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Nine hospitals report financial losses on treatment of private patients

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By vfiore
13 March 2018

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Treating patients privately has resulted in financial losses for nine hospital trusts, according to new research.

Nine out of the 41 trusts that returned FOI requests on their expenditure revealed that treating private patients did not help them to generate additional funding in some or all of the years from 2010/11 to 2015/16.

Treating patients privately has resulted in financial losses for nine hospital trusts, according to new research.

Nine out of the 41 trusts that returned FOI requests on their expenditure revealed that treating private patients did not help them to generate additional funding in some or all of the years from 2010/11 to 2015/16.

A report by the think tank Centre for Health and Public Interest (CHPI), published yesterday (12 March) found that four of these trusts made significant losses between 2010 and 2016, with one losing £18m over the same period.

The author of the study, Dr Sarah Walpole, suggested that these losses could be linked to a lack of a standard price-setting approach in the NHS.

She wrote: ‘Failure to set prices for treating private patients that reflect the cost of delivering the care may also explain why some hospitals were making a loss from their private patients’.

Of the 78 NHS acute hospital trusts that responded to an FOI request on their methodologies for setting the prices charged to private patients, 22% said they did not have a standard procedure for setting these costs, the report found.

Health and Social Care Act 2012

Under the Health and Social Care Act 2012, hospital trusts, which until then could only make 2% of their income based on looking after private patients, are allowed to make up to 49% of their income from offering private assistance.

The report said that ‘since then NHS hospitals have been encouraged to see private patients as a significant potential source of income’.

However, the report found that four years after the Act, the NHS saw an increase of only £85m from looking after private patients for a total income of £596m from treating private patients made in 2015/16.

A possible scenario

The report warned that, although private patients are not yet an important source of income for the NHS, ‘the continuing squeeze on NHS funding could lead to the treatment of private patients becoming more important, with a potentially significant impact on the availability of care for NHS patients.’

NHS Providers announced last month that they expect a £931m end-of year deficit for this financial year (2017/18).

The report found that some trusts are still waiting to receive payments from patients who were treated privately, with NHS Foundation Trust hospitals reporting a the total value of bad debts equal to £1.77m in 2014/15 and £1.81m in 2015/16.

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