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The government has limited pay for heads of private hospitals and has banned bonuses, while the NHS takes over its facilities to help out during the coronavirus crisis, in a rare example of demanding wage limits in exchange for state support. of emergency.
Under a deal agreed last month, the government took more than 8,000 private hospital beds, 20,000 nurses and 700 doctors “at cost” for at least 14 weeks, in what was described as a de facto bailout for the companies.
The temporary acquisition was designed to provide additional healthcare facilities during a time of national crisis, but it has also provided financial relief to private hospital companies and their shareholders. The sector faced a large drop in revenue during the shutdown as non-emergency treatments were canceled and foreign patients, representing a significant proportion of private hospital revenue, were prevented from traveling to the UK .
The median annual salary for the executive director of a very large NHS acute trust should be around £ 225,000, according to NHS guidance. Simon Stevens, the executive director of NHS England, was entitled to a salary of up to £ 240,000 for the 2018-19 fiscal year.
While the median annual salary for a trust executive director is almost eight times higher than the UK average, maintaining the salary cap over a 12-month period would represent a significant reduction for many private healthcare managers whose salary arrangements are significantly higher than your public payments. counterparts in the sector. Once the initial 14-week term of the agreement expires, it can be extended weekly.
For example, Justin Ash, the CEO of Spire Healthcare, received £ 1 million in full payment for 2019. Spire said Ash and the President and Chief Financial Officer had agreed to a 20% pay cut for April, May and June.
The highest-paid director of a private hospital owner’s subsidiary in the UK, Ramsay, received £ 1.1 million in the year to June 2018. Circle Health’s highest-paid director, backed by private equity, which is merging with Privately owned BMI Healthcare received a payment. £ 561,000 in 2018. The US hospital giant The US, HCA Healthcare, has cut top executive salaries by 30%, while the highest-paid director of the UK subsidiary received £ 711,000 in 2018.
However, it is understood that the contracts do not contain provisions related to executive pay or bonuses beyond the NHS control period, increasing the possibility that some private hospital managers may still receive large rewards during 2020, despite that companies may have struggled to achieve goals or even survive without emergency help from government or investors.
It is also understood that there are no limits to dividends beyond the period that the NHS is in control of the hospitals, potentially allowing payments to shareholders to resume at a later time. Other countries like France have plans to ban dividends from companies receiving state support.
“There is no margin for profit when precious resources are scarce and our key workers are on the front lines fighting the pandemic, and many lose their lives in the call of duty,” said Rehana Azam, national secretary of the GMB union, which represents some health workers
David Hare, executive director of the Independent Healthcare Providers Network, an industry lobby group, said: “As part of the recent landmark agreement whereby independent hospitals have made nearly all of their capacity available to the NHS to respond to the coronavirus, the The public must be sure that these additional resources are reimbursed ‘at cost’, which means that no profit will be generated. ”
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Private hospital owners and shareholders, their lenders and owners will benefit from the deal more than the NHS, according to Vivek Kotecha, a researcher at the Center for Health and Public Interest, an independent think tank. He said the deal was “indeed a bailout” and warned that companies could still pay bonds once the NHS has given up control.
Shares of the Spire Healthcare Group, which is listed on the London Stock Exchange, rose after the deal was announced in March. He acknowledged that the deal would provide him with “enough liquidity and financial stability” to weather the outbreak, leaving him in a “strong position” to recover when he can restart non-NHS treatments.
The Department of Health and Social Assistance declined to comment.
