Outsourcing health-care services to the private sector and treatable mortality rates in England, 2013-20: an observational study of NHS privatisation

Abstract

Background: The effects of outsourcing health services to for-profit providers are contested, with some arguing that introducing such providers will improve performance through additional competition while others worry that this will lead to cost cutting and poorer outcomes for patients. We aimed to examine this debate by empirically evaluating the impact of outsourced spending to private providers, following the 2012 Health and Social Care Act, on treatable mortality rates and the quality of health-care services in England.

Methods: For this observational study, we used a novel database composed of parsable procurement contracts between April 1, 2013, and Feb 29, 2020 (n=645 674, value >£25 000, total value £204·1 billion), across 173 clinical commissioning groups (CCGs; regional health boards) in England. Data were compiled from 12 709 heterogenous expenditure files primarily scraped from commissioner websites with supplier names matched to registers identifying them as National Health Service (NHS) organisations, for-profit companies, or charities. We supplemented these data with rates of local mortality from causes that should be treatable by medical intervention, indicating the quality of health-care services. We used multivariate longitudinal regression models with fixed effects at the CCG level to analyse the association of for-profit outsourcing on treatable mortality rates in the following year. We used the average marginal effects to estimate total additional deaths attributable to changes in for-profit outsourcing. We provided alternative model specifications to test the robustness of our findings, match on background characteristics, examine the potential impact of measurement error, and adjust for possible confounding factors such as population demographics, total CCG expenditure, and local authority expenditure.

Findings: We found that an annual increase of one percentage point of outsourcing to the private for-profit sector corresponded with an annual increase in treatable mortality of 0·38% (95% CI 0·22-0·55; p=0·0016) or 0·29 (95% CI 0·09-0·49; p=0·0041) deaths per 100 000 population in the following year. This finding was robust to matching on background characteristics, adjusting for possible confounding factors, and measurement error in our dataset. Changes to for-profit outsourcing since 2014 were associated with an additional 557 (95% CI 153-961) treatable deaths across the 173 CCGs.

Interpretation: The privatisation of the NHS in England, through the outsourcing of services to for-profit companies, consistently increased in 2013-20. Private sector outsourcing corresponded with significantly increased rates of treatable mortality, potentially as a result of a decline in the quality of health-care services.

Funding: Wellcome Trust.

Figure 1

Levels of CCG outsourcing to for-profit organisations from 2013 to 2020 (A) Rolling percentage of total spending on health care and other for-profits. (B) Percentage change in total spending received by companies in different industrial sectors, based at zero for each sector's 2013–14 levels. (C) Total for-profit outsourcing over the entire time series for each CCG in England. (D) Levels of for-profit outsourcing across all CCGs each month. CCG=clinical commissioning group. NA=not available.

Figure 2

Treatable deaths from 2006 to 2018 The dashed grey line represents expected number of deaths if there had been no change to outsourcing since 2014. The shaded area represents the 95% CI. The expected trend line was constructed by subtracting the calculated additional deaths attributed to outsourcing for each CCG each year from the previous years’ synthetic death count by adding observed changes of the numbers of deaths. Data were trimmed to 2018 to maintain as many CCGs as possible as full observations of all variables were needed for each year. An updated version of this graph containing data up to 2019 is available in the appendix (p 12). CCG=clinical commissioning group.

Figure 3

Synthetic random error The plot shows the density of the coefficient for outsourcing treatable mortality when running the regression 10 000 times with five different levels of random error. The horizontal dashed line represents the regression coefficient of for-profit outsourcing with observed values.