Channel Four News – Outsourcing in Health

Here is another of my videos for the Channel Four News website series "Who Runs Your World"?  In this one, I'm talking about the history of outsourcing in the UK's Health Service.

In summary - private sector involvement goes right back to the start of the health service, when Nye Bevan decided that hospital consultants and General Practitioners could remain, in effect, private providers rather than becoming state employees.

We then saw a gradual increase in the use of the private sector through the 70s and 80s, as external providers were used in areas such as catering. But the big growth in private sector involvement under the last Labour government came in three areas:

1. Independent Treatment Centres, run by private providers, started actually carrying out operations for the first time.

2. PFI led to much greater private sector provision in areas such as ancillary services, catering, running car parks etc.

3. Greater private sector involvement in some of the major cross-cutting support areas – such as the outsourcing of NHS Logistics to DHL, or the involvement of Steria in NHS shared services.

It’s still unclear whether the current changes to the health commissioning process will lead to more private sector involvement in the delivery of front-line services. We’ll see...

Has it been a success? There are different views on the ancillary services. A lot comes down to the competence of the original contracting process and the contract management. And the budget matters - if a hospital only allows a pound a meal, it probably doesn't matter whether the catering is in or outsourced - the end result won't be very good.

We could argue about the success or otherwise of independent treatment centres – my view is that they certainly encouraged public sector providers (hospitals) to sharpen up their act by introducing an element of competition.

And as for the future - well, I think I talked a little about new areas such as Circle Healthcare running Hinchingbrooke, but that may have been cut form the final video! Interesting times ahead, though.

First Voice

  1. Sam Unkim:

    Does anyone have an example of outsourcing bringing an improvement in a service ?

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