Controversy over UK NHS commissioning / procurement

We wrote last week about the new UK Department of Health regulations that “clarify” how the commercial aspects of commissioning are supposed to work under the new Clinical Commissioning Group regime.

Since then, there has been a growing swell of complaint and questioning from the media, stallholders and medical professionals.Indeed, that has now led the government to say they will review the regulations.  I’m a little surprised at all the outcry because I always assumed the changes were going to have a major effect and were likely to open up the market to private providers.  For instance, way back in May 2011 we asked:  “... how will ‘any willing provider’ work without it leading to cherry-picking and the most profitable work drifting away to private providers”?

But obviously some people believed it wasn’t really going to make much difference; however, one fundamental issue is that you can’t easily open up the system to just a little competition – EU regulations tend to make it all or nothing.   So reality is now biting and we’re getting comments like this, reported by the BBC, from Professor Terence Stephenson:

“Exposing more of the NHS to private competition could cause a "dangerous" fragmentation of health services in England , the chairman of the Academy of Royal Medical Colleges has said”.

Our article also got some interesting comments from our readers - here’s a sample.

“Basically it’s another large step in the plan to shift the NHS across into being an “insurance” provider. GPs are going to have to commission all services as “frameworks” to provide patient choice. Private providers will have huge sales team producing wonderful bids full of improvement opportunities. Patients will take the Private choice to avoid a “Mid-Staffs” experience, regardless of cost. Hospitals will have to move out of providing anything but “Blue Light” and critical care as economies of scale dwindle.  Job Done”.  (Sam Unkin)

It was always about opening up the spend to private companies. That is why lobbyists lobby and MPs take non-Exec posts etc. How can you predict over a 10-year contract where medical technology & pharmacy will take you? Blanket privatisation in Councils has serially failed in Bucks, Beds, Liverpool, Birmingham and Somerset, so your touching faith in fusing the best of public & private Peter is not backed up by any serious evidence is it? I predict another cartel-like & dysfunctional market developing like energy, water, rail etc. (Dave Orr)

“There is enough confusion in the system already and these new regulations add further complexity at a time of turmoil. As a statutory instrument coming into force from the 1 April (if they actually get through the Lords without significant change!) they will be subject to wide interpretation at local level which will ultimately lead to significant increased legal and procurement costs... As a procurement practitioner in this area, the CCGs I have spoken to are confused, frustrated and angry by some of the areas included incorporating what was previously guidance and policy into domestic law and giving Monitor powers far in excess of those currently afforded ...It would appear that Jeremy Hunt has just woken up to the fact that these Regulations will create a legal mindful...

PS  If anyone can answer the question -  does this mean that the one year contract (current maximum that you can award without SHA or Commissioning Board approval) with the local hospital for £100M needs to be competitively tendered each year? Would be great to know. Pandora’s box is open and will be very difficult to close”. (Pauline)

"The section 75 regs at a first glance seem similar to the previous PRCC that PCTs had to follow, however there are some significant differences... the default position in the new regs that everything should be put out to competitive tender and that the only basis for doing a single tender award (i.e. not tendering) is for “technical reasons” (which are unhelpfully not defined) or “extreme urgency”.

This is definitely significantly more restrictive than the PRCC which gave more scope for PCTs to award contracts without tendering (e.g. to other NHS bodies) where it could be shown to be in patients’ interest. This test has been removed and no provision for “in-house” awards seems to be allowed. As Pauline says, this suggests that even the main acute contracts that PCTs agree with major hospitals would be required to be tendered – something which seems almost inconceivable at the moment. There are other references in the new regs to CCGs having to ensure that commissioning decisions don’t adversely impact competition within a particular market – again something which wasn’t required previously... " (Mark)

So, interesting times for procurement and commissioning professionals in the sector, and we will without a doubt come back to this. Do read all the comments here, and thanks as always to everyone who has contributed.

First Voice

  1. Dave Orr:

    This comment on privatisation and profit from public services relates to a joint venture contract between Cornwall Council and BT, but could equally apply to NHS Commissioning, couldn’t it?

    Copyright to “Despondent Worker” in Cornwall (and I suspect everywhere in the NHS soon):

    ===============================================================

    Common sense dictates that a private, profit making company are only going to be keen on this deal because it will prove profitable for them. They are not going to be interested in running anything at a loss or for the good of the residents of Cornwall.

    Profit is the net difference between the cost of delivering the service and the charge for the service. Realistically, there are only two ways to accomplish this; by charging more than the service costs or by charging the same amount but reducing the level of service.

    The traditional argument here is that private companies are inherently more efficient than government organisations and are therefore able to deliver the magic free lunch. Meanwhile, back in the real world… this is rarely (if ever) the case and anyone who has bought a rail ticket or paid their water bill lately should be able to testify to this.

    Of course the latest spin on privatisation is the ‘Strategic partnership’ or ‘Shared services’ idea which will deliver efficiency and savings by sharing resources between organisations as we all hold hands and wear our little JV hats. Again, back on Earth… I suspect we’ll actually see a disjointed mashing together of several disparate departments, systems and processes complete with flying shrapnel and an endless procession of over-paid project managers attempting to hold the whole ungodly mess together.

    ===============================================================

    Have a look at the Blog of that very rare species – a Councillor who is an Independent and not whipped into party block voting:

    http://www.cllrandrewwallis.co.uk/bt-invited-to-tender-for-the-jv/

    There are more choughs in Cornwall than non-party Councillors!

    No prizes for guessing who “Beware the Ides of Somerset” might be……!

Discuss this:

Your email address will not be published. Required fields are marked *