September 17, 2009 10:28 pm

Shift in policy on private sector services

Andy Burnham©Reuters

Andy Burnham: ’The NHS is our preferred provider’

NHS organisations are the “preferred provider” of state-funded healthcare and should be given the chance to offer redesigned services before they are put out to tender, the health secretary said on Thursday, in what appeared to be a marked shift in government policy.

The move was widely seen as introducing obstacles to the involvement of the private sector in health care provision.

In a wide-ranging speech to the King’s Fund health think tank, Andy Burnham said: “Where I stand [is that] the NHS is our preferred provider.”

Where services are failing on quality or patient satisfaction, NHS organisations should be given an opportunity to improve, he said. If that does not happen, there should be “perhaps a more formal request for improvement”, after which there should not be any bar to their services being put out to tender, he said.

Where a new or redesigned service was needed, NHS organisations “should be given an opportunity to meet this new requirement”, said Mr Burnham.

He told the Financial Times: “It seems to me right and fair that the existing staff get the opportunity to respond to the new requirements” first, rather than automatically face the “destabilising” process of a tender.

He denied relegating use of the private and voluntary sectors to “a last resort”.

However, what he called the “clearer process” for market testing contrasts sharply with current NHS operating rules. These dictate that primary care trusts will be required to explain their actions if they decide not to open for tender “new or significantly changed” services.

Ministers had been “in discussion with trade union colleagues about exactly what the process should be around market testing of NHS services”, Mr Burnham said.

Payments to hospitals in future would depend “significantly” on patients’ satisfaction with the care they received.

Nigel Edwards, head of policy at the NHS Confederation, which represents health authorities and trusts, said Mr Burnham’s announcement “does appear to represent a policy shift” and could frustrate NHS foundation trusts, as well as private providers, who believe they can drive big improvements by taking on other NHS services.

Steve Barnett, the confederation’s chief executive, said: “We have concern if the suggestion is that the commissioners of services would be limited in their ability to move services swiftly to alternative providers where there is clear benefit to patient care.”

Some private providers saw Mr Burnham’s statement as a placatory gesture to the unions ahead of a general election. And Unison, the biggest health trade union, expressed some scepticism, saying it wanted to see the “rhetoric” of the NHS being the preferred provider “turned in to reality”.

However, Anna Dixon, director of policy at the King’s Fund, said: “This will leave the private sector feeling quite uncomfortable. It has been waiting to see the reality of a level playing field in the NHS and what they have heard will send a signal saying ‘don’t wait around for that opportunity; it may not come’.”

Mr Burnham’s pledge to make an as yet undefined “substantial” part of hospital payments depend in future on patients’ reports of their own experience received a broad welcome.

Achieving that will require a huge expansion in patient surveys of satisfaction, judged on factors such as cleanliness, politeness of staff and whether patients are treated with dignity, since Mr Burnham wanted it reported “service by service”, not just by hospital.

He also told the NHS it would get its first indication this autumn of how fast hospitals will have to cut costs and improve productivity to meet the “£15bn to £20bn” of savings that he acknowledged the NHS would have to make over the coming years.

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