Wasteful payments to private hospitals is England’s forgotten Covid healthcare scandal

In March 2020, just before Covid hit, shares in Spire Healthcare were 51p. Today, they’re 244p. 

Along with the scandals of PPE contracts being awarded to firms that were supplying equipment that didn’t work or was’t required and/or they enjoyed connections with government ministers and the granting of fraudulent payments under the Bounce Back Loan Scheme can be added the extension of largesse on an epic scale to private hospitals. Unlike PPE and Bounce Back, private health continues to reap the benefit and will do so for years to come. 

When the pandemic began, a relative was due to have knee replacement surgery done privately. She was in agony and could not wait any longer for an operation on the NHS. Her private surgeon told her she was lucky; he was able to carry out the procedure ahead of his hospital being seconded by the NHS and all the beds taken.

Later, once lockdown was lifted, she returned for a consultation. She inquired how the outbreak had gone, was the place full of Covid patients? No, he said, not one bed was used. Not only that, but they did not receive any non-Covid NHS patients either. As the state-of-the-art premises stayed empty, the NHS covered all the costs of the hospital, including rent, staffing and interest payments.

In all, the NHS paid private hospitals billions of pounds to buy beds that were hardly touched. In March 2020, the government block-booked all 7,956 beds in England’s 187 private hospitals along with their almost 20,000 staff to help supplement the NHS’s efforts to cope with the unfolding outbreak. 

A study by the Centre for Health and Public Interest (CHPI) has found that on 39 per cent of days between March 2020 and March 2021, private hospitals treated no Covid patients at all and on a further 20 per cent of days they cared for only one person. Overall, they provided only 3,000 of the 3.6m Covid bed days in those 13 months – just 0.08% of the total.

Meanwhile, they did less work under their contract with the NHS than previously. The year before the virus struck, private hospitals undertook 3.6m NHS-funded planned procedures. That dropped to 2m during the first year of the pandemic – a fall of 43 per cent. As my relation found at her private hospital, in some cases it fell away completely.

At the time, NHS England heralded the Covid deal as a way of guaranteeing a boost in healthcare capacity when they feared NHS hospitals would be swamped and unable to cope. Along with the Nightingale hospitals (subsequently also not required), it was seen as an emergency stop-gap. 

NHS executives stressed, though, that Covid patients who needed hospital care would be treated privately – routine operations such as hip and knee replacements would be carried out in the private hospitals. Yet, my relative’s knee surgeon did nothing, he was not called upon to operate on an NHS patient, not at his hospital. 

The reason for the non-take-up should have been obvious: private hospitals have operating theatres and beds, but they rely on NHS staff to moonlight for them, to work for them as freelancers – and the NHS employees could not get away because they were working flat out in the NHS combating Covid.

To add to the sense of wonder at the generosity of it all comes further news: private hospitals received tens of millions in furlough payments. Yes, that’s right, despite having the costs of their hospitals completely paid, they were able to claim furlough money for staff not directly involved in patient care and those who were clinically vulnerable and forced to shield at home. 

Together, says the CHPI, private hospitals obtained £41m in furlough funding between December 2020 and August this year. The think-tank’s calculation is based on official government data. Details of furlough claims prior to December 2020 have not been released. 

As soon as restrictions were eased, the number of patients using private hospitals surged. They soared by 30 per cent between April and June compared with the same months in 2019. About 65,000 people paid for their treatment privately during that three-month period. Yet the private hospitals were continuing to receive furlough cash for some of their employees. 

This, though, is nothing as to what lies ahead. 

In March this year, the private hospitals struck a new £10bn four-year contract with the NHS to treat patients. Currently, there are 5.83m people waiting for treatment on the NHS. The government-spending watchdog, the National Audit Office, warns that total will keep on rising and could reach anywhere between 7m and 12m people by early 2025. 

The Department for Health and Social Care and NHS England are working on an “elective recovery plan” that will detail just how they propose to attack the growing backlog. Key measures are likely to include scrapping follow-up outpatient consultations to free up doctors to do more operations, encouraging people to have operations outside their home area and making greater use of private hospitals. But how many people will simply give up waiting and choose to self-pay to go private? 

It’s quids in for private healthcare every way you look. This, too, is an NHS that even in the absence of the pandemic was struggling. Indeed, ministers blame Covid as having caused the backlog, but back in March 2020 when Covid had not spread, the waiting list of people who ought to be treated within 18 weeks stood at 4.43m people and the target of dealing with 92% of them within the 18 weeks had been missed every year since 2016. 

The NHS was already creaking under the strain of an increased population, of people living longer, expensive new drugs and more complex operations using costly new technology. Then, along came Covid to further worsen its condition. 

Yet, as far as investors in Spire and the private healthcare sector as a whole are concerned, NHS England really is the gift that keeps on giving.