Memorandum by General Healthcare Group
(PS9)
1. SUMMARY
The needs of patients should be the core of
any review of public private partnership in the NHS. General Healthcare
Group believes that increased partnership need not compromise
the fundamental principle upon which the NHS was built, that health
care should be available to all and free at the point of use.
A public sector monopoly over provision is not a precondition
for a strong and sustainable National Health Service.
The starting point for GHG is that future healthcare
needs could be met more effectively by further developing a regulated,
mixed economy in NHS provision. This is less radical than it sounds.
What critics of this perspective fail to acknowledge is that we
already have a mixed economy in health. Successful partnerships
have already been developed between the private sector and the
NHS in a number of important areas. Indeed the Health Committee
was itself broadly supportive of the private sector operating
as it does in mental health, under strict regulations and monitored
by Health Authorities. However, more benefits for patients could
be delivered by using private sector capacity to help alleviate
pressure on the NHS if it were undertaken on a more systematic
basis. Current arrangements are short term and characterised by
tight timescales and generally very short lead-in periods.
To help improve the present position, GHG recommends
that:
— at all levels of the NHS a concerted
effort at examining the scope for developing long term partnerships
should be made (page 6 of this memorandum);
— there should be an increased exchange
of data between public and private sectors on NHS patient
surveys to enhance the delivery of patient-focused approaches
through the Concordat (page 7);
— work be done to refine and enhance
mechanisms to enable effective price comparisons (page
7);
— work on a standard contract
be prioritised by the Department of Health and that it should
be updated and amended as required in the light of its experience,
and then made freely available as a model form for use (page 8);
— consideration be given to the
establishment by the Department of Health of acceptable price
scales or ranges for the undertaking by the independent sector
of concordat work (page 8);
— the scope for private sector facilities
to contribute to NHS capacity should be carefully considered before
the scarce resources available to the NHS are devoted to new Diagnostic
and Treatment facilities (page 9);
— the location of these Centres
is linked to areas with waiting list problems (page 9);
— serious consideration needs to be
given to speeding up the lead time on these new facilities,
including alternative funding outside the PFI (page 9);
In the right circumstances, GHG would be
prepared to build and operate a Centre at its own expense for
use by the NHS. This would involve:
— GHG capital not Government funds—circa
£30 million;
— a quick delivery time—two
years;
— no up-front NHS contracts—at
our own risk;
— locating the Centre in an area
with severe waiting list problems.
GGH does not see a role for itself in capital-only
partnerships such as PFI. The process is cumbersome, expensive
and currently does not recognise the ability of General Healthcare
Group to deliver high quality clinical provision.
In conclusion, GHG notes that in the field of
psychiatric care (inter alia) private provision has been an unremarkable
reality for many years and that this partnership with the NHS
is recognised in many quarters (including the present Health Committee)
to be productive and worthy of strengthening. If the patients'
perspective is paramount, they could be forgiven for wondering
why the provision of acute healthcare should be regarded differently:
if schizophrenia is treated in a setting of mixed provision, why
not heart disease? The reality is that when asked the question
the patient is predictably pragmatic about the locus of treatment.
Government policy should follow the lead given by patient opinion.
2. OVERVIEW
The needs of patients should be the core of
any review of public private partnership in the NHS. General Healthcare
Group (GHG) believes that increased partnership need not compromise
the fundamental principle upon which the NHS was built. That is,
healthcare should be available to all and free at the point of
use. Acknowledging the primacy of this principle does not prevent
recognition that the delivery systems used by the NHS can, and
should, evolve to deliver this core objective. A public sector
monopoly over provision is not a precondition for a strong and
sustainable National Health Service.
The NHS is experiencing unprecedented demands
for its services. This is reflected in long waiting lists and
evidence of care inequalities across the UK. The need to reform
the NHS is driven by increased appreciation of where it is failing
to deliver. It can no longer guarantee the uniformly high standards
across the country that patients have a right to expect. GHG firmly
believes that structural change is required. Increased public
private partnerships can play an important part in this. The public
shares this view. MORI research[1]
has found that two thirds of the public accept the idea of the
NHS paying independent hospitals to provide health services for
NHS patients. Over 90 per cent agree that waiting lists would
be shorter if private hospitals were allowed to treat NHS patients.
The starting point for GHG is that future healthcare
needs could be met more effectively by further developing a regulated,
mixed economy in NHS provision. This is less radical than it sounds.
What critics of this perspective fail to acknowledge is that we
already have a mixed economy in health.
3. EXISTING PARTNERSHIP
ARRANGEMENTS
Successful partnerships have already been developed
between the private sector and the NHS in a number of areas.
Medium Secure Psychiatry
Operating under the name "Partnerships
in Care"[2],
GHG delivers medium secure psychiatry and acquired brain injury
services for the NHS. It was pleased to receive a visit, and positive
reactions, from members of the Select Committee at its facility,
Stockton Hall[3],
in 1999. Partnerships in Care provides over 275,000 days of psychiatric
care annually to some of the most challenging NHS and social services
referred patients. These patients represent a significant proportion
of the third of all state psychiatric patients who are referred
to the independent sector.
Rigorous standards of care are maintained through
Service Level Agreements in place between Partnerships in Care
and its referring NHS or social services agencies. These define
service and quality levels, the scope of treatment and care to
be provided and target outcomes. Aligned to this are individually
tailored care plans for each patient, regular reviews of their
progress and the active participation of the referrer in helping
define the patient's treatment. Our ongoing work in this area
reflects the high standards of patient care that we are able to
deliver for some of the most vulnerable patients within the NHS.
The Health Committee has itself recently considered
the role of the private sector in the field of mental health and
reached generally positive conclusions. In its 1999 report on
regulation[4],
the Committee recommended that ". . . health authorities
. . . should review ways in which the independent sector . . .
can contribute to the planning mechanisms, [believing that] the
outcome of such a process should be the provision of optimum services
determined by the NHS and provided in a manner which ensures a
high quality of care for patients and maximum value for public
money . . .". Earlier this year, in its report[5]
into head injury rehabilitation, the Committee recommended that
the statutory services recognise the contribution in this field
of the independent sector, and that they collaborate actively
with them to provide the best possible service for the patient.
Acute Surgical Treatment and the Concordat
GHG works in the acute sector under the name
"BMI Healthcare"[6].
Our work with the NHS in the acute sector is complementary to
the services provided by traditional NHS providers. We also have
partnership links based on sharing facilities. Local purchasers
have long been able to purchase services from BMI's hospital network.
We welcomed the opportunity to extend this work under the Concordat.
Since November of last year we have treated some 20,000 NHS patients.
Over the same period independent providers have treated some 70,000
cases. We are pleased that the sector has been able to contribute
to meeting local needs in this way.
The growth in patients treated under Concordat
should be welcomed. They have received care more quickly than
if the NHS had to rely entirely on its own capacity to provide
services. The reality is, however, that concordat patients represent
only a small proportion of the total of patients treated. This
is the case, whether one considers total NHS patients treated,
or total private patients treated. NHS patients represent only
5 per cent to 10 per cent of the independent sector's output.
In some respects, the figures for the Concordat are disappointingly
low. They should not, however, be underestimated. General Healthcare
Group estimates that without the operations carried out under
the Concordat, NHS waiting lists would now be some 70,000 patients
higher than their current level.
4. PERCEPTIONS
OF THE
CONCORDAT
GHG believes that the Concordat is a valuable
initiative but that its full potential has not yet been realised
because there are still negative perceptions of independent acute
surgical healthcare. Some criticism has suggested that developing
links under the Concordat is a bridgehead to the "privatisation"
of the NHS. We take this to mean that in some way the essential
character of the NHS, that it is free at the point of delivery,
would be adversely affected by the involvement of the independent
sector in service delivery. Certainly this has not been the experience
in mental health, and there is no reason why it should be in acute
surgical treatment. Changing this essential ethos of NHS service
is no part of GHG's strategy towards the NHS—and we do not
believe it reflects the intention of other independent providers.
A core aspect of our expertise lies in building
and running small elective surgical units of up to 250 beds, not
in managing large District General Hospitals; we are not planning
to bid to manage units beyond our present competencies. Given
the existing problems of waiting lists and growing patient demand,
GHG believes that the current priority should be to explore how
the private sector can offer complementary services to meet local
needs for elective surgery. Talk of "privatisation"
distorts the true reform agenda.
GHG has also been concerned about press reports
regarding sending patients abroad to receive treatment. It has
been suggested that this has become necessary because the prices
of private providers are too expensive. GHG totally rejects this
claim. This misunderstanding has been created by a failure to
understand the way in which private sector pricing works. Prospective
patients can pay for their care in various ways. A patient approaching
a private facility and paying by cash on a one-off basis would
pay a one off price, a so-called "spot price". These
prices are inevitably higher than those negotiated by bulk purchasers—such
as, say, the NHS. A NHS purchaser will have in place mechanisms
to estimate where their capacity will be inadequate and therefore
where it might need to make purchases from a local private provider.
A purchaser making properly planned multiple purchase will be
able to secure a cost-effective rate from the private sector.
It will certainly be competitive in comparison with continental
suppliers. It will also be preferable in terms of patient convenience
and by giving the purchaser greater confidence that the proper
standards of care will be delivered. Certainly this was the experience
in a recent concordat initiative[7]
undertaken in East Surrey.
Critics have also called for resistance to the
Concordat because of concerns about staffing issues. GHG rejects
the notion that its staff are not properly treated or that they
are not motivated by the keen desire to deliver the best care
possible for their patients. GHG's staff are a critical element
in its ability to deliver care successfully. Our policy is to
treat them with respect and, as far as possible, involve them
in making decisions that affect them. Authority is delegated to
front-line service staff wherever possible. All GHG's staff are
engaged on clear written terms and all employees enjoy full employment
protection. Clinical staff enjoy benefits broadly comparable to
those that they would have in the NHS. There is no premium payable
over NHS. Our internal research indicates that staff work in the
independent sector because they enjoy the work and the delegated
management style.
GHG pioneered the use of flexible terms and
conditions and led on return to nursing programmes. GHG encourages
staff to see the real value in front-line service delivery. It
adheres to the highest ethical standards in its recruitment and
staff management practices. As in any sector, employers should
be judged on the actual way in which they operate. Knee-jerk reactions
to private sector employers are not helpful; they misrepresent
the approach of individual providers and impugn the reputation
of our highly committed and professional staff operating at all
levels within GHG.
5. DEVELOPING
THE CONCORDAT
Using private sector capacity to help alleviate
pressure on the NHS could deliver more benefits for patients if
it were undertaken on a more systematic basis. Current arrangements
are short term and characterised by tight timescales and generally
very short lead-in periods. This may be appropriate where the
objective of the commissioning NHS unit is to reduce patient waiting
times/numbers.
However, it is unlikely to be totally effective
and does not represent a means of providing a long-term solution
to capacity problems. Longer-term service arrangements for acute
elective surgical treatment would enable a more measured approach
to waiting list management and maximise the scope of the independent
sector to effectively complement local NHS resources. GHG recommends
that, at all levels of the NHS, a concerted effort at examining
the scope for developing long term partnerships should be made.
Some headline issues could be addressed to facilitate
this general recommendation:
Enhancing the Development of Clear, Measurable
Quality Standards
The passing of the Care Standards Act 2000 and
the development of a comprehensive set of healthcare standards
for the private sector, modelled on those prevailing within the
NHS were excellent initiatives. They have been crucial in ensuring
a common platform for service quality across both the NHS and
the independent sector. These measures have also raised standards
for small operators working at the periphery of the independent
sector. The new standards now allow for direct comparability[8]
between NHS and independent providers. This is invaluable for
greater co-operation through the Concordat.
However, a number of independent sector providers
(including GHG) participate in additional external accreditation
and quality measurement programmes such as HQS, HAP and ISO. This
helps support the delivery of appropriate service quality levels
and provides an external assurance to service purchasers (both
independent sector and public sector). A number of NHS Trusts
have also joined such schemes, again helping ensure that service
provision benchmarks are set appropriately and at levels consistent
with the experience of both sectors.
These developments are extremely positive but
more could be done. The independent sector has established a strong
tradition of patient follow-up to monitor and measure patient
satisfaction. This has been a very strong factor in shaping service
delivery to patients' own preferences, and will help ensure that
any NHS patients treated benefit from a fully patient-focused
approach. GHG recommends that there should be an increased
exchange of data between public and private sectors on NHS patient
surveys to enhance the delivery of patient-focused approaches
through the Concordat.
Demonstrable value for money, against public sector
comparators
In addition to quality, cost-effectiveness is
a critical factor for the successful development of the Concordat.
The recent publication by the NHS of reference costs has allowed
direct comparisons to be made when considering whether the independent
sector could be used for cost-effective service provision.
A recent East Surrey waiting list initiative,
for example, was able to undertake a full comparison between the
cost of using independent sector hospitals and holding patients
within the NHS. This enabled the independent sector to focus on
what it did well—delivering short patient lead times from
consultation through to surgery—in a manner that was compatible
with the full cost of service within the NHS.
East Surrey concluded that, on a directly comparative
basis, using the private sector was often cost effective. Twelve
procedures were analysed[9].
In seven cases the NHS reference cost was higher than the independent
sector charge. In the other five cases the independent sector
charge was the higher.
What is clear is that the publication of reference
cost data is critically important in allowing proper, objective
comparisons to be made in support of "best value" decision
making. Enhanced price transparency will be important in assessing
the optimal choice of provider against three considerations: overall
service quality; immediacy of access; and relative price. GHG
recommends that work be done to refine and enhance mechanisms
to enable effective price comparisons.
Developing the Contracting Process
Private/public partnership in medium secure
psychiatric services has been fostered by a clear contracting
procedure, supported by clear and unambiguous contract terms.
This works by setting out the respective roles and responsibilities
of both the service provider and the commissioning organisation.
The same position prevails in those other areas of healthcare
where contracting with the independent sector is an established
part of NHS provision. The position in the acute elective sector
has not been so well developed, with individual health authorities
and commissioners developing their own contractual arrangements
and contractual terms. This adds cost to the purchasing process
and draws resources from front-line services. Much of this activity
"re-invents the wheel" as the work has been done, and
tested, elsewhere.
GHG supports the development of a standard form
contracts for use between the independent sector and the NHS.
Work in this area is already underway and will draw on best practice
already developed under the Concordat. This will cover, for example:
the nature of the activity; quality; cost; and, importantly, the
absolute scope of the service being provided and where the service
start point and finish points[10]
are. It would benefit all involved in Concordat service commissioning
and provision if a standard could be promptly agreed for the purchase
of acute services. General Healthcare Group recommends that
work on a standard contract be prioritised by the Department of
Health and that it should be updated and amended as required in
the light of its experience, and then made freely available as
a model form for use.
In addition to the time being expended on the
contracting and documentation processes, much time is also being
consumed in price negotiations. The work being done at each locality
often duplicates work that has already been done elsewhere within
the NHS. For that reason, and subject to the competition constraints
applicable, GHG recommends that consideration be given to the
establishment by the Department of Health of acceptable price
scales or ranges for the undertaking by the independent sector
of concordat work. This would improve overall service cost-efficiencies,
help reduce NHS transactional costs, and most importantly bring
treatment even faster to waiting patients.
6. THE PRIVATE
FINANCE INITIATIVE
GHG does not see a role for itself in capital-only
partnerships such as PFI. Although General Healthcare Group was
involved with one of the first PFI schemes[11],
it has concluded that while the focus of the PFI is on "bricks
and mortar" rather than the delivery of front line service,
the contribution we can make is restricted.
We would, however, make some observations about
this initiative. The debate on the PFI is highly politicised.
The value of this discussion is sometimes reduced because of this.
Political perspectives (both pro and anti) have sometimes simplified
the debate. For example, much of the criticism of the PFI has
been focused on the number of hospital beds created, rather than
about the efficiencies of their configuration or the throughput
that they will permit. Continuing focus on service inputs is misplaced
and fails to take account of the potential of the PFI approach.
The real question is how the new PFI based units that have been
created will function in practice. Number of beds is simply one
indicator. How those new, PFI funded beds and the related operating
theatres and support services are used is the critical question.
Put bluntly, poor management practices are unlikely to be transformed
simply by moving them into new premises.
7. TREATMENT
AND DIAGNOSTIC
CENTRES
GHG has been following the development of the
Treatment and Diagnostic Centre initiative with interest. The
creation of these facilities could be an invaluable tool for the
NHS to address waiting list problems. However, we would make the
following observations:
Existing Private Sector Facilities
While the creation of dedicated NHS units will
provide local purchasers with more capacity, pursuing this option
will involve (a) delay as projects are developed and (b) expense
as additional funds have to be devoted to build them. It must
be recognised that there are over 200 private hospitals in the
UK, many with facilities and the capacity to undertake the same
sort of work that Treatment and Diagnostic Centres would. The
ability of private facilities to provide quick results for NHS
patients should not be underestimated. GHG recommends that
the scope for private sector facilities to contribute to NHS capacity
should be carefully considered before the scarce resources available
to the NHS are devoted to new Diagnostic and Treatment facilities.
Match Up with Waiting List
Treatment and Diagnostic Centres could be a
very significant means of addressing waiting list problems. Certainly,
the public perception is that this is the key objective of such
centres. However, the list of schemes announced bears little relationship
to areas where waiting lists are most problematic. GHG recommends
that the location of new Treatment and Diagnostic Centres is more
closely linked with waiting list problems.
Delivery Under the PFI
The PFI is a key means of developing new Treatment
and Diagnostic Centres. However, of the 29 facilities so far announced,
only two are expected to be completed by the end of 2002, with
only four completed during 2003. In total only 12 will have been
completed by the end of 2004. The rest are not expected to be
completed for four or more years. GHG recommends that serious
consideration needs to be given to speeding up the lead time on
these new facilities, including alternative funding outside of
the PFI (see GHG proposal below).
8. PROPOSAL FOR
A TREATMENT
AND DIAGNOSTIC
CENTRE
GHG believes that there are opportunities for
private sector involvement in this important initiative that are
not being properly pursued. In the right circumstances, GHG
would be prepared to make its own contribution to this initiative
by building and operating a Centre at its own expense for use
by the NHS. This would involve:
— GHG capital not Government funds—which
we estimate would be around £30 million;
— a quick delivery time—we
estimate we could have a centre up and running in two years;
— no up-front NHS contracts—this
would be done outside the PFI and at our own risk;
— locating the Centre in an area
with severe waiting list problems—also likely to be
a relatively deprived area that could not benefit from the Concordat
because of a lack of existing private facilities.
All GHG requires to undertake this initiative
is a commitment from the Government that no political impediments
to such a facility building a long-term relationship with NHS
purchasers will be introduced. GHG would not want to build a Centre
that would not be used after a couple of years because the Government
subsequently decided to reject using private sector provision.
GHG would also require action dedicated to removing
remaining local and institutional barriers to the purchase of
services from private sector facilities (see recommendations
on Concordat).
9. CONCLUSION
GHG commends to the Committee that the Government
should provide a clear commitment to long term partnership between
the private sector and the NHS and should actively examine how
barriers to private/public co-operation can be reduced.
In conclusion, GHG notes that in the field
of psychiatric care (inter alia) private provision has been an
unremarkable reality for many years and that this partnership
with the NHS is recognised in many quarters (including the present
Health Committee) to be productive and worthy of strengthening.
If the patients' perspective is paramount, they could be forgiven
for wondering why the provision of acute healthcare should be
regarded differently: if schizophrenia is treated in a setting
of mixed provision, why not heart disease? The reality is that
when asked the question the patient is predictably pragmatic about
the locus of treatment.
Government policy should follow the lead
given by patient opinion.
General Healthcare Group
September 2001
1 Research conducted by MORI in 1999, and referred
to in LSE-New Statesman 1999 Annual Conference Background Paper,
The Role of the Private and Voluntary Sector in Healthcare. Back
2
Background information on Partnerships in Care has been supplied
to the Clerk to the Committee. Back
3
Since the Committee's visit in 1999, the unit has been completely
redeveloped at a cost of £20 million. The Committee would
be welcome to visit the new facility. Back
4
The Regulation of Private and Other Independent Healthcare, Health
Committee Fifth Report, Session 1998-99. Back
5
Head Injury: Rehabilitation, Health Committee Third Report, Session
2000-01. Back
6
Background information on BMI Healthcare has been supplied to
the Clerk to the Committee. Back
7
See footnote 10 below. Back
8
The Consultation Paper introducing the new standards noted that
the standards had been prepared by reference to, inter alia, ".
. . the standards that apply in the NHS, including the relevant
national service frameworks . . . ". See Consultation
Document, National Minimum Standards, July 2001, Project Method,
page 15. Back
9
See Health Services Journal, 6 September 2001, table on page
26. Back
10
An important consideration at East Surrey was to define the services
that the individual providers were not being contracted to provide,
so as to allow for absolute clarity in the scope of what was being
provided. Back
11
The Norfolk and Norwich Hospital. Back
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