Hospitals

There are concerns with every aspect of privatisation in hospitals.

Multiple concerns in DHSC briefing on private eye clinics and the NHS

There have been concerns for several years on the effect the private companies have been having on ophthalmology in the NHS and on the quality of work carried out by the private companies (see below).

In April 2025, The Sunday Times reported on a leaked briefing from the DHSC about the private eye clinic market and its business with the NHS. The briefing, which was given to Wes Streeting in November 2024, detailed concerns about the effect the five main companies, SpaMedica, CHEC, Newmedica, Optegra and ACES, outlined how money and expertise was being drained from the NHS.

The briefing said: “The delivery of high-volume low-complexity cataracts procedures in the independent sector has rapidly expanded since 2019. NHS England has concerns covering value for money, unnecessary operations, impacts on workforce and training, poor follow-ups and patient safety.”

As warned about for several years, the report noted that NHS hospital trusts were becoming short of consultants; it found that 76% of departments did not have enough consultants to provide a full service, meaning patients with serious conditions that left untreated can lead to blindness, such as glaucoma or wet macular degeneration, were waiting longer to be seen. This situation is outlined in more detail below under Diversion of money, staff and training opportunities.

The Sunday Times article focused on financial issues noting that there were "serious concerns among NHS England officials about some clinics’ financial practices, poor post-surgery care and patient safety." The article noted that private clinics now face investigation over claims they have "artificially inflated costs for the taxpayer, performed unnecessary operations and incentivised high-street optometrists to refer patients to their services."

The DHSC said it was investigating and the NHS Counter Fraud Authority has been called in to examine billing irregularities in the private cataract market.

One aspect highlighted by the article was the practice whereby in exchange for patients being referred for surgery, some providers guarantee a follow-up appointment with a high-street optometrist paid for by the NHS, despite the fact that the rules state that companies should not offer fees as inducements for referrals.  In addition, the DHSC briefing said most patients did not need these follow-up appointments. The CHPI (Centre for Health and the Public Interest) found that in the year to 2023, the NHS paid for 235,000 such appointments, costing almost £16 million.

Another issue is that although companies had agreed to manage all their post-surgery complications, “NHS A&E units are still reporting patients attending A&E for post-operative complications following [private] cataract surgery”.

There are concerns over the quality of work carried out by the companies, with reports that some companies are using poorer-quality lenses than those used in the NHS.  The briefing said: “This suggests that the independent sector has not delivered good value for money in ophthalmology.”

This market has massively expanded over the past decade. Cataract surgery is straightforward and takes an average of 15 minutes per eye to carry out. A clinic can perform up to 16 in a four hour session. With NHS cataract operations costing between £896 and £2,653, the business has proved to be very lucrative for the companies.

A separate financial analysis by the Centre for Health and the Public Interest (CHPI), published in April 2025 found the five major companies were paid a total of £536 million to carry out NHS cataract surgery in 2023-24, delivering a profit of £169 million.

David Rowland, CHPI director, told the paper that: “The weak market regulations governing the NHS have allowed private companies to gain access to huge amounts of taxpayer revenues and local NHS commissioners have been powerless to stop them.”

Although normally the NHS assesses its population in a particular area and determines a contract for that population, in the case of ophthalmology contracts, once a company has a contract with at least one local NHS area, it can operate anywhere in England and submit a bill to the NHS for payment even in areas where it has no agreement. The CHPI found over a three-year period at the least 84,000 cataract procedures had been paid for by the NHS without any contract in place. As a result the NHS can not control the number of patients. The CHPI estimates that cataract activity should have grown by about 3.5% each year, but instead it rose 47% between 2019-20 and 2023-24, with the costs for the NHS increasing 100% from £439 million to £880 million.

The focus of the NHS Counter Fraud Authority specialist team is the practice of “upcoding”. This is where the complexity of a patient’s treatment, which is given specific codes under an NHS payment tariff, is set at a higher level meaning companies are paid more. The CHPI said there had been a 144% rise in complex surgery in the past five years among private providers.

SpaMedica, the largest private eye clinic company, was singled out by the DHSC briefing for criticism. It was alleged that the company, which had carried out more than a quarter of all cataract operations, coded the majority of its patients “at higher complexity, resulting in the cost per procedure being 8% more expensive than [at] an NHS hospital”.  SpaMedica has denied any wrongdoing.

An NHS England source said the problems had been building for years but no significant action had been taken. They added: “Massive holes have been allowed to exist and no attempt has been made to close them. The companies have just taken advantage of an overly complex system built around too much trust.”

The amount a company can claim for a complex procedure was reduced in March 2024 by NHS England following what it said was significant growth in cataract surgery that was not linked to an increase in demographics or waiting lists.

Conflict of interest

CHPI's April 2025 report - Out of Sight – the hidden profits and conflicts of interest behind the outsourcing of NHS cataract care - highlighted a number of conflicts of interest, including over 100 NHS ophthalmic consultants who own shares or equipment in the private clinics which provide NHS funded cataract care. Some of these consultants have generated millions of pounds in dividends from these arrangements, according to the report, with very few of these conflicts being declared on the websites of the NHS Trusts where they work.

The report noted that "whilst the clinics where these consultants own shares have seen very large increases in income from providing NHS cataract operations, the NHS hospitals where they are mainly employed have seen a large drop in the number of cataract operations delivered over the past 6 years." The conclusion is that this suggests that these conflicts of interest maybe impacting care for patients with more complex conditions, but further research is needed to establish the link between financial stakes in private clinics and the resources available to the NHS.

The report also stated there is evidence that high street optometrists are being offered financial incentives to refer patients to particular private companies.

The estimated potential value to all high street optometrists of referring a patient to a particular private company is in the region of £17 million – £21 million a year.

Diversion of money, staff and training opportunities

The effect of the expansion of private providers in the ophthalmology market has been very negative on staffing and training in the NHS. This was highlighted in the November 2024 briefing to Wes Streeting, reported by The Sunday Times in April 2025, but has been pointed out for several years now by ophthalmologists.

In February 2022, ophthalmologists warned that the safety of NHS patients could be put at risk if the private sector is given any more NHS work.

In the letter, signed by nearly 200 ophthalmologists and sent to NHS England and the Royal College of Ophthalmologists and shared with The Independent, they warned of “the accelerating shift towards independent sector provision of cataract surgery” which is already having a “destabilising impact” on safe ophthalmology provision.

They predict that the wide scale use of private providers will “drain money away from patient care into private pockets as well as poaching staff trained in the NHS.” adding that “urgent action” is needed to prevent further work being given to the private sector.

Staff who would normally do extra hours for the NHS are now being offered better paid work doing cataract operations in the private sector, but this means other eye procedures are not being carried out for the NHS and waiting times for these will grow.

Speaking to The Independent, Professor Ben Burton, consultant ophthalmologist and one of the lead signatories of the letter, said: “What’s happening is that staff who could be treating preventable but irreversible sight-threatening conditions like glaucoma, macular degeneration, and diabetic retinopathy are instead doing cataract surgery for private providers.”

The private sector is already heavily involved with the area of cataract surgery; in November 2021, the Royal College of Ophthalmologists reported that in 2016, 11% of NHS cataract procedures in England were delivered by private companies, but by April 2021 there was almost a 50/50 split, with 46% in the private sector and 54% by NHS trusts and treatment centres.

Cataract surgery is the main training ground for junior doctors, they need to complete at least 350 cataract procedures to be able to then manage more complicated work. The use of the private sector means trainees are finding it harder and harder to access the opportunities. The NHS is left with the more complex cases, which are less suitable for training. This is making it more difficult for trainees to successfully complete training and, most importantly, more difficult to develop skilled and experienced surgeons.

The issue was addressed again in December 2023, when Royal College of Ophthalmologists’ president Ben Burton told HSJ the specialty was at risk of becoming like dentistry, where patients face charges for services.

Professor Burton said a review needed to look at the entire commissioning process and argued “generous” tariff rates for cataracts were resulting in some patients with “very mild cataracts getting surgery at the expense of other patients going blind”, which he said was “just wrong”.

He added: “There is a risk that the NHS loses ophthalmology completely, like it has dentistry, in terms of it being a service which is available free at the point of delivery.

“If we are going to try and keep it as an NHS service, then we definitely need to change what we’re doing, because the current system is causing chaos, with huge financial loss to the NHS and it’s not in the best interests of patients.”

Professor Burton said the college “recognises the independent sector can help with reducing backlogs” but urged NHSE not to continue with the approach of “unplanned commissioning [which] means the NHS is losing consultants, money and trainees to the private sector”.

Further investigations into the area of cataract surgery by CHPI has found disturbing figures on the number of complex cataract operations carried out in private clinics.

CHPI found that the percentage of NHS cataracts delivered by the private for-profit sector has increased from 24% in 2018/19 to 55% in 2022/23 and over this time the NHS has paid the private for profit sector around £700 million.

The overall budget for cataract provision has doubled over this period result of this outsourcing and the percentage of the total NHS budget which is being spent on cataracts has increased from 27% to 36%. As a result it is likely that there is less budget to treat other eye care conditions such as glaucoma and macular degeneration which lead to irreversible sight loss.

Their investigations found that the rise in expenditure on cataract services has been accompanied by an increase in the number of private for profit clinics which have been established to deliver NHS cataract services. 78 new private for-profit clinics have been opened over the past 5 years.

CHPI noted that ophthalmologists they had spoken to were concerned that the growth in expenditure on NHS cataract provision is not being driven by patient need but by the commercial interests of the companies delivering them– this is known as “supplier induced demand” and is the consequence of the market driven approach to healthcare planning.

The growth in the amount of NHS cataract care which is being delivered by the for-profit private sector has also been accompanied by a large increase in the number of “complex cataracts”. The report notes that NHS England has raised concerns that the increase in the number of complex cataracts cannot be explained by changes in patient complexity. CHPI found that the provision of complex cataracts has increased by 144% over 5 years and that the increase is almost entirely due to the provision of these operations in the private for-profit sector.

The report recommends that policy makers from the National Audit Office, the NHS Counter Fraud Authority, NHS England and the Department of Health and Social Care look into the issues raised in this analysis to ensure that public money is being properly spent and to examine the wider impact of this large shift in how NHS cataract care is being provided on patients with other eye care conditions.

CHPI published a further report in July 2024, which examined the impact of the outsourcing of NHS funded cataract care to the private sector has had on NHS patients, staff training and the financial viability of NHS eye care departments. CHPI collected data from 50 NHS Trusts through Freedom of Information requests and a survey of 198 ophthalmologists carried out in December 2023.

The report found that outsourcing had a major impact on training the next generation of ophthalmologists. NHS England estimates that in order to train the next generation of ophthalmologists, there is a need to set aside around 47,000 routine cataract operations in NHS eye care departments for trainees to develop their skills and competences.

CHPI's research showed the NHS is now providing 37,000 fewer operations due to outsourcing than it did 5 years ago. On average NHS hospitals are now providing around 20% fewer cataract operations than they did 5 years ago with some Trusts performing more than 40% fewer surgeries.

CHPI's survey found that 62% of respondents said that outsourcing to the private sector had resulted in a large (56%) or small (6%) negative impact on opportunities for staff training within their NHS eye care departments.

Income from cataract operations is key to maintaining the financial viability of many NHS eye care departments, as it cross-subsidises care for more complex conditions such as glaucoma and macular degeneration which can lead to irreversible sight loss. Income from cataracts also supports emergency care and care for children in the NHS.

CHPI's research shows that total income from cataracts across NHS Trusts has declined marginally, but half of the sample saw a 21% drop in income over a 5 year period.

Across the NHS the amount spent on ophthalmology services has increased by 52% over 5 years but large amounts of this increase have been spent in the private sector on cataract care. For NHS Trusts as a whole, their overall ophthalmology budget has only increased by 15% over 5 years mainly because of the outsourcing of cataract care.

The private sector uses NHS ophthalmologists to carry out cataract surgery, which has meant a reduction in the availability of staff to work in NHS departments. CHPI's survey found that 37% of respondents said that they had seen a large negative impact of outsourcing on staffing in NHS eye care departments and a further 21% said that they had seen a small negative impact on staff.

The report notes that the reduction in the overall ophthalmology budgets and ophthalmology staff undertaking work in NHS Trusts is likely to have had an impact on treating care for more complex patients. CHPI's previous research has shown that for conditions other than cataract care waiting times have increased for these patients.

CHPI recommends that NHS England undertake a whole sale review of the use of the private sector to deliver NHS cataract care to determine the impact that it is having on a) waiting times b) staffing c) health inequalities d) available resources to treat more serious diseases which can lead to irreversible sight loss.

Reduction in quality of care

In March 2024 a review published by researchers at the University of Oxford in The Lancet concluded that privatisation of healthcare results in a reduction in quality of care. The study’s authors from the University of Oxford, concluded that:

“At the very least, health-care privatisation has almost never had a positive effect on the quality of care.”

Adding that their review:

“provides evidence that challenges the justifications for healthcare privatisation and concludes that the scientific support for further privatisation of health-care services is weak.”

The published review looked at studies made of healthcare systems in eight high-income countries, where privatisation has been taking place over the past 40 years. Studies included those from the UK, USA, Canada, South Korea, Germany, Sweden, Croatia and Italy.

The review aimed to assess whether the often-stated aim of privatisation – to improve the quality of care through market competition – did indeed occur. Or, is the impact negligible, or in fact to worsen the quality of care due to the profit-driven nature of the organisations.

The study included longitudinal studies – those performed over time – which although small in number provided some of the most useful information. The researchers found a consistent picture of privatisation adversely affecting the quality of care. In these studies, they found that although outsourcing can reduce costs, this was at the expense of standards.

Although an assessment of the financial changes that privatisation brought about was not a primary aim of the study, the researchers did find that hospitals moving from public to private ownership status tended to make higher profits than public hospitals that did not convert. The primary way this happened, however, was through the selective intake of patients and reductions in staff numbers.

The review also has implications for all the theoretical arguments made in favour of privatisation in many areas, noted the authors, as their evidence “does not align with the expectations of mixed markets, namely that they would improve quality by increasing competition.”

It was not just profit-driven companies that were studied, transition to not-for-profit private organisations was also found to frequently have a detrimental effect on the quality of care, although to a lesser extent than moving to for-profit provision.

The authors noted that there will always be issues with the studies that have been carried out in this area. They tend to focus on inpatient care, and there are very few studies on other aspects of health care such as community, primary, and ambulatory care. The studies also tend to look at staffing levels and are often missing public and patient perceptions of the services provided.

The Lancet review is not the first to look at the effect of private ownership on the quality of care in healthcare. Last August the BMJ published a systematic review – Evaluating trends in private equity ownership and impacts on health outcomes, costs, and quality – which looked at the takeover of healthcare services by private equity funds, and found that ownership by private equity companies is associated with a worse quality of care and higher costs. This review did not look at privatisation of public-owned healthcare, but, rather a change to a different type of private company ownership, one that was focused on short-term profit.

The authors of the review, which was led by the University of Chicago, found that private equity ownership was “most consistently associated with increases in costs to patients or payers” and was “associated with mixed to harmful impacts on quality.”  Furthermore, the review identified “no consistently beneficial impacts of PE ownership.”

Taken together the two reviews provide good evidence that taking publicly-run services, such as those of the NHS, out of public hands and into the private sector is a bad move for quality of care, even if the organisation is run on a not-for-profit basis.

Elective Surgery and Patient Safety

The safety of the private sector has been a concern for many years, with questions over their lack of ICU beds, use of registered medical officers, lack of transparency, communication issues with the NHS, and even the use of individual rooms. The issue of NHS patient safety has been investigated by the Centre for Health and the Public Interest (CHPI).

The concerns include:

• Post-operative care in private hospitals is usually carried out by inexperienced junior doctors who are working excessively long hours.
• The consultant who carries out the surgery and who is responsible for the patient is permitted to be off-site.
• Nature of this post-operative care has been cited as a factor in a number of patient deaths.
• Lack of intensive care facilities means if something goes wrong then patients have to be transferred back to NHS hospitals, which in itself is very dangerous.
• Data on patient safety in private hospitals is poor and they aren’t required to make this information public in the same way as NHS hospitals are.

With the number of patients being treated in these hospitals increasing, particularly with the Choose and Book system or with acute trusts referring patients to clear extensive waiting lists, it is important to note these issues.

CHPI conclude that NHS commissioners and clinicians would find it difficult to avoid blame, and possible legal consequences, if NHS patients are harmed in private hospitals. Particularly now that the risks are openly documented.

This raises the issue of the cost of these referrals, both in the short term and the long term. In the short term, the cost of treatment for NHS patients in private hospitals is much higher than it would be if they could be treated in NHS facilities. Moreover, if something is to go wrong and there are legal consequences then it is the NHS that may have to pick up the bill in the long term.

In another report, the CHPI also document the safety issues in private hospitals following the scandal whereby surgeon Ian Paterson wounded 500 women who underwent unnecessary breast surgery in private hospitals. They conclude that until the private hospitals have full liability for the patients under their care, then there will be no guarantee of safety.

The Paterson scandal led to a public inquiry that released a damning report in February 2020 stating that the private healthcare system he worked in was “dysfunctional at almost every level”. However, the previous Conservative government did not make the major changes in the report that would have improved patient safety in private hospitals. In November 2021, the safety of the independent hospital sector was once again under the spotlight in a report released by the HSIB (Healthcare Safety Investigation Branch) – Surgical Care in Independent Hospitals – triggered by the death of a NHS patient sent to an independent hospital for bowel surgery. The report made six safety recommendations, three to NHS England and NHS Improvement, one to NHSX, and two to the Care Quality Commission (CQC).

 

Facilities Management

In facilities management, there have been concerns with quality and cost. There have been reports of low-pay received by the staff employed by facilities management companies and cost-cutting leading to reduced cleanliness. An investigation by researchers at the University of Oxford found that hospitals that used outsourced cleaners had higher rates of MRSA, which causes life-threatening infections.

In 2023, cleaners and catering staff at the South London and Maudsley NHS Trust (SLaM) subcontracted to ISS went on strike due to poor pay and conditions, with some paid just £10.84 per hour. In August 2023 cleaners and caterers at Norfolk and Suffolk NHS Foundation Trust (NSFT) in Ipswich staged a protest over the “poverty wages” paid by contractor G4S. Most G4S staff at NSFT are only paid the minimum wage of £10.42 an hour, £1 an hour less than their colleagues doing the same jobs but employed directly by the NHS.

In 2013 Interserve signed a contract with Leicestershire Partnership NHS Trust, University Hospitals of Leicester NHS Trust and the Leicester City, Leicestershire County and Rutland Primary Care Trust Cluster to improve estates and facilities management services across the cities and counties. The contract was seven years long, worth around £300 million and was expected to save the NHS a significant amount of money.

However, in April 2016 this contract was scrapped four years early due to major problems and poor standards. These included patients in one hospital receiving meals up to three hours late and the merging of cleaning and catering services meaning around 100 people lost their jobs.

After the contract was scrapped, it came to light that the ex-Interserve staff were getting paid half what the NHS contracted staff were being paid.

Spin-off companies

There are several concerns surrounding this type of privatisation; these are discussed in the section entitled Spin-Off companies.