The government’s preferred provider policy should be abandoned and NHS services should face periodic competitive challenge from the independent sector, a body has claimed.
The NHS Partners Network, which represents independent sector healthcare companies, also calls on the next government to create a level playing field in tendering in a new briefing document, which is being seen as a blueprint for a Conservative government.
The body lists a series of policy changes to enable the independent sector play a greater role in NHS service delivery. It claims independent providers are uniquely place to drive productivity and raise quality during a tough funding period.
NHSPN says the provider market is still underdeveloped and a level playing field needs to be created for healthcare providers. “Commissioners need to be more aware that the surest way of demonstrating they have secured best value is by using open, non-discriminatory tendering processes wherever practical,” the document says.
It claims that independent economic analysis shows that the independent sector currently has to operate with a 14% cost disadvantage to public sector providers.
The NHS pension scheme is blamed. NHSPN says a substantial part of the pension costs are carried by central government not by NHS provider organisations themselves, which puts the public sector at a competitive advantage.
“To deal with this it will be necessary to ensure that public sector bidders are assessed on the basis of their full cost to the taxpayer,” it says.
“This might be done either by increasing the percentage of their pension costs which they have to bear directly or by applying a ‘shadow’ weighting factor which forces commissioners into making a truer comparison when assessing bids.
“Unless this aspect of the playing field is levelled it is likely that over time the pitch will become unplayable for the independent sector.”
The NHSPN also calls for the publication of comparative quality data to support choice, and says the independent sector is already committed to publishing its own data relating to clinical outcomes from the summer.
It says the NHS competition regime and the Cooperation and Competition Panel (CCP) have to be put onto a statutory basis; full cost allocation and accounting in public sector providers has to be enforced and even-handed regulation developed.
Last month the Department of Health pulled the plug on an investigation into the preferred provider policy by the CCP.
Commenting on the document, Dr Mark Porter, chairman of the BMA’s consultants’ committee, said: “Many of the companies now arguing for a level playing field were quite happy to accept preferential contracts when the NHS was being opened up to competition. Private providers continue to enjoy competitive advantages that the NHS does not - the ability to cherry-pick, to set exclusion criteria, and to not have to deal with the consequences when problems arise.
“The preferred provider policy, while it does not fully address the fragmentation and waste caused by market reforms, goes some way to recognising the benefits of NHS care being delivered by NHS providers.”
NHSPN claims that private sector productivity has outstripped that of the public sector in healthcare delivery. Between 1997 and 2007, NHS productivity declined by 4% whereas that in the private sector increased by 23%.
Despite this, in 2007/2008, PCTs spent less than 5% of a £71.2bn commissioning budget on independent sector care.
On value for money, however, Dr Porter said that every eight cases diverted to an Independent Sector Treatment Centre costs the taxpayer the equivalent of almost ten cases dealt with by the NHS.
The BMA is currently running a campaign against further marketisation of the NHS.
Read the full NHSPN briefing document.
Tags: ISTCs, Preferred provider, Privatisation
I would just mention the words PFI….how much value for money has that provided?