Written evidence from NHS Partners Network
(COM 136)
1. The NHS Partners Network (NHSPN) is grateful
for the opportunity to give evidence to the Health Select Committee
as part of the Committee's inquiry into NHS Commissioning. As
well as the comments set out in this note, we have also contributed
to the NHS Confederation's main written submission to this inquiry.
We will be happy to provide the Select Committee with any further
details if that would be helpful.
2. The NHSPN is the NHS Confederation's
network for independent sector healthcare providers of all types.
Our commercial and not for profit members include hospital groups,
specialist hospitals, dentistry, patient transport and primary
and community care providers. We are committed to creating an
environment, politically and with the public, where independent
sector providers are able to become a fully integrated part of
a mixed economy NHS. Full integration of independent sector providers
will lead to more choice and better value for money as well as
contributing to the contestability and innovation that the NHS
will need in order to meet the difficult financial challenges
of the future. Underpinning the NHSPN's position is an absolute
commitment to the core values of the NHS, combined with a passionate
belief in the right of patients to be able to choose between real
alternatives.
3. The NHSPN is strongly supportive of the
policies set out in the coalition government's health White Paper
"Equity and Excellence: Liberating the NHS" and
the subsequent consultation documents. Our comments are therefore
intended to help ensure that implementation of these policies
is as effective and flawless as possible. The scale and scope
of the proposed reforms is such that at this stage there are inevitably
still areas of uncertainty and potential difficulty. Our view
is that with constructive engagement and goodwill these can be
clarified and resolved and that the end-point will be a better
national health system for patients and a more cost-effective
one for taxpayers.
4. It is however also important to keep
in mind the scale of the independent sector's involvement in NHS
provision. This is far smaller than is often implied (leaving
aside, of course, the fact the GPs are themselves private sector
providers and account for almost all of mainstream primary care
provision). The key facts are:
— The latest publicly available full-year
figures show that the ISTC programme accounts for only 1.8% of
NHS elective surgery (Audit Commission, 2008, Is the treatment
working? Progress with the NHS system reform programme).
— Use of the extended choice network ("ECN"),
though it has rapidly expanded, accounting for 147,000 procedures
based on the most recently available yearly figures still represents
only around a further 2.5% of total NHS elective care.
— While accurate data is not yet available,
the independent sector share of the primary care market is still
probably less than 2%.
— Data just released by the DH shows that
only 4% of community service contracts are to be put to tender
and thus subjected to market challenge in terms of value for money
(which we define as the optimum combination of quality and price
that can be secured. (DH, Plans in place to transform Community
Services, Press Release of 26/11/10).
5. With regard to the government's proposed
new commissioning regime, there are a number of key issues we
would invite the Select Committee to consider:
RECENT HISTORY
OF COMMISSIONING
6. While there is much criticism of the
lack of progress made towards "world class commissioning",
NHSPN's view is that some significant progress has been made by
a number of PCTs. For independent sector providers, good quality,
professional commissioning is vital, as is building and maintaining
good relationships with commissioners. The best PCTs were starting
to develop the market and the provider side and were also starting
to understand the sort of contractual relationships that brought
stability and closer integration as well as innovation and challenge.
Some were also starting to encourage the role of the independent
and third sectors in bringing important innovation to the way
healthcare is delivered. Despite the relatively small scale of
independent sector involvement to date, there are a growing number
of case studies of innovation in, for example, elective care and
community services that show how quality can be improved while
costs are reduced. Under the proposed reforms there is a significant
risk that the development of "best practice" commissioning
and the encouragement of vital innovation could be lost. It will
then take considerable time for this momentum to be rebuilt.
MULTIPLE COMMISSIONING
RELATIONSHIPS
7. It is a characteristic of many independent
sector providers that they are national or regional companies
able, and wanting to work with a number—sometimes many—PCTs.
In this respect independent sector providers differ from the majority
of public sector providers. Even the existing arrangements have
the effect of requiring multiple commissioning and contracting
relationships with different PCTs and the development of standard
contracts has not been as effective at addressing this problem
as was hoped. With the imminent termination of the Extended Choice
Network contracts and the possible creation of between 300 and
500 GP commissioning consortia, the independent sector is viewing
with considerable concern the potential for a significant increase
in contracting costs and unproductive variations in contracting
terms. This is already becoming an issue during the "transitional
phase" but must be addressed fully as part of the implementation
of the new commissioning regime. It will be vital to have central
accreditation and consistent implementation of the Any Willing
Provider policy at local level. Otherwise the new regime will
have created further barriers to entry and transaction costs will
be a serious constraint.
SCALE
8. The scale of GP commissioning consortia
is a concern because the experience of independent sector providers
is that many services need to be commissioned and to operate across
significant geographic areas. It is not yet clear to us how relatively
small consortia will address this problem or what arrangements
will, given time, emerge to allow them to do so. Nor is it clear
how much time that will take, or whether it is prudent, from both
patients and taxpayers perspectives, to wait for it to happen
of its own accord.
PROCUREMENT
9. The biggest challenge facing the NHS
for the next decade will be the increasing shortage of funds and
as a result the vital need to secure maximum value for money.
The rigorous, non-discriminatory application of government procurement
principles (and procurement law) is therefore of the utmost importance.
While the government's intention is clearly that the principles
of public procurement will apply to the GP consortia, the NHSPN
is concerned that the consortia will lack the necessary skills
and knowledge. The risk of this is highlighted by the way the
representatives of GPs have spoken openly of their wish to discriminate
in favour of public sector providers. This "preferred provider"
approach was successfully challenged by NHSPN and ACEVO in the
closing months of the last government. The resurrection of the
approach at local level will be potentially damaging to the interests
of taxpayers by undermining patient choice and opportunities to
secure value-for-money.
NHS COMMISSIONING
BOARD
10. Relatively little attention has thus
far been paid to the role of the NHS Commissioning Board. The
Board will still retain responsibility for large swathes of commissioning,
notably most primary care including all of dentistry. While recognising
that further clarification of these arrangements is no doubt in
the pipeline, NHSPN is still unclear as to how a Board working
at national level will be able to ensure that it is fully informed
as to local needs and conditions. NHSPN is also concerned that
the Board will be responsible for the structure of tariff whilst
the new economic regulator, Monitor, will be responsible for price
setting. In our view the two are so tightly linked that both roles
should sit with Monitor.
December 2010
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