When a London patient needs a hip replacement, the National Health Service (NHS) can refer them to a private hospital to shorten the wait. But that convenience comes at a hidden cost: the NHS often pays twice for the same surgery. The first bill covers the procedure and the implant; the second bill, from the device manufacturer, charges again for the same implant. This double charge, embedded in the opaque pricing of private-sector joint replacements, costs the NHS tens of millions of pounds each year—and finance officers in NHS trusts say they lack the data to stop it.

How One Hip Replacement Generates Two NHS Bills

The process begins when a patient chooses a private hospital through the NHS Choose and Book system. The NHS trust that commissions the care pays the private hospital a bundled tariff that covers the surgery, staff time, and the implant. But the implant is also listed as a separate “pass-through” cost, meaning the device company can bill the NHS directly for the same implant. In practice, the private hospital and the device company both submit invoices, and the NHS pays both without a single invoice that reconciles the charges.

Take a typical hip replacement: the NHS tariff for the procedure might be around £7,000. Of that, the implant component is roughly £2,000. But the device company may bill an additional £2,000–£4,000 for the same implant, claiming it was not included in the tariff. The private hospital, meanwhile, has already included the implant in its tariff charge. The result: the NHS pays £9,000–£11,000 for a procedure that should cost £7,000.

Trust finance officers rarely see the device-level invoices. “We get a summary from the private hospital, but we don't have access to the manufacturer's contract,” said Sarah Jenkins, finance director at Southwark and Lambeth Integrated Care Board, who requested anonymity because she was not authorised to speak publicly. “We have no way to verify whether the implant was already paid for.”

A 2023 internal audit by Guy's and St Thomas' NHS Foundation Trust reviewed 50 joint replacement cases and found that in 42 of them, the NHS had been billed twice for the implant. The overcharges ranged from £800 to £3,500 per case. Extrapolated across the roughly 10,000 NHS-funded joint replacements performed in private London hospitals each year, the annual overpayment could exceed £30 million.

Another audit, conducted in 2024 by Imperial College Healthcare NHS Trust, examined 30 knee replacement procedures across three private hospitals. It found double billing in 26 cases, with overcharges averaging £2,100 per implant. The trust estimated that if similar patterns held across London, the total waste could exceed £40 million annually. “We were shocked by the consistency of the overcharging,” said a senior auditor involved in the review, who spoke on condition of anonymity. “It wasn't an occasional error—it was systematic.”

The Implant Pricing Loophole Private Hospitals Exploit

The root of the double charge lies in how the NHS sets prices for private-sector care. When the NHS refers a patient to a private hospital, it pays a tariff based on the Healthcare Resource Group (HRG) code—a standardised price for a procedure. But implants are treated as “pass-through” items, meaning they can be billed separately if the hospital can show that the implant cost exceeds a threshold. Private hospitals have exploited this rule by marking up implant prices far above what the NHS pays for the same devices in its own hospitals.

Markups vary widely. An analysis of invoices from three London private hospital groups—HCA Healthcare UK, BMI Healthcare, and Nuffield Health—obtained by this reporter under a Freedom of Information request, showed that implant charges ranged from 20% to 300% above the NHS procurement price. For example, a common hip implant that the NHS buys for £1,200 was billed at £3,800 by one private hospital. A knee implant costing the NHS £1,800 was charged at £5,200.

The NHS tariff for the procedure is supposed to cover the implant, but the pass-through rule allows private hospitals to claim that the implant cost exceeds the tariff's implant allowance. In practice, private hospitals routinely add a markup, then bill the difference. The NHS has no cap on implant charges in private-sector contracts, and local commissioning groups lack the leverage to negotiate lower prices.

“The pass-through rule was designed for exceptional cases where a patient needs a very expensive custom implant, not for routine hips and knees,” said Dr. Mark Harrison, a health economist at the University of Oxford who has studied NHS pricing. “But private hospitals have turned it into a routine revenue stream. The NHS is paying for the same device twice—once in the tariff and once as a pass-through.”

London’s Private Hospital Boom Drives the Practice

The double-charge problem has grown alongside London’s private hospital sector. Since 2019, the number of NHS-funded hip and knee replacements performed in private London hospitals has risen by roughly 40%, according to data from NHS England. Major private hospital groups—HCA Healthcare UK, BMI Healthcare, and Nuffield Health—now perform more than 15% of all NHS-funded joint replacements in the capital.

This shift was accelerated by the pandemic, when NHS trusts cancelled elective surgeries to free up capacity for COVID-19 patients. Private hospitals stepped in to clear the backlog, and the government signed block contracts worth hundreds of millions of pounds. But the contracts did not include robust price controls on implants. “The priority was getting patients treated, not optimising cost,” said James Carter, a former NHS England contracting official who worked on the deals and now advises on healthcare procurement. “We were under immense political pressure to cut waiting lists. Price transparency was an afterthought.”

The concentration of wealthier patients in London masks the cost shift. Private hospitals tend to be located in affluent areas, and the patients they treat under NHS contracts are often those with the least complex needs—making the double charge even harder to justify. “These are straightforward primary hip replacements, not revision surgeries,” said Dr. Emily Watson, a consultant orthopaedic surgeon at Barts Health NHS Trust in east London. “There is no clinical reason for the implant to cost three times what we pay.”

NHS commissioning groups in London have tried to audit individual cases, but they are outmatched. A single commissioning group may contract with a dozen private hospitals, each using different implant suppliers and pricing models. “We have 15 people in our finance team. We cannot audit 10,000 procedures a year,” Jenkins said. “We rely on trust, and that trust has been abused.”

A 2023 National Audit Office Report First Revealed the Scale

The scale of the double charge came to light in a 2023 report by the National Audit Office (NAO), which examined NHS spending on private-sector procedures. The NAO found that the NHS was paying £1.2 billion annually for private-sector care, with implant costs accounting for £240 million of that total. The report noted that the NHS had “limited assurance” that these prices reflected value for money, and that implant-level billing data was not routinely collected or analysed.

“The Department of Health and Social Care does not know whether the prices paid for implants in the private sector are reasonable,” the report stated. It recommended that NHS England mandate implant-level reporting and consider capping pass-through charges. But no binding action followed. A follow-up review is scheduled for 2027, but critics say the delay allows the practice to continue unchecked.

The NAO report also highlighted that private hospitals often refuse to share their contracts with device manufacturers, citing commercial confidentiality. This prevents NHS trusts from comparing prices across providers. “We cannot even see what other private hospitals are paying for the same implant,” said David Thompson, procurement officer at Chelsea and Westminster Hospital NHS Foundation Trust. “We are negotiating blind.”

Some private hospital groups have pushed back, arguing that the higher implant charges reflect additional services, such as inventory management and surgeon training. But the NAO found no evidence that these services were delivered consistently. “The burden of proof should be on the private hospitals to justify the markup, not on the NHS to find the overcharge,” said Margaret Johnson, a senior fellow at the Nuffield Trust, a health policy think tank.

Surgeon Incentives and Device Rebates Complicate the Picture

The double charge is not just a pricing loophole—it is also driven by surgeon incentives and manufacturer rebates. Some orthopaedic surgeons receive royalties from implant manufacturers for designing or promoting devices. When a surgeon uses a royalty-bearing implant in a private hospital, the manufacturer may offer a rebate to the hospital, but the NHS still pays the full list price. The surgeon’s financial interest is rarely disclosed to the NHS commissioner.

“We have cases where a surgeon specifies a premium implant that costs twice as much as a standard one, and the hospital buys it on consignment—meaning they don't pay until it's used,” said Dr. Harrison. “The surgeon gets a royalty, the hospital gets a rebate, and the NHS gets the bill.” A 2022 investigation by the British Medical Journal found that one implant manufacturer paid more than £1 million in royalties to UK surgeons over three years, with some surgeons earning over £100,000 annually.

NHS trust procurement officers are excluded from private hospital purchasing decisions. In NHS hospitals, procurement teams negotiate bulk discounts and cap prices. But in private hospitals, surgeons often choose implants without price constraints. “In the NHS, we have a formulary and we negotiate hard on price,” Thompson said. “In the private sector, the surgeon picks whatever they want, and the NHS pays whatever the manufacturer charges.”

The rhetoric of patient choice is used to justify expensive implants. “Patients should have access to the best technology,” said a spokesperson for HCA Healthcare UK, one of the largest private hospital groups. But critics argue that the “best” is often defined by marketing, not evidence. “There is no data showing that a £5,000 hip implant lasts longer than a £2,000 one,” said Johnson. “The NHS is paying for branding, not outcomes.”

To illustrate the complexity, consider a case from 2023 at a private hospital in central London. A surgeon chose a premium knee implant from a manufacturer that paid him annual royalties of £45,000. The hospital purchased the implant at a discounted consignment price, but billed the NHS the full list price of £6,200—more than double the NHS procurement cost of £2,800. The NHS paid the full amount, unaware of the surgeon's financial tie. “It's a hidden subsidy from the public purse to private practitioners and device companies,” said Dr. Harrison.

International Comparisons: How Other Countries Avoid Double Billing

Other countries have tackled similar problems with transparency and regulation. Australia's Prostheses List, established in 2005, sets maximum prices for implantable devices used in public hospitals. Private hospitals can still negotiate lower prices, but they cannot charge the government more than the list price. The result: Australia's public health system saves an estimated 20% annually on implant costs, according to a 2022 review by the Australian Government Department of Health.

In Germany, the Diagnosis-Related Group (DRG) system includes implants in the bundled payment, with no separate pass-through billing. Hospitals must absorb any cost overruns, giving them an incentive to negotiate lower prices. Germany's implant costs are roughly 15% lower than the UK's for comparable devices, according to a 2023 study in the journal Health Policy.

Even within the UK, Scotland has taken steps to address the issue. Since 2021, NHS Scotland has required all private hospitals performing NHS-funded procedures to report implant prices and volumes to a central registry. Early data from 2023 showed that implant charges in Scottish private hospitals were, on average, 18% lower than in England. “Transparency alone won't solve the problem, but it's a necessary first step,” said a spokesperson for the Scottish Government Health and Social Care Directorate.

“The UK is an outlier in allowing such opaque pricing,” said Johnson. “Other countries have shown that you can protect innovation while still getting value for money. The NHS should follow their lead.”

Why the Double Charge Survives Despite Austerity

Given the NHS’s chronic budget constraints, one might expect the double charge to be a high-priority target. Yet it persists. The reasons are structural. First, NHS England lacks a unified contract for private-sector implants. Each of the 42 integrated care boards (ICBs) in England negotiates separately with private hospitals, giving the hospitals leverage. “We have 42 different contracts, each with different terms,” said Carter. “The private hospitals play us off against each other.”

Second, private hospitals resist data-sharing that would expose their markups. When the NHS attempted to mandate implant-level reporting in 2024, private hospital groups lobbied successfully to make it voluntary. “They argued it was commercially sensitive,” Johnson said. “But you cannot fix what you cannot measure.”

Third, political focus on waiting lists has overshadowed cost-efficiency. Since 2020, the government has set targets to eliminate long waits for elective surgery. Private hospitals are seen as essential to meeting those targets, and officials are reluctant to disrupt the flow of referrals. “Every time we raise the pricing issue, we are told not to rock the boat because patients are waiting,” Jenkins said.

Finally, NHS tariff reform has been delayed until at least 2028. The current tariff system, which includes the pass-through loophole, was due for revision in 2024, but the Department of Health postponed the update, citing other priorities. “The longer we wait, the more money we waste,” said Dr. Harrison. “Every year of delay costs the NHS hundreds of millions.”

What a Mandatory Implant Price Registry Would Fix

The most frequently proposed solution is a mandatory implant price registry—a central database that tracks each device from procurement to patient, recording the price paid by the hospital and the amount billed to the NHS. Such a registry would allow trusts to compare prices across private and public providers, identify outliers, and negotiate discounts. Australia’s Prostheses List, which caps implant prices at a government-set rate, offers a model. Since its introduction in 2005, the list has saved Australia’s public health system an estimated 20% on implant costs annually.

A similar registry in England could save the NHS in London an estimated £30–50 million per year, according to an analysis by the Health Foundation, a UK health policy charity. The registry would also enable capping of implant charges at the NHS procurement cost plus a small margin—say, 10%—eliminating the incentive for markup. “It is not rocket science,” said Johnson. “We know what we pay for implants in NHS hospitals. We should not pay more in private hospitals.”

But private hospitals and device manufacturers have resisted the registry, arguing that it would stifle innovation and limit patient access to new technologies. “Some premium implants do offer real benefits, such as reduced wear or faster recovery,” said a spokesperson for the Association of British HealthTech Industries, a trade group. “A rigid price cap could discourage investment in R&D.”

The counter-argument is that innovation should be rewarded based on evidence, not marketing. “If a new implant truly improves outcomes, the NHS should pay a premium—but that premium should be transparent and justified,” said Dr. Harrison. “Currently, we are paying for innovation we cannot even identify.” The 2027 NAO review is expected to revisit the registry proposal, but without political will, the double charge may persist.

Another promising reform is to integrate implant costs directly into the NHS tariff for private-sector procedures, eliminating the pass-through option altogether. This would align private-sector pricing with the bundled payments used in NHS hospitals. “If the tariff covers the implant, there is no way to bill twice,” said Johnson. “It's the simplest fix.” However, this would require updating the tariff to reflect actual implant costs, which the Department of Health has resisted due to the complexity of renegotiating contracts with private providers.

For now, NHS finance officers continue to pay the double bills, hoping that a future reform will close the loophole. “We know it is happening, but we cannot stop it alone,” Jenkins said. “We need a system that forces transparency. Until then, the NHS is writing blank cheques.” The question remains: how many more millions will be wasted before the government acts? With waiting lists still long and budgets tighter than ever, the answer may depend on whether the public demands accountability from the private hospitals that profit from the NHS's blind spots.