Wider impact of market-type reforms
in primary care
174. As well as the aim of strengthening commissioning,
the Government's proposals to divest PCTs' provider services to
alternative services providers are clearly also driven by the
desire to introduce market-style incentives into the primary and
community care sector, as has already happened in the secondary
care sector. The Government hopes that by encouraging alternative
providers into the community care market, including private and
voluntary organisations, quality will be improved and costs will
be reduced as a variety of different providers compete to win
NHS contracts.
175. The likely impact of market-type reforms on
the NHS is a huge and complex subject, and there are still a great
many unknowns in this area. The tangible benefits of contestability
are uncertain, and may be constrained by limits imposed on the
healthcare market by Government. Equally, the benefits of contestability
may not be realised if it is not possible to generate enough supply
to ensure contestability—this may be particularly the case
in remote or deprived areas. Moving to a market-type system also
brings its own risks. Some of our evidence suggested that growth
in plurality of providers will inevitably bring about an increase
in transaction costs.[140]
Another risk is that of over-provision of services, which is ultimately
very expensive. There is also the risk of private companies going
bankrupt, potentially leaving the NHS with no alternative provision,
as has happened in the past with nursing homes, which, according
to one of our witnesses, are sometimes closed down at very short
notice. [141]
176. It is beyond the scope of this inquiry to conduct
an exhaustive assessment of the complex subject of market reforms
in healthcare. However, our evidence did raise several concerns
relating specifically to the introduction of market-type reforms
in community health care, which is in many respects very different
from the acute sector. Yvonne Sawbridge explained the unique value
of healthcare delivered in the community:
In the community we deal with people not disease
... we want the chaos and the richness that come from helping
people live their lives. It does not fit neatly into "You've
got diabetes" or "You're having your hip replaced".
People have all sorts of things happen to them at the same time
and that is a core value … [community staff] are very anxious
about losing that and going into organisations that do not understand
that difference, which is intangible.[142]
177. She went on to argue that fragmenting the joined
up services that community health professionals currently strive
to deliver is a real risk associated with introducing a plurality
of providers:
Charlotte Atkins: This is supposed
to be patient focussed. Do you think it will fragment the so-called
patient pathway?
Ms Sawbridge: Yes. Seamless care
is difficult enough to do at the moment and the more fragmentation
the more people you are going to have knocking on the same door
to deliver different aspects of care.[143]
178. Introducing non-NHS providers into the community
sector also raises questions about workforce development and training.
Yvonne Sawbridge asked "Who is going to train our future
workforce? Who is going to plan across the health and social care
when you have got plurality of provision? I just do not understand
how that will happen. It is hard enough now."[144]
179. Currently, there is little contestability in
community health services. However, in attempting to increase
contestability, a new range of alternative providers will need
to be found to provide the services currently provided by PCTs.
By their nature, community health services are often long-term
and involve complex interaction between different health and social
care agencies. In this respect, they are different from the types
of health services that have so far been provided by organisations
outside the NHS, which have tended to be mostly 'stand-alone'
episodes of treatment or diagnosis, such as day case surgery or
diagnostic services. It is thus uncertain whether or not alternative
providers will see community health services as a worthwhile market
to expand into. Other potential providers could include hospital
trusts or GP practices expanding to provide community health services.
However, while this could improve clinical collaboration and minimise
the fragmentation of services, it carries the risk of simply creating
an even greater monopoly than currently exists. If PCT monopolies
are broken up into smaller (geographically overlapping) new organisations
that will compete with one another, this may increase contestability,
but at the risk of oversupply.
180. A final, pressing concern is that the NHS will
become "providers of last resort", only providing services
that are not profitable or attractive enough for other organisations.
John de Braux seemed to suggest that this would be the case:
There will always be some services for which
I believe PCTs will say there is no alternative provider, much
as we have tried to find an alternative provider it will not be
safe to do so, or nobody is interested in providing that bit of
the market or whatever, and I think it will stay with PCTs.[145]
However, some of our witnesses objected very strongly
to this idea: Dianne Jeffreys told us:
I think it would be very sad if PCTs ended up
as providers of last resort; in other words, we only provided
that rump of services that nobody else, that the housing associations,
that the private sector, that the voluntary sector, that the community
sector did not want to provide. That would not be the best outcome
for patients and I for one will try hard to see that that does
not happen.[146]
Yvonne Sawbridge agreed:
Obviously you will get people looking at bits
of the patient pathway. People are unlikely to bid for the old
lady with Alzheimer's disease needing full leg compression bandaging.
There were comments made earlier about how we should not leave
PCTs with the services that nobody really wants to do; that is
not a very exciting place for anybody. You need to make sure we
have got a variety of things that people can do that matter.[147]
181. Whether or not PCTs should divest themselves
of their provider services is a huge question which is outside
the scope of this short inquiry. However, inevitably our witnesses
raised many important concerns about the divestment of PCT provider
services, most notably that it would lead to fragmentation of
services, and make joined-up care even harder to deliver. Equally,
it is not clear whether sufficient alternative providers exist
to provide a market in community services. We urge the Government
to address these crucial questions in its forthcoming White Paper
on out-of-hospital care.
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