My eye - the blurring of Foundation Trusts and private medicine

A disturbing experience at a private hospital exposes the tangled relationship between Foundation Trusts and private business.

Diane Langford
25 July 2014

Image: Flickr / Rob Unreal. Some rights reserved.

Only when I was summoned to an appointment at a private hospital I’d never heard of, for a procedure I didn’t need, did I begin to question how NHS Foundation Trusts are obliged to raise money from private patients - and the pressures on them to set up private units through a complicated web of business arrangements.

For two years I’ve been treated at the Kent and Canterbury NHS Hospital under the supervision of ophthalmology consultant, Mr X, for vitritis. This inflammatory disorder impairs vision, causes discomfort and light intolerance. I was given a variety of steroid treatments, including a steroid implant.

In March of this year Mr X’s consultant colleague viewed scans which showed my condition had slightly improved and was certainly not getting any worse. I was advised I needed no further treatment for now and given a follow up monitoring appointment for July.

A couple of weeks after being told I needed no further treatment, a letter arrived from Spencer Private Hospital, Margate, inviting me to an appointment on 18th March with Mr Z, consultant ophthalmologist. I tried to contact Spencer Private Hospital to find out what the appointment was for and why they had my details. When nobody picked up the phone at Spencer Private Hospital, I was worried enough to travel home from London (where I'd been dealing with an ill family member) and over to the Spencer Hospital.

The private consultant Mr Z told me that he was going to give me the first of a series of three injections in my eye. I pointed out that this did not concur with the NHS consultant Mr X’s advice. Mr Z insisted that the injection he was about to give me was a recently-licensed drug, much better than the one I'd had on the NHS. He said it carried fewer risks as the needle used was smaller, though there was still a risk of side effects. I asked Mr Z whether he had my notes from the NHS hospital, the K&C. All he had was a manilla folder with my name and hospital number inside. I noticed that a nurse who was hovering nearby had prepared a trolley with the medication ready to be injected.

I said no, worried I would be subjected to an unnecessary, intrusive and potentially risky procedure. Mr Z walked me out to the front office where an administrator was told to sort it out.

On March 21 I wrote to the NHS consultant Mr X requesting clarification about my treatment and asking how the Spencer Private Hospital came into possession of my name and address.

He did not reply.

I made a complaint that crossed with a letter from him confirming that I did not need further treatment and denying that he had referred me to the Spencer Private Wing. He said the appointment had been an administrative error. He advised me that if I received any further communication from Spencer Private Wing, just to ignore it.

I then received yet another invitation from Spencer Private Hospital, again offering an appointment with Mr Z. I telephoned the administrator at the Spencer Private Hospital. He was insistent that Mr X had indeed referred me for an appointment.

The trust which runs the Kent & Canterbury, East Kent Hospitals University NHS Foundation Trust, responded to my complaint, saying,

“An investigation into how you came to receive a duplicate appointment for treatment to take place at the Spencer Wing QEQMH, has now reached conclusion. Mr X is sincerely sorry that he inadvertently requested this appointment for you. Your name was erroneously included on a referral document and he deeply regrets this.”

The Trust promised that they were taking the following "key actions" including “removal of erroneous referral data information from Spencer Wing QEQMH database...investigat[ing] the introduction of a robust checking system of referrals from clinic appointments prior to them being actioned.”

The Trust did not answer my questions about the relationship between the Foundation Trust and the Spencer Private Hospital.

I had made clear that I did not want to be treated in a private hospital unless absolutely necessary. As things are, it is difficult enough to identify whether a particular procedure is being provided by a private company or the NHS. Private companies frequently incorporate the NHS logo into their identities. Hence, many complaints against “the NHS” should be laid at the door of companies like Capita, VirginCare or Harmoni.

Questions and contradictions remain.

How exactly did my treatment at an NHS Foundation Trust translate into receiving an invitation for private treatment?

Was my experience really a one-off error, or are other, less assertive patients having unnecessary procedures charged to the NHS by private providers?

Who would have been liable had I complied with Mr Z and complications had arisen from the unnecessary treatment?

The Health and Social Care Act supposedly maintained the prohibition on the solicitation of private work by the NHS. An amendment in December 2012 was moved by Lord Philips of Sudbury, to rule that “NHS services must not use NHS business to recruit private patient business.”

But Lord Sudbury was told this amendment was not necessary and it was withdrawn following the debate.

Debating in parliament, Lord Sudbury noted that the code of conduct prevents consultants from putting pressure on patients to receive private treatment - but also that there are obvious questions here about what constitutes "putting pressure on a patient". 

There are obvious conflicts with the requirement of NHS Foundation Trusts to raise money through private patient services. Why would they not refer NHS patients to their own privatised units, ‘erroneously’ or not?

The reply I received to my complaint confirms that patients are being referred, though my own referral was ‘erroneous.’ Clinicians working across the private and NHS spheres, Foundation Trusts forced to raise money by selling their services to privately run units, create an impression that the NHS is eating itself from within.

The relationship between the East Kent Foundation Trust and the Spencer Private Hospital is difficult to unravel. The private hospital is located in the grounds of the another of East Kent Foundation Trust Hospital, Queen Elizabeth the Queen Mother Hospital in Margate.

Spencer Private Hospital's website advertises breast enhancement, arm lifts, ear pinning, brow lifts, facelifts and nose jobs.

Its parent company is East Kent Medical Services Limited.

Financial statements and directors’ reports available online for East Kent Medical Services Limited describe the “Ultimate parent undertaking” thus:

“The company is a 100% subsidiary of Healthex Limited... the ultimate controlling part is East Kent Hospitals University NHS Foundation Trust, the parent company of Healthex Limited.”

The directors of East Kent Medical Services Limited include both the Chief Executive of East Kent Hospitals University NHS Foundation Trust, Stewart Bain, and its Director of HR, P.J. Murphy, along with other Foundation Trust senior personnel. They sit on the private company's board alongside non-executive directors with multiple directorships including with pharmaceutical, defence, IT, housing development and insurance companies.

Loans to the private hospital company owners from the parent company (the Foundation Trust) and Healthex are being repaid over 20 years till 2028 and bear 4% interest above bank rates.

Is the NHS actively participating in its own demise by channeling funds into privatising itself?

Minutes of a company board meeting dated 27 April 2012 include “A Review of Options on the Future Control and Management of the Spencer Private Wing Group of companies,” followed by a note reading “this item is redacted due to commercial sensitivity.”[iii]

Sophie Barnes, writing in Health Services Journal, discloses:

“East Kent Hospitals University Foundation Trust is seeking to work with an independent provider to ‘reinvigorate’ its private patient service.”

According to Barnes, the trust is looking to pay up to £45 million to a 'partner' to develop and run a private hospital on the site of the former NHS Arundel Unit at third of its NHS hospitals, the William Harvey Hospital in Ashford, over the next 15-25 years. In the advertisement the trust stated it was looking for a provider who can deliver a return of more than 15 per cent on any investment made by the trust. The trust also hopes that the provider will “enhance the returns from Spencer Private Hospital.”

An announcement about this is expected this month (July, 2014).

The Arundel site was an NHS mental health unit closed in 2012 after several high profile tragedies, creating a long round trip to Canterbury or Margate for users.

There is a pattern - NHS units are starved of resources, ‘allowed’ to fail, then privatised on grounds of ‘failure.’

That starvation makes them more reliant than ever on private sector income.

Until the Health & Social Care Act 2012 Foundation Trusts were in practice allowed to raise no more than 2-10% of their income from treating private patients.

But now, as BBC Health reporter Nick Triggle wrote,

"NHS hospitals would be allowed to do 49% of their work in the private sector – something which could potentially mean eight in 10 increasing their private work 25-fold.".

'Allowed’ is slightly misleading: ‘forced’ seems more descriptive of the situation.

On the face of it, the NHS raising money from private patients having cosmetic surgery could benefit NHS services. East Kent Medical Services Limited/Healthex was a pre-existing local company taken over by the NHS. At least they saved the cost of having to start a private unit from scratch.

It appears the foundation trust tried to play the system by integrating East Kent Medical Services into its structures. But the government has made it easy for the financial sector to muscle in and take over such enterprises.

GPs who have set up consortiums have then been gobbled up by large private companies and hedge funds.

Why should the NHS have to squander its resources on running private companies that become easy prey for equity fund vultures?

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