CREEPING – NO LEAPING PRIVATISATION

Godfrey Jennings, Secretary – with thanks to the Centre for Health and the Public Interest.

Cataract Cash Cow – Private Sector Bonanza

It is bad enough having the private sector operating in healthcare, but the NHS is complicit in the growth of the private sector especially in certain areas of provision.

Rules on patient choice that govern cataract care in England are allowing private companies to make millions of pounds in profits from treating NHS patients.

The regulations also mean that treatment for patients at risk of losing their sight is being delayed as profit margins are prioritised over clinical need.

A report¹ from the Centre for Health and the Public Interest (CHPI) think tank found that £526m was paid by England’s 42 NHS integrated care boards to five companies for NHS cataract surgery in 2023-24.  Of this, £169m consisted of profits for the firms, while £68m went towards paying interest on high-cost loans taken out by some of the companies that are owned by private equity funds.

“Very large amounts of money are leaking out of the money paid by the NHS to private companies in the form of pre-tax profits, dividends, and interest payments on high-cost loans, which could otherwise be spent on NHS patient care.”¹

This drain on NHS finances has grown considerably in the last five years. The percentage of NHS cataracts delivered by the private for-profit sector has increased from 24% in 2018/19 to 55% in 2022/3. Over this period the NHS has paid private providers c£700 million.

The overall budget for cataract provision has doubled over this period, thus fewer resources are available to treat other eye care conditions such as glaucoma, diabetic retinopathy and macular degeneration, which can lead to irreversible sight loss – there is some evidence that waiting times for these conditions have increased.

The rise in expenditure on cataract services has been accompanied by an increase in private clinics: 78+ in 5 years. Concern has been expressed by some ophthalmologists that the growth in expenditure on NHS cataract provision is not being driven by patient need but by commercial interests of the companies delivering them – so called ‘supplier induced demand’. This means there is an increase in cataract operations for NHS patients because private companies have expanded their capacity to provide them. The provision of ‘complex cataracts’ has increased by 144%. NHS England said that this could not be explained by changes in patient complexity. It is estimated that had the private sector been delivering complex cataracts at the same rate as the NHS the overall cost to the NHS would reduce by £29 million.[i]

There has also been suspicions on ‘upcoding’ i.e. billing for a more expensive type of service or procedure than was delivered. The Centre for Health and Public Interest (CHPI) have called for greater scrutiny from government, parliament and regulatory bodies.

Other areas of concern include training and staffing. It is reckoned by NHS England that to train the next generation of ophthalmologists there is a need for 47,000 routine cataract operations for trainees to develop their skills and competences; there are now 37,000 fewer than five years ago due to outsourcing. On average NHS hospitals are undertaking 20% fewer operations than five years ago: some trusts 40% fewer. There is already a shortfall of ophthalmology consultants. As the private sector uses NHS ophthalmologists there is a reduction in the availability of staff to work in NHS hospitals.

[1] Rowland, D and Ryan, S Out of Sight – understanding the hidden impact of cataract outsourcing on NHS finances. (2024) Centre for Health and the Public Interest (CHPI)

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These developments are having an impact on the financial viability of NHS Eye Departments and thus a reduction in cross-subsidies that provide for more complex eye conditions. Also, income from cataracts support emergency care and care for children.

According to CHPI there are over 100 ophthalmic consultants with shares or equipment in private clinics, and some consultants have generated millions of pounds in dividends. The system since NHS inception which allows private work was and is a fundamental flaw.

There is some evidence to suggest that high street optometrists are being offered financial incentives to refer patients to particular companies. The estimated value, according to the CHPI, to all high street optometrists is in the region of £17 -£21 million a year.

Profits leaking out of NHS funded eye care 2023/2024 (CHPI)

NHS INTEGRATED CARE BOARD	TOTAL SPEND ON 5 EYE CARE COMPANIES £	ESTIMATED AMOUNT OF ICB REVENUE GOING TOWARDS PROFIT £	ESTIMATED AMOUNT OF ICB REVENUE GOING TOWARDS INTEREST ON HIGH-COST LOANS
Leicester, Leicestershire and Rutland	8,493,922	2,733,202	1,203,096
Northampton-shire	5,642,928	1,675,669	871,464
Nottingham	8,654,752	2,667,234	1,776,045
Derby and Derbyshire	11,500,572	3,557,917	881,494
Lincolnshire	9,537,268	3,393,042	549,398

It is worth noting that the aggregate financial position of all 42 ICB’s in 2023/24 was a deficit of £109 million. Of course there are more cuts to come recently announced, though there are no budget cuts to clinical services, ICB’s are facing a mandatory 50% reduction to their running and programme costs for the 2025/26 financial year. 

If profits leaked were plugged, these parts of the NHS would move from deficit to a surplus of £60 million. The government is introducing a cap on profits in the children’s care sector of 8.8%. If such a cap was implemented in the NHS it would have saved £122milion on outsourced eyecare services alone in 2023/24 and aggregate finances of the NHS ICB’s would have moved from overall deficit to an overall surplus of £12.5million (CHPI).

Apart from the view that private healthcare is morally wrong even Wes Streeting a champion of outsourcing and the private sector should surely see the economics and the counterproductive effects on the system.