Hospital privatisation is linked with worse quality care for patients – new research

Our review shows that evidence to support further privatisation of healthcare services is weak.

The NHS is in a critical state. The continued consequences of the pandemic and long waits for treatment mean that people are facing more difficulties than ever accessing the care they need. A growing number of people are even paying to get treatment.

There’s a clear need to reform the NHS – and it’s likely this will be a huge issue in the upcoming election. The next government, whoever they are, will be under pressure to urgently address these issues within the NHS.

While increasing spending may be one way to address these issues, others have argued that outsourcing NHS services to for-profit providers (privatisation) would help make services more efficient and improve care

But outsourcing may solve one problem while creating others. A recent review I published with some colleagues has found that while privatisation may allow hospitals to cut their costs, it’s also linked with worse quality care for patients.

To conduct our review, we brought together peer-reviewed research on the effects of outsourcing on quality of care. Our review analysed 13 studies from eight high-income countries, including the US, Germany, Canada and South Korea.

Importantly, we only included studies which tracked outcomes before and after outsourcing and could compare outcomes to areas or hospitals with fewer outsourced services. We did this so that our research was directly comparing the effect of privatising care on public services, and not just looking at how care in both the public and private sectors differed.

We found that hospitals who converted from public to private ownership tended to make higher profits than public hospitals. This was achieved by reducing staff numbers and taking on patients who would be considered more profitable (such as those with more generous insurance coverage). Outsourcing also tended to correspond with fewer staff members per patient – including fewer cleaning staff.

Privatised hospitals also tended to cut back on more qualified members of staff. For example, in the US, there was a substantial reduction in the number of qualified nurses employed after a hospital was privatised, when compared with the number employed in public hospitals. But while numbers of most other types of staff were reduced after privatisation, doctors’ numbers remained the same. The studies often concluded that cutting qualified staff was the result of incentives to increase profits and reduce costs.

We also found that increases in outsourcing frequently corresponded with worse health outcomes for patients.

Two studies, one conducted in England and one in Italy, both found that increases in the proportion of outsourced care corresponded with higher avoidable death rates (for example, deaths from curable respiratory diseases or surgical accidents) than before outsourcing took place. While neither study could be certain the reasons for higher death rates, they both concluded that quality of care was the most plausible reason. Further research is needed to be sure that the decline in health outcomes is specifically due to changes in accessibility, inequitable treatment or just poorer performing hospitals in the private sector.

When it came to how easily patients could access healthcare services, results were mixed. Two studies that assessed hospital conversions from public to private in the US found that care became less accessible after going private – either because the hospitals became more selective of which patients they treated or because the number of services provided in the privatised hospitals was cut.

But one study in Croatia found that when primary care practices came under private ownership, patients saw benefits. Patients started receiving more precise appointment times and had the opportunity to access healthcare through new means – such as out-of-hours telephone calls.

Overall, this is a difficult area to evaluate as there’s not a huge range of evidence. But, based on the best evidence available, our review consistently finds that privatising healthcare services corresponds with worse quality care and worse patient outcomes.

Evidence from other care sectors, such as long-term adult care and children’s social care, have also shown negative outcomes for patients when these services are privatised.

What this all means

In light of our findings, and in the context of the current NHS crisis, how should the next UK government’s healthcare agenda look? We would suggest that a progressive agenda would aim to remove the dependency of healthcare services on private market provision, avoid further outsourcing and instead fund publicly run services.

Outsourcing has been a popular policy posed by governments of different political stripes for decades. And, with an election looming, both Labour and the Conservative parties show no signs of changing their tunes.

But the evidence which is starting to emerge shows that more often than not privatisation would be a mistake.

Benjamin Goodair receives funding from Wellcome Trust 221160/Z/20/Z.