NHS opens hospital doors to insurance firms

Labour last night warned that a meeting of NHS trust leaders today to select an insurance company for health service pay beds will pave the way for turning the health service into a "safety net" for those too poor to pay for care.

Four insurance companies will make bids for the nationwide contract to offer insurance for private pay beds in NHS hospitals to the leaders of 73 hospital trusts at the offices of the Federation of NHS Trusts in the Strand in central London.

The Norwich Union is being tipped to replace Bupa, the private health insurance specialist, which pulled out of providing care for NHS pay beds to concentrate on Bupa-backed private hospitals.

Tessa Jowell, Labour's health spokesperson, said it was part of a "secret agenda" by the Government to switch most patients into private health schemes, leaving the rest to the NHS.

That charge is strongly denied by ministers and the trusts hospitals. Stephen Dorrell, the Secretary of State for Health, secured an extra pounds 1.6bn for the NHS next year, with a pledge to increase spending in real terms every year. He rejected in an interview with The Independent a plan by an adviser, Dr Michael Goldsmith, in a paper for the right-wing think-tank, the Adam Smith Institute, for the NHS to adopt a "core curriculum" and "top up" insurance schemes to supplement funding by the taxpayer.

A spokesman for the federation said that Bupa were going to "push their customers into their own hospitals - clearly that is a situation that the trusts who are losing that income could not ignore".

The federation looked at alternative providers of insurance "to encourage a continuing income stream", said the spokesman. "When Bupa announced they were going to pull out, we were inundated with people who said they had been treated in private hospitals and wanted the full back up of NHS hospitals.

"Pay beds contribute a significant amount to the NHS which goes to the benefit of the overwhelming majority of NHS patients. We want that income to go back into the NHS."

Labour has dropped itsthreats to abolish pay beds, but Ms Jowell said the meeting would secure a contract for an insurance company in NHS hospitals. She said patients would be offered a choice between treatment in private wards under the hospital's private insurance scheme, or in NHS wards.

Ms Jowell said it was different from the arrangement under which Bupa was one of several companies offering private insurance for patients using NHS pay beds. By linking themselves to a dedicated insurer, she fears that the hospitals will promote their insurance schemes.

"We see this as the Government's hidden agenda for the NHS. They want it to switch into an insurance-based system particularly for elective surgery."

The trusts have assured her they will not be promoting one company's private insurance schemes, but she has written to Mr Dorrell, protesting at the scheme. "The Government are fond of protesting their support for the NHS but are turning a blind eye to this deal.

"This is because it fits perfectly with their plans to make the NHS an insurance-based privatised service with a safety net for those who cannot afford to opt into the private scheme."