UK Government turns to for-profits to bust backlog
The UK independent sector is gearing up for an explosion in backlog-busting public outsourcing. The for-profit hospital, ophthalmology and imaging markets in particular look set for a significant boost according to wide-reaching government plans announced today (August 4).
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Thirteen new community diagnostic centres (CDCs) – including eight independently run CDCs – are being launched across the country as part of government plans to use the independent sector to cut NHS waiting lists, Health and Social Care Secretary Steve Barclay said.
Five of these independent sector-led CDCs will operate in the South West of England, with permanent sites fully opening in 2024 in Redruth, Bristol, Torbay, Yeovil and Weston-super-Mare. Additional diagnostic testing capacity is already being rolled out in the region via the use of mobile diagnostic facilities, to provide additional diagnostic services while these sites are constructed.
Three others will open in Southend, Northampton and South Birmingham – with the former commencing activity from November and the latter two from December. A spokesman for the government said: “These independently run CDCs will help to make it easier for patients to receive checks closer to home and will remain free at the point of use for patients. This adds to the four CDCs run by the independent sector that are already operational in Brighton, North Solihull, Oxford and Salford.”
These 13 new CDCs will provide capacity for more than 742,000 extra tests a year once all are fully operational, bolstering access to care.
The government has also set out additional new measures to unlock spare capacity within the independent healthcare sector. This comes following actions from the Elective Recovery Taskforce which was established last December. Chaired by Health Minister Will Quince and made up of academics and experts from the NHS and independent sector, the taskforce looked for ways to go further to bust the COVID-19 backlogs and reduce waiting times for patients.
The measures include a commitment to using data on independent sector providers to identify where they have capacity to take on more NHS patients to help clear the backlog, and increasing the use of the independent sector in training junior NHS staff.
As part of the plans, the tendering process to do NHS work will be made more transparent. This means both operators and commissioners will be made aware which facilities meet the criteria for providing NHS care.
Ultimately, the change should make it easier for patients who are already on the waiting list to come off it and also to treat new arrivals without subjecting them to the same lengthy waits as their peers. The UK’s independent sector has a capacity to carry out 30% more NHS procedures than it currently does.
A source who worked on the outsourcing taskforce tells HBI: “What the new regime will do is make the criteria clear and transparent. You have a situation today where they are not following the existing law effectively, and by making it more transparent it strengthens the law as it stands rather than changing what exists.
“Choice has existed for 10-15 years in the NHS constitution, but patients don’t know they have a choice and GPs and administrators don’t often have the time to offer that choice. You sort of slip into default behaviour.
“From this month, there will be an awareness raising campaign on choice making patients more aware and make an obligation on GP referrers to offer choice by default. Everyone will be offered five providers of a particular services, regardless of whether they’re independent or NHS.”
The re-emphasis on existing laws should also make it easier for new capacity, whether that be a new entrant in the market or an existing player entering a new geography, to become accredited.
“The objectives are to make it easier for new entrants into the market to be accredited to provide capacity for the NHS. Those provisions have existed for ten years, they’re just not applied in a transparent way, so this process will be much more transparent and clear to enable providers who want to provide services an easy to follow process to become accredited,” the source explains.
HBI understands five groups will be the greatest beneficiaries of this:
- InHealth, the UK’s largest imaging provider which works in over 800 hospitals, medical centres, GP surgeries and health clinics
- Spire, the UK’s largest hospital group
- Ramsay, a subsidiary of its eponymous Australian hospital group
- Practice Plus Group, a for-profit hospital group which delivers NHS care and middle market self-pay options
- Circle Health Group, another of the UK’s largest for-profit hospital operators
Spire’s CEO Justin Ash said: “The best way to reduce waiting times for patients is for the independent sector to be fully integrated as part of the solution, and to offer choice. We welcome the Taskforce’s recognition of this and are pleased that it has recommended some bold and far-reaching steps to encourage collaboration, promote patient choice and engage the independent sector to help deliver the NHS Workforce Plan.”
By October 2023, all patients waiting over 40 weeks who have not had a first outpatient appointment booked or where a decision to treat has been made but the patient does not have a date for their treatment will be able to initiate a request to transfer to another provider and receive treatment more quickly.
Tom Whicher, founder of NHS-facing technology platform DrDoctor, tells HBI ophthalmology operators could be another beneficiary: “It’s a high-volume, low complexity sector where the patient outcomes are directly correlated with how soon they are seen. Basically, choice is good, and we should do everything we can to give people that.”
Sources have previously told HBI the opportunities will be most profound outside London. The assumption goes London has more high-margin private pay patients, and so NHS outsourcing wouldn’t make sense for London providers. The source who worked on the outsourcing taskforce tells us this is an oversimplification.
Whicher says: “Spire operates all over the country and have a high share of private pay but also do public pay. If you took HCA out of the picture you’d have a more diverse view of the payor mix in London.”
HBI understands there are no plans to change the NHS tariff to incentivise outsourcing.
Jamie Griffin, head of commercial at teleconsultation provider Livi, tells HBI: “The really positive thing is the opposition’s (Labour party) response, which is aligned to the government. Private care is not seen as the enemy and this hasn’t been presented as privatisation. That’s always been a difficult dichotomy. We know from working with the NHS that private companies don’t always get the confidence we feel they deserve from the public.
“We are a private company but we only thrive if the NHS thrives. We offer additional GP services to a subset of patients we believe could benefit from it, and we can deliver this care better than the NHS can alone.”
NHS England will evaluate the independent sector’s impact on healthcare capacity and has already begun publishing regular monthly data on independent sector use, showing its contribution to tackling the backlog.
David Hare, Chief Executive of Independent Healthcare Providers Network, who sat on the taskforce, said: “This is a real, significant step forward to unlocking more of the capital, capacity and capability of the independent sector (building on) the Prime Minister’s recent welcome announcements about how the government is committed to providing patients with better choice over who provides their NHS care, as well as positive changes in how services are procured, which can help add overall capacity and speed up waiting times for NHS patients.
He added “the commitment to open further independent sector-led community diagnostic centres is also good news for patients, deploying some of the private capital that is available to build new facilities and to help ensure that more NHS patients can get the tests and scans that they need”.
Will it work and crash private pay demand?
When could we expect to see the waiting list reduce? A source says this is the million dollar question. He explains: “Given the waiting list has been growing every month, I think that the likely outcome is you stabilise the waiting list rather than it growing. There is the opportunity to reduce it but the trajectory will be quite flat. The PM is dampening expectations on the NHS waiting list aspect.”
The outcome on the public sector could be a source of concern for private providers as rising waiting lists have correlated with increased demand for self-pay and private medical insurance. This has also transitioned the UK private sector from the elective care sausage factory it once was to a more holistic sector offering other disciplines, like paid-for primary care. Though it seems a reach from the current situation, if waiting lists are tackled, the demand could be too?
Griffin says: “I think people would go back to how it was. The whole goal is to maintain free at the point of use care. This is proving the NHS partners well with the private sector, so patients won’t expect to pay.”
Whicher agrees: “Lots of people are paying to go private, but I personally don’t think a copay model is a good idea. It creates complexity and risks creating a two-tier system. It’s better to utilise the private sector capacity we already have.”
But our source who worked on the outsourcing taskforce explains this may not be the case: “What we’ve been seeing is marketisation and widening the supply, privatisation is shifting the burden of payment from state to individual. Will that sustain as people get used to paying for a portion of their care? We’re seeing that already. I don’t think you’ll find a politician saying that’s what they’re trying to do but that may be the de facto outcome which comes to pass.”
We would welcome your thoughts on this story. Email your views to Joe Quiruga or call 0207 183 3779.
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