German medical firm to build and run NHS hospital

A German private health company is to open and run a hospital in Britain as part of the Government's plans to give the private sector a bigger role in the National Health Service.

The Department of Health has opened negotiations with the unnamed German company to build, staff and run a new hospital. It also intends to hold talks with health providers in other European countries.

Alan Milburn, the Health Secretary, has already announced plans to allow patients to travel abroad for operations if they face long delays. But he believes that persuading health firms on the Continent to run hospitals in Britain offers a better long-term solution because most people would prefer to be treated here.

The announcement will worry critics who accuse the Government of planning the "backdoor privatisation" of the health service, because the doctors and nurses would be employed by the private company rather than the NHS.

But Mr Milburn is confident the proposal would be welcomed by the public. One Government source said yesterday: "Patients are not interested in labels and whether they are treated in a private or publicly-owned hospital; they just want to be treated. By and large, people are happy when they are treated by the NHS; it is the waiting that it is so distressing."

In a speech setting out his strategy in the next few weeks, Mr Milburn will argue the NHS can no longer be a "monopoly provider" of services in this country but he will seek to reassure opponents by promising the NHS will remain the "monopoly purchaser" and would fund the treatment of patients using the foreign-owned hospitals built in Britain.

He will declare he is not be prepared to switch to a system under which patients are encouraged to pay for their own treatment privately, saying this would be "hugely inefficient and hugely unfair".

Meanwhile, tables published today by an independent medical consultancy will show that patients having heart-bypass operations are more than three times as likely to die in some hospitals because of huge variations between NHS trusts.

The highest death rate in the country was recorded at the Walsgrave Hospital in Coventry, which was nearly double the national average.