The NHS and the Private Sector

1. The NHS and the Private Sector Advantages and disadvantages of increasing the role of the Private Sector in the provision of health care

2. The Private Alternative • When the NHS started the Labour government insisted that the Private alternative should still be open to the people of Britain. • AIM – Freedom of Choice. • NOTE: The relationship between the private sector and the NHS has been a difficult one.

3. Private Health Care. • Private Health care has always existed in Britain. • Private Health Care has always been associated with the middle and upper classes (although it said they do not exist anymore).

4. Paying for Private Health Care. • People who choose to ‘go’ private usually pay for their treatment through a form of Private Medical Insurance (PMI). • BUPA and AXI are forms of PMI. • This medical insurance works the same way as a persons Home Insurance or Car Insurance

5. How does it work? • PMI works on the principle that the lower possibility that you will claim (Actually use the Private Medical Service) the lower your premiums or payments are. • For example Joe Stevens (72) premiums will be higher than Carol Watson (25) • Why is this the case?

6. Increased number of Private Patients. • 1950’s – Approximately only 2% of the population was covered by PMI. • 1990’s – The figure has increased to approximately 12.7%

7. WHY IS THIS THE CASE? • One of the main reasons that this is the case is that some people have lost faith in the NHS. For example • Long waiting lists • Hospital-based diseases (e-coli, MRSA) • Lower standards of care • Media scare stories • High profile court cases • Government promotion of PMI

8. During the 1980’s people who worked were becoming richer and as a result the relative cost of PMI decreased. • Many companies began to offer PMI along with company cars and cheap loans as a perk to attract key skilled workers. • Why was this an advantage for big companies?

9. Conservative governments and PMC. • The Conservative government of 1979-97 were very enthusiastic about PMI. • They did not want the NHS to be the only or main provider of health care as they believed the NHS was getting too big. • They also believed that if the NHS was the sole provider of care then there would be no competition and therefore their would be no incentive to improve services for patients.

10. 1. Waiting lists are reduced • In many cases, the NHS will ‘sub-contract’ out operations to the private sector if it cannot deal with all of it’s patients so NHS waiting lists kept down • It estimated that the NHS hires 40% of private sector beds • Sub-contracting helps the NHS to meet waiting list ‘guarantees’

11. 2. Increased Patient Choice • It gives NHS patients more choice than they would have if the private sector was not used as a sub-contractor • Patients can choose time and place most convenient to them

12. 3. ‘Windfall’ funding • If a patient chooses to ‘go private’, then the NHS still gets that persons taxation and National Insurance contributions ‘for nothing’ • In finance terms this is called a ‘windfall’ – where money is received for little or no outlay

13. 4. Job Creation and training • Private health creates hundreds of jobs in Scotland • People who work in the private sector will get skills training which they might bring back to the NHS • There are many construction jobs created when building a new private hospital • It benefits local businesses who supply goods and services to a private hospital in the area

14. 5. Prevents the ‘Brain Drain’ • Some top medical staff would be tempted to go abroad to work for much higher wages than they get in the NHS • allowing them to work part time in the private sector ‘boosts’ their NHS income and so might help to stop them going abroad. • Better to have ‘half’ a top surgeon in the NHS than none!

15. 6. Keeps Key Workers at Work • Key workers* in the economy are able to be treated more quickly privately than if they had to wait in an NHS ‘queue’ • These workers are able to ‘plan’ their absence more effectively and reduce the impact of their absence (*A key worker’ might be someone like a top salesperson who wins orders to keep others in a job)

16. 7. Increases Competition and Efficiency • Certain services such as laundry, catering etc are put out to private tender – companies compete against each other. • This competition will lower prices • the NHS saves cash to put back into treating patients

17. Advantages - summary • Waiting lists reduced • Increased patient choice • NHS gets funding ‘windfall’ • Health jobs are created and staff are trained • Reduces brain drain • Accommodates key workers in the economy • Public Private Partnership • Increases competition and efficiency

18. AGAINST PMC. • It is immoral that money can buy health. It is argued that health should not be a consumer good, like beer. • All human life is equally important, regardless of the amount of money a person has. V's

19. 2. The NHS becomes a ‘dumping ground’ for expensive patients • Private health insurance is too costly for some people • Private health insurance discourages ‘expensive’ patients by putting up premiums (payments) • The NHS is left with the treatment of the chronically ill, the poor, the elderly – the expensive and long-term patients • Private sector ‘plays on’ the image of the NHS as second best

20. 3. Moonlighting • ‘moonlighting’ means getting paid by someone else on your employers time • Some NHS staff who also work in the Private Sector may treat their private patients during their NHS time

21. 4. ‘Freeloading’ • Most nurses and doctors are trained within the NHS, this costs a lot of money • At the end of the training, these staff could choose to work in the Private Sector which has paid nothing for the training • A lot of new procedures and treatments are piloted and tested in the NHS – the Private sector can get the benefits of this without having had the costs. • This is called ‘freeloading’

22. 5. Pay Beds within the NHS • A certain number of beds within the NHS are kept for private patients • This earns the NHS money • Patients in pay beds, however, require more attention from staff so these pay beds are more costly to the NHS than ordinary beds.

23. 6. NHS equipment used by Private Sector • Some private hospitals do not have the very largest equipment such as MRI scanners • They will ‘rent’ time on these from the NHS – this earns the NHS money • but, the Private Sector does not have the initial outlay of buying the machine • Time used in this way means fewer NHS patients treated

24. 7. No ‘expensive’ Emergency Services • Private hospitals do not have to bear the cost of expensive Accident & Emergency services • The Private Sector does not have the cost of the ambulance service to meet • Accident patients needing emergency treatment are taken first to an NHS hospital and only later transferred to the private hospital if their condition allows

25. 8. Loss of Working conditions • Many staff who used to work for the NHS, whose jobs have been ‘contracted out’ find themselves with poorer conditions such as longer hours.

26. Disadvantages - summary • Immorality of money buying health • NHS seen as ‘dumping ground’ – a 2-tier health service? • NHS staff ‘moonlighting’ in the Private Sector • Private Sector ‘freeloading’ off of the NHS • Pay beds in NHS take up more staff time • Using NHS equipment • Don’t have to have high cost A&E • Loss of working conditions for staff transferred to Private Sector