The Private NHS

Mark Reid

Class 2007/2008

16 Nov. 07

Competition is the essence of economic theory. In a perfect market

competition is essential to drive innovation and cause the parties involved to

push themselves to achieve the best results that can possibly be attained. It’s

healthy, natural and seems to conform to the psychological profile of western

democratic free market society.

In public sector markets however, there is generally no competition therefore

the lessons that the private sector have learned have been missed by the

public sector. The concept that growth and innovation through competition is

often viewed as a threat rather than an opportunity for growth. The National

Health Service has been publicly funded and provided since the forties and

time and again, the patients, clinicians and politicians have expressed their 

wish that it remain in the public realm. The most common argument being

that health care is a basic human necessity and therefore should be provided

by the government without thought towards profit.

Unfortunately this belief is flawed. While no one in the United Kingdom wants

to see a private health system like the United States where a sixth of its

population is unable to access health services and many, many more fear that

their coverage will not cover them completely in case of accident, the

government sees the economic benefits of private sector involvement and the

competition that it brings, and sees it as a temptation that cannot be ignored.

This review looks at some of the measures that are being considered to make

 

private sector competition in the public health more palatable to the general

public.

The first article being considered by this review is a Health Services Journal

article from early in 2007 entitled Opportunity Knocks. This article lays out the

government’s goals of using the Independent Sector Treatment Centres

project to provide the private health industry with the opportunity of offering

several politically loaded, low priority health care packages, such as cataract

surgery and hip replacements, on guaranteed contracts with the government.

The article answers the most common accusations from the public sector 

providers and government opponents to the private provision of health, some

of which are legitimate, the majority not.

The second article also from the Health Services Journal, entitled Wise Buys,

looks at how the government’s new policy document The Framework of 

securing External Support for Commissioners (FESC) lays out the guidance

for allowing the NHS to contract out to private health care organisations and

health management organisations for guidance on ensuring the purchase of 

best value care options. The article talks with several Primary Care Trusts

(PCT’s) and one Strategic Health Authority (SHA) that have decided to

purchase their commissioning capability from the private sector, usually due to

the poor performance of their in-house commissioning capability. The article

further examines the options now available to all PCT’s and SHA’s to involve

the private health industry in their commissioning framework.