Venture capitalists see a new market

Guardian leader
Monday October 3, 2005

Do not be beguiled by the health secretary's assertions that 
the second wave of treatment centres currently under 
negotiation will restrict the private sector to a 10% share 
of elective care or just 1% of NHS expenditure. It would be 
a mistake to infer that this would be the limit of private 
sector involvement.

True, elective care - routine non-emergency surgery such as 
cataract operations or orthopaedic work such as hip or knee 
replacements - accounts for only just over 10% of NHS care. 
But ministerial plans for the private sector are not 
restricted to just elective care. They have a much wider focus.

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The latest development is a plan by a former Goldman Sachs 
banker to build a network of private health campuses across 
England offering services to NHS patients. Each would have a 
state-of-the art hospital, surrounded by other healthcare 
facilities such as GP and dental surgeries, pharmacies and 
gyms. One of the attractions for medical staff would be the 
co-ownership model on which it is based, under which health 
professionals would share in the profits. He has already 
recruited 300 NHS consultants to work in the centres in 
their spare time. The scheme has been designed in 
anticipation of the new health market that opens in 2008 
when NHS patients will be entitled to select any hospital, 
public or private, that can work within NHS cost limits. 
Treatment will remain free to the patients, whose private 
bills will be funded by the NHS.

The new health entrepreneur still has a long road to travel. 
His current funds - "significantly in excess of £100m" - 
would barely build more than one campus. But his investors 
already include one multi-billion pound institution and he 
hopes to become a City conduit for more. Even under current 
spending plans, the NHS will be paying the private sector 
over £4bn a year for services - 6% of total spending. And 
this does not include the new markets emerging in primary 
care and community services, the latter boosted by primary 
care trusts divesting themselves of these services by 2008.

All this is being pursued open-eyed by ministers and even a 
readiness to accept that it will mean closure of NHS units 
and a more fragmented service. Last week's composite 
resolution at the Labour party conference calling for a 
suspension of these moves until rigorous assessment is made 
will be ignored. Clearly only a revolt of the electorate - 
such as in Kidderminister when a hospital unit faced closure 
- will stop them. It is now up to the voters.

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