Privately financed hospitals squeeze UK’s National Health Service

Figures obtained by the BBC indicate that hospitals built under private finance initiatives (PFI) will cost the UK £65 billion ($105.7 billion Canadian) over the lifetime of the contracts. With declining funding levels, there is concern that the fixed costs of paying for these massive contracts will overwhelm the UK’s National Heath Service (NHS). Some local NHS trusts say the annual payments will exceed 10 per cent of their funding.

The same projects were originally valued at £11.3 billion ($18.3 billion Canadian) when they were built. However, these contracts do include such ancillary services as cleaning, maintenance and food services.

The BBC reports that the situation has prompted calls for the NHS to try and renegotiate the deals to help it cope during the present squeeze on public spending.

Like Ontario, the Trusts also find themselves paying for these contracts at a time when the government is trying to move services out of the hospitals.

Dr. Mark Porter of the British Medical Association told the BBC “now the financial crisis has changed conditions beyond recognition, so trusts tied into PFI deals have even less freedom to make business decisions that protect services, making cuts and closures more likely.”

Ontario continues to enter into similar public-private partnership (P3) hospital projects, leaving the province with less flexibility in allocating health spending.