Treatment centres run by the private sector are profiting from NHS funding by taking on less risky patients while being paid the same rate as publicly funded hospitals, a study suggests.

Patients treated in centres that carry out thousands of planned procedures, such as hip and knee replacements, to relieve pressure on the NHS are less likely to come from deprived areas, have fewer diagnoses and undergo fewer procedures than those treated in NHS hospitals, according to analysis of more than 3.3 million patient records funded by the Department of Health. The national system for funding hospitals for treatment — known as “payment by results” — pays hospitals and treatment centres the same average cost for carrying out particular types of operation.

The average cost of a hip operation, for example, is about £6,000. But the actual cost to a hospital can be much higher, meaning that independent sector treatment centres (ISTCs) could be profiting by taking on only less complicated, less expensive cases.

The study, by the University of York and others, published in the journal Health Policy, found “evidence that hospitals are treating patients of greater complexity than treatment centres”. The authors add: “If these observed differences between hospitals and treatment centres drive costs, then payments should be refined to ensure fair reimbursement.”

There are about a hundred treatment centres in England, half of which are ISTCs operated by private-sector companies. They mainly conduct orthopaedic surgery, cataracts and diagnostic screening under contracts with the NHS. Last year the NHS paid £275 million to ISTCs.

Previous research, reported by The Times, has also found that patients treated in the centres are up to 20 times more likely to need painful and expensive repair work, often in NHS hospitals.

The authors say: “If treatment centres routinely treat patients with less complex needs within a healthcare resource group, they may profit at the expense of NHS hospitals. If so, this would suggest that the prospective payment system is unfair.”

Keith Brent, deputy chairman of the British Medical Association’s Consultants’ Committee, said that, unlike NHS hospitals, ISTCs could “cherry pick” patients who were less likely to need expensive treatment. He echoed the call for any centre with a selection policy to be paid a lower tariff.

However, the Department of Health said that it had no plans to change the funding system.

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