STPs and Privatisation

The Health and Social Care Act passed in 2012 ushered in a market-led NHS and hundreds of contracts are now advertised and awarded each year; this has led to an increasing number of private companies gaining contracts in the NHS. Now the STP process is bringing a second wave of opportunities for private companies to take an even larger chunk of NHS money.

All STPs contain references to the integration of community care most often through a multispecialty community provider (MCP) and, even if not explicitly mentioned, this is likely to lead to the eventual formation of an accountable care organisation (ACO). The MCP contracts will be worth millions and 10-15 years in length; a single contract could give a private company a major slice of the NHS budget. It is also not just the NHS budget that is on offer, these MCPs will cover social care as well, as CCGs and councils join forces to integrate care.

Contract notices and PINs (prior information notices) are now appearing that give a good idea of the size and scope of these contracts and what is on offer to private companies.

Largest contract ever

In early April 2017, a Manchester commissioning group announced the largest ever tender for NHS services, a contract for a provider of all out-of-hospital care worth £6 billion. The ten year contract will be awarded by Manchester Health and Care Commissioning, a partnership between the city council and a newly formed single clinical commissioning group.

The tender outlines a local care organisation (LCO) that will provide services for around 600,000 people in Manchester and, according to the contract notice, bring together “a range of health, social care and public health services to be delivered in the community.”

MCP in Yorkshire

In March 2017,  Scarborough and Ryedale CCGs published a PIN saying that it hopes to procure a single multispecialty community provider (MCP) contract under a contract worth £1.3 billion over 10 years, by April 2018; a PIN is published before a contract notice often to see how many organisations are interested in such a contract.

15 year contract in Dudley

In November 2016, Dudley CCG published a PIN, in partnership with Dudley metropolitan borough council, which outlines a MCP contract to be awarded to a single entity for up to 15 years. No financial details were stated, but the contract will be worth millions as it is likely to include a large number of services including, community based physical health services, some outpatient services including urology, gynaecology, rheumatology and geriatric medicine; primary medical services; urgent care and primary care out of hours services; adult social care services; mental health services; learning disability services; and end of life care.

Large contract failures

The success of such large contracts is untested to a large extent. At the same time as these contracts were appearing, CCGs in Staffordshire announced their failure to award the £690 million contract for integrated cancer care services. A consortium, led by private company Interserve, was the only bidder left in the process but failed to convince the commissioners that its bid was financially viable. The whole process cost the CCGs around £840,000 but ended in no contract. There are other high profile contract failures - Cambridgeshire and Peterborough Older Peoples services, Coperforma and Sussex patient transport services, and Capita and primary support services. See here for a more comprehensive list.

Which companies will be interested

So which companies will be interested in these contracts. Of the large community contracts that have been awarded recently, one company stands out - Virgin Care. In August 2016, Virgin Care won a seven year contract in Bath and North Somerset, worth around £700 million, under which it will coordinate over 200 health and social care services, including adult social services. Virgin Care has been targeting community health contracts for some years now; the company also has contracts for community health in Guildford and Waverley, Wiltshire and North Kent, as well as a large number of much smaller contracts. It almost seems that the MCP contracts are just what Virgin Care has been waiting for.

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