by GK Strategy 4th August, 2017
3 min read

Healthcare: Why are private sector services sidelined?

Within UK healthcare, private sector provision of products is the norm – with companies delivering state of the art equipment to save lives every day. However, the private provision of services bears the brunt of controversy. The disparity between the perception of private products and services is significant. Why do we pride ourselves on research and innovation, practically throwing money at SME’s to come up with the next cutting-edge product, while service provision, which delivers quality and cost-savings, is not dealt the same hand?

Despite many services being provided by the private sector for several years, such as dentistry, the debate over their use remains constant. Yet, with the Department of Health (DH) spending an increasing amount on non-NHS healthcare providers, the potential growth for this market is significant.

Spend on private providers has been steadily increasing over recent years. In 2014-15, £10bn worth of services were purchased from non-NHS providers (including local authorities and the voluntary sector); in 2015-16, this figure rose to £12.2bn, with £8.7bn on independent sector providers. More recently, the DH’s quietly published Annual Report and Accounts for 2016-17documented £12.7bn worth of services with over £9bn spent on independent sector providers. These are the same accounts that reveal that key performance targets were missed, including the proportion of patients assessed or treated in A&E within four hours, which fell further below the 95% target to 89.1%.

Despite the politically motivated scaremongering creating hostility and growing negative perceptions, the figures lay bare the direction of travel. The private sector has been used for decades to help sustain healthcare free at the point of use and available to all. It is important to note that the increased use is not just a result of demographic changes, lengthening waiting times and unprecedented demand. There is now an emerging awareness that independent health contractors provide innovative and high quality services, often at better value for money for taxpayers.

CCGs are statutorily constituted to procure healthcare services for the population they serve and are obliged to improve quality of care, whilst ensuring efficient use of available resources. It is with this mind that local commissioning groups should not be discouraged from awarding contracts to independent health providers where there is a clear delivery need.

The surprise result of the 2017 General Election and rise of the Labour Party after a period of relative redundancy, risks producing less favourable conditions for independent service providers due to renewed negative public perception. This is ironic when it was the same Labour Party that introduced competition within the NHS, albeit with a different looking leadership team. The current uncertain political environment does also provide a timely moment for these businesses to become more vocal about the role that they play in increasing patient outcomes. Standing quietly by whilst the narrative is written by those in Westminster will do little to help their future bottom lines.

The need to publically put forward the positive case for high quality service provision is heightened in the current environment of austerity. Why should public services continue to be bailed out when services that offer value for money are side-lined?

Making a profit is not synonymous with reducing quality of care and whilst there are undoubtedly stories of independent contractors failing to meet the standards expected, bad news stories and inadequate performance are certainly not limited to those outside of the public sector. Reputation management and public education campaigns are more important than ever for the private sector to ensure that the narrative of choice, high quality and value for money is heard.

In the age of limited resources, it is time to put party politics aside and have a reasoned debate about the need for a mix of healthcare providers. Allowing the independent sector to meet the increased demand on the strained NHS, reduces waiting times and improves lives. There are great examples of public and private sector collaboration across the country, and it is time that these stories were shared widely. This has never been truer than when looking at waiting times and cancelled elective operations. During the quarter ending 31st March 2017, 21,219 operations were cancelled at the last minute for non-clinical reasons by NHS providers. Let’s utilise independent services to make sure patients receive the timeliest care – that is after all what matters most. Across the public sector, best practice should be shared, rather than just applying blame on the independent sector when targets are not met. Successful integration between the two will result in lives improved and money saved, fundamentally benefiting all of us.

Demand for services provided in the health and care system continues to rise above what would typically be expected from population growth and changing demographics alone. The NHS cannot face another “humanitarian crisis” like the winter just gone. Independent-sector healthcare providers increase the system’s capacity to respond to demand, help meet waiting-time targets and enable investment to bring benefits to patients. It is time that they started being appreciated.


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