NHS Partners Network, which represents independent sector health organisations, has launched a briefing document entitled Harnessing the benefits of the independent sector: priorities for the next government.
The document claims that the independent sector is uniquely placed to help develop innovative approaches to healthcare that drive quality and patient satisfaction up, increase productivity, and thus ensure that the unprecedented funding pressures on the NHS do not lead to a decline in quality.
But NHSPN demands that the process of market reform instituted during the Blair government needs revitalisation. The following is a summary of the changes that NHSPN believes are needed:
1. Publication of comparative quality data to support choice
All the main political parties are committed to improving patient information. NHS Choices website should be run by an independent organisation, and multiple sources of information should be encouraged.
The first published outputs from the independent sector’s data benchmarking project will be launched this summer. It is also important that data collected by the Department of Health itself is made fully available. It is wrong that data collected by the government, at considerable expense to the providers, should be withheld from the public and from analysts who can help the public make sense of it.
2. Abandon the preferred provider policy and require periodic competitive challenge
The government’s preferred provider policy is anti-competitive. The principle of value for money should be the overriding one guiding NHS commissioners. Any willing provider who meets NHS standards should be eligible.
There should be a commitment that, over appropriate periods of time, all NHS services should be exposed to competitive challenge so as to ensure that opportunities for maximising value and embracing innovation are not overlooked.
The provider market is still underdeveloped. This should be objectively recognised and reflected in practice, but not abused or used as an excuse for restricting the use of competition.
There will be circumstances when taking a broader view of alternative ways in which services can be provided may well result in there being a wider pool of potential providers than is at first apparent.
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.
3. Create a level playing field
With increasing pressure on tariffs, and the likelihood of some form of renewed price competition in the future, resolving the major outstanding level playing field issues is a strategic necessity if independent sector and investor participation in the NHS is to be sustainable.
Independent economic analysis has established that the independent sector currently has to operate with a cost disadvantage of around 14% relative to public sector providers. The NHS pension scheme is the biggest problem. Unless this aspect of the playing field is levelled it is likely that over time the pitch will become unplayable for the independent sector.
A substantial part of the pension costs are carried by central government not by NHS provider organisations themselves. This puts the public sector at a competitive advantage over the independent sector.
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. 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.
Internal accounting and cost allocation is weak within the NHS. Full cost allocation and accounting should be enforced.
4. Putting the NHS competition regime and the Cooperation and Competition Panel onto a statutory basis
The CCP has no statutory powers or legal teeth and can only make recommendations, and in recent months it has become clear that its rules can be rewritten by its sponsors.
The CCP needs to have teeth and become independent of political influence. A firmly established regime for managed competition has emerged as one of the vital reforms needed if investors are to be persuaded to the UK NHS market.
5. Establish proportionate, even-handed regulation
The Care Quality Commission must regulate the independent sector to the same standards and proportionality of all types of provider.
6. Build a new relationship with GPs
GPs will face an increasing conflict of interest. Inherent in the GP model is a perpetuation of commissioner-provider integration, rather than the split which is generally seen as beneficial for healthcare systems.
GP practices that scale up to carry out broader commissioning functions will become more dominant in their local markets, thus reducing patient choice, making market entry more difficult and further reinforcing their advantages. And the GP contract fails to incentivise them to drive change.
There will need to be a new GP contract which incentivises change and high performance, with corresponding measures of quality, thus recognising that the structure of primary care needs to move with the times.
The OFT should look into the changing nature of the GP market and consider what changes might be appropriate to avoid excessive market dominance and reduce barriers to entry.
7. Simplify contracting arrangements
There is a need for simpler, more proportionate contracts for services that genuinely differ from the core NHS circumstances. Problems include disproportionate requirements, models perpetuating historic delivery patterns, undeliverable insurance requirements and failure to recognise the position of national providers operating across multiple trusts.
8. Promote the adoption of new technologies to provide advice and assistance to patients
Increased financial pressures on the NHS mean that it is important that individuals actively manage their health and adopt healthy behaviours. New communication channels need to be harnessed that can catalyse action in the public and private sector experience drawn upon.
Read the full briefing.
Tags: CCP, Pensions, Privatisation
