NHS trusts are enmeshed in private provision - as buyers and suppliers NHS hospitals deal with private firms to buy and sell patient care and treatment services worth more than £500m, creating a marketplace for commercial healthcare companies in the English health service, an analysis by the Guardian reveals. Freedom of information requests to more than 100 NHS trusts revealed hospitals were spending millions of pounds buying beds in private hospitals, often to bring down long waiting lists. A review of these trusts' finances identified at least £300m generated in hospital income from patients who pay. Many trusts admit they seek to profit from private patients and use the money to fund public healthcare. With demand for healthcare rising and budgets constrained, many of the best-known names in the NHS are spending taxpayers' cash to buy beds from private companies. St George's NHS trust in south London last year spent £3.25m at nearby private hospitals Parkside - ultimately owned by US private equity firm Welsh, Carson, Anderson & Stowe - and Bupa's St Anthony's. "The use of the private sector facilities was to provide the trust with additional theatre and bed capacity to ensure patients receive timely treatment," said St George's in a reply to the Guardian's freedom of information request. Birmingham-based Heart of England, one of the largest NHS foundation trusts in the country, has bought more than £4m in healthcare from Spire, a private equity-owned provider, in the past three years - mostly for NHS patients in trauma and orthopaedics. BMI Healthcare, Britain's largest private hospital group, received £1m last year from East and North Hertfordshire NHS trust, which runs four hospitals. This marketisation of healthcare presents ethical issues for the NHS. The Guardian discovered that Sheffield teaching hospitals NHS foundation trust decided to spend on average £1.3m annually for the last three years at BMI's Thornbury hospital - yet at the same time the NHS hospital's medical director, Michael Richmond, had a private clinic at the Thornbury. The trust did not respond to questions. In some cases the NHS draws a veil of secrecy over the state's relationships with the private sector. Some trusts simply refused to name which companies they were spending tax pounds with for patient care, claiming that to do so would "prejudice commercial interests." Many in the health service say the NHS has been forced down this road. Managers have to deal with waiting lists and a narrowing in the range of operations provided by the state and end up falling back on private operators. This is compounded by the biggest shakeup in decades at a time when the government is attempting to cut £20bn from the NHS budget by 2015. Some hospitals are already feeling the heat of competition in the new NHS as patients are sucked away by rivals in state and private hands. This year it emerged that the private healthcare company Circle had taken 30% of the market share for hip, ankle and knee operations in the Bath area from March 2010 to June 2011. At the same time the Royal United Hospital Bath NHS trust's share fell from 71% to 41%. In its last set of accounts the trust admitted in future the hospital "is likely to have fewer beds, as services move into community settings, demand management initiatives reduce the number of patients accessing acute services, and there is more competition for less complex elective services." With the public sector in flux, the private sector remains buoyant. Ramsay, one of the biggest private healthcare firms, with 22 UK hospitals, reported in its latest accounts that "in particular, in the UK, NHS admissions were up 11.3% last financial year and now comprise more than 65% of the total Ramsay UK admissions." Ramsay's revenue from the NHS and private patients topped £360m. Experts say that NHS funding to "independent acute medical hospitals and clinics" rose to a record £1.09bn last year. It is also clear from the Guardian's work that many foundation trusts are gearing up to lure private patients from home and abroad as health budgets are squeezed - a move made possible after the coalition allowed the proportion of income hospitals can earn from paying patients to rise by 5% a year to a maximum of 49% of patient income. Six elite hospitals in London attracted £153m from private patients last year, with the Royal Marsden pulling in £51m, up £6m on the previous year and accounting for 23% of total patient income. Next most successful was the Royal Brompton with private patient revenue of £29m. The figures point to a market developing for surgery as the NHS cuts back on what it offers the public. Research by Laing & Buisson, a healthcare consultancy, showed NHS private patient revenues in 2011-12 grew by 3.5% - "the first significant increase" since the mechanism was introduced under Labour. It said that "trusts are gearing themselves up for a much larger slice of the private patient market." Guy's and St Thomas' hospital in London trumpets its new cancer centre, which will "deliver enhanced private patients' services." Clive Peedell, BMA council member and founder of the National Health Action party, which aims to contest seats against the coalition, claimed: "Both parties are to blame here. The cuts being demanded from the NHS mean that services will fail and that means patients will be forced to pay for treatments. Many see the appointment of more executives from the private sector as importing a new culture into the NHS. South Tees foundation trust appointed a finance director from the private sector to garner "more commercial financial skills and culture." In a presentation to the local council the hospital argued it needed to increase its money from private patients - at present £1.5m - because of large profit margins of 20% and "within 25 miles of [the trust's] James Cook University hospital, there are seven facilities offering private health services, in addition to other NHS hospitals." Labour says a private marketplace is becoming entrenched in the NHS thanks in large part to the coalition's NHS bill, which promotes competition, patient choice and private sector involvement in the delivery of publicly funded healthcare. Andy Burnham, the shadow health secretary, said: "This is the inevitable consequence of the new NHS the government has created, where hospitals are being told to sink or swim and are being forced to think and function like businesses. English hospitals are slowly becoming like American hospitals, putting profits before patients. This is exactly what Labour warned would happen during the passage of the Health Act earlier this year. It is why we step up our fight in the new year to protect the core ethos and values of the NHS. When given details of the Guardian's examination of the accounts, a Department of Health spokesperson defended the policy. NHS patients can benefit from the extra income that private patients bring, but this will be carefully regulated. Any private income to an NHS trust has to be reinvested back into NHS services, and NHS trusts must be able to demonstrate that this has happened. And if a foundation trust increases its private income by five percentage points or more, its governors, who represent the public, must vote to approve that increase. Data reporting by John Burn-Murdoch, Thomas Herbert, Rob Grant and Sean Anderson