Magazine article Public Finance

Hospital Avoids Private Income Cap

Magazine article Public Finance

Hospital Avoids Private Income Cap

Article excerpt

Great Ormond Street hospital has gone public on its intention to establish a trading charity to circumvent the cap on private patient income for NHS foundation trusts.

The 2003 Health Act capped the percentage of income an NHS foundation trust could gain from private patients at 2003 levels. But trusts have discovered that as long as private income is channelled through a separate entity, it will not be consolidated into their accounts and will therefore not count against the cap.

'We need to find a legal, open, fair and sound solution to our international patient issue,' said Great Ormond Street chief executive Jane Collins. 'We want to become a foundation trust... However, the private patient cap would require us to limit our international income. At a time of financial pressure, this would have a significant effect on our financial stability.'

Private patients account for over 12% of Great Ormond Street's income - around £25m a year. But its cap would be 9%, which would imply an £8m revenue cut when the hospital gains foundation trust status in 2008.

The hospital has therefore published plans to transfer its private patient work to a new, legally distinct, charitable company to which the trust will formally sell its clinical services. …

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