From BAMS to Medical Services
14. The Department's memorandum explains that "the
existence of a medical advisory service within the DSS dates back
many years. Originally part of DSS Headquarters, full time doctors
became part of the Benefits Agency, as BAMS [Benefits Agency Medical
Services], when the Agency was formed in 1991. The medical advisory
service had always been largely composed of part time doctors,
with a small core of full time medical civil servants."[9]
15. In the early 1990s, BAMS was considered as part
of the Government's "Competing for Quality" agenda
for the introduction of private sector participation in the delivery
of its services. Following a study of options (including that
of a management/employee buyout), it was concluded that "contracting
out Medical Services to the private sector was the most likely
to deliver the improvements sought and ministerial approval was
obtained for this course of action."[10]
A project team (IMPACT) was set up to undertake a procurement
exercise, and it was decided that BAMS would be divided into three
contract packages (North, South East, South West) in order to
encourage competition in terms of bids. Five companies (Andersen
Consulting, BMI Healthcare, CAPITA, EDS and Sema Group) were shortlisted
and invited to enter negotiations.
16. A full evaluation was made of the bids, but the
procurement process ceased at the time of the General Election
in order to allow the incoming Government to decide whether to
continue. The Department's memorandum states that:
"The current Government
set the following criteria against which they reviewed this and
other initiatives involving the use of the public sector:
- Their objectives for modernising the Social Security
System
- Their commitment to work within the announced
spending totals for the first two years of government
- Their aim of getting the best value for public
money and of reducing the burden on taxpayers
- The scope to apply private sector expertise,
discipline and economies of scale in procuring public services
and the ability to secure increased investment from the private
sector
- The need for continuing flexibility for government
to make future changes to the service
- The opportunities for improving the quality of
service for customers, and
- The implications for staff.
... On 31 July 1997 Ministers
announced that the outsourcing of BAMS should go ahead".[11]
17. Following the issue of the Invitations to Tender
and an evaluation of the bids, all three medical services contracts
were awarded to Sema Group in February 1998, for a period of five
years, with potential to extend the contract by another two years.
The Department's memorandum states that "the decision to
award the business to a single supplier, Sema Group, was based
on Best Value for Money Principles....[which] address not just
the financial aspects but takes into account a range of quality
and service aspects..... Sema Group achieved the highest scores
under both the qualitative and financial evaluations and for each
of the proposed contract terms."[12]
The memorandum also states that "the value of the three contracts
is £305 million and represented savings of £62 million
(14 per cent) against the Public Sector Comparator over the lifetime
of the contract".[13]
Sema took over the responsibility for running Medical Services
in September 1998.
18. Sema Group did not have experience of running
a medical operation prior to winning the medical services contract.
The BMA stated that "our experience since the contract was
let is that the successful bidder did not understand [the] complexities
from the outset, having had no experience of employing doctors,
and saw the process as strictly technological and administrative....
It is clear that Sema also has difficulty communicating with the
medical profession. When the five chosen bidders for the "contractorisation"
of BAMS were announced, the BMA invited all five to discuss the
problems with the existing system. Three of the five bidders came
to see the BMA and were fully appraised of the problems that they
would be inheriting. Of the two that did not come to see us, one
was the successful contractor, Sema Group."[14]
19. The Department's memorandum states that "evaluation
of [Sema's] bid demonstrated that, despite their lack of experience
in managing a medical service, they had extensive experience of
managing contracted services and an acknowledged reputation in
the delivery of IT systems and of handling large Civil Service....
transfers successfully..... Sema Group engaged two companies as
sub-contractors, one of which was Nestor Healthcare Group plc
and its subsidiary Nestor Disability Analysts (NDA), who have
extensive experience of supplying nurses and doctors to fill posts
across the country."[15]
20. We do not believe, in principle, that the award
of the contract to a company without experience in the delivery
of medical services was necessarily mistaken, especially given
the involvement of experienced sub-contractors. However, we are
concerned that the BMA consider that Sema Group were unaware of
the complexities of running such a service. It seems an unusual
and inauspicious decision on behalf of Sema Group not to take
up the BMA's offer of discussions about the service, as did three
of the four other competing contractors. We discuss the performance
of Medical Services so far since contractorisation at Section
X below.
Delivery of the service
21. Approximately one million examinations are conducted
by Medical Services annually. As well as those conducted at claimants'
homes, examinations are conducted at approximately 180 Examination
Centres. The service is administered from 12 Medical Service Centres.
Medical Services employs 1113 staff, including 216 employed doctors.
However, the majority of doctors working as EMPs—2968—are
contracted to Nestor and provide their services on a sessional
basis as required.[16]
Of these doctors, 3 per cent are aged 25-34, 19 per cent are aged
35-44, 32 per cent are aged 45-54, 27 per cent are aged 55-64
and 19 per cent are aged over 65.
22. Sessions are defined as a notional period of
three hours and thirty minutes. In November 1999, EMPs saw an
average of 4.4 IB claimants per session, which, as we shall discuss
at paragraph 129 below, had increased from an average of 3.8 in
September 1998.[17]
In the period September 1998-November 1999 the average number
of sessions carried out per doctor each month ranged between 8.1
and 13.4.[18]
3 Ev. p. 51, para 1.1. Back
4
Ev. p. 51, para 1.2. Back
5
Other benefits supported include Severe Disablement Allowance
and Industrial Injuries Scheme Benefit (Ev. p. 93, para 2). Back
6
Ev. p. 51, para 1.4. Back
7
Ev. p. 102, para 6.4 Back
8
Ev. p. 102, para 6.6. Back
9
Ev. p. 51, para 1.6. Back
10
Ev. p. 52, para 1.9. Back
11
Ev. p. 52, paras 1.14-1.15. Back
12
Ev. p. 53, paras 1.18-1.19. Back
13
Ev. p. 53, para 1.26. Back
14
Ev p. 35. Back
15
Ev p. 53, paras 1.19 and 1.21. Back
16
Ev. p. 92. Back
17
Ev. pp. 100-101, para 6.1. Back
18
Ev. p. 101, para 6.3. Back
