More than half the private hospitals in the UK are foreign-owned, with average pre-tax returns in 2012 of 24%, although some of the parent companies have been so loaded with debt or rent obligations that they make minimal trading profits, and even losses – risking a Southern Cross-style collapse that could have a big impact on some parts of the NHS. One of the four largest for-profit groups, Ramsay, relies primarily on NHS patient income, while BMI and Spire each get 20% or more of their revenue from treating NHS patients. A rapid increase in their NHS business – private hospitals are now treating almost one in five of all NHS knee and hip replacement cases – has kept all three groups afloat during the recession.
Exactly how they get this business is a bit of a mystery. Private hospitals have successfully resisted publishing information which would allow them to be compared with NHS hospitals. The Choose and Book website, which provides performance data for every NHS hospital, includes private hospitals but provides no performance data for them. NHS patients who choose private hospitals are acting on private advice from their GPs. Not surprisingly, perhaps, it turns out these patients tend to be drawn from the same social class as private patients. Given that their treatment is paid for out of public funds the lack of openness involved seems indefensible.
If NHS patients are to continue being treated at private hospitals this gross imbalance of transparency must end. NHS hospitals treat everyone – including the dangerously ill, accident victims, the old and frail, people with multiple illnesses – on steadily shrinking budgets. Some of them – again unsurprisingly – present “serious concerns”. Private hospitals take only low-risk patients, do a limited range of elective surgery and make a lot of money. They should present no concerns whatever. Yet as the CQC reports show, they can sometimes be dangerous places.
My emphasis. Why this market failure?