Time to end the NHS experiment with the market?
From NHS Support Federation:
- The private sector share of NHS contracts is rising, as they focus increasingly on growing opportunities to provide community health services. For-profit companies won £3.1 billion worth of new contracts in the last year (16/17).
This was 43% of the total value of awards advertised and their share has risen from 34% (15/16).
- Virgin Care has been the most successful company in winning NHS clinical
contracts – mostly to provide community healthcare, picking up over £1bn worth
of NHS awards in 2016/17. Its latest awards are a £355m contract to provide children’s health services in Essex and a £65m award to run community health in West Lancashire. In each case the company is taking over services from the NHS and non-profit making providers. Virgin Care is now the dominant private provider in the NHS market – winning a third of the total value of contracts won by non-NHS providers over the last year. The number of services the company provides to the NHS has risen from 230 to 400 over last 12 months, according to its website.
- There is compelling evidence that the competition regulations under section 75 of the Health and Social Care Act (2012) – introduced in April 2013 are dysfunctional and have resulted in numerous failed outsourcing projects.
In a growing number of instances NHS organisations are starting to game-play the
procurement rules to avoid open competition. At the same time private companies are using the courts and competition law to try to maintain their access to NHS contracts.
- There is a growing consensus that the competition framework needs to be
replaced and yet party-political concerns are preventing it, a situation which will
leave the NHS with a failing procurement model and could result in a further
£10bn in NHS contracts going to the private sector over the next 3 years.
- Accountable Care Systems have been flagged as the new model for local
healthcare planning in the NHS. The future role for private companies has not
been clarified, but commercial opportunities are far from being capped.
Only a handful of examples of new models of care are fully developed and so far the private sector have not been bidding for the multi-billion contracts. However, in Nottingham, Capita and Centene have been employed to help develop the Accountable Care System. Healthcare companies are also well placed to bid to market their costsaving solutions to ACOs, who will operate with capped budgets. Virgin and Care UK have already landed over £2bn worth of NHS business and the government has not signaled that it will inhibit this kind of sub-contracting or outsourcing.
- An even bigger role for business is possible though. The ACO contract that has been drawn up by NHS England does not preclude the private sector from bidding for them, although the major players in the international market, companies like United Health and Humana and Centene could will want to assess the business risk.
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