NHS for Sale? 

Paul Evans

 

There is now clear proof that privatisation is an everyday reality within the NHS. It is underway, with force behind it and no effective limits on how far it goes. The NHS changes have fixed the market at the heart of health planning. It has distracted the NHS in to competition with the private sector. Across the country profit-making companies are bidding for and winning contracts to run a wide range of NHS services. Below we outline the evidence; the NHS services that are being privatised, the huge sums of public money involved and the numerous examples that starkly depict how business and healthcare don't mix.  

What's the evidence that the NHS is being privatised?

The government does not hold central data on who has been awarded contracts to provide care to NHS patients. They say this because it is all organised locally. So to find out who is winning NHS contracts and pinpoint where public money is going takes considerable research.

 

Tracking NHS contracts

The NHS Support Federation has been monitoring the official website where tenders are advertised to find out which clinical services are being organised through the market.  We followed this up with Freedom of information request to the clinical commissioning groups. 1

This is a summary of our most recent investigation (October 2014) into the trends in NHS contract activity around clinical services. It covers the 18-month period since the Health and Social Care Act came into effect.  By recording details from live contracts adverts we have been able to track which services are open to private providers, which providers are winning contracts and how much money is involved.

 

Summary - NHS Clinical Contract Data (Apr 2013 - Oct 2014)

1. £18.3 billion worth of contracts to run or manage clinically related NHS services have
been advertised in 865 notices in the first 18 months since the Health and Social Care Act
came in to effect in April 2013

2. £5 billion worth of contracts have been awarded through the market since April 2013.

3. 67% of these clinical awards have been won by Non-NHS providers – totalling £2.4bn in
value. A further £760m was shared in 10 joint contracts

4. £13bn remain in the pipeline. This is very likely an under estimate as around a third of
tender adverts do not publicly reveal their contract value. However we estimate that
non-NHS bodies stand to gain £6.6bn from the contracts still in the pipeline, if they
continue to win contracts at the current rate (50% of the total value tendered)

5. The amount of NHS contracts being awarded through the market is rising significantly. In
the first six months since the Health and Social Care Act came into effect (apr-sep 2013)
over £400m of NHS contracts were awarded. A year later the number of awards in the
same six-month period (apr-sep 2014) has doubled (72) and their value is over seven
times higher, at £3bn.

6. A huge range of services are involved in these contracts. Overall we have counted over
80 categories of NHS service covering every aspect of the patient journey including
diagnosis, treatment and ongoing healthcare across every possible setting. In 2012 there
were just 40 types of treatment covered by contract notices.

7. The value of clinical notices placed by CCGs since April 2013 is £8bn - 604 contracts
(many containing multiple commissioners). Non NHS providers have so far won 56% of
clinical awards from CCGs.

8. The most frequently advertised types of service (including Any Qualified Provider
scheme) in terms of contract notices are Diagnostics (133 contracts), Mental Health (64)
GP Services/Out of-hours/111 (59 contracts), , Pharmacy (51) and Community Care (39).

9. In terms of value of contract notices plus awards, Community Care services was of the
greatest value at just over £1.9 billion, followed by Diagnostics at £1.2 million, then
Elective Surgery at just over £1 billion, MSK on £785m, patient transport/ambulance
£583m and pharmacy £558m

10. There has been a trend towards the use of the Prime Provider contract model, which
involves the appointment of a single provider, which will then appoint subcontractors to
carry out some of the work. This has been most noticeable in the area of MSK services,
where from April 2013 to the end of September 2014, £709 million worth of work has
been awarded via prime provider contracts.

11. The largest contract for work within the NHS advertised since April 2013 is the
'Framework for Commissioning Support Services' with a value of £3 to £5 billion over a
four year period.

 

Primary Care

For several years now GP surgeries and health centres have been gradually acquired by profit driven companies, such as Virgin Care, The Practice, and Care UK. Many patients may not be aware that their GP service is run by a private company.2

Together the top five private companies in the area of GP surgeries own 170 GP surgeries, with the leading company, SSP Health based in the North West of England owning 42 surgeries, closely followed by The Practice PLC with 39 GP surgeries. Other top owners are Virgin Health, Malling Health and IntraHealth. With the exception of Virgin Health, all these companies have increased their ownership of GP surgeries from 2010 to 2014, and in the case of SSP Health, Malling Health and The Practice PLC, the number owned has more than doubled.

 

Emergency and Out of hours care

Today, if you call 999 it could be a private ambulance crew that comes to treat you. For several years the NHS has been outsourcing the transport of patients but contracts are now being won by private companies to provide blue light services. Spending on private firms to provide 999 ambulances has doubled in the last three years from £24m to £56m.3

GP out of hours contracts are a priority for commissioners to put out to tender. Serco currently organises GP out of hours care services in Cornwall, but will quit the contract following criticism of quality of care .4 Care UK (Harmoni) claims to cover 8 million NHS patients as part of its GP out of hours services. It also runs GP-led health centres, referral management centres, 111 telephone services, offender healthcare, and urgent care for the NHS.5

 

Community health services

Contracts to provide community healthcare typically cover a wide range of services including complex health needs of children and older people.  Some CCGs have bundled these services into a single giant tender.  Examples include, Virgin Care's £130 million contract to run  children's services, and services for people with learning difficulties and adolescents with mental health problems in Devon from March 2013 for three years and its £450 million contract to run a range of community services in Surrey. More recently in July 2014, North Somerset CCG published a contract notice seeking bidders to provide an integrated community care service. The five year contract is valued at a maximum of £120 million.6

 

Surgery

Private hospitals share of NHS funded patients grew rapidly between 2006-07 and 2010-11 after the introduction of patient choice and as part of the ISTC programme. By 2010-11 private companies performed 17% of hip replacements (11,500 operations), 17% of hernia repairs (9,000) and 6% of gall bladder removals (3,000) annually in England. By 2010-11 private providers also handled 8% of patients' first attendances in relation to orthopaedics or trauma, such as a broken limb; 4.8% of gastroenterological problems; and 2.3% of attendances for sight problems. The latest figures from the HISC (2014) show that 12% of all NHS cataract operations are now performed by private providers

In 2012-2013, 45,379 cataract operations were carried out by non-NHS providers, or 12.6% of cataract procedures conducted overall. This is up from 10.6% carried out by non-NHS providers in 2012-2013.7

Non-NHS providers conducted 4% of procedures overall in 2013-14 or 437,919 up from 3.7% in 2012-13 (388,211).8

There are now 195 independent hospitals and treatment centres in England where patients can be treated at NHS prices under the Choose and Book system. The total cost of contracting out runs into billions of pounds but the government has not published precise figures .9

 

Cancer Care

In July 2014, four NHS GP-led clinical commissioning group areas in Staffordshire tendered for a £687m, 10-year contract to provide cancer care, the first such contract in this area opened up to private companies.10 The four CCGs involved are also seeking bidders for a separate £340m 10-year contract to provide end-of-life care.11 Together the contracts are worth £1.04 billion. It has been reported that Virgin, Care UK, Ramsay Health and other private companies have all expressed interest in the contract. The Health Service Journal revealed that Lockheed Martin, which makes fighters for the RAF and Merlin helicopters for the Royal Navy, attended a meeting hosted by NHS England for firms interested in the contract.12

 

Commissioning support services

Locally each new GP-led CCG will be assisted by a Commissioning Support Unit (CSU). Each CSU covers a number of CCGs and are already forging links with the private sector. The NHS Supply Chain has been run by the German logistics company DHL and NHS Shared Business Services, handling a wide range of back office functions (SBS), is 50% owned by French IT company Sopra Steria. Private players involved in commissioning of services, include  NHS SBS and the private company HealthTrust Europe, owned by the US hospital giant HCA. The Financial Times reported in November 2013 that private equity companies have been approached about the possibility of taking over or merging with 19 commissioning support units (CSUs).13 In February 2014 NHS England issued a contract notice for 5 billion seeking companies to compete for work advising CSUs; the winners are due to be announced in early 2015, but companies such as SERCO, Optum (part of UnitedHealth) and Assura are reported to have submitted expressions of interest.14

 

Hospital management

In February 2012 the private company Circle took over entire operational control of Hinchingbrooke hospital in Cambridge. In January 2015 they announced that they were pulling out of the contract as they weren't getting adequate returns.

Privatisation of management is also ongoing in a different way with the Department of Health awarding contracts to some of the biggest management consultancies and accountancy firms. They will share in a £200 million pot to offer "failing" NHS hospitals strategic direction and temporary management. Deloitte, Ernst and Young and McKinsey are amongst those due to benefit.15

 

The Blood Service

In July 2013 the Government sold an 80% stake in the state-owned blood products business Plasma Resources to Bain Capital for £200 million. 16

 

PFI

Hospitals built under the private finance initiative where companies design, finance,   build and operate services are an early example of privatization. The cost of PFI is a continuing burden for many hospitals. In 2013/14, 9 out of the 15 most in debited trusts had PFI schemes. PFI is now widely recognised as providing very poor value, costing nearly twice the amount of a publicly funded scheme. Around 100 NHS hospitals have been built this way, started by the Tories but implemented mainly under Labour. The cost to the tax payer will be £80bn for hospitals that cost nearly £13bn to build.

 

Section 75

Section 75 of the Health and Social Care Act 2012 has been described as the "engine of privatisation" as it ensures that NHS contracts are opened up to the market. The regulations within it state that CCGs must put all services out to tender unless they can prove the service could only be provided by one particular provider.17 The effect has been to acceleratation by creating many more opportunities for the private sector and charities to bid to run NHS services.18

 

Any Qualified Provider (AQP)

This policy introduced competition across a huge range of community healthcare. Private companies and charities can apply to join a list of approved health providers alongside existing NHS services. Each provider, including existing NHS services, will be paid according to how many NHS patients choose their service. There are now 39 community health services for which AQP can be used by commissioning bodies to award contracts, including areas such as adult hearing services, continuing care for adults and children, dermatology, pain services, endoscopy and ophthalmology. 19

 

 

 

 

Tracking NHS contracts

Primary Care

Community Health Services

Surgery

Cancer Care

Commissioning support services

Blood services

PFI

Competition rules (section 75)

Any Qualifies Provider

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