The Independent Healthcare Association estimate that the private sector can deliver 150,000 operations a year in its 211 hospitals. This is small beer compared with the 6,500,000 NHS operations. The private sector already delivers 20% of all acute mental health provision, 80% of brain injury services and 55% of all medium secure care. There are 450,000 beds in private residential care, more than the NHS and local authorities combined and there is capacity to provide 40,000 more. Alan Milburn says “It is the right thing to do for patients” to make more use of private facilities. If the NHS has no facilities for me when I need them it will not disadvantage me individually to go to the BUPA hospital for nothing and enjoy the benefit of a private room with shower and wine with my meals. We have a mixed economy of private and public provision in many sectors, and since the collapse of the Berlin Wall there are few people advocating that the whole economy should be nationalised. The Labour Party has adjusted its definition of socialism accordingly. We now fight for “a dynamic economy, serving the public interest in which the enterprise of the market and the rigour of competition are joined with the forces of partnership and co-operation to produce the wealth the nation needs and high quality public services where those undertakings essential to the common good are either owned by the public or accountable to them”. It’s not quite as inspiring as it was before, but perhaps it is more useful as a guide to policy. But what effects might this Concordat have on the health service in the longer term?

If a mixed economy is a good thing – and this is a fundamental assumption not accepted by everyone – then the balance between services provided by the public sector and by the private sector is about quality and cost. The fundamental principle of the NHS is that care should be provided when it is needed without charge to the patient, not that it should be provided by the public sector. If we could get more health gain for less cost by contracting all NHS services to the private sector then we should do it. All that is proposed now is a bit of readjustment of the balance, and a bit more planning about how this balance is to be managed. Will this arrangement lead to improvement in public services? Will these private health undertakings, which are clearly already essential for the common good, be accountable to the public?

As far as private acute medicine goes there are a number of issues in respect of staffing. Many private hospitals are operated by NHS staff moonlighting. And so are many NHS hospitals. Conditions in the NHS must be attractive enough to keep trained staff inside the NHS – and doing their proper jobs, not coming back to their own ward as an agency nurse for more money. If we are going to lay down stricter conditions on how and when doctors work privately we might need to do the same for other staff. The costs of training are entirely met by the NHS for most staff and it is not unreasonable for the NHS to have first call on those staff for whose training it has paid. The national plan proposes protocols for transfers between the two sectors. Perhaps private hospitals should have to pay a transfer fee if they recruit an expensively trained NHS doctor. Many private hospitals rely on the NHS for backup if something goes wrong, and it is obviously cheaper to do routine surgery if someone else meets the cost of the intensive care bed which is needed from time to time. It would hardly be ethical to turn patients away because they had been in a private hospital, but perhaps the cost of this backup service could form part of the agreement.

Private hospitals concentrate on cold surgery and they might if permitted corner the market in particular conditions such as hip replacements, cataracts or bypass grafts and then drive up prices as seems to have happened with sex-change operations, which are almost entirely done privately. Alan Milburn has suggested that we might have dedicated surgical centres. They could be more efficient – although their efficiency might be gained at the expense of a loss of flexibility elsewhere in the system. It may not be desirable to have medical patients in surgical beds, but when there is an epidemic it is very useful to have them. We need to ensure that the costs of private surgery must not be higher than the costs inside the NHS, although that will entail some difficult negotiation about the marginal costs of extra work. If we are to show greater health gain from using the private sector then we must make sure that all the costs to the NHS are counted in. Private operators are far more experienced at laying off costs onto the NHS than managers are at spotting them.

Waiting lists are the main driver for private acute work. We have to end the days where a consultant can say to a patient “you will have to wait 42 weeks for this procedure on the NHS but at my private rooms I can see you next week.” Consultants may do this from the best of motives. They would like to do more NHS work but they cannot get theatre time or beds to do it in. The National Plan must reduce the incentive for patients to go privately because they do not want to wait, and we need to make it clear to consultants that diverting business from their employer to the competition is unethical.

It gives patients the impression that the NHS is a second class service. Most people know this is untrue, but it is easy to see how you could reach that conclusion because of the poor state of visible things like furniture, decoration and food in most NHS hospitals. We need to improve facilities in NHS hospitals, and perhaps consider whether patients should be permitted to pay for more extras. Paying for TVs and telephones seems to be acceptable. In our local psychiatric unit patients send out for a curry if they don’t fancy the hospital food. Perhaps patients could be permitted access to the hospital wine cellar if they are prepared to pay for it. In a more diverse society the institutionalised uniformity of the environment is one of the most uninviting aspects of a hospital, but it needs some sensitivity to permit people to pay for extras without the basic provision degenerating.

And how are we to make this private care accountable to the public? The track record on quality monitoring up to now has been mixed. Private hospitals have not been subject to inspection by CHCs or subject to any complaints procedure, and have relied on local NHS provision, especially of intensive care beds, to bail them out – at considerable cost – if something went wrong. The Care Standards Bill will make some improvements here, but there seems no good reason for not extending the work of the Commission for Health Improvement into the private sector. Residential care has been subject to increasingly rigorous inspection in recent years and there are signs that standards have risen and some poorer homes have gone out of business. But in many of the areas in which the NHS has used private provision, such as medium secure accommodation and eating disorders, there seems to be little expertise or interest inside the NHS, and certainly not much in the way of planning. If we are going to use the private sector more constructively then the planning and commissioning process will have to include their facilities in a more strategic way. It cannot be left to provider trusts merely to contract out business opportunistically. Accountability is not just about monitoring quality. It has to extend into the planning processes, which will be a challenge to the private sector but part of the price they will have to pay for a more stable relationship with the NHS must be an agreement that they will not undermine local NHS provision. Competition will have to be constrained, especially if local councils are to be convinced that what is proposed is acceptable. And we need to see transparent complaints processes and user involvement in the management of the service. Whatever mechanisms replace the CHCs must extend into the private sector. Ownership and accountability do not necessarily go together. If the private sector is to form part of the local NHS provision then if there is to be a patients forum, an advocacy service or scrutiny by the local council it will have to be included. Accountability implies an openness which the private sector may find challenging, as indeed do some in the public sector.

Martin Rathfelder 22/10/00

Why Milburn’s concordat is unhealthy

The health secretary, Alan Milbum, has just signed a concordat with the private health-care sector, promising early treatment for NHS – patients in private hospitals and other facilities, whenever necessary and free of charge. The unseen cost to patients and the NHS will be enormous. In South Birmingham this winter, for example, the cost of buying 10 intermediate care beds in private nursing homes will be £156,000 compared with £47,000 for 11 extra intermediate beds in two local NHS community hospitals. Moreover, Mr Milburn provides no guarantee that, in future, the private sector will not be used in preference to local NHS hospitals. This occurred during the 1994 waiting time initiative in Birmingham when varicose-vein work was subcontracted to a private firm in Manchester even though NHS surgeons said that, with additional funding, they could do the work more cheaply in local NHS hospitals. At the time, the health authority was implementing a strategy which involved the loss of hundreds of acute beds across the city. Today, similar bed and staff cuts are occurring as new PFI hospitals come on stream. it is acknowledged that PFI hospital schemes are more expensive to run than new publicly funded hospitals – not least because above average profits are now routine for PFI shareholders, according to the audit commission. As a result, NHS trusts are building considerably smaller facilities than the hospitals they replace. In Birmingham for example, the Birmingham University Hospital Trust plans to replace two acute hospitals with a £200m Privately financed hospital, which could result in an overall loss of 200 acute beds The government has earmarked an extra 33% rise in NHS spending over the next five years. Ironically, the concordat with the private sector and the policy of building PFI hospitals means a growing proportion of the extra money will go straight to shareholders instead of. funding improvements in the NHS.

Ursula Pearce Chair, South Birmingham Community Health Council 1997-2000