Cleveland Clinic, the US based healthcare group, is to employ its own doctors when it opens its first British hospital later this year, marking a major shift for the UK’s health sector and triggering a war for top talent.
Unlike the US, where medics are routinely employed directly on fixed salaries, private hospitals in the UK generally use doctors employed by the state-funded NHS, who work in their spare time on a fee-for-service basis.
Cleveland, which is headquartered in Ohio, will open a six-storey out patient centre in Marylebone, near Harley Street in London in September. Next Spring it plans to open a 184 bed general hospital on a site overlooking Buckingham Palace which, once operational, will be one of the largest private hospitals in central London.
It plans to employ 1,350 staff in the UK and said it had been inundated with applications from medics and had already signed up 200 consultants on part-time, fixed salaries.
But the move to directly employ doctors will add to the pressure on the already restricted pool of doctors in Britain, a problem which has been heightened by the demands of the Covid-19 pandemic.
Ted Townsend of LaingBuisson, the healthcare consultancy, said there was already a war for talent among private hospitals, which had been heightened by the Cleveland’s arrival as well as the Covid-19 pandemic.
“Consultants are increasingly moving around and some of the busy ones are being poached with substantial financial offers, a bit like rainmakers in investment banking,” Townsend said.
If the Cleveland model is successful, the NHS may struggle to retain senior medics even though taxpayers have paid for the lengthy training that it takes to become a doctor.
Michelle Tempest, analyst at healthcare consultancy Candesic, said Cleveland’s decision to employ its own doctors marked a “fundamental shift” for private healthcare in the UK, which has suffered a long-running shortage of doctors.
Around a quarter of consultants are aged over 55, while tighter immigration restrictions after Brexit, as well the current dispute over the government’s plan to raise pay for NHS staff by just 1 per cent may exacerbate the shortage.
The issue was highlighted during the first wave of the pandemic last year when around two-thirds of private hospitals remained empty because medics were required to work longer hours for the NHS.
Although the government agreed to pay all the private hospital costs during the crisis — including rent, interest and operating costs — patient numbers across private hospitals dropped 83 per cent in April 2020 compared with the same month the previous year as most non-Covid-19 related work was cancelled, according to the Private Healthcare Information Network. The amount paid by the government to private hospitals has not yet been disclosed.
Dr Brian Donley, chief executive of the Cleveland Clinic London, said it wanted to “combine the best of the US and UK models, reinventing the private sector model with a consultant led approach.”
The Cleveland argues that by hiring consultants on fixed employment contracts — rather than paying them per operation — it reduces the chance of unnecessary procedures and encourages doctors to hand work on to other better qualified consultants.
“If there’s a salary there’s no reward or incentive for me to do more surgery,” said Dr Donley. “The key is the fixed rate as that drives team work.”
Unlike most private hospitals in the UK, the Cleveland, which has 19 hospitals and 220 outpatient facilities, mostly in the US, will act more like a general hospital with 29 intensive care unit beds and the capability to carry out a wide range of surgeries including cardiology, neurology and gastroenterology.
Most of its patients are expected to be self-paying or paid for through insurance but Dr Donley also said it was exploring ways to help deal with the record backlog of 4.59 million people on the NHS waiting list for surgery after the Covid crisis delayed operations.
Most private hospitals including Spire Healthcare and Circle Healthcare have signed up to a £10bn contract with the NHS to increase the number of operations they perform for the health service.