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 Foreword

During his time as Secretary to the Private Practice and Professional Fees
Committee of the BMA, Christopher Locke acquired a vast amount of know-
ledge about the problems and difficulties experienced by doctors who were
engaged in private practice. Many of these difficulties arise because private
practice and its special problems are not subjects covered in any medical cur-
riculum and little information about private practice is passed on to doctors
in training grades. It is only when newly appointed consultants or principals
in general practice actually start to practise that they become aware of the
gaps in their knowledge in this important area of medical practice.
This book provides a comprehensive guide to all aspects of private practice
and contains a wealth of information about equipment and the complexities
of taxation and pension arrangements. There is a useful review of the ar-
rangements in the UK for private medical practice and the book concludes
with some thoughts about how private practice may develop in the future and
the impact of various social and political factors on this development.
The text should form an invaluable source of reference, not only for new
entrants to consultant and general practice, but also for those who have been
established for some years and who may wish to update their knowledge on
particular areas of private practice.

David E Pickersgill
January 1994
 Acknowledgements

I am grateful for the support and encouragement given to this venture by col-
leagues in the British Medical Association, both elected representatives and
staff. I should especially like to thank Dr David Pickersgill, Chairman of the
Private Practice and Professional Fees Committee, and his deputy chairman,
Mr Richard Marcus FRCS, for their help in making this book possible. I am
grateful also for the inspiration and encouragement of Mr Norman Ellis,
head of the BMA's Contractor Services Division.

I would like to take the opportunity of thanking all of the following who
have assisted with comments and assistance with the diverse areas covered by
the book: Sally Watson, Secretary, Central Consultants and Specialists Com-
mittee; Jon Ford, BMA Economist; Ann Sommerville, Executive Secretary,
Medical Ethics Committee; Roger Dowsett, Solicitor; John Dean, Pannell
Kerr Foster; and Douglas Shields, Medical Insurance Agency.

My grateful thanks also go to Helena Morris, Janet Whitehouse and Lisa

Parker for their diligence and patience in typing the manuscript.

The book is affectionately dedicated to my wife Kaye and our daughters

Helen and Corinne.
 Introduction

The term 'private medical practice' can be defined very broadly. However, in
this book it refers principally to the treatment of private patients. Therefore
the book does not attempt to examine in great detail the full range of private
medical services currently provided in this country; nor is it a clinical
textbook.
The objectives of the book are threefold: first, to explain the rules which
govern the practice of treating private patients; secondly, to offer practical
advice to those thinking of setting up in private medical practice for the first
time; and finally, to describe the various permutations of private medical
practice and to speculate about its future development.
The book will therefore be of most relevance to hospital specialists, but it
should also be of interest to general practitioners and to all those wishing to
understand private practice and the workings of the private healthcare 'in-
dustry' in the UK.
At the time of writing, little statistical research was available on the activi-
ties and earnings of private practitioners. The survey of private specialists'
fees undertaken by the Monopolies and Mergers Commission in 1993 is ex-
pected to provide the first extensive 'hard' data on these matters. The final re-
port of the enquiry was not available, however, when this book went to press.
The author has, therefore, to some extent anticipated that report's
conclusions.
As well as providing explanations and advice, the book contains opinions
on matters on which, in the absence of factual data, there may not be a con-
sensus. The opinions expressed on such matters are those of the author, and
should not be assumed to be those of either the British Medical Association or
any other individuals with whom he may be associated.

Christopher Locke
April 1994
1
Medical Practice in the
UK: An Overview

Interdependence of public and private healthcare

provision

In order to understand the nature of private medical practice in the UK it is es-

sential to appreciate the symbiotic relationship between public and private
healthcare provision. There are two aspects to this relationship. The first is
the extent to which the perceived failings of the National Health Service
(NHS) define the parameters of the market in private healthcare. The second
is the fact that, because the vast majority of the doctors who undertake pri-
vate treatment also work in the NHS, the medical culture of the private sector
and its modus operand! are, to a large extent, determined by that prevailing in
the State system. These statements will require some explanation. In order to
give this it will first be necessary to consider, in brief, the essential features of
the NHS and how these affect its interrelationship with the private sector.

The National Health Service

Established by a Labour government in 1948, the NHS is a comprehensive
healthcare system funded exclusively by taxation. It aims to provide free ac-
cess to health services at the point of delivery to all UK citizens. It has proved
to be a remarkably durable and popular institution. Despite its perceived fail-
ings, it has survived the stresses and strains of economic and political change
during the last 45 years and continues to provide for the medical needs of the
vast majority of British citizens 'from the cradle to the grave'. This is not the
occasion to open up the debate about how it is funded. However it is of note
that the system, often considered by its critics to be cumbersome, bureau-
cratic and wasteful of resources (it is the largest employer in Western Europe),
continues to consume less than 6% of the UK's gross national product.
As we will see, the success of the NHS has had the effect of limiting the size
of the market in private healthcare. Currently only about 12% of the UK

1
2 Medical Practice in the UK: An Overview

population are covered by some form of private health insurance. The exist-
ence of a universal 'safety net', providing ready access to primary care and im-
mediate emergency access to secondary care services, obviates the necessity
for all-embracing health insurance and has limited the demand for private
services to the areas where NHS provision is overused and in greatest de-
mand. These are the acute specialties, particularly elective surgery. ('Acute'
conditions are those which cause discomfort and require treatment but are
not usually life-threatening. Among the most common are hernia repairs, var-
icose veins, extraction of wisdom teeth and hip replacements.)

The significance of NHS waiting-lists

The reasons why individuals opt for private treatment are many and various.
'Cultural' factors often play a part, as does the desire for comfort and privacy
and the personal attention of a private doctor. In the opinion of many com-
mentators, however, one of the most significant factors in recent years has
been concern about the length of time the individual may have to wait for op-
erative treatment on the NHS. While estimates vary, at least 70% of private
treatment is accounted for by private medical insurance. According to Laing
(1993), 'waiting for elective surgery under the NHS is at the heart of decisions
to purchase private medical insurance'.
All elective procedures can be performed within the NHS but, despite an in-
crease in the proportion of booked cases (ie those who are given a firm date of
admission), it is generally not possible for patients to choose the date of ad-
mission, and they will have little choice in the location or timing of that treat-
ment. Going private ensures early admission at a time and place convenient to
the patient.
In fact the public perception of extensive waiting-times for surgery on the
NHS in recent years is not supported by the evidence. According to the most
recent available statistics, the median waiting-time for NHS elective surgery
is only about six weeks. This is rather shorter than was the case 20 years ago.
However, the figures suggest that there is a substantial pool of 'slow stream'
patients who are having to wait considerably longer than the median: about
25% of patients awaiting elective surgery may have to wait in excess of one
year, despite government-sponsored initiatives to reduce NHS waiting-lists.
Whatever the truth of the public's perception of the waiting-list crisis it has
led to a situation where the private services of consultants in acute specialties
(where lengthy waiting-lists exist) have become a valued commodity.
The fact that the private sector now accounts for 20-25% of elective sur-
gery carried out in the UK demonstrates that the private sector does, to some
extent, relieve the pressure on the NHS by helping to reduce these waiting-
lists in certain areas. This is an illustration of the mutual interdependence re-
ferred to above.
 Medical Practice in the UK: An Overview 3

Of course the 'waiting-list factor' does not apply universally and there are
notable exceptions. There are no waiting-lists in obstetrics, for instance, yet it
rates as one of the most popular of the acute specialties in which private treat-
ment is sought.

The concentration of private healthcare provision

In addition to the elective treatments described above, the private sector pro-
vides a number of specialist services which are either not available within the
NHS or are provided only on a limited scale. These include cosmetic surgery,
abortions, fertility treatment and various screening and diagnostic services.
However, these are not normally covered by health insurance; nor are spe-
cialties catering for long-term and chronic conditions, eg geriatrics and oncol-
ogy. This is because the cost of such treatments would increase the premiums
of health insurance to a level beyond the reach of the average subscriber.
Health insurance does not provide either for the services of general practi-
tioners (GPs). The reasons are explained in the next chapter, but essentially
the demand has been limited by the existence of universal free access to a net-
work of NHS GPs and primary-care support services. Only those who are
wealthy enough to pay for the additional benefits of a more personal service
feel the need to have a private GP.
In terms of expenditure, private nursing and residential care is the largest
element of private healthcare but the contribution of medical practitioners in
this area is modest compared with the amount of private practice undertaken
in acute hospitals.

Medical personnel

In the NHS, primary care is provided by a network of some 31 000 GPs, to-
gether with nurses, ancillary staff and co-workers; secondary care is provided
by 19 000 hospital consultants, 31 000 doctors in less senior grades and a vast
array of nurses, paramedics and support staff.
The numbers of patients seeking treatment from GPs privately is probably
very small. Few NHS GPs have any private patients. However it has been es-
timated that about 12 000 NHS consultants undertake some degree of private
practice and there may be as many as 6000 consultants who have retired from
the NHS and practise privately on a part-time basis. There are no more than a
few hundred wholly private doctors, both GPs and consultants, practising
full-time: and almost all of these will have trained in the NHS.
In one sense the private sector can be regarded as parasitic on the NHS, in
that it makes no effective contribution to the training of the medical person-
4 Medical Practice in the UK: An Overview

nel on whose services it relies, and makes only a small contribution to the
training of nurses. However it may be said to subsidize the NHS in the man-
ner in which the private practice fees paid to consultants allow them to main-
tain a high standard of income without any additional strain on the financial
resources of their principal employer (see Chapters 5 and 7).
Very few doctors working in the private sector have salaried appointments
(although there are some exceptions—eg doctors working in psychiatric hos-
pitals and some other specialist units). Almost all work partially or mostly in
the NHS.
Private medical care in the UK is provided via a contract (usually unwrit-
ten) between the patient and the private practitioner. It is rare (except with
psychiatric treatment) for the institution where care is provided to be directly
responsible for medical (as opposed to nursing) care. The choice of practi-
tioner is determined by the system prevailing in the NHS.
Both from a strategic point of view, and from the point of view of the indi-
vidual patient, the GP/consultant axis is the basis of healthcare delivery in the
NHS. This has served as the model for the private sector. It may therefore be
helpful to consider briefly the interrelationship of GP and consultant in the
NHS and how this is translated into the private sector.

The role of the GP

The GP has accurately been described as the 'gatekeeper' of the NHS. What
may not be obvious to outsiders is the extent to which he is a gatekeeper to
private medicine also. General practice is acknowledged to be one of the
strengths of the NHS and is justly described as a 'British success'. In almost no
other developed nation has a system evolved which is so dependent on a net-
work of primary-care practitioners. The effectiveness of this network helps to
compensate for the fact that the UK has significantly fewer doctors per head
of population than many of its EC partners.
The benefits of this system to the patient are obvious: the GP attends to all
the minor medical complaints of his practice population, assesses their indi-
vidual needs and co-ordinates provision of secondary care. The benefits to the
system are equally clear: the GP ensures that only genuine calls are made on
the more expensive secondary-care facilities. The GP's value lies in the ability
to ration access to secondary care. The saving to the NHS is demonstrated by
comparing costs with those of other healthcare systems in which direct access
to secondary care is established.
Except for emergency treatment and certain non-life-threatening condi-
tions, self-referral to secondary-care facilities is rare. In the wider interests of
patient care, the General Medical Council actively discourages specialists
from treating patients who have not been referred by a GP (see Chapter 2).
In all other forms of treatment the mechanism of referral is all-important.
The GP determines which consultant to refer his patient to, and he is free to
choose any consultant within or outside the local district. The GP's right to do
 Medical Practice in the UK: An Overview 5

so has been reinforced by successive government pronouncements, notwith-

standing recent concern about the effect of 'extra-contractual referrals' in the
post-reform NHS. When secondary treatment by the consultant of the GP's
choice is completed, care of the patient is then transferred back to that GP.
Thus the GP remains the guarantor of continuity of the patient's treatment.
Recently this pivotal role has been developed further, as part of the NHS re-
forms, by making GPs responsible for their own budgets with which they may
purchase secondary care for their patients. By giving GPs the right to 'shop
around', the Conservative government has made them the instrument of their
plans to bring market forces into play in the NHS. Fundholders are now also
free to purchase healthcare directly from the private sector if this is a cheaper
and more effective option for their patients.

The role of the consultant

The consultant has long been regarded as the pinnacle of hospital medicine.
Though an employee of a health authority (or NHS Trust), he has a profes-
sional contract which allows him to work flexibly and manage the treatment
of the patients entrusted to his care as he sees fit. In return he assumes com-
plete responsibility for the treatment of these patients.
Despite the introduction of clinical directorates, the consultant remains the
prime mover and initiator of all hospital treatment. The clinical director is no
more than 'primus inter pares'. However, the range of consultant activity is
always constrained by budgetary considerations, which often bring the con-
sultant into conflict with hospital administrators (both clinical directors and
lay managers) who control the purse strings.
A key element of the contract, which testifies to its professional nature, is
the consultant's ability to manage private and NHS patients simultaneously.
The NHS consultant is usually permitted to manage as many private patients
he feels able to treat, either in beds in the NHS hospital where he works or in
his rooms or local private facilities, provided his private work does not inter-
fere with the carrying out of his NHS duties (see Chapter 3).
Many fear that the introduction of locally devised Trust contracts for
newly appointed consultants will lead to a gradual erosion of the flexibility
with which consultants have traditionally been able to manage their time,
though the freedom to undertake private practice under Trust contracts will
inevitably vary.

The private patient 'compromise'

The simultaneous responsibility for both NHS and private patients owes its
existence to a compromise patched together at the inception of the NHS. The
Secretary of State for Health and architect of the NHS, Aneurin Bevan, en-
6 Medical Practice in the UK: An Overview

countered many difficulties in establishing a system which was acceptable to

the medical profession. One of the points at issue during the long-drawn-out
negotiations with the British Medical Association was the question of special-
ists' private patients. The chosen solution was, as Bevan put it, to 'stuff their
mouths with gold'. This meant, among other things, allowing consultants to
be able to continue treating their private patients, either in NHS beds or in
private facilities, subject to availability.
From this compromise was born the maximum part-time contract and the
very complex series of rules by which private practice is permitted to be un-
dertaken in NHS hospitals (see Chapter 3). These were consolidated compar-
atively recently in the Department of Health document called the Guide to the
Management of Private Practice in Health Service Hospitals in England and
Wales (DHSS 1986, known colloquially as 'The Green Book') and its equi-
valents in Scotland and Northern Ireland.

Restriction of opportunities for junior grades

Subject to occasional variations, the right to admit private patients to NHS

hospitals has always been confined to doctors of consultant status. Junior
hospital doctors are forbidden to undertake private practice other than out-
side their contracted hours, though they are obliged to assist consultants
treating private patients in NHS hospitals for no additional remuneration.
This has given rise to the feeling among junior grades that achievement of
consultant status is a passport to greater financial rewards.
There has never been anything to prevent individuals who have not at-
tained consultant status in the NHS from treating their own private patients
(albeit outside NHS contracted time and with the approval of the consultant
to whom they are responsible): but in practice the opportunities remain lim-
ited. The recognition accorded to NHS consultants by the health insurers has
strengthened their pre-eminence. The creation within the NHS of a new grade
of doctor, the associate specialist (AS), has done nothing to diminish this, as
most health insurers will not accord specialist recognition to AS grade doc-
tors. In practice the reliance on consultant status as the hallmark of the spe-
cialist means that the activities of even wholly private physicians and
surgeons who have not held a substantive consultant post in the NHS are
limited.

Access to private treatment

The benefits of the GP-consultant referral process were readily accepted by

both patients and practitioners when it came to private treatment. The pa-
 Medical Practice in the UK: An Overview 7

tient inevitably turned to his family doctor to suggest the name of a competent
specialist when taking the decision to go private. The specialist, meanwhile,
was content that the patient had been Vetted' by a GP with whom he could
correspond about the patient's treatment and to whom he could transfer
aftercare responsibility.
This system was also readily embraced by the health insurers. The provid-
ent associations, some of whom predated the advent of the NHS and which
continue to dominate the health insurance market (see Chapter 5), were
mindful of the fact that, by ensuring that referral was 'necessary and appro-
priate', the GP would keep down their costs. They adapted their policies to
the prevailing structure of the NHS by insisting on GP referral to named con-
sultants or accredited specialists.
Where they parted company with the NHS was in being able to guarantee
personal treatment by that specialist and not, as might be the case in the NHS,
by his junior colleagues. This has been a mainstay and one of the major selling
points of private treatment. The public were led to believe that private treat-
ment guaranteed quality. While comfort and convenience were very import-
ant, the personal service of a top consultant was a significant consideration.

Specialist status and the health insurers

For many years the health insurers did not seek to influence in any way the
choice of specialist treating their subscribers. They were content to let the pa-
tient's GP be the arbiter of the specialist's professional competence. However
the last decade has seen the establishment of fairly strict criteria for recogni-
tion of specialist status by the health insurers. This usually involves reliance
on the holding of a substantive NHS consultant post, or accreditation by the
Royal Colleges or Joint Committees on Higher Specialist Training.
The establishment of these criteria was no doubt due to an emphasis on
quality and the feeling that standards should be judged by qualifications,
rather than just the subjective experience and opinions of GPs. As a result, a
number of eminent practitioners have found themselves effectively 'derecog-
nized'. The effect of non-recognition is to deny the patient reimbursement of
the costs of any treatment carried out by that practitioner which, of course,
can result in considerable difficulties for all concerned. The fact that 70% of
private treatment is now accounted for by health insurance demonstrates
how great an obstacle to successful private practice this can be.

The debate about specialist accreditation

Concern at the application of these criteria served to increase the groundswell
of criticism of the system of specialist accreditation which was beginning to
make itself felt in the early 1990s. The campaign to reform this system was
8 Medical Practice In the UK: An Overview

given tremendous impetus by the government's acknowledgement in 1992

that the system was not in accord with the European Community directive on
mutual recognition of specialist training. This acknowledgement led to the in-
stigation of a fundamental review of specialist training by a working party
headed by the government's chief medical officer, Dr Kenneth Caiman. The
review threatens to have enormously far-reaching implications both for the
NHS and for private medical practice (see Chapters 3 and 18). However, for
the present it is sufficient to note that the health insurers are still wedded to
the system of accreditation established in and for the NHS, demonstrating
once again how closely public and private healthcare provision in the UK are
enmeshed.

The NHS reforms

The reform of the NHS initiated by the Conservative government, with the
NHS and Community Care Act 1990, has involved the most radical shake-up
in the provision of State healthcare since the foundation of the NHS. The cre-
ation of an internal market by means of a split between purchasers and pro-
viders, and the general break-up of the cumbersome regional and district
administrative bureaucracy, have transformed the NHS beyond recognition.
However, if critics of these reforms are to be believed, the overall effect may
simply be to highlight even more starkly the gross underfunding which has
lain at the root of the problems affecting the NHS since its inception.
Whether or not the reforms will be successful, the 1990s will certainly be
tumultuous for the NHS and its medical personnel. The effects will, more-
over, be carried over into the private sector, with private hospitals not know-
ing whether to expect an increase or decrease in demand for private services,
and consultants not knowing whether they will enjoy greater or lesser free-
dom to undertake private practice in the post-reform regime. The distinction
between the NHS and the private sector may become more blurred as a result
of the reforms, but this will not necessarily work to the benefit of the medical
profession. In any event, the concept of private practice as it is today may re-
quire complete redefinition in a few years' time.
With this proviso we will now consider the essential features of private
medical practice as it exists today.

References and further reading

Caiman K (1993) Hospital Doctors: Training for the Future. Report of the Work-
ing Group on Specialist Medical Training. DoH, London.

Central Consultants and Specialists Committee, BMA (1990) The Consultant