Carly Caton
It didn’t take long for new health secretary Wes Streeting to order an independent review that he hopes will bring home some “hard truths” about why the NHS isn’t performing as expected.
Whether it will deliver something resembling a silver bullet remains to be seen but in the absence of a sudden injection of new public investment, there’s scope for NHS trusts to look at how they can not only create efficiencies, but also drive new revenue streams.
One of the untapped ways of doing this for many trusts is to look at expanding their revenue from private patients and review expanding, or creating, private patient units (PPUs).
When doing so, trusts must also ensure the legal and regulatory requirements are identified early on to ensure the expansion is structured in a way beneficial for all parties involved.
Benefits of increasing private patient activity in the NHS
Closer relationships between the public and private sector can bring a string of benefits beyond just new income streams that ultimately aid NHS services.
Promoting commercial thinking within a trust is highly valuable, providing an opportunity to incubate new ways of working, drive up quality standards, and enable greater translation of innovation and science from labs to clinics by harnessing partnerships.
There’s also an opportunity to build a trust’s brand and reputation internationally, which could help to attract inbound patients to participate in clinical trials, while further bolstering commercial income for the organisation.
How an NHS trust can expand its private patient unit
There are several ways in which a trust can increase the revenue it makes from a PPU. Firstly, it could increase its PPU capacity by adding beds, consulting rooms and treatment rooms.
A standalone private hospital could even be explored, perhaps in partnership with other providers such as private hospitals and clinics.
Joint services and shared resources are another popular route for collaboration, with frameworks for this ranging from services arrangements to full corporate or contractual joint venture models.
For example, HCA Healthcare UK runs The Christie Private Care in partnership with the Christie NHS Foundation Trust to deliver private cancer services, and the specialist Harborne Hospital that recently opened in Birmingham as a joint venture with University Hospitals Birmingham NHS Foundation Trust.
Other ideas include diversifying or adding services to a PPU to attract new patients, expanding geographically by opening new satellite facilities, growing international services by partnering with overseas healthcare providers or offering specialised services for medical tourism, and developing a referral network with other healthcare providers, such as GPs or specialists.
Investing in technology could enable the PPU to improve patient care and increase efficiency without requiring further space – examples include an electronic patient record system or telemedicine services – while a marketing and branding campaign, either alone or as a joint effort like the Healthcare London private healthcare gateway brand, could attract new business.
Key considerations when expanding a private patient unit
Practical and legal considerations depend firstly on whether or not a PPU expansion involves working with a partner or some form of physical expansion, but there are some common themes.
Structures for partnerships can vary from working on certain limited services only to having a full joint venture arrangement where both parties form a new corporate vehicle, which may be used to build a new private hospital and run private patient services.
Bespoke legal documentation will be required to set out responsibilities between each party for services, as well as property and commercial arrangements. The latter may contain the capital contributions and returns for each party, percentage split of shareholding, and when and where financial distributions can be made.
While trusts using a partnership model can benefit from wider expertise and share financial risks, they should be mindful of how this offers less control, fewer profits and challenges with integrating systems and processes.
If building new real estate, the trust must consider property matters, such as the lease chain if there are funders and developers involved, or whether the project is structured as a land transaction.
Identifying who the facility will revert to at the end of a lease term is necessary if working with a private partner, while there may be interface with a private finance initiative hospital estate or the need to trigger a procurement process if the trust is acting alone.
Other significant considerations include employment matters for any staff who are integrated into a new corporate vehicle, internal approval processes for board members, data protection and privacy for any information shared, subsidy control and competition laws, and insurance arrangements – with the potential to negotiate better terms when partnering with a private provider.
