For-profit healthcare, a necessary evil in NHS systems?

In a lot of Western European countries, especially where there is a national health service funded by taxation, for-profit healthcare providers are seen at best as a necessary evil by government. Or at least, that is what they would have you believe.

Take the NHS in England and Wales. In January, health and social care secretary Matt Hancock told the Health and Social Care Committee “I am going to be much more concrete, there is no privatisation of the NHS on my watch.”

Such is the attitude of a vocal part of the general public, he could scarcely say anything else and there has been much talk of rolling back outsourcing in recent years. Do the figures support this? It would appear not.

In 2018, almost £9.2bn was spent on for-profit healthcare services firms by the Department of Health and Social Care – an almost 5% rise on the year before, and the biggest spend ever. This is not a surprise. So embedded in the fabric of NHS service provision – albeit at the edges on occasion – are for-profit operators that to remove them could be catastrophic both for service and for waiting times.

And while the great and the good profess to want to protect the sanctity of the NHS, are they really choosy about who is providing their hip replacement surgery, who provides their dialysis or who process their MRI?

Elsewhere, there have been more successful attempts to wean NHS systems off the crutch of queue-busting for profit operators. PPP specialist Ribera Salud ran into problems with the left-wing Spanish government ending its outsourcing to private providers and jeopardising its Alzira model, and is now looking to Central and Eastern Europe for further expansion – and even further-flung LATAM.

Meanwhile in Poland, healthcare reform is in full swing as attempts to build a UK style NHS are underway. For-profit hospitals which are not on the government’s approved list of providers have had their NFZ (national health fund) contracts pulled. This has led to closures – coronary specialist American Heart of Poland lost its NFZ (national health fund) contract in 2017 and shut centres in Gdańsk, Myszków and Starachowice, among others.

For those large enough, the best defence is to have a diversified portfolio of assets across Europe. As one disgruntled source told us recently, “If you’ve got assets in Poland you’re stuck there. You can’t exactly bring some balloons over and move a hospital.”

Public structures often breed inefficiency in the same way competition can, properly managed, bring savings – though it is often hard to convince the public of this. And when the money runs out, it can lead to large waiting lists – which, in the case of Spain, has seen things come full circle as regions return work to private operators to bust queues. Ultimately, it seems that one way or another, for-profit operators will remain part of the public system – integral to it, or fighting fires as needed.

We would welcome your thoughts on this story. Email your views to David Farbrother or call 0207 183 3779.