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NHS spend on private care increased over the last decade

Meanwhile private providers earned less from their private patients

Ingrid Torjesen

Wednesday, 22 May 2013

Private providers have delivered an increasing amount of NHS-funded care since 2000, while the amount of care paid for by private clients has fallen, an analysis has found.

Researchers from the Nuffield Trust and the Institute for Fiscal Studies found that between 1997 and 2011, public spending on health grew more quickly than it had between 1975 and 1997. In contrast, growth in private health spending slowed significantly during the 2000s.

Their report, Public payment and private provision: the changing landscape of health care in the 2000s, says that the role of non-NHS providers in delivering NHS-funded care in England increased markedly from 2006 onwards, reflecting explicit policy decisions. In 2006/07, the NHS spent £5.6 billion (in 2011/12 prices) on care provided by non-NHS providers. By 2011/12 this had increased to £8.7 billion. This spending covered a range of general and acute, mental health, community and learning difficulties services. Non-NHS providers include private, voluntary and local authority providers.

The number of NHS-funded hip and knee replacements rose by a half while there was a fall in the number of privately funded procedures.

Elaine Kelly, research economist at the Institute for Fiscal Studies, said: “The changing pattern of the provision and financing of hip and knee replacements provides a clear example of how the relationship between the NHS and private sector health care providers has altered over the past decade.

“In large part, the growth in the number of NHS-funded procedures has been facilitated by using private providers to deliver these operations. For private providers, this increase in demand from the public sector has helped offset declining demand from private patients."

Nuffield Trust chief economist Anita Charlesworth said: "The public sector's share of total health spending in the UK has grown, reflecting both deliberate policy decisions to increase public funding and a slowdown in private spending. Reforms under the last Government to promote competition and patient choice have also resulted in a rapid increase in NHS spending on private providers. Whether spending on private providers will continue to increase as NHS spending is essentially frozen is less clear. There is a need to monitor whether the planned extension of choice into community services leads to an increased involvement of the voluntary sector or whether in response the private sector providers also expand into this area.”

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