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Private firms account for a third of NHS contracts

Published on 10/12/14 at 04:47pm
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A large percentage of NHS contracts in England have been awarded to private sector providers since 2013, according to data found in a Freedom of Information (FOI) request made by the BMJ.

Its findings reveal that 33% of the 3,494 contracts granted by 182 CCGs, went to private subdivisions between April 2013 to August this year. 

The information obtained also makes reference to the concerns shared among many health professionals regarding levels of care and a lack of transparency as to how NHS funds are being spent. 

Responding to the investigation by the BMJ, Dr Mark Porter, a BMA council chair says: “These figures show the extent of creeping privatisation in the NHS since the Health and Social Care Act was introduced. The government flatly denied the Act would lead to more privatisation, but it has done exactly that. 

“Enforcing competition in the NHS has not only led to services being fragmented, making the delivery of high-quality, joined-up care more difficult, but it has also diverted vital funding away from front-line services to costly, complicated tendering processes.” 

The NHS still claims the proportion of care provided by private companies remains in the minority. Campaigners opposing any notions of privatisation on the other hand say the findings provide further evidence that the government’s reforms are steadily fast-tracking the sale of the NHS.

“To undo this damage we need an honest and frank debate about how we can put right what has gone wrong without the need for another unnecessary and costly top-down reorganisation,” continues Porter. 

Since 2006 the amount spent by the NHS on commissioning private sources has increased from 2.8% to 6.1% in 2014. It was also found that private firms are more likely win smaller contracts on an ‘Any Qualified Provider’ basis for services like audiology and diagnostics.

Porter concludes: “What's worse is that there isn't even a level playing field as private firms often have an unfair advantage over smaller, less well-resourced competitors, especially those from the NHS and social enterprises.”

In response the government says the data is misleading, as it is unclear how much the contracts were worth because the CCGs would not disclose this information.

A system to privatise?

Meanwhile, a review by the Department of Health recommending a new ‘credentialing system’ that could be put in place by 2015 has been revealed.

The scheme would look to ‘kitemark’ the most prosperous companies in order to identify those most equipped to land contracts. The healthcare regulator Monitor will be accountable for the procedure, which could be finalised by October next year. 

It is understood that this proposed system will ultimately lead to more contracts being issued to private companies to manage hospitals. The review’s author, David Dalton, says it is ‘perplexing’ that England has not adopted new organisational forms seen in Europe that could raise the standards of care and reduce cost overheads.

Schemes such as this along with alliances between the NHS, the private sector and others may become more familiar as CCGs look to new methods of care delivery.

The King’s Fund’s Rachael Addicott argues that political support for integrated care may create further opportunities for the private sector, due its strengths in areas such as IT and back office efficiencies. 

Funding the NHS

Last month health secretary Jeremy Hunt laid out productivity plans aimed at potentially saving the NHS up to £10 billion by 2020.

One of his plans is to increase the safety of care and reduce unnecessary costs of ‘preventable harm.’ The NHS in England is said to cost over £100 billion annually, or a third of all departmental spending by the government.

On top of this annual cost, in his recent Autumn Statement chancellor George Osborne reiterated that an extra £2 billion funding will be in place for the NHS in an attempt to ‘modernise’ the healthcare service. 

Responding to the Osborne’s announcement, NHS England’s chief executive Simon Stevens says: “Last month the NHS itself came together to chart a new direction for health in this country. People now get the fact that a growing and ageing population means we’re going to have to supercharge our work on prevention, on care integration, and on treatment innovation.”

Tom Robinson

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