University researchers’ insight into the relationship between the NHS and Private Finance Initiatives has influenced UK government policy and approaches to health in the developing world
The ability of the NHS to keep expenditure down, while still serving the needs of the UK population, is a source of much political dispute.
This project examined the relationship between the NHS and Private Finance Initiatives (PFIs). It used approaches from economic and healthcare research to provide new insight into healthcare finance and delivery.
Dr Hellowell’s work also extends to private-public sector engagement in health providers in developing countries. Private healthcare in the developing world can be unsafe and ineffective, so making improvements in this area can be extremely valuable.
Dr Hellowell and Professor Pollock’s work showed that NHS organisations that have PFI contracts have higher capital costs than those that do not. This has led to money being taken away from clinical services to cover the shortfall.
Hellowell and Pollock’s 2007 research used the example of Bromley and Queen Elizabeth hospital trusts in south-east London. They found that these trusts ran at a deficit of £151m, with these “cash flow deficits” blamed on the PFI contracts. The result was further pressure on NHS trusts in deprived areas to cut clinical services.
Further research by Hellowell from 2008 to 2013 looked into how profitable PFI contracts are for their private-sector investors. He found that profits for these investors are high compared to other investments which have a similar level of risk. PFI contracts are often justified on the grounds of greater efficiency in operating costs. Findings show that PFI and non-PFI projects pay roughly the same amount in operating costs. This means that no major financial benefit to the NHS offsets the extra cost of raising capital via PFIs, at least in the way these contracts are currently put together.