Labour’s 2006 NHS Act deliberately opened up health services, including acute hospitals, to wide-ranging competition on price, not quality. Labour’s legislation allowed private companies to receive £250m for contracts which they never delivered. Liberal Democrat peers are working hard to ensure that the NHS, including Foundation Trusts (FTs), remain public services.
Indeed, in order to protect them from the full force of competition law and the threat of takeover by American healthcare companies, hospitals must not be deemed ‘undertakings’ or look more like private sector bodies. One way to achieve that is to make it explicit in law that the majority of their income must come from public funds. So a cap of 49% is an important way of keeping our hospitals as public services.
The Health and Social Care Bill currently contains a proposal to cap the amount of private income and to require all Foundation Trusts to explain annually how that income has been used to benefit its NHS services. Liberal Democrat peers are arguing for a ‘belt and braces’ requirement that any FT which intends to increase significantly its private income must have prior approval from its board of governors. We are doing this because we believe that the NHS should demonstrate, with full transparency, how it delivers a comprehensive national health service for NHS patients.
At present, with the exception of specialist trusts such as the Royal Marsden, most FTs raise less than 5% of income from private sources. That could remain the case in future; as the cap is a maximum and not a target. Lib Dem peers are also continuing to press the Government to enable Monitor to negotiate much lower caps in individual trusts.
The NHS has been generating private income since 1948. There are those who believe that it shouldn’t. But today, there are some services, such as fertility treatment, which are mostly delivered privately. At the moment profits from these services go straight into the pockets of shareholders of private companies. As Liberal Democrats we would rather see that money benefitting the NHS.
As one GP pointed out recently: “If my local trust could take money away from the private sector and use it to fund the extra neonatal beds which my patients really need, I would be more than happy.”
In essence we are working to ensure NHS patients come first, a principle our party has always upheld.
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11 Comments
“Liberal Democrat peers are arguing for a ‘belt and braces’ requirement that any FT which intends to increase significantly its private income must have prior approval from its board of governors.”
How often do you think that the Governors will oppose such a proposal. Are there proposals to make meetings of Governors open to the public and with the same access to information under the same terms that local councils operate?
“Indeed, in order to protect them from the full force of competition law and the threat of takeover by American healthcare companies, hospitals must not be deemed ‘undertakings’ or look more like private sector bodies. One way to achieve that is to make it explicit in law that the majority of their income must come from public funds. So a cap of 49% is an important way of keeping our hospitals as public services.”
Please explain how capping hospitals income from Private patients at 49% will help NHS patients and waiting times.
Hospital Surgery resources are already taken up with far to many “private patients” as it is, without allowing more.
If American style health care companies want to treat more private patients, let them build their own bloody hospitals and use their own equipment and leave the NHS alone with the Government and the tax payers liable for it’s upkeep as it should do in a civilized society
Your first and second sentences are not really too believable. Not even Labour would be as foolish as that. Can you explain these in more detail? By the way, my belt works. I don’t need braces, and if the belt fails I can still hold the trousers up with my bare hands!
Why are we frightened of US healthcare companies? Why can UK companies not compete successfully against them? Is there something wrong with UK companies? If so, would it actually be better to allow US companies in? Or to provide the training etc needed to let UK healthcare companies compete successfully here, and maybe in the US too? And anyway, why not specifically legislate against non-EU competition, rather than against all competition?
I started out expecting the HSC bill to basically be adequate, just needing moderate surgery (pun intended). I’m coming to the opposite conclusion. Those who will vote on it seem totally confused – which is no way forward.
Two articles on the health bill which studiously avoid the words ‘Tory’ or ‘Lansley’. Methinks I spot a political strategy taking shape. Unfortunately it seems to assume the electorate is quite astonishingly stupid.
Richard Dean
The best way to learn from the USA Healthcare companies is just that: go and learn from those who the best at doing what patients need at the lowest cost. That does not mean you need to bring them over here. Mind you, I would be very surprised if there were more than half a dozen US general healthcare outfits that could do better than ours IF OURS WERE ALLOWED TO! But they get tampered with, given meaningless targets, specious bonus policies and mainly supine non-medical managers who are conditioned to compliance and not to patient care. What private care provider could survive these: particularly one that has been proved to be twice as expensive to administer to a lower overall standard than the UK?
Now that the second CEO of the Care Quality Commission has resigned is it not time that we realise that quality cannot be inspected in. We just need good systems to capture the good work that 99.999% of the staff wish to provide.
I understand this. What I don’t understand is: why the proposal can’t be to cap private income at much less than 49% ? We’ve seen through “capping” tuition fees at 9K that the majority of universities apply for the highest cap, and achieve it. What’s to stop every hospital going for the full 49%?
A theme is developing I see. Is your strategy seriously to attack Labour as if it’s the 2006 NHS Act that is the problem here?
I have argued previously on LDV that the Private Patient Income Cap is a bad idea https://www.libdemvoice.org/private-patient-income-25375.html, The cap does not apply to NHS trusts, only foundation trusts and it puts NHS hospitals at a disadvantage when competing with private hospitals. Private hospitals can compete for NHS patients but not vice versa. Paul Corrigan http://www.pauldcorrigan.com/Blog/health-policy/the-progressive-argument-in-favour-of-lifting-the-private-patient-income-cap-for-foundation-trusts/ makes the case very eloquently as why the current cap makes no sense.
There should be a requirement that NHS foundation hospitals give primacy to NHS patients but that should not mean they should be constrained from obtaining income from private patients.
There are possible undesirable consequences from application of EU competition law so I think having a PPI cap at 49% for the reason Liz states is a good route forward and certainly better than the previous cap based on the 2002/3 proportion of private patient income. So well done Liz and colleagues for taking this very sensible approach.
Chris Nicholson,
Thanks, but there you go again – quoting obscure references and claiming some special secret knowledge that means everyone else is wrong. 🙂 What are these “possible undesirable consequences from application of EU competition law “?
I’ll bet, when you say what they are, someone will find all sorts of creative new ways to address or re-arrange or otherwise resolve your perceived problems!
@Richard Dean “Chris Nicholson,
Thanks, but there you go again – quoting obscure references and claiming some special secret knowledge that means everyone else is wrong”
It’s called referring to actual facts when considering an issue. You should try it
With reference to why we won’t see every hospital pursuing the highest cap possible: the demand simply isn’t there. Only about 8% of people have private health insurance in the UK. Even if you assume there will then be a proportion of people without insurance who wish to pay themselves, given how many people there are with an income that reaches such levels, how many can we reasonably expect to see using NHS-provided private care?
Private hospitals are still, for some minor procedures, probably desirable to many private patients, so it is unlikely that we would even see close to 49% reached by private funds in much of the country. Where the most successful trusts have gone above the cap, they have provided specialist services which private medical care in this country more or less does not. The people who would be willing to pay for their treatment, and therefore make profit for the trust to invest in services, would have likely received many specialist treatments on the NHS anyway, free at the point of receipt, as is their right. Would we not rather they paid and that the trusts could offer services to raise capital for the benefit of their patients?
I agree with Baroness Barker, it’s a good idea, and I think one of the good parts of the H&SC Bill.