The founding principles of the NHS

1
The founding principles of the NHS

• Colin Leys
• Centre for International Public Health Policy
• University of Edinburgh

2
Universal, comprehensive and free

• from the date of the earliest planning
  documents it had been assumed that the new health
  service would be universal (available to all),
  comprehensive (including all services, both
  preventive and curative), and free (involving no
  payment at the point of delivery).
• (Charles Webster, The NHS A Political History,
  p. 22)

3
A first class service for all

• Bevans scheme involved an explicit
  egalitarian commitment and a first-class standard
  of treatment, thereby implying emancipation from
  the preoccupation with the minimum or
  subsistence standards that had characterised
  earlier proposals.
• (Webster, The NHS, p. 24)

4
The NHS is no longer comprehensive or fully
universal ability to pay is back

• Dental care, routine eye care, long-term
  residential care, domiciliary care and hospice
  care must now be paid for
• A return to a minimum or core of free
  services is now anticipated (the BMA, A national
  way forward for the NHS in England, p. 11)

5
Since 2000 government policy has been to create a
market in health care

• Market advocates argue that only competition can
  make the NHS efficient
• By 2008-10 all NHS trusts will be Foundation
  Trusts with market freedom, answerable to the
  independent regulator, not the Secretary of State
• They will compete with each other and with
  private providers for patient revenues.

6
Existing UK private providers could not compete
with NHS trusts

• Geared to treating a small number of privately
  insured patients typically in small hospitals or
  private units
• Relied almost entirely on NHS consultants working
  part-time
• Consequently, a high-cost business model

7
A new kind of private health care sector had to
be created via ISTCs

• spare health capacity in other health systems
  will be made available through new surgical
  and diagnostic units that are set up and run by
  independent operators and staffed with overseas
  clinicians This will be a new sector in health
  provision in England the NHS will be the core
  business of units in this sector
• (Growing Capacity a new role for external
  healthcare providers in England, DH June 2002)

8
The ISTC programme

• 13 mainly foreign-owned companies, operating some
  48 centres in England
• Contracts run for five years in principle
  renewable indefinitely, subject to renegotiation
• The first wave opened in 2003
• The second phase is opening in 2007, (i.e. to run
  concurrently with the first wave)

9
Wave 1 Independent Sector Treatment Centres
(ISTCs) starting in 2003

• Company No. of Total procedures
  centres over five years
• Netcare (Opthalmic chain) 89,600
• Capio 9 93,441
• Mercury 5
  498,151
• Nations Healthcare 3
  276,680
• Partnership Health Group 3 128,144
• Interhealth 2
  33,817
• Clinicenta 2
  158,845
• UK Specialist Hospitals 1
  56,242

10
Phase 2 ISTCs, CATS and ICATS, starting in 2007
(a) electives

• Company No. of Centres
  Total procedures
• over 5 years
• Netcare 2 (CATS)
  1,020,000
• Capio 1
  55,000
• Mercury Health 1
  145,000
• Partnership Health Group 1
  615,000
• Clinicenta 2
  2,620,000
• UK Specialist hospitals 1
  139,000
• BUPA 2
  109,000
• Nuffield 1
  146,620
• Care UK 1 (CATS))
  220,000
• Fresenius (England-wide haemodialysis)
  500,000

11
Phase 2 (b) diagnostics

• Company No of centres Procedures
  over 5 years
• Inhealth Netcare 2
  1,450,000
• Atos Origin 2
  2,350,000
• Mercury Healthcare 1
  942,500
• BUPA 1
  500,000
• AMC Diagnostics 1
  770,000
• (Alliance Medical and Care UK)
• Alliance Medical 1 (PET/CT scans)
  240,000
• Molecular Imaging 1 (PET/CT scans)
  215,000
• Solutions (InHealth Group)

12
Wave 1 and Phase 2 ISTCs combinedProcedures
contracted for per annum

• Wave 1 Phase 2 Total
• Average no. 176,000 1,117m. 1.287m.
• of electives
• Average no. 182,000 1.494m. 1.512m.
• of diagnostics

13
Actual performance of Wave 1 ISTCs

• Total numbers of procedures
• Contracted for Carried out Average
  carried
• 2003-2008 by Jan 07 out
  per annum
• Elective
• 880,000 114,000
  38,000
• Diagnostic
• 912,000 60,000
  20,000

14
The scale of private provision contracted for
requires the transfer of NHS staff to private
employment

• The additionality rule has been effectively
  abolished
• NHS staff are being transferred to ISTCs via
  secondment, re-worked individual consultants
  contracts, and some explicit staff transfers to
  ISTC employment
• But no upper limit to the role of the private
  sector in the NHS (Hewitt, November 2006) means
  that this model can only work in the short term

15
Five stages in the experience of NHS staff as the
private sector expands

• 1. Secondments from the NHS to private sector
  providers
• 2. NHS contracts are reworked so that more and
  more non-contracted hours are worked for
  private providers
• 3. Growing medical unemployment forces staff to
  accept private sector employment on non-NHS terms
• 4. NHS trusts reduce terms and working conditions
  to compete with private provider terms
• 5. NHS training is cut accordingly
  self-regulation is curtailed to make this
  possible

16
The transaction costs of the market estimated
percentage of the NHS budget spent on
administration

• Mid-1970s 5-6
• Mid-1990s, with the internal market
  11-12
• 2007 (with the PFI, patient choice,
  20 ?
• payment by results, fee for service,
• contracting costs, accounting,
• marketing, advertising, legal costs,
• etc.)
• Estimates by Charles Webster, official historian
  of the NHS