NHS overcharged for private surgery
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The NHS continues to be overcharged for surgery contracted out to private health providers, according to recently published figures from the financial year 2002-3.
The NHS reference cost for a coronary bypass operation is ?320 ($11 280; €9496), but 1600 such operations were done on NHS patients by private contractors last year at an average cost of ?2 060¡ªan extra 91%. The NHS spent an average ?660 on each hip replacement done by its own staff but paid an average of ?848 for private hip replacements.
Health minister John Hutton admitted when the NHS reference costs were published that operations done by the private sector cost more than those done in the NHS. He said the total markup was in the range of 40%, an expense he said was justified by the need to bring waiting lists down.
"Latest financial estimates indicate that acute treatment purchased from the independent sector last year cost the NHS around ?00m," he said. "The cost to the NHS of providing the same care would have been around ?0m. The relatively high cost of paying for NHS patients to be treated in non-NHS facilities is partly reflected in the higher costs associated with spot- purchasing and in the multiple purchases by individual NHS trusts for small volumes of work."
Professor John Appleby, chief economist at the King’s Fund charity, argues that low volume is not an issue, as large numbers of patients were treated by a relatively small number of private providers. But he agreed that the cost could be justified in the short term if it helped to cut waiting lists. "I would be concerned if this were to become a pattern, but I think the NHS is determined to prevent that happening.
"The NHS is now in the position where it is becoming by far the largest purchaser of private health care. They seem eager to use their leverage as a near-monopsony to drive costs down," he told the BMJ.
Professor Appleby said the biggest single factor in the high cost of private health care in Britain is the high pay demanded by consultants, surgeons, and anaesthetists. "These large NHS contracts have provided an incentive to bring in foreign doctors who will undercut these high prices and bring them down."
Private British healthcare companies were heavily undercut by foreign competitors in bidding for contracts to operate the government’s proposed new fast-track surgery centers earlier this year. But two British providers, Capio Healthcare UK and Nuffield Hospitals, were able last month to reduce their prices dramatically to secure contracts to perform extra operations in existing NHS hospitals. Most of the staff doing the work, however, will come from outside Britain. Both companies predicted that the foreign competition will drive down British doctors?private fees, which are currently higher than those in the United States. Although the prices of individual procedures under the new contracts are confidential, the health secretary, John Reid, said they were within a few percent of NHS costs.(London Owen Dyer)
The NHS reference cost for a coronary bypass operation is ?320 ($11 280; €9496), but 1600 such operations were done on NHS patients by private contractors last year at an average cost of ?2 060¡ªan extra 91%. The NHS spent an average ?660 on each hip replacement done by its own staff but paid an average of ?848 for private hip replacements.
Health minister John Hutton admitted when the NHS reference costs were published that operations done by the private sector cost more than those done in the NHS. He said the total markup was in the range of 40%, an expense he said was justified by the need to bring waiting lists down.
"Latest financial estimates indicate that acute treatment purchased from the independent sector last year cost the NHS around ?00m," he said. "The cost to the NHS of providing the same care would have been around ?0m. The relatively high cost of paying for NHS patients to be treated in non-NHS facilities is partly reflected in the higher costs associated with spot- purchasing and in the multiple purchases by individual NHS trusts for small volumes of work."
Professor John Appleby, chief economist at the King’s Fund charity, argues that low volume is not an issue, as large numbers of patients were treated by a relatively small number of private providers. But he agreed that the cost could be justified in the short term if it helped to cut waiting lists. "I would be concerned if this were to become a pattern, but I think the NHS is determined to prevent that happening.
"The NHS is now in the position where it is becoming by far the largest purchaser of private health care. They seem eager to use their leverage as a near-monopsony to drive costs down," he told the BMJ.
Professor Appleby said the biggest single factor in the high cost of private health care in Britain is the high pay demanded by consultants, surgeons, and anaesthetists. "These large NHS contracts have provided an incentive to bring in foreign doctors who will undercut these high prices and bring them down."
Private British healthcare companies were heavily undercut by foreign competitors in bidding for contracts to operate the government’s proposed new fast-track surgery centers earlier this year. But two British providers, Capio Healthcare UK and Nuffield Hospitals, were able last month to reduce their prices dramatically to secure contracts to perform extra operations in existing NHS hospitals. Most of the staff doing the work, however, will come from outside Britain. Both companies predicted that the foreign competition will drive down British doctors?private fees, which are currently higher than those in the United States. Although the prices of individual procedures under the new contracts are confidential, the health secretary, John Reid, said they were within a few percent of NHS costs.(London Owen Dyer)