A report published by the Nuffield Trust and the Institute for Fiscal Studies (IFS) found that Labour choice reforms in 2006 and 2008 increased GP referrals to Independent Sector Treatment Centres (ISTCs) - privately owned centres that treat NHS funded patients.
Researchers found that the introduction of choice and competition under the Blair government meant that GPs were more likely to refer to privately owned outpatient clinics than they had been previously.
The total number of NHS providers remained roughly the same from 2006/07 to 2010/11, but the number of private providers rose from eight to 19. By 2010/11 GPs were referring to a wider number of secondary care providers. In 2006/7 GP practices referred to 12 providers on average but by 2010/11 this had increased to 18.
By analysing GP referral patterns the researchers found that overall the expansion of ISTCs accounted for half of the change in the number of providers referred to by GPs.
The reported concluded that changes in referrals ‘are consistent both with patients choosing to relocate to ISTCs, and with ISTCs having created capacity that was then filled by GPs or PCTs'.
IFS research economist and co-author of the report Elaine Kelly said: ‘The use of private providers to treat NHS patients is no longer a marginal policy reform and deserves greater investigation.
‘There has been a significant shift in market shares over the past five years from patients’ nearest NHS hospitals to private providers. For some procedures, almost one-in-five NHS-funded operations are now carried out by the private sector.
‘However, despite these relative shifts, increases in the number of NHS-funded treatments over the last five years have been so substantial that the total number of patients treated at NHS hospitals has not declined.’