From today's FT -
http://www.ft.com/cms/s/1e990a18-fef5-11da-84f3-0000779e2340.html


     Insurers invited into NHS economy

By Nicholas Timmins Public Policy Editor

Published: June 18 2006 22:18 | Last updated: June 18 2006 22:18

Private health insurers are being invited to take over the 
purchasing of
care for NHS patients, putting in place one of the final 
pieces of the
government’s drive to shift to a fully mixed economy of NHS 
care.

Private providers already supply a small but growing 
proportion of NHS
operations, diagnostics and mental health facilities.

But the Department of Health is now advertising for the 
commercial
sector to take on the work of primary care trusts – the health
authorities that commission hospital and GP services, and 
community care
on behalf of NHS patients.

The move is likely to attract interest from big US insurers and
providers such as United Health and Kaiser Permanente, 
Discovery of
South Africa, Bupa, PPP and Norwich Union in the UK, and 
possibly German
and Dutch health insurance funds.

“This means that in essence there are now no ‘no go’ areas 
in the NHS
for bringing in private sector and commercial expertise,” 
said Chris
Ham, professor of health services management at Birmingham 
University
and a former head of strategy at the Department of Health. 
However, he
said it remained to be seen whether the private sector had 
the necessary
skills.

The Department of Health is advertising a “framework” deal, 
with no
guarantee that any actual contracts will be awarded.

But once commissioners have qualified, primary care trust 
boards would
be able to draw on them to undertake the purchase of care on 
their
behalf, with the Department of Health able to order the same 
where a PCT
is seen to be failing.

In a separate development, Patricia Hewitt, the health 
secretary, will
tomorrow announce moves to let the private sector and 
charities take
over some of the NHS’s ailing community hospitals, using NHS 
seed corn
capital to launch a wide range of joint ventures.



http://www.ft.com/cms/s/19cf82d8-ff30-11da-84f3-0000779e2340.html


     Last brick in the wall for new-look NHS

By Nicholas Timmins Public Policy Editor

Published: June 19 2006 03:00 | Last updated: June 19 2006 03:00

The decision by the Department of Health to open up the 
purchasing of
NHS care, as well as its provision, to the private sector 
amounts to the
last brick in the wall in the government's construction of 
the new-look
health service.

To patients, such a move will make no immediate difference. 
They will
still visit their GP and, if need be, move on for treatment, 
still free
at the point of use, to the hospital or community services 
that are paid
for by their primary care trust.

Already these services can be provided by a traditional NHS 
trust, by
the new free-standing Foundation Trusts or by private and 
not-for-profit
providers.

The difference is that it would not be NHS staff, directly 
employed by a
PCT, who would be choosing which services - including GP 
services -
provide the best available choice. That would be undertaken 
by a
privately-owned manager, operating on contract to the PCT's 
board and
charged with obtaining the best value for money.

The move is part of what the health department calls a "step 
change"
that is shifting the NHS from being "a services provider to a
commissioning-led organisation" - one that operates in 
effect as a
giant, tax-funded health insurance scheme with no 
ideological view
remaining about who should provide the service: the 
publicly- owned NHS,
the private sector, or the third sector made up of voluntary
organisations and charities.

To opponents, this will be seen as another big step towards
"privatising" the NHS even though care will remain, as now, 
largely free
at the point of use.

The move reflects the fact that "ministers do not have huge 
confidence
that the NHS itself can deliver what is required on 
commissioning",
Chris Ham, professor of health services management at 
Birmingham
University, said yesterday.

"The question," Prof Ham said, "is how confident you can be 
that if you
bring in external expertise, is it going to do any better?"

Such expertise tends to lie with health insurers. But he 
said: "UK
health insurers have expertise in a fairly narrow range of 
services,
chiefly elective care and diagnostics, that make up a tiny 
proportion of
what the NHS provides."

"The big US insurers have expertise across the full range of 
services.
But they are not used to operating within the fixed budgets and
political constraints on health care in the UK." German and 
Dutch
sickness funds, which come closer to a direct parallel with NHS
commissioning, would also face cultural difficulties.

Commissioning has always been the Achilles heel of the 
attempts by both
Labour and the Conservatives to use market mechanisms to 
improve NHS care.

Given that the department is advertising only a "framework" 
agreement,
"it remains possible that this will not be implemented", 
Prof Ham said.

"Nonetheless, if you are looking for ways to help PCTs 
improve their
performance, this may be a smart way to do it."