The share of NHS community health service funding going to private providers has sharply increased in recent years, a new study reveals.
One pound in every five spent on community services in 2012-13 was on private providers, according to the research by the Nuffield Trust, which it has shared with HSJ.
This represented a 34 per cent increase in community services funding going to the private sector in one year alone.
There has also been a big increase in funding for private providers of mental health services. This saw a 15 per cent real terms increase between 2011-12 and 2012-13. Funding for NHS provided mental health services dropped by one per cent over the same timeframe.
The private sector’s penetration of the NHS community services market exceeds previous forecasts.
The market intelligence company Laing and Buisson in 2011 predicted the private sector could secure a fifth of community health spend by 2016. The Nuffield Trust’s figures show this milestone was achieved three years earlier.
The share of money going to voluntary providers of community health services has also increased from eight per cent of the total national budget in 2010-11 to 13 per cent in 2012-13.
Over the same period, spending on NHS-provided community services fell in both absolute terms, from £7bn to £6.7bn, and as a share of overall spend on community health services, from 80 per cent to 69 per cent. Nearly one third of funding for these services is now with non-NHS providers.
However, the Nuffield Trust work found that spending on non-NHS providers of acute care has reduced in real terms. In 2012-13 spending on NHS funded care delivered by private sector hospitals was £14m less in real terms compared with the year before – £1.582bn compared to £1.596bn.
In 2012-13, 95.9 per cent of the total £44.2bn spent on acute services was with NHS providers.
Nuffield Trust chief executive Nigel Edwards said the research showed there had been a “real shift in the makeup of organisations providing community and mental health services over the past three years”.
He added: “While spending on non-NHS providers of hospital care has slowed, this plateau is probably a short term phenomenon – changes in procurement rules may well see this accelerate in future.”