Actionable insights straight to your inbox

Equities logo

Does the NHS Have a Positive Effect on the Private Sector?

The NHS is the fifth biggest employer in the world and has an extrodinary impact on British culture. But how does it effect the economy?
Zak Goldberg is a Law & Business Graduate from the University of Leeds who has chosen to follow his aspirations of becoming a full-time published writer, offering his expertise on all areas of law, finance and business.
Zak Goldberg is a Law & Business Graduate from the University of Leeds who has chosen to follow his aspirations of becoming a full-time published writer, offering his expertise on all areas of law, finance and business.

The NHS has become a crucial part of UK healthcare, providing free services to those who need it most. While it isn’t without its challenges, the system as a whole is highly-effective and it has become the largest public health body within the country.

In order to continue to provide a high level of service to its patients, the NHS relies upon the private sector. The question is, does the NHS also positively benefit the private sector companies it works with? Here, we’ll look at how exactly the NHS impacts the private sector.

The Food and Catering Sector

According to surgeons within the NHS, the majority of outsourcing to private companies happens within the food and catering sector. This includes providing catering for NHS canteens, vending machines and hot beverages.

The NHS Supply Chain spends approximately £103 million on behalf of NHS Trusts. It uses top food procurement organisation, Foodbuy, to help deliver catering services throughout the sector. This helps the NHS by providing value, improving peace of mind and saving the organisation money. However, it also helps the supply chain as NHS centres across the country always require catering, providing a significant amount of repeat business.

It’s Effect on Private Technology Companies

Another private sector benefitting from the NHS, is technology companies. As the world becomes more digital, the NHS has had to invest in the latest technology and digital services. Companies such as Servelec, have benefitted from this, supplying technological solutions to help boost efficiency and save the NHS time and money on patient management.

The NHS uses an EPR system to improve patient experience, quality of care and clinical safety. EPR, or Electronic Patient Record, helps practitioners to easily access and update patient records, enabling them to deliver a higher level of care.

Without the NHS, the companies they outsource to for their technological needs wouldn’t be able to operate. Many private technology companies are solely set up to work with the NHS, so there is no doubt the organisation is positively impacting the sector. It is also an area which is always going to be required, particularly as technology improves.

The Impact on the Healthcare Sector

The healthcare sector is also reaping the benefits from the NHS. According to a recent report, in 2016 to 2017, the NHS spent just over a whopping £9 billion on the private sector. A large portion of this budget is spent on private healthcare services.

For example, the NHS often refers patients to private hospitals for procedures such as knee and hip replacements. The NHS Partners Network claims that in 2017, private clinicians carried out a staggering 515,000 non-urgent operations on behalf of the NHS. It particularly contracts services such as psychiatric services, termination of pregnancy and care of the elderly.

One of the most significant private providers the NHS has partnered with is Virgin Care. Developed by Richard Branson, Virgin Care won a total of £1 billion worth of contracts in 2017. This took the providers total contracts with the NHS to more than 400. Not everyone is thrilled the NHS has awarded so many contracts to the company due to the fact that it doesn’t pay any tax within the UK.

However, it hasn’t all been great news for the private health sector working alongside the NHS. Recent funding cuts within the NHS have also hit private firms such as Spire Healthcare. As the organisations budget gets lower, it has had to look into ways to make cutbacks. Sadly, this has meant many private sector healthcare companies have seen their NHS referrals significantly reduced.

As you can see, the NHS has a surprising impact on many private sectors. From the food sourced for the wards and canteens in hospitals, to digital solutions and even partnerships with private healthcare providers – the public and private healthcare sector is very much intertwined.

A weekly five-point roundup of critical events in the energy transition and the implications of climate change for business and finance.