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
8 Not printed. Back
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