NHS hip replacements discussion
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1. NHS-funded hip replacements increased by 40% between 2003-2011, with the independent sector providing 62% of the additional procedures. 2. Growth was faster when an independent sector provider was located nearer to the patient than the nearest NHS provider. 3. Some patients who previously would have paid privately switched to NHS-funded care at independent sector providers, resulting in some deadweight loss to taxpayers.
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NHS hip replacements discussion
- 1. Jon Sussex Nuffield Trust and IFS seminar 13th September 2013 Discussion of Kelly & Stoye “More hips please. Independent sector provision and the growth in NHS-funded elective care”
- 2. Discussion of Kelly and Stoye 13/09/2013 2 5 results 1. NHS-funded hip replacements per year up 40% (= +20,000) 2003/04-2010/11 2. Independent sector 62% of the extra 3. Growth faster when new ISP nearer than any NHS provider of hips 4. Substitution of NHS-funded hips for 1/3- 2/3 privately-funded hips at AQPs 5. Small crowding-out of NHS Trusts by ISTCs (not significant by AQPs)
- 3. Discussion of Kelly and Stoye 13/09/2013 3 3 main issues Distinguish between effects of: A. Increased capacity B. ‘Choice’ and provider (quality) competition C. Private ownership of providers X
- 4. Discussion of Kelly and Stoye 13/09/2013 4 A. Capacity • DH set out to increase capacity and activity and succeeded because: • Premium prices (≥+11%) to cover set-up costs/risks and elective-only (=> lower cost) ensured new provider interest • Initial ban on poaching NHS clinical staff, so no crowding-out NHS capacity • Initially no private hospital companies already operating in the UK were awarded ISTC contracts, so no crowding-out private capacity • ISTC take or pay contracts meant zero marginal cost to PCT per patient at ISTC • Plenty of unmet demand and ISTCs aimed at it
- 5. Discussion of Kelly and Stoye 13/09/2013 5 Deadweight loss • 1/3-2/3 of ‘private payers’ switched to NHS funded care • => deadweight loss to the taxpayer: >4,000 out of 20,000 extra capacity • In addition to possible (in-)equity impacts that are mentioned • [Not sure supply effect vs demand effect distinction is helpful]
- 6. Discussion of Kelly and Stoye 13/09/2013 6 B. ‘Choice’ and competition • Confirms distance important for choice • ‘Choice’ of private pay vs NHS funded already existed • Cannot tell from the study, but ‘choice’ of NHS funded provider might have increased deadweight loss by increasing willingness to opt for NHS-funded care • Study does not investigate impact on provider quality
- 7. Discussion of Kelly and Stoye 13/09/2013 7 C. Private ownership • Study says nothing about impact of ownership [Would impact of increased capacity have been the same if all providers had been NHS owned/nationalised?]
- 8. Discussion of Kelly and Stoye 13/09/2013 8 Other questions • What happened to ISTC activity when first round contracts expired? • What happened to NHS Trusts subcontracting to other providers (and does HES data reflect this)? • NHS hospital site vs Trust HQ location? • ISP hospital site vs company HQ location?