The move by the threatened University College London Hospital (UCLH) heralds the first hospital price war as the bite of NHS changes is felt.
Managers at UCLH - whose major hospitals are the Middlesex and University College Hospital in central London - have sent out prices for 1994-95 two months earlier than required, to the local health authorities which the hospitals have traditionally served.
On average they are 10 per cent lower than the current year and in some cases 40 per cent lower, Peter Burroughs, UCLH's director of finance, said last night. One group of gynaecological operations, for example, priced in the current year at pounds 993, is being offered at pounds 600.
The crisis at UCLH began in July when Camden and Islington Health Authority announced that it would stop its patient contracts with UCLH next year because its prices were on average 10 per cent higher than other hospitals.
The picture was complicated in August when nurses went on strike and the health authority called a halt to most surgery at UCLH until April because the hospitals had already spent their annual budget.
The north London patients have accounted for about half of UCLH's work. The group had already lost patients from Haringey and Enfield. Without this patient base the hospitals could not survive, would no longer be viable as teaching units and would be unable to support the specialist services they offer to a wider population.
The group's accident and emergency department, one of the busiest in London, is also threatened.
Camden and Islington Health Authority now wants to send its patients to the Royal Free Hospital, Hampstead, and the Whittington Hospital, Highgate.
Mr Burroughs said yesterday that the UCLH had plans to achieve total savings of pounds 13m, turning around last year's deficit of pounds 12.9m. 'Clearly there are implications for staff and this does have an impact on manpower . . . we hope to minimise redundancies through natural wastage,' he said.
Evidence of the rise in people waiting more than a year for operations is disclosed today in figures issued by the Labour Party.
In August there were 70,224 people who had been waiting more than a year for treatment, an increase of 6.8 per cent over the year. The total number of people waiting for surgery rose to 1,031,328 compared to 939,846 in September 1992.
David Blunkett, Labour's health spokesman, called on Virginia Bottomley, Secretary of State for Health, to look at which hospital facilities are 'lying idle as a result of cancellations due to budgets running out' and to use them to tackle waiting lists.