A new Government initiative will provide patients with greater choice on the hospital in which they receive treatment. In the third of our series on private hospitals, Dominic Leahy asks how this will impact the sector
The new Health Secretary, John Reid, made an important but little reported announcement on 18 July 2003 - that from summer 2004, all patients waiting more than six months for elective surgery will be offered the choice of faster treatment in at least one alternative hospital.
More importantly, from December 2005 all patients who require elective surgery will be offered the choice of four or five hospitals at the time their GP refers them for treatment.
From 2004, the choice of an alternative hospital will be made from a range of providers including NHS trusts, foundation trusts, diagnostic and treatment centres (DTCs), private hospitals and practitioners. Facilities abroad may be included depending on the speciality and the needs of the patient.
Initially, choice will be offered in all specialities other than ear, nose and throat (ENT) and orthopaedics; these are scheduled to follow later in the year. Nine pilot programmes are running nationally at the moment, and over half the patients in the pilot schemes have chosen to move to another hospital to obtain faster treatment.
The Government estimates around 600,000 patients will wait for more than six months between April 2004 and December 2005. Of these, 150,000 will exercise their option to move to secure faster treatment.
All systems go
So how does the Government envisage the system will work? The originating NHS trust will be responsible for identifying patients having to wait more than six months and will establish a system of patient care advisers (PCAs) who will guide patients through the alternatives and make the necessary bookings.
PCAs could be new or existing staff seconded from other duties. In areas of high activity they could even be attached to call centres. Transport will be provided for those patients with significant transport difficulties. Patients with a 'firm-to-come-in' date will not be offered a choice. There will also be certain clinical exclusions.
Primary care trusts (PCTs) will be responsible for commissioning treatment and arranging for the payment of these services whether to a NHS hospital or to a private sector operator. The PCTs will also commission the range of hospital facilities they judge to be needed to achieve their service priorities in the first place, allowing for the expected mix of patients and according to a standard national price tariff adjusted for regional variations.
From December 2005, however, a more substantial change is planned when choice at the point of GP referral starts. All patients requiring elective surgery will, from then on, be offered a choice of four or five hospitals. The process of offering this choice will be underpinned by the roll out of the electronic booking service accessible to GPs and the primary care team.
It is still to be decided how this new system will work since it is itself part of the Government's new £2.3bn IT programme. Not all GPs are happy with this initiative and some feel the Government is being unduly secretive, according to a recent article in Doctor magazine.
There is also disquiet at local level with one GP quoted as feeling they are never asked for an opinion. However, the Department of Health (DoH) emphasises the newly-created PCAs will form a vital part of this booking service. The exact format is still being worked on.
So how will the new initiative affect independent hospitals and other independent medical providers? According to Carol Friend, spokesperson for independent hospital group BMI, it depends on how the primary care trusts react to the initiative.
"What the private sector needs to do the best job, is to have a long term - for example, a 12-month - contract so we can provide them with the most efficient costing," she says.
Friend cited BMI's current contract for 150 heart surgery patients in the Birmingham area as an example. The NHS provides BMI with the list of patients and BMI then contacts them on a 10-day waiting list. What is not efficient is trying to cram too many procedures into a short space of time. March, for example, is usually a busy month. But in the current year, independent sector hospitals handled 28% (18,000) of the procedures for the first three months of the year - half of which took place in March.
Another independent sector operator, Western Provident Association (WPA), specialising in health insurance feels the new initiatives may help in a different way.
"Costs are spiralling and premiums are not under control. If you separate patients from buying, you get uncontrolled medical care. Patients need to be made a purchaser," says Charlie MacEwan, head of communications at WPA.
But will the offer of choice help bring down costs as well as waiting lists? PCTs will have the power to choose who they wish to fulfil their contracts including the new DTCs. There are already 10 NHS DTCs open and a further 19 in development.
However, some recent disquiet has arisen as to whether these new units will not themselves present a threat to the private sector since their aim is to bring down NHS waiting lists - a current source of significant income to private sector hospitals. Will the recent growth in self-pay be maintained if patients are guaranteed rapid treatment on the NHS, possibly at a private hospital?
Under the hammer
This might explain the reason a number of private sector operators are hoping to run their own DTCs. The DoH is seeking bidders for 11 local schemes and eight chains or multiple DTC units and is poised to announce the winning bidders in the first tranche of PFI DTCs by the beginning of October. Among the bidders qualifying are BMI, BUPA and Nuffield Hospitals as well as bidders from Canada, the US, Switzerland and South Africa.
One of the stipulations the Government has placed on the private sector role is the staff running the private sector DTCs must be additional staff over and above those available to the NHS. For example, staff either currently working wholly in the private sector, or coming from abroad.
The critical elements for success or failure of the initiative seem to depend on whether the bureaucratic system of the NHS can swing from being a wholly provider-dominated organisation to one where the customer for the first time begins to call the tune, albeit still in rudimentary fashion.
The sensitivity to consumer choice, from the selection of the hospital providers geographically to the training of the PCAs, will affect whether this new initiative really brings the visible benefits that the Government has pinned so much of its electoral hopes on.
"Clearly the initiative is a laudable aim, however, it will not be achieved simply by exhorting the NHS to deliver it. To be successful, it is imperative that rewards for success and penalties for failure are built into the structures and functioning of the system," says Sarah Pearse, communications director of AXA PPP healthcare.
Another factor to consider is the new £2.3bn NHS IT programme. Any late delivery of this system, involving GPs at the time of initial referral of the patient for surgery, will cause delays that will ripple through the NHS; and any intransigence or misunderstanding by GPs themselves will add to the problem.
Whether the private sector will benefit depends, in no small measure, on their ability to react to the changing NHS. They will need to learn how to profit in a multi-sector provider system, to be willing to take part in new initiatives such as DTCs and patient choice at the GP point of referral, as well as tailoring their own costs and systems to an NHS which is certainly going to be different from the old.
More of the simpler elective surgery will be carried out by the DTCs and not necessarily in private hospitals and clinics. There will be pressures on costs and a more competitive environment as the new NHS DTCs illustrates. And now there is a new threat as overseas operators may appear in a significant way.
While the NHS Choice initiative clearly offers an upside to independent hospital groups, can it spell anything but bad news for private medical insurers? One of the main drivers for PMI purchase is the ability to be treated quickly in the context of long NHS waiting lists. However, Fiona Harris, head of actuarial and risk management, personal lines at BUPA, disagrees.
"Private medical insurance is about more than gaining quick access to a waiting list; it enables patients to select the consultant, time and place as well as access a quality assurance network with qualified staff 24-hours a day," she says.
Referring to insurance premiums Harris comments: "Premiums rise to match claims but it is much more complex than just a supply and demand model. It is about choice and accessibility to medical advancement."
The next few years are going to test and challenge the whole healthcare system, both public and private. It will become a much more dynamic environment. If the initiative works, it will create a revolution in healthcare in the UK. Success in the private health sector will go to the nimble, the shrewd and the courageous.
Dominic Leahy is marketing director at Carehealth.co.uk - an independent guide to private health in the UK
COVER notes
• The Government estimates that 600,000 patients will have to wait more than six months for treatment between April 2004 and December 2005.
• From December 2005, all patients requiring elective surgery will be offered, at the point of referral, a choice of four to five hospitals in which to receive treatment.
• Whether the private sector will benefit from the initiative depends on its ability to react to the changing NHS.
