news focus

Published: 24/04/2003, Volume II3, No. 5825 Page 12 13

Since 2000's groundbreaking agreement, the much-hyped relationship between the public and private sectors has failed to have a massive impact, although, says Alison Moore, the concordat has not been without success

When health secretary Alan Milburn got into bed with the private sector in 2000 he was obviously hoping it was the start of a long-term relationship.

The groundbreaking concordat between the NHS and the independent sector signed in October 2000 was meant to lead not only to more NHS work being done in private hospitals, but also to a more planned approach for acute work. This would mean curtains for the end-of-year rush and the growth of long-term contracts as trusts try to hit waiting-list targets by commissioning work in the private sector.

But have Mr Milburn's wishes come to pass? Since the concordat between the NHS and the independent sector was signed in October 2000, work done for the NHS has certainly increased, although it has failed to meet some of the hopeful early projections.

Back in mid-2001, the Independent Healthcare Association predicted that the number of procedures could increase to 100,000 a year from around 35,000 in 1997. But after initial rapid rises the situation has stabilised.

'The figures for 2002 are not vastly different from those for 2001 - about 84,000 patients were treated. There is a lot more that could be done - our members reckon they could treat 150,000 a year, ' says a spokesperson. NHSfunded work has increased as a proportion of the independent sector's total patient throughput from about 5 per cent in 1997 to 7-8 per cent now.

But the IHA says long-term agreements are still thin on the ground.

'They are probably the exception rather than the rule, ' says a spokesperson.'It is more of the same piecemeal basis as it was when the concordat was signed. Long-term contracts are probably isolated instances rather than a pattern.

'We probably see in March each year almost double the number of NHS patients we would see in any other month - 12,000 rather than 6,000.'

And although the number of long-term contracts has grown, some individual ones will have been lost as trusts increase their in-house capacity or resolve waiting-list problems.

This picture of patchy progress is backed by the big independent hospital groups.

BUPA says: 'While we are seeing some very strong growth in certain areas it is quite static in others. Across the 34 hospitals we have not seen significant year-onyear growth in the first quarter.'

Although there is still much spotpurchasing (especially during the winter pressures), there are some longer-term arrangements.

Perhaps the most significant of this is the BUPA Redwood Hospital in Surrey, which has become a diagnostic and treatment centre contracted to the NHS for the next five years (see box).

But BUPA has also done a number of less well publicised deals.

The 78-bed BUPA hospital in Southampton, for example, has been doing work for three local trusts and has some deals which are relatively long term, running over two financial years.

'It helps trusts kickstart their financial year by being on top of their ongoing access issues, ' says general manager Philip Housden, who has also worked in the NHS.

Since taking up his current post 10 months ago, he has concentrated on building up relationships with key people in the NHS locally - PCTs as well as trusts. 'We are becoming more of an accepted part of the local health economy, ' he says.

The next step is to discuss how the BUPA hospital can be part of the solution to local capacity problems over the next three years.

Overall, NHS work makes up about 6 per cent of BUPA's work and has increased significantly since before the concordat.

Capio, which runs 22 hospitals in the UK, has recently treated more than 400 NHS patients in a centrally funded deal co-ordinated by the South directorate of health and social care. Orthopaedic patients from 12 trusts in five strategic health authority areas - South West Peninsula; Dorset and Somerset; Avon, Gloucestershire and Wiltshire; Thames Valley; and Surrey and Sussex - were treated in seven Capio hospitals in the South, generally remaining fairly close to home.

Discussions about the work started back in October, and some patients were treated before Christmas, but the majority of operations were carried out in the last quarter of the financial year.

Chris Leworthy, director of NHS partnerships at Capio, says: 'This is precisely the way in which longer-term partnerships between the independent sector and the public sector can be developed.

'All too often the independent sector is approached at the last minute for almost-emergency purchasing. This was a much more sensible relationship.'

Capio was talking to NHS purchasers about significant volumes of cases, he adds. It is also trying to take over the King Edward VII Hospital in Midhurst, West Sussex, a privately run hospital with financial problems. The hospital is well-integrated into the local NHS and most of its work has been under contract for the NHS. Should Capio succeed - and planning permission is needed as new homes would be built on the site and existing buildings converted - it may gain substantial NHS contracts.Mr Leworthy says: 'We believe the way forward is for it to be positioned as a centre of excellence treating both NHS and private sector patients.'

BMI Healthcare is currently doing around 14,000 procedures a year for the NHS, including many complex ones such as heart surgery, where pre-planning is vital.

Some of these are done under longer-term contracts lasting up to a year. But the position is patchy, with some areas of the NHS keener than others to commit to the long term.

Nuffield Hospitals is reluctant to give figures but says it treated a 'substantial' number of NHS patients last year and will continue to take on NHS contracts where it has the capacity, facilities and staff to do so.

But independent hospitals are likely to be protective of their main markets - insured and selffunding private patients who expect convenient, quick access.

In the early days of the concordat, many BUPA hospitals in the South East were unable to take on much NHS work because they had little spare capacity. To open up more independent sector capacity, the NHS may be forced to offer long-term contracts spread throughout the year - no independent sector hospital wants to put off potential private patients by being block-booked by the NHS for the first quarter of the year, but operating at 60 per cent of capacity for the remainder.

As it is generally the same consultants working in both sectors, there will also be a limit to how many operations they can perform in any month.

Longer-term contracts may also encourage private hospitals to make investments in staff and facilities which would not be worthwhile for a short-term rush.

When the BUPA hospital in Manchester took on a contract for Manchester Children's Hospital back in 1999, for example, it expanded its staff to include more specialist paediatric nurses and nursery nurses.

So what is going to happen in the future? The IHA foresees PCTs becoming more significant commissioners, rather than acute hospitals effectively sub-contracting care as tends to happen at the moment. Private healthcare providers are keen to build up relationships with PCTs which they hope will eventually lead to contracts: they also point out the advantages to PCTs of having alternative providers when negotiating with trusts.

But will the NHS's own plans to build more capacity put an end to the need for much work to be done in the private sector?

Diagnostic and treatment centres, in particular, aim to do the sort of work which is easily contracted out to the private sector - which may be why some independent firms have been keen to set up and run them. An announcement from the government on whether any DTCs will be run by the private sector is awaited.

Philip Blackburn of healthcare analysts Laing and Buisson suggests DTCs will not spell an end to purchasing from the private sector. 'As you get more capacity demand increases, ' he says.

But NHS trusts may be concentrating on the 2004 waiting-list targets and contracts with the private sector may not go beyond that, he suggests. 'I think if the government is struggling to meet those targets at the end of this year we will see a large increase in spot purchasing, ' he says. 'There is a short-termism in the NHS which is hard to get away from.' l Success in the long term: Redwood Hospital The prime example of long-term working between BUPA and the NHS is the Redwood Hospital in Redhill, Surrey, where the entire capacity of the hospital has been contracted to the NHS for five years, at a cost of£9m a year.The Redwood - which is linked to the main NHS acute hospital by a corridor - has effectively become the first public-private partnership DTC.

Consultant cover is being provided by the trust, which has also seconded some nurses to the hospital.Around 12,000 procedures a year will be carried out - 7,000 transferred from the day caseload at the East Surrey Hospital and 5,000 additional cases.

As well as reducing waiting lists, this will give the Surrey and Sussex Healthcare trust an opportunity to reconfigure its own services.

'Obviously there are teething problems but we are working together to overcome them, ' says Matthew Kershaw, director of strategic development at the trust.Such problems are tended to be more administrative and systems issues rather than cultural ones, he adds.Using the existing capacity of the Redwood was far quicker than a new build - and worked out cheaper than buying the operations piecemeal from the independent sector, he says.

At the end of the five years, BUPA's lease on the building will expire - and how the unit will work then, and who will run it, will be up for discussion again.