News

Privatising options on parade

The government has announced that it will give NHS hospitals more freedom to enter joint business ventures with private medical companies.

Under the new proposals, the government will increase the threshold of private financing for larger hospital trusts, according to their size. A small trust will retain its £250,000 threshold, while larger trusts can have a limit of up to £1 million, depending on size. Projects over £10 million, which would mean all new general hospitals, would still be vetted by the Treasury.

The proposals do not go as far as those suggested in MP David Willetts’ recent report, Opportunities for Private Funding of the NHS, in which he traces a step-by-step argument for hospitals to be both built and managed by private healthcare companies, with the NHS role being reduced to that of buying in services.

Willetts argues that, if a hospital is to be built by the private sector while being managed in the ‘traditional NHS way’, it will not be ‘able to embody the best features of an efficient private hospital’. He cites an example of a privatised kidney dialysis unit where he says the main efficiency factor is that the unit is ‘free of the Spanish practices which still bedevil labour relations in the NHS’. He describes how the nurses have been taught elementary technical skills, thus reducing the need for specially-trained technicians, and have had their shifts increased from eight to eleven hours.

Willetts contends that primary and community care could also benefit from private funding arrangements and cites the example of an experiment in this field conducted in Nottingham by Healthcall, a private company for which he is a consultant. He suggests that health regions be made to consider a private option whenever a project is being planned.

The recent government announcement, however, encourages contracting out only for restricted services, such as long-stay patients and acute services and joint private/NHS ventures on peripheral services, such as staff accommodation.

But, in increasing the sums available to trusts through private funding and decreasing Treasury vetting of those below a certain threshold, Labour believes that the government is slowly bringing in a private healthcare system ‘by the back door’.