Private medical practice done properly: how good contract terms protect independent doctors

Many consultants in the private healthcare sector work within a coordinated model of care, where a patient receives a package of services that may include:

• clinical advice and treatment
• hospital facilities and nursing care
• other clinicians, such as an anaesthetist if the care involves surgery

This model usually works well for patients but it creates significant legal risks for the consultant if the arrangements are not carefully structured and documented.

The key risk: patients see a single service

Patients rarely distinguish between different providers involved in their care, particularly if offered under a ‘brand name’ healthcare provider. If the care is presented as a single package, the patient may assume that “the doctor is responsible for everything” even if the reality is that the doctor is an independent practitioner with little influence over the organisation they are working within.

If something goes wrong, such as an issue with hospital care or anaesthesia, or a billing dispute, the patient may try to bring a claim against the doctor who, from their perspective, is the face of the service. Well-drafted terms are critical in ensuring each provider’s role is clearly explained and the patient understands who is accountable for each element.

Options for structuring the service

There are several ways these private healthcare services are structured:

• Fully separate contracts – a self-paying patient has separate contracts with the doctor and the hospital, and pays each party individually. This often involves the patient taking more of the responsibility for organising their care, although the doctor and the hospital will still have to take charge of various aspects.
• Coordinated by doctor model – a self-paying patient approaches the consultant first. After the consultant has held consultations with the patient, if involvement of a hospital, anaesthetist etc. is needed, the consultant organises all those elements with little or no effort from the patient. The consultant collects the fees for all aspects of the care from the patient and passes on payments to the hospital and any other third parties. The consultant may also manage the patient journey.
• Coordinated by hospital model – a self-paying patient approaches the clinic or hospital first, particularly if that hospital or brand-name healthcare group is well known for providing the required procedure. The hospital arranges for the patient to see an appropriate doctor, and if the patient needs surgery then the hospital will make all the arrangements for the patient. The hospital collects fees from the patient and passes on payments to the independent doctor, anaesthetist, and any other third parties.
• Private medical insurance – if the patient’s care is funded by a private medical insurer, complexity can still arise, particularly if part of the care is not funded by the insurance and the patient has to make up the difference.

Difficulties can arise within any of these models if the various contractual documents don’t work together properly, or if any of them fail to properly explain how the various roles and responsibilities are divided up, or even if one or more of the parties don’t state any terms and conditions at all. Doctors can be particularly vulnerable if the contractual documentation does not explain what should happen if problems arise outside of the doctor’s control.

Inadequate contractual terms and protections can certainly lead to legal disputes, such as financial disputes over fees and payment. But they can also lead to patient harm, particularly if responsibility for follow-up care is not clear. This can give rise to a clinical negligence or personal injury claim.

Aligning the patient journey with contract terms and structure

It is crucial that your contract terms correctly reflect which model you are adopting. However, courts and regulators will also look at the reality of the arrangement, including how the service is marketed, who collects payment, and who the patient interacts with.

If you present the arrangement as a ‘complete treatment package’ or collect a single combined fee, the patient may reasonably believe they are buying a single service from you, regardless of what the contract says. To manage risk effectively, there must be consistency across your T&Cs, marketing materials, patient communications, and invoicing process. Achieving this means not only ensuring you have suitable contractual terms in place, but also making sure that colleagues such as medical secretaries understand exactly how they are intended to work. You can easily undermine contract terms that state that something is not your responsibility. For example, if you or your medical secretary get involved in trying to resolve an issue that is another provider’s responsibility, the scope of your duty could be inadvertently expanded.

Patients will often be required to agree to your contract terms and separately agree to hospital or clinician terms. Patients need to understand that they are entering into multiple contractual relationships, and the different roles of each provider must be clearly explained.

Managing liability, risks, and expectations

You cannot exclude liability for death or personal injury caused by negligence. You also cannot override patients’ core legal rights.

However, you can significantly reduce risk by clearly defining the scope of your services and stating that other providers are independently responsible for theirs. In practice, clear allocation of responsibility is far more effective than attempting to exclude liability.

Well-drafted terms should also manage expectations by addressing the inherent risks of medical procedures, the fact that outcomes cannot be guaranteed, and the possibility of complications. It is important to address what happens if further treatment is required and whether additional costs may arise beyond the initial quote. While such terms must always be separate to a properly documented consenting process, they can complement the process of obtaining informed consent by ensuring that the patient understands the financial implications if any complications do arise.

Some disputes arise because patients fail to disclose relevant medical information or do not follow pre- or post-operative instructions. Clear contractual terms can be very valuable in defending claims featuring patient non-compliance.

Regulatory considerations: CQC, data protection, and consumer laws

• CQC – you need to consider whether CQC registration is required and, if so, which entity needs to hold the CQC registration, who is carrying on the regulated activity, and how responsibilities are divided between providers.
• Data protection laws – coordinated care often involves sharing patient information between multiple providers. It is essential to clearly explain who will receive the data and why, ensure the correct legal basis for sharing, and allocate responsibility between providers.
• Consumer laws – patients are also ‘consumers’ for legal purposes, meaning they are entitled to a 14-day cancellation period. T&Cs must be drafted in plain English, fees must be transparent, and complaints procedures must be clear.

In most cases, the problem is what the patient was told, how the service was structured, and how the documentation aligns with reality. In any situation where responsibilities are unclear, expensive issues can arise.

If you are offering private medical services, particularly where multiple providers are involved, it is worth reviewing your legal arrangements. Getting the right structure and contract terms can significantly reduce your legal and regulatory risk.

If you have questions or concerns about the issues raised in this article, please contact Commercial Partner Lucy Pringle, Healthcare Litigation Consultant Solicitor Joanne Staphnill, or Healthcare Litigation Senior Associate Natasha Ricioppo.