Private Providers of NHS Services: A Growing Influence in Healthcare

Private providers of NHS services are increasingly playing a significant role in the UK's healthcare system. This trend is driven by the government's efforts to improve efficiency and reduce waiting times.

According to data from the NHS, the number of patients being treated by private providers has been steadily increasing over the past decade. In 2019-20, over 100,000 patients received treatment from private providers.

The rise of private providers has also led to concerns about equity and access to care. Some critics argue that the increased reliance on private providers may exacerbate existing health inequalities.

The NHS has been increasingly relying on private providers to deliver services, with some surprising statistics. Private hospitals carried out 526,000 elective procedures on NHS patients in 2019, which fell to 291,000 during the COVID-19 pandemic in England.

In 2020, the NHS block-booked most of the private hospital sector's services, facilities, and nearly 20,000 clinical staff at cost price to expand capacity during the pandemic. This deal was brokered by the Independent Healthcare Providers Network and included about 8,000 hospital beds.

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The NHS has been outsourcing a significant portion of its services to the private sector, with nearly one in five NHS cases admitted to hospital in England last year receiving their care from a private provider. This proportion has more than doubled over the past 13 years.

Here are some key statistics on NHS-funded activity carried out by independent sector providers (ISPs):

The NHS's reliance on private providers is expected to increase further, with the government's elective recovery plan proposing to significantly increase the use of the independent sector through a range of factors, including the expansion of patient choice and long-term contracts.

Mental health is a crucial aspect of overall well-being, and the NHS plays a significant role in providing care. In 2018-9, 30% of all mental health spending was in the private sector.

The line between healthcare and social care can be blurry, especially when it comes to mental health services. In 2019, 13% of inpatient beds in England were provided by American companies.

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The private sector is also a significant player in mental healthcare, with around £1.8 billion of the £13.8 billion spent by the NHS on mental healthcare in 2018 going to private providers. This includes non-hospital services.

In fact, 25% of NHS mental healthcare beds in England were provided by the private sector. And what's more, 98% of their earnings came from the NHS.

The quality of care provided by private mental health providers is a concern, with 64 out of 238 independent NHS mental health providers licensed by the Care Quality Commission in England being rated either “require improvement” or being considered “inadequate”.

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The Health and Care Bill could enable more outsourcing of NHS services to private providers. This is a concern for many, as it may lead to a greater reliance on private providers for NHS care.

In 2019, the Care Quality Commission reported that ambulance services were relying on private providers due to a lack of capacity. This is just one example of how the NHS is already outsourcing services to private providers.

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The BMA has been clear that the Health and Care Bill is the wrong bill at the wrong time. They believe it should be amended to make the NHS the default option for NHS services.

In 2020-21, independent sector providers (ISPs) provided approximately 386,800 NHS-funded elective episodes, or about 5.2% of all NHS elective activity. This is up from just 0.02% in 2003-04.

The government's elective recovery plan risks embedding ISP provision of elective NHS care in the longer-term. This could potentially undermine NHS planning, finances, and staff training.

The Health and Care Bill risks opening the door to further outsourcing of NHS services. This is a concern for many, as it may lead to a greater reliance on private providers for NHS care.

In 2018/9, over £92 million was spent on private ambulances and taxis. This highlights the extent to which the NHS is already relying on private providers for certain services.

The BMA has called for the Health and Care Bill to be amended to make the NHS the default option for NHS services. This would ensure that NHS providers are the first choice for NHS contracts.

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Here are some key statistics on the growth of private sector involvement in the NHS:

The NHS has been increasingly relying on private providers to help tackle waiting lists and provide care to patients. In fact, nearly one in five NHS cases admitted to hospital in England last year received their care from a private provider.

Private providers have been playing a significant role in the NHS, with a record 659,000 inpatient treatments in private hospitals in 2024 paid for by the NHS - up nearly 50% from the pre-pandemic peak.

The NHS sees nearly four times as many outpatient treatments as there are hospital admissions, and private providers have been handling more than 1 million of these outpatient cases in 2024 - more than twice as many as 10 years ago.

A new deal between the NHS and private providers aims to tackle the backlog and bring the standard waiting time down to 18 weeks for 92% of patients.

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The Any Qualified Provider policy was introduced to encourage all NHS, private, third sector, or social enterprise health service providers to compete for contracts on an equal footing.

This policy aimed to increase competition and drive innovation in the NHS, but its effectiveness is unclear.

The policy was part of the Labour government's 2007 patient choice initiative, which aimed to improve care quality through market competition.

By 2016-17, the private sector secured 70% of NHS England contracts, demonstrating unprecedented market penetration.

This trend suggests that the policy has been successful in increasing the role of private providers in the NHS.

However, the policy's impact on patient care and outcomes is not well understood.

In 2019, private hospitals carried out 526,000 elective procedures on NHS patients, showing the significant involvement of private providers in NHS care.

The policy has also led to increased outsourcing of NHS services, with NHS commissioning expenditure from non-NHS organisations in England increasing by 27% to over £18 billion in 2020-21.

This shift towards greater reliance on private providers is a significant change in the NHS's approach to healthcare delivery.

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Ambulance services are being heavily relied upon by the NHS due to a lack of capacity. In 2019, the Care Quality Commission reported that this was the case.

Some private providers were not even doing the basics right, failing to obtain references or conduct criminal record checks. This is a serious issue that can put patients at risk.

A staggering £92 million was spent in 2018/9 on private ambulances and taxis, highlighting the scale of the problem.

The controversy surrounding private providers of NHS services is a complex issue. The government claims that only 6% of the NHS budget is used by the private sector, but this statement is misleading.

This percentage only accounts for the direct use of private services, not the broader involvement of private providers. In reality, around 40% of the NHS budget is spent on privately provided goods and services, such as drugs, supplies, and equipment.

The NHS also relies on private providers for subcontracted work, with £10 billion of the total NHS budget spent on care from non-NHS providers in 2013/4. This growth in private provision has been most notable in mental health and community health services.

The NHS has been using private care to help tackle waiting lists, with a four-year plan to increase the use of independent sector providers through long-term contracts and partnerships. This plan aims to clear elective care waiting lists by spending up to £2.5 billion a year on contracts with private hospitals.

The NHS is working with private providers to increase capacity and reduce waiting times, with a goal of bringing the standard waiting time down to 18 weeks for 92% of patients. This is a significant increase from the current situation, where nearly one in five NHS cases admitted to hospital in England received their care from a private provider.

Private hospitals with spare capacity will provide an extra million appointments a year for NHS patients, mainly in areas like orthopedics and gynecology. This partnership arrangement is a new approach, with Health Secretary Wes Streeting calling it the first of its kind in 25 years.

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The NHS is relying more and more on private providers, with nearly four times as many outpatient treatments as hospital admissions. In 2024, private hospitals handled over 1 million outpatient treatments, more than twice as many as 10 years ago.

The new deal between the NHS and private providers is likely to increase the NHS's reliance on private care even further. Historically, the independent sector played a supplementary role in the NHS, but it's now changing to a more significant role.

The NHS has been spending a significant amount on private providers, with £9.2 billion paid to private providers in England in 2018-9, or about 7% of the Department of Health and Social Care's departmental budget.

This expenditure has been increasing, with a 14% rise compared to 2014-15, and is expected to continue growing with the new deal between the NHS and independent providers aiming to bring the standard waiting time down to 18 weeks for 92% of patients.

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The NHS sees nearly four times as many outpatient treatments as there are hospital admissions, with independent-sector partners handling more than 1 million outpatient treatments in 2024 - more than twice as many as 10 years ago.

Here are some key figures on NHS expenditure on non-NHS providers:

The relationship between the NHS and private providers is changing, with the NHS becoming increasingly reliant on them, according to Siva Anandaciva, director of policy at the King's Fund.

The NHS expenditure on private providers has been increasing steadily over the years. In 2018-9, a total of £9.2 billion was paid to private providers in England, which is about 7% of the Department of Health and Social Care's departmental budget.

The actual figure of non-NHS provider spend is much higher, calculated by the Centre for Health and the Public Interest as about 26%, or £29 billion, managed through 53,000 individual contracts.

This is a significant increase from 2012-13, when non-NHS providers accounted for 8.7% of the DHSC's RDEL budget, which has now risen to 11.1% in 2021-21.

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The NHS is also spending a substantial amount on social care, with £830 million spent directly in 2018-9, and £1.3 billion on services subcontracted by NHS trusts.

Here's a breakdown of the increasing non-NHS provider spend:

This trend of increasing reliance on private providers is concerning, as it may lead to a loss of control over the NHS budget and a shift away from the NHS's core values.

The NHS is facing a significant challenge in clearing its waiting lists, and one solution being explored is the use of private sector contracts. The elective recovery plan aims to increase the use of independent sector providers (ISPs) through long-term contracts and partnerships, with up to £2.5 billion spent annually on elective activity from pre-approved lists of ISPs.

In the past, the private sector has played a supplementary role in the NHS, but this dynamic is changing, with the relationship shifting from help to reliance. In 2024, nearly one in five NHS cases admitted to hospital in England received their care from a private provider, a proportion that has more than doubled over the past 13 years.

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The NHS has been outsourcing a growing share of its care to private providers, with 659,000 inpatient treatments in private hospitals paid for by the NHS in 2024, up nearly 50% from the pre-pandemic peak. This trend is expected to continue, with the new deal between the NHS and independent providers likely to increase NHS reliance on private providers even further.

The proportion of spend allocated to non-NHS providers has increased from 8.7% of the DHSC's RDEL budget in 2012-13 to 11.1% in 2021-21, while NHS trust spend on outsourcing to ISPs has increased nearly seven-fold in the same time frame.

Here are some key statistics on NHS expenditure on private providers:

The transformation needed in healthcare is substantial, requiring significant investments in finance, technology, human capital, operations, infrastructure, and collaboration across the system.

Private providers of NHS services have been criticized for prioritizing cost reduction targets over patient safety.

The National Audit Office's 2018 Capita assessment identified fundamental failings in contract design and risk assessment.

Private operators often underestimate the operational interdependencies that are crucial for patient safety, leading to practices that endanger patients.

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Private providers often underestimate the complexity of patient safety when pursuing cost reduction targets. This can lead to operational interdependencies being overlooked.

The National Audit Office's 2018 Capita assessment highlighted fundamental failings in contract design and risk assessment. Investigators found that private operators often lack an adequate understanding of primary care support services.

Delayed agreement on basic principles and practices that endanger patients have been identified as major issues. The British Medical Association has called for returning primary care support services to public management.

Patient safety requires a deep understanding of operational interdependencies that private operators may not always prioritize.

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Private providers have proven themselves to be a valuable asset to the NHS, with 92% of independent acute hospitals rated 'Good' or 'Outstanding' by the Care Quality Commission (CQC).

This is a testament to their commitment to providing high-quality care. The IHPN highlights that independent providers are not only meeting but exceeding standards.

Independent providers have shown that they can deliver care efficiently, with NHS patients seen by them having an average wait of 11 weeks, compared to 18 weeks in the public sector.

This is a significant difference, and one that could be replicated across the board if more private providers were utilized. The IHPN is now calling on the government to make greater use of the private sector to tackle the backlog.

By ensuring all appointments made available in the private sector are used by the NHS, around one million slots a year could be freed up, allowing patients to receive the care they need more quickly.

Here are some key statistics on the performance of independent providers:

The private sector is playing a significant role in helping to tackle NHS waiting lists. More private sector contracts are being used to provide elective care, with a four-year 'National Increasing Capacity Framework' agreement that could see ICSs and NHS trusts spend up to £2.5 billion a year procuring elective activity from a pre-approved list of independent sector providers (ISPs).

This is a significant increase from the funds spent on contracts with ISPs in 2018 and 2019. The funds represent almost double the amount spent in those years, highlighting the growing importance of the private sector in supporting the NHS.

Private providers are consistently delivering around 10% of all NHS planned care, and are having the largest impact within trauma and orthopaedic surgery as well as ophthalmology services.

Market Response and Adaptation is a crucial aspect of the NHS's strategy. NHS hospitals are now reclaiming profitable procedures that were previously outsourced to private providers.

This shift is a strategic move to bring services in-house, rather than allowing private operators to select low-complexity, high-margin cases. The market leaders are feeling the impact of this change.

BMI Healthcare, Britain's largest private hospital provider, reported a 4.4 per cent decline in NHS caseload. This is just one example of how the NHS's strategies are evolving.

Ramsay Healthcare UK revenues fell 8.4 per cent, not 4.8 per cent as previously stated, while Spire Hospitals experienced a 1.9 per cent NHS revenue reduction. These numbers show the extent of the market contraction.

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The influence of private providers in the NHS is growing rapidly. Since 2021, the amount of patient care episodes delivered per week has increased by a third, standing at approximately 101,000 per week.

Private providers now consistently deliver around 10% of all NHS planned care, and the care is priced at NHS rates and free at the point of use for patients.

Independent providers are having the largest impact within trauma and orthopaedic surgery, delivering 26.3% of NHS planned trauma and orthopaedic activity - that's around 26,000 patient episodes per week.

In ophthalmology services, independent providers are also making a significant contribution, delivering 24.4% of NHS ophthalmology activity - that's around 22,000 patient episodes per week.

Here's a breakdown of the impact of independent providers in trauma and orthopaedic surgery and ophthalmology services:

The NHS Transformation and Care is a complex and multifaceted issue. The UK government has announced a new deal between the NHS and independent providers to tackle the backlog and bring the standard waiting time down to 18 weeks for 92% of patients.

Private hospitals with spare capacity will provide as many as a million extra appointments a year for NHS patients in treatment areas such as orthopedics and gynecology. This is a significant increase from previous years, with nearly one in five NHS cases admitted to hospital in England last year receiving their care from a private provider.

The NHS is increasingly relying on private providers to meet demand, with the number of inpatient treatments in private hospitals paid for by the NHS up nearly 50% from the pre-pandemic peak. This has raised concerns about the long-term sustainability of the NHS and the role of private providers within it.

Historically, the independent sector has played a supplementary role in the NHS, but it feels increasingly like that dynamic is changing, with the relationship "moving from help to reliance", according to Siva Anandaciva, director of policy at the King’s Fund.

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Implementation failures in NHS transformation are a stark reminder of the importance of careful planning. Circle's 2012 takeover of Hinchingbrooke Health Care NHS Trust, the first entirely privatised NHS hospital, collapsed within two years due to £5mn losses and damning Care Quality Commission findings.

Setting unrealistic targets can lead to system failures, as seen with Capita's £330mn primary care support contract. They bid on cutting support staff from 1,314 to 314 positions, resulting in widespread problems including patient record transfer issues and payment delays affecting thousands of healthcare providers.

Aggressive cost reduction targets often generate unintended consequences that undermine transformation objectives, as witnessed with Capita's contract. This highlights the need for a more nuanced approach to cost cutting in NHS transformation.

Serco's Cornwall out-of-hours GP services ended in 2013 after staff falsified performance data, demonstrating the importance of robust monitoring and accountability in NHS transformation. UnitingCare's withdrawal from an £800mn elderly care contract eight months after signing shows that even with a £1mn tendering process, transformation risks can still be underestimated.

Complex system change requires deep operational understanding before introducing market mechanisms, as the NHS privatisation experience has shown. This means taking the time to understand the intricacies of the system and its stakeholders before embarking on transformation.

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The NHS is shifting its focus from hospital visits to care. This is partly due to the increasing reliance on private providers, with nearly one in five NHS cases admitted to hospital in England last year receiving their care from a private provider.

The NHS is outsourcing more care to private providers, with private hospitals handling a record 659,000 inpatient treatments in 2024 paid for by the NHS. This is up nearly 50% from the pre-pandemic peak.

The NHS sees nearly four times as many outpatient treatments as there are hospital admissions. In 2024, private providers handled over 1 million outpatient cases, more than twice as many as 10 years ago.

The new deal between the NHS and private providers aims to increase the use of private hospitals to tackle the backlog and bring the standard waiting time down to 18 weeks for 92% of patients. This could see as many as a million extra appointments a year for NHS patients in treatment areas such as orthopedics and gynecology.

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Our view on the use of private providers of NHS services is that doctors are largely divided on whether it will improve the ability to manage pressures on NHS hospitals. Two in five doctors (39%) feel that ISP contracting will significantly worsen the ability to manage NHS pressures, compared to just 29% who believe it would improve.

Concerns about the availability of NHS staff, funding and sustainability of NHS services, and the scope and quality of doctors' training are valid and need to be addressed. The NHS does not have adequate capacity to address the record backlog of care, making it essential to use all available capacity, including the independent sector in the short-term.

To ensure that the NHS can cope with the backlog, we recommend developing a workforce strategy that ensures sufficient investment in growing the workforce. This includes increasing medical school and postgraduate specialty training places, and taking immediate action to retain the existing workforce.

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Here are some key recommendations to mitigate the risks associated with outsourcing to private providers:

Our view is that the outsourcing arrangements in place with ISP hospitals have raised concerns among doctors and the NHS.

Two in five doctors (39%) feel that ISP contracting will significantly worsen the ability to manage NHS pressures. This is a significant concern, especially when considering the potential trade-offs.

The availability of NHS staff is a major concern, with 83% of doctors citing it as an issue. This is largely due to the existing limited pool of staff taking on additional work in the independent sector.

Funding and sustainability of NHS services is also a worry, with 81% of doctors concerned that certain more profitable services will be 'creamed off' from NHS hospitals. This could have long-term implications for the NHS.

There are also concerns around the regulation of ISPs, with 47% of doctors worried about the fairness and transparency of their regulation. This is a critical aspect of ensuring that patients receive high-quality care.

Here are some of the key concerns highlighted by our research:

To tackle the record backlog of care in the NHS, we recommend using all available capacity, including the independent sector in the short-term, to ensure patients receive timely care.

The NHS must develop a workforce strategy that ensures sufficient investment in growing the workforce, including increasing medical school and postgraduate specialty training places. This is crucial to address the staffing needs of the NHS.

To increase bed capacity, the NHS should re-open closed acute beds, which is a more efficient way of expanding capacity compared to relying on private hospitals.

Any outsourcing arrangements must be time-limited and run alongside the development of a new strategy to address the NHS backlog.

To mitigate risks associated with outsourcing, the NHS Standard Contract should be amended to require ISPs to contribute towards the education and training of the NHS workforce.

The NHS must also ensure that pre-operative checks are aligned for NHS and private hospitals, and that there are structured arrangements in place to transfer patients to the right environment if needed.

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A clear and transparent governance system must be in place, including contracting and financial arrangements, to monitor and scrutinise the costs and performance of approved framework suppliers.

Here are the key recommendations in summary:

The Health and Care Bill must be amended to safeguard the NHS from further outsourcing, with the default provider for NHS contracts being the NHS, and the Government ruling out independent sector companies wielding influence over commissioning decisions.