You recover your health, they recover their costs
A new report suggests that pay beds could help to secure the future of the NHS. Paul Gosling reports
Wednesday 27 September 1995
As the market reforms take an ever-tighter hold over the NHS, more patients and trusts accept the principle of a wider range of charges within the the service. Chris Ham, director of Birmingham University's health services management centre and a member of the Healthcare 2000 panel, says: "As we are moving towards more of a mixed economy in the NHS, it is inevitable that hospitals will want to offer pay beds, and I don't see any problem with that. It is a useful way of topping up budgets."
In 1993/94, the last year for which figures have been published, 158 NHS trust hospitals earned pounds 185m from pay beds, giving them a market share of 14.4 per cent of private health care. That represented a growth of almost 13 per cent over the previous year, a trend that looks set to continue.
Pay beds are offered through various arrangements: some hospitals directly manage them, others contract with external companies to run private wings. For example, Margate Hospital in Kent has 13 pay beds, which are managed by the private company Healthex. The company's profits are transferred to the hospital after keeping a proportion as a management fee.
A pounds 3m development is planned for Margate, to be run by Healthex, funded through the Private Finance Initiative. The new wing will offer an additional 18 to 20 beds and, unusually, provide a private out-patients and daycare facility. The Department of Health must give approval before the contracts can be finalised, but has informally welcomed the proposal.
Bill Nuttall is the private patients manager at Margate, employed by Healthex, having previously run pay beds at Leeds General Hospital. He argues: "We are helping to secure the future of the NHS." Mr Nuttall believes that as the number of pay beds grows, so private hospitals will close down, as is already happening in London. He predicts private healthcare suppliers will move away from running independent hospitals, instead developing partnerships to run private wings at NHS trusts.
Nuffield Hospitals, one of the country's leading private healthcare suppliers, says political uncertainty is holding it back from doing this, though it is leasing land from Hull trust hospital. Nuffield will run an entirely independent hospital, but expects to rent out some facilities while the NHS hospital is being refurbished.
Bupa has entered into two agreements, with Hastings and Bradford hospitals, to lease land from trust hospitals, with rental being a proportion of income. The hospitals will have their own operating theatres, and radiology and physiotherapy units. It is expected that the closeness of the private hospitals will assist the NHS trusts in retaining consultants who want to do some private work.
Ian Robertson, manager of St Mary's NHS trust, which has provided pay beds for 60 years, and last year generated a pounds 1.25m profit for the trust, argues that the retention of consultants is a key benefit from pay beds. "It keeps our medical staff, and enhances the reputation of St Mary's. We have got the consultants' loyalty," he says.
Mr Robertson believes that the market reforms are confusing traditional definitions. "The question of what is a private patient will be harder to define. GP fundholders' business is going to our private wing because of our package of prices. It may be that it will be in the NHS interest in some cases to close beds."
The independent sector argues that a hidden form of cross-subsidy is taking place, under which trusts protect private beds from the real commercial costs. Norwich Union has sponsored the National Economic Research Associates (Nera) to establish whether this is true, and a report will be published within the next month.
Nera's economics consultant, Keith Davies, says: "First, we have looked at the purely accounting side of things, to see whether [private beds] make a surplus, to see whether all the resources used are costed. Then we have looked at the wider issues of the cost of training, of consultants who don't look after NHS clients, and see whether they still make a surplus."
If the results support the complaints from the independent sector, the Government will be under enormous pressure to introduce stricter accounting regimes, which, independent providers say, would destroy the concept of pay beds.
If, though, the report shows that pay beds genuinely create additional income for the trusts, producing a subsidy for NHS patients, it could have important effects beyond the next election. Even an incoming Labour government might then accept the use of pay beds.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 1 President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
- 3 Sir Winston Churchill’s family begged him not to convert to Islam, letter reveals
- 5 Game of Thrones is most-pirated TV show of 2014
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Millions of Britons struggling to feed themselves and facing malnourishment
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Nigel Farage: Ukip leader named 'Briton of the year' by The Times
Immigrants make UK racist, says Ukip councillor Trevor Shonk
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...
Day In a Page
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens