Hundreds of NHS consultants are shareholders in profit-making joint ventures with private healthcare firms, in arrangements that have generated more than £1bn in revenues since 2015, it has emerged.
The Centre for Health and the Public Interest (CHPI), an independent thinktank, has identified 481 consultants in England with shares in 34 private ventures set up in partnership with providers ranging from the huge US healthcare firm HCA to Specsavers opticians. The vast majority of these consultants – 73% – are NHS doctors.
In a report published on Friday, CHPI claimed the arrangements were often opaque, and that the financial incentives created by these joint ventures could lead to conflicts of interest. It is calling on regulators to investigate, saying the Covid-19 pandemic has “turbo charged” the share of NHS budgets spent in private clinics.
“The large number of consultants who own shares in private hospitals through joint venture arrangements and the very large financial benefit which they derive from these arrangements is a significant matter of public interest,” said David Rowland, CHPI director.
The report found no evidence of wrongdoing, and there were no instances of patients being put at risk. But Rowland said lack of scrutiny and public understanding of these arrangements meant there was “potential for abuses to occur”.
Between 2015 and 2020, the last full year for which accounts are available, joint ventures with consultants generated nearly £260m in operating profits. While the majority of this cash went to the private firms, consultant shareholders extracted an estimated £31m in dividends, CHPI said.
The average dividend was £11,600 a year, but the highest earning consultants were estimated to have received £172,000 a year. These dividends were paid on top of any fees for treating private patients and NHS salaries. Some consultants received no dividends, but CHPI said this was because many of the joint ventures were less than three years old and do not yet pay out to shareholders.
The number of joint ventures is increasing, as more private healthcare companies enter the UK market. The fast-growing Australian firm GenesisCare, which specialises in cancer clinics, has set up three joint ventures with 41 consultants. Genesis is owned by investors including the US private equity firm KKR and the Chinese state conglomerate China Resources.
“The effect of joint ventures could be to pull consultants away from NHS work,” said Rowland. “There’s a finite pool of consultants to do all the hip operations, all the cancer care, there isn’t another pool out there that comes with the private sector.
“By virtue of doing more private care at the expense of doing NHS care, you drive up waiting lists and the consequence is that you create more demand for private care. It’s a negative loop from the perspective of the patient and the NHS, it’s a profitable, positive loop from the perspective of the companies and the consultants.”
Delays in NHS treatment have hit record levels during the pandemic, with 6 million people in England now waiting for routine hospital treatment. Many NHS trusts are turning to the private sector to help bring down waiting lists, and private hospitals are increasingly looking to pick up NHS work.
“The Covid pandemic has ‘turbo charged’ these strategies,” the report claimed. Private hospitals received more than £2bn from the NHS in the year to March 2021, as ministers encouraged the use of private facilities. Up to £10bn has been earmarked for the private sector to deliver NHS services over the next four years.
CHPI expressed concern about conflicts of interest after finding some NHS trusts paid for services with companies that have joint ventures with their own consultants. The thinktank, which is not politically affiliated, is calling for a regulatory overhaul, with responsibility for policing the financial arrangements of medical consultants handed to the Care Quality Commission (CQC).
One of the private healthcare firms that has received NHS cash while running joint ventures with consultants is HCA, which is the largest private provider in the UK.
NHS hospitals employ 342 consultants who are members of 15 separate joint ventures with HCA. Those ventures have paid out nearly £26m in dividends to doctors since 2015.
After HCA, the group with the second-largest number of joint ventures is the US-owned Aspen Healthcare, which runs private hospitals across the UK. It has five joint ventures, with 51 consultants. Specsavers has established five joint venture arrangements with 18 NHS ophthalmologists through its subsidiary company Newmedica.
CHPI compiled the numbers using accounts filed at Companies House by private healthcare providers and the transparency data, which they are required to publish by the Competitions and Markets Authority. The thinktank’s report calls on the public spending watchdog, the National Audit Office, and NHS England to examine the “full extent” of taxpayer money flowing to consultant joint ventures, and the potential conflicts of interest.
A spokesperson for HCA Healthcare UK said: “Our work to support NHS trusts is entirely separate to and independent of any co-investment consultants may have with us in any of our private clinics or practices. Any suggestion that the two are linked is wholly inaccurate and misleading, as is any suggestion that HCA UK incentivises doctors to refer into our hospitals.”
They added: “We work with NHS trusts on an individual basis and in response to their requests for support.”
All companies named as holding joint ventures with NHS consultants were contacted for comment. Circle Health Group, which acquired BMI Healthcare in early 2020, referred queries to the industry body, while Spire Healthcare declined to comment. An Aspen Healthcare spokesperson said the company complied with the regulations set out by the CQC and the CMA.
A spokesperson for the Independent Healthcare Providers Network, an industry body, said: “As CHPI make clear, there is absolutely no evidence that joint ventures put patients at risk or that that any wrongdoing has arisen through joint venture arrangements. Additionally, GMC [General Medical Council] guidance clearly states that healthcare professionals in both the NHS and the independent sector should not allow any financial interests to influence the care they provide to patients.”
A spokesperson at the Royal Marsden NHS foundation trust said: “Consultants with a private practice at the Royal Marsden are required to disclose any conflicts of interest and only refer patients to other providers if there is a clinical need to do so.”
