Private hospitals charging NHS inflated fees for work

Private hospitals are demanding more than twice the NHS cost for treating some health service patients, cashing in on the Government's scramble to cut waiting lists.

Private hospitals are demanding more than twice the NHS cost for treating some health service patients, cashing in on the Government's scramble to cut waiting lists.

Ministers have urged trusts to co-operate with the private sector to increase capacity in the overstretched health service and hospital trusts are sending thousands of patients to private hospitals for treatment at NHS expense.

But new figures, seen by The Independent, show private hospitals are taking advantage of a buyers' market by charging inflated sums for the work.

There were 1,600 heart bypass operations carried out on NHS patients in private hospitals in 2002-03 at an average charge of £12,060 compared with the NHS cost of £6,320, an excess of 91 per cent. Hip replacements were charged at an average of £6,848 by the private sector, 47 per cent higher than the NHS cost of £4,660. For arthroscopies - an operation to remove the cartilage in the knee - private hospitals charged £2,600, a rate 138 per cent higher than the NHS cost of £1,094.

Up to now, ministers have only admitted paying a premium of 30 to 40 per cent over NHS costs to get work done in the private sector.

Paul Burstow, the Liberal Democrat health spokesman, said: "Managers desperate to meet the latest nine-month waiting time targets are paying well over the odds to private companies. These government targets have put a gun to the head of NHS managers.

"This is a massive waste of taxpayers' money and would be better spent treating more patients on the NHS."

The high costs also explain the failure of the private sector to win government contracts worth £2bn over five years to run the new fast-track surgery centres being established to crack long NHS waiting lists. When the contracts were awarded last year, they all went to foreign companies.

Professor John Appleby, chief economist at the King's Fund, who uncovered the figures, said: "Has the NHS got value for money? The answer appears to be no. Even the most expensive NHS provider is less costly than the lowest priced non-NHS provider for these procedures."

The Department of Health has defended the high costs charged by private hospitals on the grounds that they were due to low volumes of work and high unit costs. But Professor Appleby said this was not the case. "Some are reasonably high volume. The work is not with lots of different providers. There is a relatively small group doing most of the work and their prices are high."

A key reason for the high charges is the fees demanded by surgeons and anaesthetists. A recent survey showed the fees paid to private doctors in the UK were among the highest in the world. "It is one of the biggest chunks of the cost," Professor Appleby said. Research by Norwich Union Healthcare found that senior hospital doctors in Britain charge 22 per cent to 59 per cent more for each private operation than their counterparts in the US, Australia, Canada and Germany.

But the private sector may be about to change its approach. Last month it was disclosed that two private hospital groups, Nuffield Hospitals and Capio, had agreed to cut their prices for the NHS. Nuffield and Capio won contracts worth £50m and £25m respectively to perform 25,000 waiting list operations at prices comparable with the NHS costs.

The NHS spent a total of £110m buying operations for 60,000 patients from the private sector in 2002-03. Although the number is small compared with the millions of operations carried out in the NHS, the high cost has caused severe difficulties for some health authorities. The North Bristol NHS Trust ran up debts of £44.6m last year and the deficit is expected to rise to nearly £90m this year.