Posts Tagged ‘Preferred provider’

“Let’s make the most of the independent sector”

By Mike Broad - 26th April 2010 2:34 pm

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.

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Government U-turn on preferred provider policy

By Francesca Robinson - 30th March 2010 9:08 am

The government has rowed back from a promise to prioritise the NHS as the ‘preferred provider’ of health services, opening the way for increased privatisation.

The preferred provider pledge, made by health secretary Andy Burnham in September, has been “essentially neutered” by new guidance on procurement and commercial practice, claim independent sector and charity organisations.

Three new guidance documents make it clear that PCT commissioners  should engage with a range of potential providers before deciding whether to issue an open tender.

The new rules state that the commissioning process, including any form of procurement, should be “non-discriminatory and transparent at all times” and should not give an advantage to any sector (public, private, third sector/social enterprise). PCTs are now required to “give all providers fair and equal opportunity to bid”.

“The guidance provides the clarity to ensure we get the best provider offering the best quality care for patients at the best price for taxpayers,” explained Burnham.

“Independent and third sector organisations will continue to make a valued contribution to providing treatment and care, helping to add capacity, improve quality, increase patient choice and drive innovative practice,” he said.

But he also made it clear that where existing NHS services were delivering a good standard of care for patients, “there is no need to look to the market”.

The guidance also stresses that where existing NHS providers are failing they must be given two chances to improve before contracts are terminated.

David Worskett, director of the NHS Partners Network, the organisation representing independent providers, said the new guidance marked a move towards a more open and competitive market with lower barriers to entry.

“The guidelines stress the importance of non-discrimination between providers, make a fresh commitment to the use of the independent sector and are clear about the need to use robust procurement to tackle under-performance. They effectively concede that while mainstream NHS organisations and their staff will inevitably continue to be the principle providers of healthcare, the unwise and anti-competitive concept of preferred provider has essentially been neutered.”

Stephen Bubb, chief executive of ACEVO, which represents charities, said: “This guidance is the final nail in the coffin for the preferred provider policy, which has been well and truly neutered. The Department of Health has explicitly told NHS commissioners that they must not prefer providers from any one sector, and should instead be non-discriminatory and seek to remove barriers to third sector participation.”

The BMA, which has been running a campaign highlighting the threat of the market to the NHS in England, gave a muted response to the new guidance. A spokesman said: “While we would have welcomed a more explicit commitment to the NHS as preferred provider, this guidance does keep the principle intact. The BMA will continue to work to highlight the benefits of public provision of NHS care, and the problems and waste created by competition.” 

The new guidance is called revised Principles and Rules for Cooperation and Competition; revised PCT Procurement Guide, and Commercial Skills for the NHS.

Meanwhile, three private sector bidders have been shortlisted to win the franchise to run a DGH in Cambridgeshire. The companies seeking to run Hinchingbrooke Health Care Trust include Circle, Ramsay Health Care UK, and a partnership between Serco Health and Peterborough and Stamford Hospitals Foundation Trust. They have been invited to discuss their proposals for the heavily indebted Hinchingbrooke Hospital with NHS East of England, commissioners, hospital staff and others.

Read a blog on the preferred provider issue.

 

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Marketisation of the NHS only going one way

By Mike Broad - 16th March 2010 7:59 pm

Confusion reigns over private sector participation in the NHS.

On the one hand you have Hinchingbrooke Hospital, which is being lined up to be run by the private sector, and on the other you have NHS Great Yarmouth and Waveney, which didn’t even allow the independent sector to bid for its community services tender because it wants to keep them NHS run.

So, why are some trusts ushering in the private sector with impolite haste, while others are actively excluding them?

The answers lie in health secretary Andy Burnham’s autumnal speech on the NHS being the ‘preferred provider’ of healthcare. He signalled a dramatic change in thinking by suggesting that NHS units would be given every chance to turn around failing services, before private or independent would even be considered.

Everyone got excited about this. Too excited. Was this a U-turn? How did this sit with existing policy and guidance? Was this the beginning of the end for private sector involvement in NHS delivery? The BMA had been running a high profile campaign trying to achieve just that and there were a fair few doctors rubbing their hands with glee.

But, as the weeks passed and no new guidance appeared on what this actually meant, we started to realise this was policy on the hoof (apparently it’s now due any day…). In the meantime, trusts interpreted it themselves. Great Yarmouth’s decision led to a challenge through the Cooperation and Competition Panel. And, just as it was about to make its decision, the government cancelled all tendering of community services in the Eastern region.

Surely it couldn’t have done this because it feared the CCP’s decision. The government is now facing multiple freedom of information requests on the move and potential investigation by he Office of Fair Trading.

Funnily enough, Burnham is now saying his original speech was misinterpreted. Silly us. He wasn’t trying to deter private or voluntary sector providers, just point out that public services should be given a chance to improve.

From my position, it looks like Burnham wanted to curry some favour with the unions and thought a pro publicly delivered NHS speech would help achieve it in the run up to the election. He underestimated the momentum behind the marketisation of the NHS and the potential backlash from wannabe providers.

I’m sure Gordon has had a little word.

This little escapade has offered some insight. For better, or for worse, an increasing proportion of NHS services are going to be delivered by private and third sector providers and it’s going to take more than a secretary of state for health to put the brakes on it. 

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Preferred provider rule faces more challenge

By Francesca Robinson - 12th March 2010 6:43 pm

The Office of Fair Trading has been asked to investigate the government’s policy that NHS organisations should be the ‘preferred provider’ of care.

The policy was announced by health secretary Andy Burnham in September to the dismay of private providers.  

The request to the competition watchdog has been made by shadow health secretary Andrew Lansley. 

It follows a move by the Department of Health to pull the plug on an investigation into the policy by the Cooperation and Competition Panel (CCP).

The CCP had been scrutinising a decision by NHS Great Yarmouth and Waveney to exclude non-NHS providers from a £25m procurement to run its community services arm. Private and voluntary sector providers had lodged a complaint about the PCT’s anti competitive behaviour.

But on the day the CCP’s report was due to be published the DoH cancelled the entire procurement process in the East of England.

ACEVO, a body representing charities, has now lodged freedom of information requests to the DoH and the CCP to force publication of the report in a bid to shed light on the “backroom dealings”.

Stephen Bubb, chief executive of ACEVO, has also written to the Prime Minister calling for the CCP to be made independent of the DoH.

He said the DoH’s move had undermined the independence of the CCP and threw doubt on the government’s intention to encourage third sector provision.

ACEVO members were reporting a wide range of instances where PCT commissioners were discouraging provision of the third sector, he claimed.

“We believe this new policy of treating the NHS as preferred provider is a direct breach of the government’s manifesto pledge to treat the third sector on equal terms.  We urge you strongly to reverse this policy,” wrote Bubb.

Mike Parish, chair of the NHS Partners Network, the organisation that represents independent healthcare providers working within the NHS, said “NHS only” procurement was unacceptable and potentially unlawful. 

The failure of the competition panel to publish its report meant that a significant opportunity to clarify the validity of the policy had been lost.

“The behind the scenes compromise inevitably suggests that the CCP as a mechanism for maintaining a rules-based system may not be sufficiently independent of ministers and of the system it is meant to regulate,” he said.

Parish has called for the competition panel to be given genuine independence with powers aligned more closely with those of other competition authorities.

“We remain convinced that the ‘preferred provider’ concept and policy is in itself anti-competitive and will result in a failure across the NHS to secure value for money or to drive continuing improvements in quality and encourage innovation,” he said.

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