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NHSE to pay private providers at least £225m under Covid surge deal

NHSE to pay private providers at least £225m under Covid surge deal
By Jess Hacker
13 January 2022

NHS England is set to pay private providers between £75m and 90m a month until March, under a new deal intended to help overwhelmed systems manage capacity.

The deal – which will see independent sector providers’ (ISP) facilities and staff ‘on standby’ to support the NHS until 31 March 2022 – was announced earlier this week (10 January).

However, the DHSC yesterday (12 January) published a letter addressed to health secretary Sajid Javid from NHSE chief executive Amanda Pritchard, outlining the ‘risks and costs’ associated with the deal.

Based on the information at hand, it is estimated this will cost between £75m and 90m a month, totalling at least £225m by the contract’s end.

However, in the event that a system must take advantage of the arrangements, the monthly figure could rise ‘significantly’ to around £175m.

In her letter, Ms Pritchard stated that ISPs had asked NHSE to guarantee each of them a ‘minimum level of NHS income’ for the contracted period, in return for their resources.

They also requested the NHS pay for the affected facilities and staff on a not-for-profit cost recovery basis.

Ms Pritchard said that the NHS would ‘normally’ only pay for activity ‘actually delivered’, noting that in granting a minimum income guarantee (MIG) there is a ‘material risk that the NHS pays for activity that is not performed’.

She said: ‘To mitigate this risk the NHS and ISPs have agreed to set the MIG at 90% of the value of NHS work delivered in the relevant facilities in the best 4 weeks between October and December 2021.’

This is in addition to a 10% premium to the standard NHS tariff for all work above the value of the MIG, alongside incentivising premiums for complex work such as cancer.

In his response, Mr Javid instructed Ms Pritchard to take the scheme forward ‘with immediate effect’, noting that the need to protect NHS services in light of the Omicron variant justified the risks.

However, Dr Jeremy Lawrance and Dr Jennifer Yell, BMA private practice committee (PPC) co-chairs, said the contract is ‘an exercise in smoke and mirrors’, with significant financial risk.

‘While policy makers might think this is a good idea, doctors on the ground do not – we are of the view that this agreement will not fulfil its intention of boosting NHS capacity but rather further impact private patient care and prove to be a waste of taxpayer’s money,’ he said.

Up to 3,000 beds available

Further details revealed in the letter to the secretary of state included that ISPs could provide around 5,600 physical beds in surge if required.

However, estimates suggest that only around 2,000 to 3,000 of these could be staffed.

Additionally, Ms Pritchard noted that the independent sector’s staffing model ‘does not easily support significant 7/7 staffed bed capacity’.

It is therefore ‘not possible’ to be sure what additional effective bed capacity would be available given that NHS staff will be ‘fully stretched at this point’, she added.

There is also the fact that both the NHS and the independent sector will likely see high levels of staff absence due to Covid infection.

When is a system ‘surging’

NHSE previously said that the ISP capacity is only to be used ‘in extremes’, with ‘surge status’ invoked centrally when a system’ situation becomes unworkable.

The NHSEI independent sector senior responsible owner (IS SRO) will approve escalation when hospitalisations or staff absences become ‘unsustainable’ due to Covid pressures, and:

  • There is insufficient bed capacity to support the continued treatment of urgent/P1/P2 elective or cancer procedures
  • Staffing absence reaches levels that present a significant clinical risk to patient safety
  • There is insufficient critical care capacity to support Covid activity.

The deal was made under the direction of health secretary Sajid Javid, a month after NHSE declared a Level 4 National Incident in response to the Omicron variant.

It comes amid growing pressure from the sector and Government to review whether the self-isolation period can be safely cut to five days.

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