Should the private and public sectors be working together more effectively to deliver healthcare services? Mike Hall investigates
Over recent years we have seen the supply side of the private sector playing an important role in treating NHS patients as part of the Government's commitment to deliver healthcare targets. In addition, partnerships to fund the building of NHS hospitals have continued to be developed through private finance initiatives. But the role of the private sector in the funding of the delivery of healthcare remains, for the time being at least, a debate waiting to happen.
Sharing facilities
Despite indications of recent tension in relations between the Department of Health (DoH) and some private hospital groups, the news that Capio and Nuffield have been awarded contracts to carry out 250,000 orthopaedic operations for NHS patients in the next 12 months testifies renewed co-operation between the two sectors. This partnership has a significant role to play in the DoH's bid to reduce waiting times for operations to six months within the next two years.
In his announcement of the new contracts Secretary of State for Health, Dr John Reid, stated: "This is great news for thousands of NHS patients who will have their operations more quickly as a result of this agreement. I am determined that no NHS patient should wait in pain where we can negotiate cost-effective agreements to use capacity already available in the independent sector in this country".
It seems clear that the Government needs to utilise the spare capacity found in the private sector if it has any chance of meeting its waiting time targets. It has been acknowledged that the NHS' capacity is restricted, while some private hospitals continue to operate with only 50% capacity. The question is how traditional private patients will react to sharing facilities with non-paying NHS patients.
While partnerships that are being developed should be welcomed, the answer to this question is one that the hospitals concerned may find they need to address in the future.
Whatever the outcome, it is certain that health consumption will continue to increase and that this increase will be exponential to the public funding available. It is equally certain that health will be the main focus of the General Election and that the Government will pull out all the stops to improve the delivery of healthcare in the next 12 months. It is likely therefore that we shall see the DoH pushing through NHS reforms that it hopes will show results before voters go to the polls. In this context the role of the private sector in bringing down waiting lists will be significant.
At a recent presentation Bob Ricketts, head of access policy development and capacity planning at the DoH, discussed the use of public/ private partnerships in delivering the patient choice agenda. Within his presentation he discussed plurality of providers and acknowledged that substantial elective and diagnostic capacity will be needed quickly if the Government targets are to be reached.
He also talked about a healthcare service that allows patients to make informed and supported choices about where, when and by whom they are treated. The first stage of this is the Government's intention that by December 2005 patients will be offered a choice of hospital at point of GP referral.
In order to deliver the informed and supported choices outlined by Ricketts, the patient needs access to better information. Patients should have access to more information about how they are treated and who is carrying out their treatment. But this will involve a major overhaul of the NHS IT system and while it is hoped that a new system will be in place in two years, there are some doubts over whether this can be achieved without additional support.
Foundation Trusts are starting to come on stream and here we are likely to see further opportunities for the private sector. While at present the Trusts can only increase their private income incremental to their own growth, this could be likely to change as they come under more pressure to manage their financial position. It is likely therefore that we shall see contracts being negotiated with private patients and insurers as the Trusts look for ways to raise income. In addition the possibility of private companies applying for Trust status in the future has not been ruled out so another interesting development could open up in healthcare provision.
Informed choices
The other big item on the DoH's agenda is to address the issue of public health. A consultation paper has been issued to question how areas such as the growing problem of obesity might be addressed and a white paper is expected in the summer. This follows the Wanless report Securing Better Health for the Nation, which highlighted the need to consider prevention as well as cure as a way of controlling spiralling healthcare costs.
Both Wanless and the Government consultation paper mention that the responsibility for public health lies partly in the hands of employers and here the private sector has another role to play. Reid reinforced his commitment to improved public health when commenting on the publication of Sir Liam Donaldson's exercise recommendations. In commending the report, he said that there is a challenge for all of us "Government, business, the voluntary sector and industry to show we can achieve [a more active lifestyle]".
Prevention
There is clearly an opportunity for insurers to work with corporate business. They are in a position to deliver programmes that provide for not merely the treatment of illness but for the reduction of the incidence of preventable ill health by increasing awareness of health issues, encouraging healthy eating, exercise and management of stress programmes. These schemes have shown considerable success in trials, reducing absenteeism in the companies that offer the programme to their staff, and it is likely private medical insurers will be taking a more active role in such preventative programmes.
While it is hoped that these programmes will reduce ill health, and therefore the cost of the healthcare budget, the issue of funding is inescapable. The impact of new and emerging therapies, for example, will have a dramatic effect. Many scientists are predicting a rapid advance in the development of new medicines over the next two decades. For example, new cancer drugs are becoming available that arrest the growth of cancerous cells. They do not eradicate them but prevent the disease from developing to a point where it becomes harmful. This means that the patients must take these drugs for the rest of their lives - if they were to stop, the cancer would start to develop again. It does not take a mathematician to work out that at a cost of £10,000 per year per patient, the advance in technology, while welcome, comes at a price.
Furthermore, the price of this technology goes further than simply the cost of the drugs themselves. By increasing the lifespan of patients whose lives would have otherwise have been cut short, we shall see these same people needing treatment for other ailments as their life expectancy is increased and this needs to be taken into account.
We all know that medical technology has introduced more diagnostic options so that whereas 15 years ago MRI scans were reasonably unknown, they are now commonplace and other options are likely to be introduced as technology advances further. So while consultants had a limited number of options to diagnose or confirm conditions 15 years ago, their options are increasing and with multiple options comes multiple costs.
My question is: how is the NHS going to fund the introduction of new technology? It is every patient's right to have access to these new advances in medicine, but the sustainability of a tax-funded system has to be reviewed in light of these additional costs. We know from observing the systems in other countries that raising taxes is not a viable option. The Swedish population has the highest taxes in the world, yet its health service is facing crisis because their economy is slowing down and tax revenues cannot keep up with rising costs. It seems the only way forward is to have a mixed funding system where private and public sectors work together to deliver a system that is not vulnerable to the fluctuations of economic cycles or fluctuating tax receipts.
Balanced debate
The Social Market Foundation's Health Commission recently called for less ideology and more pragmatism over private payment for healthcare. It suggested that over-simplistic views were likely to cloud the debate and recognised that private payment represents significant benefits to the NHS. While the Commission does not advocate Government policy changes at this stage, it concludes: "the possible pressures on the public purse caused by increased NHS expenditure mean that in the long-term the funding debate has not lost its relevance".
Although a proper balanced debate on mixed funding cannot be expected to happen this side of an election, let's hope that if this Government sees a third term in office it sees fit to set aside ideology to discuss a mixed system before funding reaches the crisis proportions seen in Sweden. We are seeing partnership in action on the supplier side, the time is approaching to extend these partnerships to the funding debate to deliver the healthcare system that we all deserve.
Mike Hall is chief executive of Standard Life Healthcare
Cover notes
• If there is increased access to private services for NHS patients, it could disgruntle paying customers.
• It is likely Foundation Trusts will seek extra income from insurers and private patients.
• The need for a technology overhaul in the NHS and the rising cost of drugs builds a strong case for a mixed funding system.
