Myth of spare capacity in private health care sector straining to help the NHS

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John Puntis is Co-Chair of Keep Our NHS Public

The private sector health sector remains small and its activities opaque

Shadow Health Secretary Wes Streeting has no doubt that greater investment in the private sector by utilising its ‘spare capacity’ is a way of helping those on ever lengthening NHS waiting lists and he presents this policy as a progressive measure to help working people. He argues that any who oppose such a plan simply wish (for ideological reasons) to deny poor people access to the private health care that they themselves enjoy. To labour the point further, he enthusiastically repeats Nigel Lawson’s derogatory characterisation of the NHS as a ‘religion’, implying that it is held to be beyond criticism and defies rational understanding.

The total number of NHS hospital beds in England has more than halved over the past 30 years, from around 299,000 in 1987/88 to 141,000 in 2019/20.However, the private sector remains much smaller with 8,900 beds, and relies almost entirely on senior doctors who already work for the NHS. Although claims of spare capacity are common (made as if self-evidently true), as one private health care website puts it: ‘facts and figures about the private health sector in the UK are surprisingly hard to come by’.

This issue was the subject of a recent article in the British Medical Journal calling for private providers to be required to report the same data as NHS hospitals. The authors highlighted that we just do not have the information on private sector workforce, hospital capacity, outpatient services, and prices required to understand the implications of boosting private sector activity on the healthcare workforce, demand for services, and healthcare quality. The paper argued that such information is crucial to policy making because the NHS and the private sector fish in the same limited pool for health care staff – expand work and staff in one, and the other is likely to suffer.

NHS-funded work in the private sector continues to increase. Almost 10% of elective procedures such as hip and knee operations were outsourced in 2023, up 50% from pre-covid levels. Staffing problems and pressure to reduce the 7.6 million care backlog are increasingly forcing health service trusts to send patients on their waiting lists to private providers.

Putting this another way, government failure to invest in NHS staff and facilities is driving the growth of the private sector.

Reasons for policy makers to be cautious

Recent experiences of using the private sector to ‘help’ the NHS should make any rational policy maker cautious.  For example, during covid there was the disastrous privatised ‘Test and Trace’ system, the unusable PPE scandal, and the contract with private hospitals for providing additional capacity. The latter meant that work funded in the private sector by the NHS actually went down by 43%, numbers of fee-paying private patients increased, and no more than one private hospital bed was occupied by a covid infected patient during 59% of the contract. All these examples underline that by their nature private providers in general are profit maximisers rather than ‘helpers’ or cost minimisers for the NHS.

Overall, it seems clear that demand for private health care other than from the NHS is far from booming, despite what the industry likes to say. Even the numbers of NHS consultants engaging in some private practice has fallen, going from 16,000 in 2000 to 9000 in 2023. No wonder the sector is keen to offer ‘help’ to the NHS in return for a guaranteed income. While it may be no surprise to see a Conservative prime minister reflexively turning to the private sector for an NHS recovery plan, when Labour does the same it suggests the influence of heavy lobbying together with a concerning failure to critically examine relevant evidence. Other possible explanations are incompetence, or an ideological aversion to the NHS continuing as a public service providing comprehensive care that is publicly delivered.

What might ‘spare capacity’ actually mean?

The bosses and cheerleaders for the private sector usually like to present it as lean and efficient in contrast to the plodding and wasteful public sector NHS. In contrast, we are now expected to believe that it has ‘spare capacity’ with staff sitting twiddling thumbs in empty facilities, just waiting to be called upon. If true, then perhaps this waste of resources tells us that the private sector is not such a well-run business model after all. More likely, what ‘spare capacity’ means is that when guaranteed an income stream by the NHS, the private sector can rapidly increase capacity for certain conditions that are deemed profitable. While some suggest increased use of private providers would be temporary and only until waiting lists fall, it seems unlikely that such contracts would be commercially attractive and more probable that the NHS would find itself locked in for a longer period.

This can be seen played out in ophthalmology, where the majority of cataract surgery is now performed in the private sector and paid for by the NHS. Waiting lists may have been brought down but at the same time the outsourcing has undermined NHS services. Cataracts are the bread and butter for eye surgeons in training, but are now being done in private clinics where they are no longer available for junior surgeons to learn their craft. Nurses attracted by better pay leave the NHS and deplete units of trained staff. Consultant surgeons and anaesthetists who would have been working sessions in the NHS now opt to work some of their time in the better paid private clinics which select out complex cases and leave these to the NHS.

‘Supplier induced demand’ undermines NHS services

The threshold for offering an operation has reduced with a resulting rise in numbers of procedures performed (termed ‘supplier induced demand’). Given the NHS has now to pay for this increased volume of cataract operations, there is then less money left for dealing with those conditions that will cause irreversible sight loss (e.g. glaucoma, macular degeneration, retinopathy) which are left to the NHS to manage. Since consultants are almost always employed by the NHS and adapt their work plans to work sessions in the private sector on a freelance basis, they inevitably spend less time in the NHS if they take on more work elsewhere; team working and training are again undermined.

The Centre for Health and the Public Interest (CHPI) found that the percentage of NHS cataracts delivered by the private sector increased from 24% in 2018/19 to 55% in 2022/23. The proportion of the total NHS budget for ophthalmology which is being spent on cataract services has increased from 27% to 36% while 78 new private for-profit clinics have been opened over the past five years. Also, over this time, surgery for ‘complex cataracts’ has increased by 144%, almost entirely due to the declared provision of these in the private sector. This is an anomaly given the screening out of complex cases by the private clinics and raises concerns about the coding practices being followed and the use of public money. There is some worrying but predictable evidence that waiting times for assessment of conditions causing preventable sight loss have increased.

What do the experts think?

A Health Foundation report pointed out that it is relatively easy for the private sector to scale up provision for simple high volume procedures like cataract surgery, but less so for other procedures such as orthopaedics. For example, in the case of hip replacements, the increased share carried out in private hospitals ran alongside a decline in NHS provision – leaving numbers almost unchanged, but much more cash flowing out of the NHS into private pockets. The Health Foundation report concluded that the private sector was likely to play only a limited role in fully recovering services and can’t be a substitute for addressing the major problems facing the NHS. The King’s Fund examined strategies used in the past for successfully reducing waiting lists for non-urgent care, and concluded that increasing funding and NHS workforce capacity both played a key role.

The Nuffield Trust observed that more spending on the private sector means more competition for the time of consultants and outsourced services like imaging, potentially making it harder to expand care paid for by the health service. Private services which are not co-located with emergency and intensive care and tend to be in wealthier areas may favour white and more affluent patients and be less able to provide extra care to sicker people in poorer areas. The NHS Confederation representing health service managers has stated that the private sector does not have the capabilities, workforce or capital to take on the more complex and urgent cases which will be left to the NHS. Many trust bosses (NHS Providers) are sceptical about private providers, pointing out that access is not uniform across the country and emphasising the potential to increase health inequalities.

It is disingenuous to dismiss objections to use of the private sector as simply ideological

David Rowland, Director of CHPI, highlighted the concerns about Streeting’s plans in an opinion piece in the Guardian. Nearly all the doctors working in the private sector do it on a part time basis and work for the NHS the rest of the time. The main constraint on clearing the NHS backlog is not lack of operating theatres but consultant surgeons and anaesthetists. There is only one pool of such healthcare professionals in the UK and unless that pool expands significantly and quickly, pushing patients into the private sector will have little impact on the overall waiting list.

Real risks for patient safety

It will, however, expose patients to greater risk as has been shown in a number of reports and inquiries including a recent Panorama programme focusing on deaths. These risks stem mainly from private hospitals being small, lacking intensive care facilities, and having poor medical cover at night.

In reality, it is the NHS that ‘helps’ private hospitals, through providing trained staff; training costs borne by the NHS are estimated at around £8 billion. In addition, there are also in the region of 6,600 patients that have to be transferred to NHS facilities from the private sector each year at an estimated cost of £80 million. Despite the scandal surrounding the breast surgeon Ian Paterson needlessly operating privately on women, neither the Government nor the private sector have done much to implement the recommendations of the subsequent enquiry. Currently The NHS finds itself treated as a ‘safety net’ by the private sector, and left to pick up the pieces and the costs when private treatment fails or if private providers carrying out NHS work collapse.


The long-term problems facing the NHS relate to lack of capacity from chronic understaffing and underfunding in relation to current demand. No amount of ‘reform’ will solve these issues without significant investment, as was demonstrated under the Blair-Brown government. In addition, previous experiments by Labour in using the private sector through Independent Sector Treatment Centres increased costs while undermining NHS services and contributing little in the way of greater capacity.

A key flaw in Labour’s plans to use ‘spare capacity’ is that the private sector depends on staff who already work in the NHS. If they spend more time working for private providers, they spend less time in the NHS. The impact on waiting lists of ‘holding the door open’ for the private sector is likely to be marginal at best. However, increasing reliance on the private sector will undoubtedly undermine NHS services as has been clearly demonstrated recently in ophthalmology. Given the distribution of private facilities, such a policy is also likely to increase health inequity with white and better off patients being the most likely beneficiaries, while exposing some patients to increased risk.

Growth of the private sector has not simply been due to market forces but is rather the product of government policy over the past two decades.  Any government can, if they choose, reverse this trend by sustained investment in the NHS and the removal of subsidies which promote the growth of for-profit provision in the UK.  Labour needs to have a radical re-think of its policies or be prepared to share the evidence on which it bases claims that investing in the private sector helps the NHS, in order that this can be critically evaluated.

The current situation is clearly sufficiently serious for the next government to declare a national health emergency. Then, a policy option to seriously consider would be to requisition any real spare capacity in private health care facilities and use it for the benefit of patients. Much better would be for Labour to commit to investing in rebuilding a strong NHS based on its founding principles.

John Puntis, June 2024

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