© Institute for Fiscal Studies and Nuffield Trust, 2013 May 2013 Public payment and private provision The changing landscape of health care in the 2000s.

© Institute for Fiscal Studies and Nuffield Trust, 2013May 2013

Public payment and private provisionThe changing landscape of health care in the 2000s

Sandeepa Arora, Nuffield Trust and George Stoye, Institute for Fiscal Studies

Understanding competition and choice in the NHS

© Institute for Fiscal Studies and Nuffield Trust, 2013

Trends in public and private health care spending


Proportion of secondary care spending on private providers


Regional variation in NHS spending on private providers


Public and private spending on hip and knee replacements

• The spending patterns that we observe previously may be consistent with some ‘crowding-out’ of private spending.

• The extent to which this occurs is difficult to assess directly using aggregate spending data.

• This part of the report focuses on the case of elective hip and knee replacements.• Provided and funded by both private and public sector.

NHS-funded knee and hip replacements (2003/04 – 2011/12)

NHS-funded knee and hip replacements increased by 52% and 45%, respectively, between 2003/4 and 2011/12.


Change in NHS-funded hip & knee replacements by provider type

Independent sector providers (ISPs) account for more than half the increase in NHS-funded hip and knee replacements between 2003/4 and 2010/11



What explains the increase in NHS-funded activity?

• The increase in NHS operations may suggest that some patients are now having procedures that they would otherwise not have had or would have had much later.

• However, the rise in operations may also be explained by:• Demographic change

• Some patients switching from privately funded to NHS funded-care.

• Our estimates suggest that population ageing accounts for a fifth of the increase in hip replacements and a sixth of the rise in knee replacements.


Examining substitution between NHS- and privately funded care

• To what extent are patients that would have paid privately a decade ago now choosing NHS-funded care?

• For most procedures very limited information is available on the privately funded activity.

• For hip and knee replacements, we can address this question by comparing two data sources:• National Joint Registry (NJR): hospital-level data on all hip and knee

replacements conducted in England and Wales.

• Hospital Episodes Statistics (HES): patient-level on NHS-funded hip and knee replacements in England.

Three-year aggregates of hip and knee replacements recorded in the National Joint Registry and Hospital Episode Statistics

Total hip and knee implant sales, as recorded by the NJR, changed little between 2003/4 and 2011/12. However, the number of NHS-funded hip and knee replacements, as recorded in HES, increased by a third. © Institute for Fiscal Studies and Nuffield Trust, 2013


Evidence of substitution from the privately funded to NHS-funded sector

• Aggregate evidence is consistent with some substitution from privately funded to NHS-funded knee and hip replacements.

• Evidence from individual providers tells a similar story:• Decreasing volumes of NHS private patients and independent

private hospital patients.

• Falls in numbers of privately funded procedures for ISPs that treat both private and NHS patients.


Conclusions

• Spending patterns are mirrored by changes in the provision of NHS-funded elective knee and hip replacements.• Increased volumes over and above which can be explained by

demographic changes

• More than half of the increases are accounted for by ISPs.

• Overall volume of these procedures remained relatively stable over the same period.

• Falling private volumes

• Suggestive of substitution from the private to publicly funded sector.


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The Institute for Fiscal Studies is a leading microeconomic research institute, aiming to promoting effective economic and social policies.

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© Institute for Fiscal Studies and Nuffield Trust, 2013 May 2013 Public payment and private provision The changing landscape of health care in the 2000s.

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