NHS for Sale: Myths, Lies & Deception (37 page)

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 contract 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.

1. Contracts to run or manage clinically related NHS services have been advertised in 865 notices in the first 18 months since the HSC Act came in to effect in April 2013. These have a combined value of £18.3bn over their lifetime.
   
2. £5bn worth of contracts have been awarded through the market since April 2013.
   
3. 67 per cent of these clinical awards have been won by non-NHS providers – totalling £2.4bn in value. A further £760m was shared in ten 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 per cent of the total value tendered).
   
5. The number of NHS contracts being awarded through the market is rising significantly. In the first six months since the HSC Act came into effect (April-September 2013) over £400m of NHS contracts were awarded. A year later the number of awards (72) in the same six-month period (April-September 2014) has doubled 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 health care 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). So far non-NHS providers have won 56 per cent 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), Mental Health (64), GP Services/out-of-hours/111 (59), Pharmacy (51) and Community Care (39).
   
9. In terms of value of contract notices plus awards, Community Care services were of the greatest value at just over £1.9bn, followed by Diagnostics at £1.2bn, then Elective Surgery at just over £1bn, 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, £709m 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 £3-5bn over a four-year period.
    

Primary Care

For several years 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.
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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 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.
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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.
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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.
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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 £130m 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 £450m 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 £120m.
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Surgery

Private hospitals share of NHS-funded patients grew rapidly between 2006-7 and 2010-11 after the introduction of patient choice and as part of the ISTC programme. By 2010-11 private companies performed 17 per cent of hip replacements (11,500 operations), 17 per cent of hernia repairs (9,000) and 6 per cent of gall bladder removals (3,000) annually in England. By 2010-11 private providers also handled 8 per cent of patients’ first attendances in relation to orthopaedics or trauma, such as a broken limb; 4.8 per cent of gastroenterological problems; and 2.3 per cent of attendances for sight problems. The latest figures from the HSCIC (2014) show that 12 per cent of all NHS cataract operations are now performed by private providers.

In 2012-13, 45,379 cataract operations were carried out by non-NHS providers, or 12.6 per cent of cataract procedures conducted overall. This is up from 10.6 per cent carried out by non-NHS providers in 2012-13.
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Non-NHS providers conducted 4 per cent of procedures
overall in 2013-14 or 437,919 up from 3.7 per cent in 2012-13 (388,211).
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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.
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Cancer care

In July 2014, four clinical commissioning groups 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.
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The four CCGs involved are also seeking bidders for a separate £340m ten year contract to provide end-of-life care.
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Together the contracts are worth £1.04bn. 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.
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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 they 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 (SBS), handling a wide range of back office functions, is 50 per cent 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).
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In February 2014, NHS England issued a contract notice for £5bn seeking companies to compete for work advising CSUs; in early 2015 the winners are due to be announced, but companies such as Serco, Optum (part of UnitedHealth) and Assura are reported to have submitted expressions of interest.
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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 £200m pot to offer ‘failing’ NHS hospitals strategic direction and temporary management. Deloitte, Ernst and Young and McKinsey are amongst those due to benefit.
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The Blood Service

In July 2013 the Government sold an 80 per cent stake in the state-owned blood products business Plasma Resources to Bain Capital for £200m.
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Private Finance Initiative (PFI)

Hospitals built under the private finance initiative where companies design, finance, build and operate services are an early example of privatisation. The cost of PFI is a continuing burden for many hospitals. In 2013/14, 9 out of the 15 most ‘indebted’ trusts had PFI schemes. PFI is now widely recognised as providing very poor value. Around a hundred
NHS hospitals have been built this way. The cost to the tax payer will be £80bn for hospitals that cost nearly £13bn to build.
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Section 75

Section 75 of the HSC Act 2012 has been described as the ‘engine of privatisation’ as it ensures that NHS contracts are opened up to the market. The regulations later attached to 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.
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The effect has been to provide many more opportunities for the private sector and charities to bid to run NHS services.
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Any Qualified Provider (AQP)

This policy introduced competition across a huge range of community health care. 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.
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Advances in NHS care ‘going into reverse’

Two health think tanks claim that improvements in recent years to vital NHS services such as GP consultations, planned surgery and treatment in A&E – in terms of both quality and access – are ‘starting to go into reverse’.
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Research by the Nuffield Trust and the Health Foundation published by
Pulse
Today
found:

• Hospital A&E units missed the NHS target of treating and either admitting or discharging 95 per cent of A&E patients within four hours for over a year in 2013-14.
  
• The number of patients experiencing a ‘trolley wait’, a delay of at least four hours between the decision to admit them at A&E and their arrival on a ward, rose from 93,905 in 2010-11, to 167,941 in 2013-14 – an increase of 79 per cent.
  
• One in ten patients had to wait more than the supposed 18-week maximum for planned treatment, mainly elective surgery such as cataract removal, in 2014.
  
• Patients are waiting four days longer for such treatment than they did in 2010.
  
• Waiting times for mental health patients to be assessed by a specialist have risen by a third, and in 2013 such patients waited almost twice as long to be assessed as people with physical ailments.
  
• The number of nurses working in psychiatric hospitals has fallen by 13 per cent since 2010, despite a 17 per cent rise in the number of patients detained for treatment.
  

The researchers also found that patients are finding it harder to get a GP appointment and 250,000 fewer older people now receive free social care services.

Spending on management consultancy in the NHS doubles in four years

In December 2014, Professor David Oliver, Visiting Professor in the School of Community and Health Sciences at City University, writing in the
BMJ
noted that spending on management consultants had more than doubled from £313m to £640m per year between 2010 and 2014, even though the
coalition vowed to clamp down on the practice. The figures were obtained through a Freedom of Information request made by Professor Oliver.

In his article, Professor Oliver likened management consultants to ‘racketeers’ profiteering from ‘times of chaos’. He warned that the staggering fees charged were hurting the health services. The investigation found that many senior partners in the consultancy firms charge £3000-£4000 a day – the amount that a senior doctor earns in two weeks. Professor Oliver singled out examples including Barts and the Royal London Hospitals, which spent £935,000 on advice from Global Titanium Solutions, about twice the combined salary of the trust’s chief executive, chairman, and finance director; and West Dorset Clinical Commissioning Group, which is currently spending £2.7m with McKinsey for a ‘strategic review’. He warned that consultancy firms ‘are unaccountable and can walk away from bad or damaging advice with no consequences’, adding, ‘I have lost count of the number of reports that model drastic reductions in urgent activity or cost, based on no credible peer reviewed evidence’.
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