Subsidising Private Hospitals

Press, Volume XC, Issue 27407, 21 July 1954, Page 10

Subsidising Private Hospitals

Though it will add substantially to the bill for health benefits payable from the Social Security Fund, the Government’s decision to increase benefit rates for patients in private hospitals is justifiable on grounds of both equity and finance. The increases are substantial. In two of the three classes of patients the benefits are more than doubled; and for maternity benefits (vzhich have run considerably higher than the others) the increase is 50 per cent. The total cost of all private hospital subsidies will be increased by £266,000 a year, but the private hospitals will be greatly helped to discharge functions which are of great value to the community. The private hospital system not onlj contributes a good number of beds for surgical, medical, and maternity patients, and so strengthens the hospital system as a whole, it also provides them at a cost to the State considerably less than the cost to the State of beds in public hospitals. To maintain a patient in a public hospital costs about £3 a day; under the new subsidy it w'ill cost the State £1 Is, 18s, and £1 10s respectively for the three categories of patients in private' hospitals. The difference between the Government’s subsidy and the private hospital’s charges is paid, of course, by the. patients—the patients, in general, who prefer private to public hospitals and are willing to pay for their preference. But there is a limit to what patients can and will pay when they have ah alternative that will cost them nothing. There are, also, limits to what, in fairness, they should be asked to pay. The Consultative Committee on Hospital Reform, which reported last year, pointed out that the private hospital patient has paid at least as much in social security charge and income tax as the public hospital patient. Contending that the private hospital patient had a strong moral claim to much more liberal treatment than he was receiving, the committee said it was “ surely fair and reasonable ’’ that the private hospital patient should expect to receive out of the public fund to which he had contributed something more nearly approaching that received by the public hospital patient. However, it is unlikely, that private hospital fees will be reduced as a result of the increased subsidies. The increased subsidy should, however, obviate the need for increased fees, which were becoming unavoidable. It should also give the hospitals more latitude to conduct their business on progressive and sound financial lines.

The chief meaning of the Government’s decision is that it is official policy now to encourage the private hospital system after many years in which it was official policy to allow more and more private hospitals to be closed because of financial difficulties. The present Government’s policy is to encourage the expansion of private hospitals, which may be helped by suspensory loans towards the cost of extensions, new buildings, renovations, and the purchase of equipment. As the cost to the State of building public hospitals is about £5OOO a bed, any plan to give private hospitals a helping hand with building costs is thoroughly good business for the State.