Select Committee on Health Appendices to the Minutes of Evidence


APPENDIX 12

Memorandum submitted by PPP Healthcare (PM 29)

EXECUTIVE SUMMARY

  In view of the close practical integration between private and public healthcare services, PPP healthcare believes that it would be beneficial to patients for the two sectors to be governed by equivalent statutory regulatory mechanisms. [paragraph 4.4]

  The regulatory environment should be framed to ensure minimum standards across the private healthcare sector for the protection of the public. [paragraph 5.2]

  The registration requirement placed upon private hospitals should be separated from the existing statutory requirements aimed at nursing home facilities contained in the Registered Homes Act 1984. [paragraph 7.1.4]

  PPP healthcare would like to see new legislation to establish a core set of standards and requirements for private hospitals, which would be applied consistently in all inspections across the country. [paragraph 7.1.5]

  The OFT should re-examine the use of price guidelines by insurance companies as such guidance serves to limit open price competition among specialists. [paragraph 7.3.1]

  PPP healthcare recommends that wherever possible patients should be given full information before their treatment commences, about the professional fees that will be incurred. [paragraph 7.3.4]

  Private medical services should conform to the clinical guidance issued by the National Institute for Clinical Excellence and, further, due consideration should be given to coverage by the Commission for Health Improvement. [paragraph 7.4.3(i)]

  Chief executives and directors of private hospitals should have a duty to implement clinical governance policies in line with those proposed for NHS trusts. [paragraph 7.4.3(ii)]

  Regulation should require formal, local complaints procedures. [paragraph 7.4.3(iii)]

  A new national complaints procedure—perhaps in the form of an Independent Health Ombudsman—for the private and independent sectors, should be established. [paragraph 7.4.3(iv)]

1.  INTRODUCTION

  PPP healthcare believes it is well placed to comment on the current operation of private healthcare in the UK. We are keen to ensure that all patients receive the best possible care. We hope that the select committee will give careful consideration to our recommendations, which are intended to serve as a constructive contribution to the debate.

2.  PPP HEALTHCARE

  PPP healthcare dates from 1940 when it was known as the London Association for Hospital Services. In its infancy, the company was actively supported by the medical royal colleges, the British Medical Association and the King's Fund. Today PPP healthcare forms the healthcare arm of the Sun Life and Provincial Holding PLC and serves over 2.6 million people. PPP healthcare's business activities include:

    —  Medical insurance for individuals and companies in the UK and abroad.

    —  Occupational health services (Medical and Industrial Services).

    —  Expert health information services (Access 24 UK).

    —  Dental care services (Denplan).

    —  Long-term care insurance (PPP lifetime care).

    —  Hospital services (PPP/Columbia healthcare owns and operates the Harley Street Clinic, the Portland Hospital for Women and Children, the Princess Grace Hospital and the Wellington Hospital).

3.  PRIVATE HEALTHCARE INDUSTRY

  3.1  The private healthcare industry includes pharmaceutical and medical appliance companies, hospitals (including NHS private facilities and independent hospitals), retailers and healthcare financial services companies such as PPP healthcare.

  3.2  People from all social groups buy health related financial products such as medical insurance, health cash plans and other health products and more than a third of the adult population now owns a healthcare finance product compared with only a quarter in 1995. Over twelve million people are covered by insurers, friendly societies and cash plan providers. Medical insurance covers almost seven million people—- approaching 12 per cent of the population by the end of 1997.

  3.3  Increasingly, businesses are using the healthcare industry's services—from employee healthcare schemes, such as stress counselling, to medical insurance—to safeguard the well-being of their employees and reduce the numbers of days lost through illness.

4.  PRIVATE PRACTICE

  4.1  The private sector no longer focuses on minor conditions and procedures. A substantial amount of highly complex care is carried out in the private sector and, in the interests of the millions of people who use these services, private practice should be regulated to ensure that it meets the highest standards of safety and competence. For example, coronary artery bypass graft, angioplasty (widening of coronary arteries), hip replacement and knee replacement are four of the 10 procedures for which PPP healthcare paid the most benefit in 1997. Treatments for cancer now account for 15 per cent of our claims costs. This is in contrast to the types of treatment which predominated ten years ago: varicose veins, wisdom teeth removal, hernia repairs and hysterectomies.

  4.2  When framing policy, government often seems to view the private sector in isolation from the NHS. This is inappropriate since the great majority of specialists who work in private sector undertake both NHS and private work. Indeed, even GPs actually work for the NHS primarily on a capitation fee basis and not through salaried appointments. Private practice among GPs is also on the increase. Furthermore, the great majority of patients treated in private practice also receive some elements of care in the NHS.

  4.3  NHS purchasing bodies also contract some health services from the private sector, for example, pathology services, and NHS trusts provide healthcare services to the private sector through their private facilities (NHS pay beds now account for about 20 per cent of the private acute care hospital beds in the UK).

  4.4  In view of the close practical integration between private and public healthcare services, PPP healthcare believes that it would be beneficial to patients for the two sectors to be governed by equivalent statutory regulatory mechanisms.

5.  REGULATION

  5.1  The purpose of regulation should be to ensure that the public is provided with a service:

    —  that is given by professional clinicians who are appropriately trained and registered to provide the care they are offering;

    —  that is provided by hospitals or other organisations which meet all statutory safety standards and which have operational systems in place to ensure that clinical care is offered in accordance with professional standards and guidance; and

    —  for which there is an opportunity to seek explanation and redress for any failures in the provision of their care by hospitals and/or specialists.

  5.2  The regulatory environment should be framed to ensure minimum standards across the private healthcare sector for the protection of the public. This function should be distinguished from that of purchasing organisations such as PPP healthcare, which seek to ensure that consumers receive the highest possible quality service from healthcare providers.

6.  PPP HEALTHCARE'S STRATEGY FOR ACHIEVING QUALITY

  PPP healthcare's preferred provider network strategy involves us in establishing comprehensive contracts with selected hospitals across the country. The establishment of our preferred provider network is designed to address three key issues:

    —  the lack of monitoring of the quality of care delivered;

    —  the increasing complexity of work undertaken in the private sector; and

    —  the over-provision of private facilities.

  The PPP healthcare preferred provider approval process includes detailed assessment of the quality of service and care at a hospital, including arrangements for clinical governance and regular monitoring and review of the standards achieved. (See Appendix 1 for a summary of the PPP healthcare criteria for assessing the quality of private hospitals, including NHS facilities).[8]

7.  STRENGTHENING THE REGULATORY REGIME

  We wish to highlight the following areas as central to improving regulation of the private sector:

7.1  Registration of private hospitals

  7.1.1  The only existing statutory inspection requirement is that all private hospitals must be registered with their local health authority under the terms of the Registered Homes Act 1984. The Act primarily covers the registration and inspection of care homes and nursing homes.

  7.1.2  We understand that this legislation will be comprehensively revised when the plans contained in Modernising Social Services (Cm 4169), the social services white paper issued at the end of 1998, are implemented. The White Paper proposes the creation of eight regional Commissions for Care Standards for England. It is unclear from the white paper how, if at all, private hospitals will continue to be subject to registration when the new commissions take effect.

  7.1.3  The current system lends itself to inconsistent standards and methods. In some areas private hospitals are inappropriately viewed as a subset of nursing homes.

  7.1.4  PPP healthcare recommends that the registration requirement placed upon private hospitals should be separated from the existing statutory requirements aimed at nursing home facilities contained in the 1984 Act. The reforms to the registration and inspection regime for nursing and care homes presents an opportunity to review the extent and adequacy of the current inspection for private hospital facilities.

  7.1.5  PPP healthcare would like to see new legislation to establish a core set of standards and requirements for private hospitals, which would be applied consistently in all inspections across the country.

7.2  Information sharing

  PPP healthcare agrees with the recommendation contained in Sir Donald Acheson's recent report, Independent Inquiry into Inequalities in Health (The Stationery Office 1998), that those providing private healthcare "should be required to give the same routine information on activity and quality of services as in the NHS." This would include inter alia:

    —  notification of cancer cases and treatments to the appropriate cancer registry; and

    —  contribution to national audit programmes such as the National Confidential Enquiry into Perioperative Death.

7.3  Regulation of specialist' charging practices

  7.3.1  The Office of Fair Trading should re-examine the use of price guidelines by insurance companies as such guidance serves to limit open price competition among specialists.

  7.3.2  PPP healthcare believes that, in the majority of instances, specialists' charges reasonably reflect the work and expertise that is required in providing their clinical services. Nevertheless, there are some aspects of the way in which specialists make their charges which may be construed as anti-competitive, which fail to provide patients with the information they need to act as genuine consumers and which fail to comply with the spirit of the Supply of Goods and Services Act 1982.

  7.3.3  In the majority of cases, patients are not given prior knowledge of the charges to be made for professional services and do not have the opportunity to discuss these or to seek an alternative provider of the services. At PPP healthcare, we have observed a disturbing new trend in which specialist charge incrementally for elements of care which are an integral part of the clinical service. These elements should be included in the charge for that service—for example, extra charges by anaesthetists for an anaesthetic assessment or for local nerve blocks to provide postoperative pain relief, and extra charges by surgeons for each postoperative review appointment.

  7.3.4  PPP healthcare recommends that wherever possible patients should be given full information before their treatment commences, about the professional fees that will be incurred. This should be provided in a simple format which ensures that all costs for a particular treatment or course of treatment are included. The information should be readily available when the patient is deciding with their general practitioner which specialist they wish to see.

  7.3.5  Professional fees may also be charged separately by specialists in disciplines such as anesthesia and radiology in which the patient has no advance knowledge of or choice in the specialist providing the service. In such circumstances, information about these fees should be made available with information about charges for the hospital service. The responsibility for this should be with the hospital or unit at which the investigation or procedure will be carried out.

7.4  Accountability of specialists

  7.4.1  The regulation of specialists is complicated by the fact that they contract directly with their patients. This means that each individual specialist is accountable for their own private practice.

  7.4.2  Specialists take admitting rights at private hospitals to provide appropriate support services and equipment to enable them to treat their patients. However, clinical services which require no facilities other than those provided by the specialist themselves (such as out-patient consultations and minor procedures in an out-patient setting) are provided independently by the specialist.

  In general, neither specialists nor hospital managers see the hospital as being responsible for specialists' clinical practice. Hospital managers will become involved in rare circumstances in which it is felt that the hospital itself is being brought into disrepute but are reluctant to do so otherwise. Because of this, patients who wish to complain about or question the care they have received from a particular specialist have no recourse to an independent third party or organisational hierarchy to pursue their complaint.

  Most private hospitals have a medical advisory committee which controls or advises the hospital manager on the granting of admitting rights. In many private hospitals these committees also take responsibility for ensuring that systems of clinical audit are in place and that the practice of specialists in the hospital conforms with relevant professional standards such as those set by the medical royal colleges and other professional bodies.

  7.4.3  PPP healthcare believes that it is essential that specialists practice in a way which conforms to the highest professional standards and that all specialists work only within their current sphere of experience and expertise.

  Although PPP healthcare's existing purchasing policies are designed to ensure these objectives are met, there is an urgent need to ensure that a strong regulatory framework is established to ensure these principles are applied in private practice. To address these issues, PPP healthcare recommends that:

    (i)    private medical services should conform to the clinical guidance issued by the National Institute for Clinical Excellence and, further, due consideration should be given to coverage by the Commission for Health Improvement;

    (ii)  chief executives and directors of private hospitals should have a duty to implement clinical governance policies in line with those proposed for NHS trusts. This should incorporate the requirements for implementation of systems of clinical governance;

    (iii)  regulation should require formal, local complaints procedures. There should be minimum requirements for the local complaints mechanisms. These procedures should be mandated to deal with all complaints, including those regarding individual specialists' clinical practice;

    (iv)  a new national complaints procedure—perhaps in the form of an Independent Health Ombudsman—for the private and independent sectors, should be established.

January 1999


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