The switch could lead to the collapse of the NHS's pounds 250m private patient income, Marco Cereste, chairman of the NHS Trust Federation claimed. That in turn would lead to cuts in NHS services as hospitals lost the profits from private patients and the efficiency gains from running pay-beds alongside NHS services.
The move was potentially "a catastrophe" for the NHS, he said, adding: "We are not going to take this lying down." The Federation is consulting lawyers over whether Bupa's move is legal and will hold talks with PPP, Norwich Union and the other insurers to organise a fightback, Mr Cereste said.
Bupa accused the federation of "overreaction" - saying that only pounds 16m of its pay-outs for personal subscribers went to the NHS.
But Norwich Union, the third biggest health insurer, accused Bupa of reducing "choice and diversity" for its customers, adding that the move was aimed at protecting Bupa's own hospitals and those of the other private providers when they have been losing business to the NHS.
The row follows last month's launch of Bupa's new Health Fund which allows subscribers to build up credits which can then be spent on other health care products such as long-term care or fitness clubs.
In return, subscribers will normally be limited to a choice of only 150 private hospitals, including Bupa's own and those of Nuffield and BMI with whom the health insurer has cut advantageous deals.
Bruce Tranter, Bupa's marketing director, said it had gone only for private hospitals in part because there was "a question mark" over whether NHS pay-beds would continue under a Labour government. In addition, they offered the high quality "hotel" facilities Bupa's subscribers expected. Most Bupa subscribers already used private rather than NHS units. But where it was clinically necessary and cleared with Bupa beforehand, patients would still be able to use private NHS beds, he said.
The federation was "overreacting", he added. Even if all its subscribers transferred to the new fund, the NHS would lose a maximum of pounds 16m of business. "I don't know where the pounds 250m figure comes from."
Mr Cereste, however, said the loss of pounds 16m could be enough to destabilise the rest of the trusts' private patient income. "As a result, the whole organisation could collapse, costing us pounds 200m to pounds 250m in lost income. If that revenue stops, fewer NHS patients will be treated. It is as simple as that."Reuse content