

The most important element to CCO (in relation to private patients) is the removal of the private patient income cap. Whilst the Trust does not currently perform up to its cap of 2.2%, the removal of the cap enables the potential to extend private patient business without limitation.

The trust suggests that there is no limitation on the private patient business of their joint venture. This is against section 164(1) of the Health and Social Care Act 2012 which says that the majority of the income of the trust must be from the NHS. The trust’s Forward Plan [18] is optimistic about the future of the facility:

We are now poised at one of the most significant points in our history. The Trust is committed to the development and implementation of plans for a major capital investment in a World Class cancer centre located in Liverpool. This is a once in a generation opportunity to design oncology services to ensure the people of Cheshire, Merseyside and beyond benefit from world class care that is of the highest possible quality.

The mention of a “major capital investment in a World Class cancer centre” implies that the trust has secured significant funding. However, closer reading of the OJEU documents tell a different story. The announcement in the OJEU [19] for the joint venture partner says:

The Partner will also be required to propose a solution for the provision of a new Linac

And the Expressions of Interest says:

Therefore, prior to commencement of a new private patient service within the proposed facility (with the existing Linac bunker), an additional Linac with OBI facilities must be fully commissioned and in operation at the Clatterbridge site. As the Trust do not have capital available for funding a new Linac, Bidders are requested to indicate how they might fund the Linac investment as part of their proposals for operating the private patient unit.

The trust is admitting that it does not have the funds to provide the new Linac. If a joint venture partner is found who will provide the funds for this new Linac, and if NHS patients will have access to this facility, it will be one of the few cases where NHS patients will benefit from private patients. However, we have yet to see if a private sector partner is willing to fulfil this request.

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[5] pp249-252