Special Report on Private Health: Hospitals adapt to growing challenge of briefer stays: Many operations can now be done in half the time, Lynne Curry reports

FIXED-PRICE procedures offered by private hospitals are encouraging people who have no medical insurance to pay for their own operations. GPs' surgeries are sent lists of costs, which are not tied to how many days a patient needs to stay in hospital.

This low-key advertising is part of the push by private hospitals to expand their market and entice more people into looking outside the NHS. They have had to find more customers to compensate for the fact that new technology has led to patients needing shorter stays and going home sooner.

Cataract operations, for example, are among those that can now be done in a day, and gall-bladder removals mean a stay reduced from six or seven to two days. As a result, the cost of these operations in some hospitals has halved.

Independent British Healthcare, one of the largest private groups, with 17 hospitals administered from a Blackpool base, said the number of those who paid for treatment was rising, although between 70 and 80 per cent are still admitted through insurance schemes. Eric Hemming, operations director, said admissions had risen by 10 per cent from last year.

Keith Chadwick, IBH's chief executive, said the change from long to brief admissions had not been a bolt from the blue and private hospitals had been adapting for some time. 'If you go back 12 years, the average number of days a patient stayed in hospital was five. Now, the equivalent number for the same procedure is just over three.'

The reduction, he said, was the result of technological advance and unconnected with any pressure from insurance companies to cut costs. 'The hospital doesn't decide how long the patient stays in; the final say is from the doctors.'

A round figure for keeping a patient in a private hospital is now pounds 500 a day. Ron Finlay, spokesman for the Nuffield group, which has 32 hospitals, said demand for overnight beds had stayed static while the number of day patients and outpatients had risen by 25 per cent a year. Last year Nuffield, a charity which turned over pounds 110m and put its 1993 trading surplus of pounds 10.7m back into its own funds, treated more than 250,000 people as outpatients against 100,000 as in-patients.

Its buildings, meanwhile, are being adapted for the change. Part of this year's pounds 25m-plus capital expenditure has gone on refurbishing the Fitzroy Nuffield hospital in central London, with an increase in facilities for the patients and a cut in bed numbers. 'Overall, we're seeing an increased demand for individual health care,' Mr Finlay said. 'It didn't grow as fast in the recession but we're seeing a pick-up in activity now. There has been more publicity about waiting list delays and people have also begun to recognise that they have rights to be referred to a private hospital, more than they might have done in the past. Because of our fixed-price surgery scheme it's more attractive.'

The prosperity of private hospitals, however, still tends to ride in tandem with the success of the health insurance companies. Between 1990 and 1993 the number of subscribers to private health schemes remained flat, dramatically halting the rapid expansion of the Eighties. Since then, the companies have looked to no- claims bonuses, discounts, preferred suppliers, partnership arrangements and excesses, reminiscent of car insurance. Hospitals and consultants agreed price scales, with hospitals also giving discounts for exclusive use.

Employers, who pay for about two thirds of all those covered by private health insurance - nearly two million people - have been solicited by a range of customised schemes which cost (through Bupa) as little as pounds 9 and as much as pounds 130 per person per month. The current ratio of those whose company pays to those who pay themselves is 3:2, which leaves 1,284,000 people paying their own subscriptions. A fifth of the privately insured population is in the outreaches of London.

Robbie Burns, regional director of Bupa, which treats half a million outpatients a year on its 29 sites, said referrals through insurance companies and 'self-pay' were increasing. 'I don't think it has to do with procedure price; it's more a matter of economic confidence and greater disposable incomes. As we deal primarily with cold elective surgery - non-urgent - I think it's a reflection of people saying they are slightly more confident.

'We are continuously looking at the market and have gone away from concentrating on beds to how to process the patient in an efficient and cost-effective manner. Currently about 45 per cent of our total discharge are day cases and they require a much slicker service and more intensive nursing. We have radically reappraised the way we have traditionally nursed and managed the patient. We don't feel the NHS pay-bed wings will steal a march on us.'