Up until now NHS hospitals have had a cap in place on the amount of income that can be earned from private work. Under new government proposals these caps could well be abolished freeing the NHS hospitals to directly compete with the private hospitals.
There are several London hospitals already operating private wings, providing an alternative for private patients. There are likely to be opportunities to collaborate, already we have seen the private hospital group HCA International team up with University College Hospital in London with the aim of establishing a private patient cancer unit.
The current cap for NHS hospitals on private patient treatment is under 2% of revenue and has been a cause for dispute in the past with trusts lobbying for its removal and campaigners arguing that abolishing such a cap would undermine the founding principles of the NHS.
We saw the government this week stating that all NHS Trusts must become foundation trusts by 2013/2014, this includes mental health services as well as hospitals. The Foundation status is earned by demonstrating both good operational and financial performance, having foundation status means the trusts are free from central government control.
Today, there are roughly 130 foundation trusts, removing central government control and allowing NHS hospitals to compete with the private providers should help contain costs without a drop in service or funding.
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