FT: 'UK tops world league for surgery costs'

'UK tops world league for surgery costs'
By Nicholas Timmins in London

Financial Times
Published: December 28 2003 21:57

Senior doctors in Britain's National Health Service are charging the highest
fees in the world when they operate in the private sector, according to a study
that compares their earnings with counterparts internationally.

The study shows that surgeons receive fees 22-59 per cent higher than the
average in the United States, Australia, Germany, Canada and Spain. For many
common procedures, British fees are three to four times higher than those in
the country with the lowest payment per case.

The revelation will be particularly sensitive for the Blair government, as it
comes at a time when the health service has been paying surgeons private sector
rates for up to 80,000 extra operations a year to cut waiting lists.

The study, jointly commissioned by the Financial Times and Norwich Union
Healthcare, was conducted by the independent consultancy, National Economic
Research Associates.

Tim Baker, business development director for Norwich Union Healthcare, said the
figures explained why private providers from the US, Canada and South Africa -
rather than the UK - had won almost all the contracts to provide a chain of
fast track treatment centres to the UK health service. His company provides
private medical insurance but does not run private hospitals.

"They also help explain why private health care is affordable to a relatively
small proportion of the UK population - and why the private medical insurance
market has barely grown at all in the past decade and declined in some
sectors," he said. The figures pose a challenge to the government which, amid a
shortage of surgeons, has allowed the health service to pay high rates for
extra work.

The study took the standard rate that UK insurers pay for nine of the most
commonly performed private sector operations.

These ranged from a coronary artery by-pass to cataracts, hernias and hip
replacements. It then compared them with the equivalent fee paid by Medicare,
the US public sector programme for the elderly, fee schedules published by the
Barcelona and Australian medical associations, a private insurer in Germany and
fee schedules used in the Canadian province of Saskatchewan.

The payments were translated into purchasing power parities that reflected
differences in price levels between countries. UK surgeons were paid 22 per
cent more than the average for surgeons in other countries for a hip
replacement, 35 per cent more for hysterectomies, haemorrhoids, and hernias,
and 55-59 per cent more for a by-pass graft, cataract and tonsil removal.

Edward Bramley-Harker, who conducted the research at Nera, said: "Comparisons
of this type need to be interpreted with care."

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