ANALYSIS: Is the NHS on course for privatisation? There are a few bales of straw in the wind

Written by Tony Millett.


The government's talk of a clamp down on the huge sums of money hospitals are paying for agency staff - especially nurses - made for some good headlines.  But there was no parallel talk of a clamp down on the corporate overheads and profits charged to the NHS by commercial health and social care providers.

During the election campaign we were told repeatedly there was no plan to privatise the NHS - as though some candidates had not read the coalition's Health and Social Care Act. If pressed they told us that anyway it was all started by Labour.

There have already been some very large contracts won by commercial companies such as Virgin Care.  It is reported that since 2010 Virgin Care has won contracts for NHS work totalling about £1 billion.  This may underestimate their share of privatised contracts as some are not publicised and their value is not revealed.
Now we have fresh evidence from Nottingham University Hospitals:  in 2013 their 'distinguished' dermatology service had 13 consultants who not only treated patients but did research and taught students. Now the Hospital has one consultant and one part-time consultant.

Why? After a competitive tender run by a local Clinical Commissioning Group (CCG), dermatology services were transferred to Nottingham Treatment Centre run by the private company Circle.  And the CCG even stopped Nottingham University Hospitals setting up a small elective dermatology service.

An independent report calls the Nottingham tender process an "unmitigated disaster."  But it is too late now:  the CCG does not have to provide teaching or research.  It will, for sure, scream loudly when Circle cannot find enough consultants in the specialty - or simply walks away from the contract as it did with Hinchingbrooke Hospital.

It is acknowledged at Wiltshire CCG that private hospitals have an impact on their commissioning decisions and policies - and, importantly, that not enough information is fed back to the CCG by these private providers.

Last month the Board was told that just about every month one private hospital in north Wiltshire sends two of its elective surgery cases (hips and knees for example) onto Great Western Hospital when things get too complicated for them.  And that, in turn, costs the CCG money - money it does not have enough of and is trying hard to use wisely.

If you are not worried about increased private (also known as 'independent') provision, you may well be worried about the wide-ranging uncertainty that has gripped the NHS and the amount of public money being used up by procurement processes and by the consultants and lawyers called in to help with those processes.  
If anyone thought the Lanlsey re-organisation had produced a firm and settled NHS regime, they were very wrong.

There are many procurement processes underway which will help people decide whether politicians were telling the truth during the election campaign.  But one of the key indicators lies in the non-front line area of commissioning support.

Following Lansley's Act a network of Commissioning Support Units (CSUs) was set up - a way to cut, or at least to hide, the hated bureaucrats who apparently sop up money that should be going to front line services.  CSUs handled back room tasks like human resources, pay roll and data collection for CCGs.

Wiltshire CCG has already renewed its contract (worth £2.7million for 2015-2016) with its CSU once and is being forced to procure a new service contract.  It can now go to the Lead Provider Network of already evaluated and approved organisations offering these back-office support services and pick a supplier.  This is a cheaper and faster way to obtain new contracts.

Some of these 'tested' providers are offering end-to-end commissioning support and others are offering individual services such as medicines management.  Some are commercial companies and some are CSUs and many are mixtures with a range of 'partners'.

For example Optum offers a comprehensive service. To meet that challenge they have 21 'approved partners' - ranging from BT Global Services to Keele University and PA Consulting.

At their May meeting the CCG Board was told: "We will have full flexibility as the CCG to pick and choose".  But then it was revealed there was a dictat from NHS England: "Do not take IT or business intelligence services in house."

Board members heard that the relationship with the contracted CSU had "not been entirely smooth" and at one time featured in the CCG's top ten risks.  And the task of deciding which back-office service should be outsourced has become harder following the imposed cut to the annual sum a CCG can spend on these 'running costs'.

How will it look if Wiltshire CCG decide to contract a commercial group?  "The CCG should simply confirm that, in accordance with national guidance, we are re-procuring our commissioning support services" - wrote the CCG's Director of Planning, Performance and Corporate Services.

Elsewhere in the CCG Board's documents a little spin is proposed: "Depending on the outcome of the procurement, given that some private companies are on the framework, there is a risk some might cite this move as evidence of creeping privatisation of the NHS."

"However, it is considered that this could be rebutted by a line to take that procuring cheaper and more effective support services will enable the CCG to spend more resource on front line patient services."

Questions remain: how will the corporate overheads and profits of any of the commercial providers square with "cheaper and more effective support services"?  And where on the CCG's risk register will the new provider or providers feature?  The CSUs could not walk away from their contracts, private companies can.