Independent providers depending more on NHS contracts

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BUPA hospital NHS service contracts for independent health providers are increasing faster than their private income, according to health economic analysts.

Annual growth in private health spending slowed by nearly 50% between 2006 and 2011, while annual NHS business for private contractors increased by over 50%.

According to the report from the Institute for Fiscal Studies and the Nuffield Trust, private health spending has suffered worse from the recession than public health spending.

While public spending on healthcare rose in 2008 and 2009, but fell in real terms by 0.7% in 2010 and 1.2% in 2011, private spending fell by 6% from 2008 to 2011.

However, NHS spending on care from non-NHS providers rose from £5.6bn in 2006–7 to £8.7bn in 2011–12, with private sector providers accounting for most of the outsourced care.

The increase in outsourcing of NHS care to the private sector encompassed general and acute care, mental health and community services.

Anita Charlesworth, Chief Economist at the Nuffield Trust and co-author of the report, said: “Reforms under the last government to promote competition and patient choice have also resulted in a rapid increase in NHS spending on private providers. Whether spending on private providers will continue to increase as NHS spending is essentially frozen is less clear.

“There is a need to monitor whether the planned extension of choice into community services leads to an increased involvement of the voluntary sector or whether in response the private sector providers also expand into this area,” Charlesworth added.