Case study: A charity to deal with private patients

As it changes status, Great Ormond Street wants a solution to limits on private patient income.

NHS London wants every hospital under its jurisdiction to be established as a foundation trust by the end of the year. Great Ormond Street Hospital for Children, one of the world's leading paediatric hospitals, is in the throes of preparing for the transition.

The challenge

The hospital receives 10 per cent of its admissions and 16 per cent of its income from international and private patients. Foundations are subject to a private patient cap, which includes international patients, even though the government of each patient's home country pays for their treatment. The cap would deprive the hospital of £8m of private and international income.

"This would have a significant effect on our financial stability, particularly in future," explains Dr Jane Collins, chief executive of Great Ormond Street. "The international income allows us to treat more NHS patients than would otherwise be the case."

The process

The solution is to set up the international and private patient division of the hospital as a separate charity that will donate its surplus to the hospital. Staff working for the charity would remain NHS employees, the new organisation would buy its clinical services from the NHS Foundation Trust and a series of agreements and contracts would cover the use of buildings and services.

"This is our preferred option because it is simple, clean and easy to understand," explains a hospital spokesman. He adds that the hospital was considering alternatives in case its regulators, the Charity Commission and the foundation trust regulator Monitor, objected to its proposal.

The outcome

Great Ormond Street launched a consultation on the proposal in October. Responses have been broadly supportive, but it is the Charity Commission and Monitor that will have the final say.

"The private patient cap means we'd be losing income and turning patients away," says the hospital spokesman. "So we have to find a solution. We think setting up a charity is a win-win scenario for everyone."

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