Private providers push for bigger NHS role

Private health companies are seeking talks with ministers and health service leaders to secure a bigger role in providing NHS care amid frustration that the Conservatives have failed to drive the growth of the sector.

The NHS spent just under £7bn buying services from private providers in 2013-14 but the sector believes hundreds of millions of pounds of additional investment by companies could be unlocked if there was a more stable operating environment.

When the coalition government introduced the health and social care bill in 2010 it appeared to pave the way for a bigger role for private companies by stating that “any willing provider” would be able to bid for NHS-funded services and would be allowed to compete on price.

After a backlash from the Liberal Democrats, the legislation was changed to outlaw both price competition and any policy to increase the private sector’s market share.

An investigation by the British Medical Journal found that just 6 per cent of about 3,500 contracts it examined had been awarded through competitive tender, despite critics claiming that the Health and Social Care Act amounted to “forced privatisation”.

Data from the OECD shows that a higher proportion of health spending comes from public sources in the UK — at about 84 per cent — than in comparable nations, with the public sector accounting for 82 per cent in Japan, 77 per cent in Italy, Germany and France, and 48 per cent in the US.

Fifteen years after a Labour government signed a historic “concordat” with the private health sector setting out ways it could work with the NHS, David Mobbs, chief executive of private hospital group Nuffield Health, said the relationship needed to be “revisited and refreshed” to keep the NHS financially sustainable as it faces a £30bn funding gap by the end of the decade.

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Alarm bells rang last winter when only about half the operations that private hospitals had pledged to provide at NHS rates were taken up by trusts and GP-led commissioning groups — to the reported frustration not only of the providers but of David Cameron’s close advisers.

The NHS Partners Network, which represents private providers, said much more was now known about the performance of private groups. They had better than average NHS waiting times for elective operations, lower than average cancellation rates and patients reported better results for procedures such as hip and knee replacements and groin hernias.

Companies that stand to benefit from an expansion of the private sector’s role include Ramsay Health Care UK, which had the biggest slice of the market for NHS inpatients in 2013-14, followed by BMI Healthcare, Care UK, Spire Healthcare and Nuffield Health.

Rob Roger, chief executive of Spire, said it was “encouraging that the independent sector has been increasingly able to provide support to the NHS during peak periods such as the winter months”. But he added: “We’re still able to do more”. It would work closely with the NHS “to see where we can provide support”, he added.

The sector has taken heart from the prime minister’s decision to use his first speech after winning re-election to highlight the importance of non-NHS providers, even though he was careful to focus on charities rather than private companies.

Mr Cameron’s comments reflect a belief in Whitehall that the NHS will be unable to satisfy growing demand without the additional capacity that the independent sector provides. “We can’t do it without the private sector,” said one government insider.

The health department said: “Independent providers play an important role in the NHS and have done for many years, helping patients get prompt care free at the point of use. The decision to use independent providers is made by the NHS itself, based on the best interests of patients.”