New study links hospital privatisation to worse patient care

This review challenges the justifications for healthcare privatisation and concludes that the scientific support for healthcare privatisation is weak. Overall, hospital privatisation may reduce costs, but does so at expense of quality of care.

Lead author Dr Benjamin Goodair, postdoctoral researcher at the Department of Social Policy and Intervention at the University of Oxford

The researchers carried out a meta-analysis based on evidence from 13 longitudinal studies, covering a range of high-income countries.* Each study assessed quality of healthcare measures for patients before and after health service privatisation, at either the hospital or regional level. The studies included measured indicators of care quality which included staffing levels, patient mix by insurance type, the number of services provided, workload for doctors, and health outcomes for patients such as avoidable hospitalisations.

Key findings:

• Increases in privatisation generally corresponded with worse quality of care, with no studies included in the review finding unequivocally positive effects on health outcomes.
• Hospitals converting from public to private ownership status tended to make higher profits. This was mainly achieved by reducing staff levels and reducing the proportion of patients with limited health insurance coverage.
• Privatisation generally corresponded with fewer cleaning staff employed per patient, and higher rates of patient infections.
• In some studies, higher levels of hospital privatisation corresponded with higher rates of avoidable deaths.
• However, in some cases (e.g. Croatia), privatisation led to some benefits for patient access, through more precise appointments and new means of care delivery, such as out-of-hours telephone calls.

 According to the researchers, the results challenge the theory that privatisation can improve the quality of healthcare through increased market competition, and by enabling a more flexible and patient-centred approach.

Further research is now needed into the effects of privatisation on other aspects of healthcare, including community, primary, and ambulance services.

Co-author Professor Aaron Reeves, from the Department of Social Policy and Intervention at the University of Oxford, said: ‘Health-care systems are under pressure from ageing populations, constrained budgets, and the reverberations of the COVID-19 pandemic and governments might look to privatisation as a single, simple solution to pressures. There is a risk, however, that seeking short-term reductions can come at the expense of long-term outcomes, since outsourcing services to the private sector does not seem to deliver both better care and cheaper care.’

The study ‘The effect of health-care privatisation on the quality of care’ will be published in The Lancet Public Health.

*The countries included in the analysis were Canada, Croatia, England, Germany, Italy, South Korea, Sweden, and the USA.