How much private sector in NHS?


Will the NHS have to do more for less in the future?

I tried to set out the arguments for and against increasing the involvement of the private sector in the provision of NHS healthcare, in a short film for the Ten O'Clock News last night.

The central questions for me are these ones:

1) If you accept the argument that a bit of competition from the private and voluntary sector will help to spur productivity gains throughout the NHS (and not everyone does), what is the optimum share of NHS provision that the private sector should provide to deliver this benign outcome (right now, the private and voluntary sectors provide about 5% of NHS healthcare)?

2) Since there is evidence that competition is most effective at raising standards when weaker institutions, unable to raise their game, know that they will go bust, are we happy to see NHS hospitals put out of business? And if we are, can arrangements be put in place to minimise the disruption for patients and communities?

3) At what point (if ever) would the private sector's clout within the NHS be so great that private providers would be able to hold to ransom taxpayers who finance them (pay us more, or else), eroding the productivity gains? As we've seen with the financial crisis at the care home provider Southern Cross, the threat of an interruption of a vital service is quite a bargaining chip for a health provider.

4) And will the greater transparency of costs of different treatments and therapies likely to be brought by increased private sector involvement in the NHS start to undermine political and public support for the principle of universal provision that is free at the point of use? If it does, would that be a good thing or a bad thing?

Robert Peston Article written by Robert Peston Robert Peston Economics editor

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  • rate this

    Comment number 263.

    If the private patient cap is removed. Nhs hosptial can capture more private patient money that will benefit Nhs patients in the long term. Look at moorfield eye hospital in Dubai the profits from that go back into Nhs moorfield london which means more money to provide better services to patients.

  • rate this

    Comment number 262.

    The real point is that there is this huge pot of taxpayers money that will be channeled into the private sector. The "smoke and mirrors" job that the Government is trying has failed so far. Most of us are not that stupid.
    Like Southern Cross, it's only a matter of time before the family silver is sold.
    Privatised Gas/Water/Electricity/NHS: Where is the competion?
    It's a con and we know it!

  • rate this

    Comment number 261.

    privatisation doesnt have to mean selling off the assets. the NHS/government would continue to own everything, but a private company would provided what is called "managed services". there is no "cherry picking", "farming" or "milking". If the private entity doesnt deliver, they lose the contract, and staff transfer to the new contractor. this is happening already, so shows what you lefties know!

  • rate this

    Comment number 260.

    259.Simon ORegan >> "If public health becomes a private business, business will make the profit rather can keep people alive."

    Amoral corporations will farm old people who have assets and no "living will".

  • rate this

    Comment number 259.

    If public health becomes a private business, business will make the profit rather can keep people alive. If public health is insulated so that people are kept alive, the institution will sustain itself and people will die again,albeit for different reasons. A mixed economy, where public is kept on their toes by private and vice versa may result in less people dying and will cost the taxpayer less.


Comments 5 of 263



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