The new NHS tariffs which have set fixed prices for almost 30 surgical procedures have been announced. It would seem that private sector costs for common operations are some 40 % higher. The Times reported a hip replacement costing on average £4,660 in the NHS but £6,848 privately. Leading hospital providers have challenged the discrepancies because the NHS tariff does not include VAT on drugs and prostheses, pensions and centrally funded capital and other development programmes. The fact that consultants are salaried in the NHS and working to a fee for service in the private sector will also affect costs. Many operations in the NHS are also performed by non consultant grades.

The NHS tariffs will gradually provide a method for comparing costs across this whole healthcare sector, whether or not they will impact on NHS work contracted to the private sector remains debatable. Much would depend on the spot contract rates and whether or not the NHS believes that it can secure good value for money.

The mixed economy of healthcare means that consultants will have to consider carefully reimbursement rates for various procedures.