NHS funds boost private health services

National Health Service managers could be misusing public funds to subsidise private wards, a research study has claimed.

The report found that the NHS has grown to become the biggest provider of private beds in the UK, but that much of this growth has come from ‘the proliferation of a multitude of small-bedded units’ which are not economic.

According to William Fitzhugh, publisher of the 1996/97 Fitzhugh Directory of NHS Services, small units such as these were unviable, and, he claimed, some ‘must be being subsidised by the NHS’. Fitzhugh’s research found the NHS now had 16.5% of the market for private acute services compared to just 11% in 1988. In the same period the private sector share of the market grew by only 5%.

A large slice of the #225m brought into the NHS from selling private services is accounted for by the largest 52 NHS trusts. They earned more than #1m each from providing private beds, while a further 20 trusts earned more than #2m each.

An NHS Executive spokesman denied the health service was using cross-subsidies to boost its private business. Fitzhugh, however, countered that his research had shown private sector providers struggled to get occupancy rates as high as 50%.

‘In this climate there is no way that smaller bedded units can be viable, once you add in all their costs,’ Fitzhugh added.

Labour has denied claims that up to 7,000 NHS accountants would lose their jobs under plans to cut #100m from management costs. Health spokesman Chris Smith admitted that ‘hundreds’ of posts would go, but said natural wastage would enable health bodies to cut jobs and not people.