Myth 7: Every NHS service will need to be competitively tendered

The Government's Claim:
Our plans for ‘any willing provider’* are precisely the opposite. Competitive tendering means identifying a single provider to offer a service exclusively. 'Any willing provider' means being clear that a service needs to meet NHS standards and NHS costs, and then allowing patients to choose themselves wherever they want to be treated. It is designed to avoid the need for costly tendering processes, unlike Labour’s 'independent sector treatment centres'.

[* the government have changed the name from Any Willing Provider to Any Qualified Provider.]

The Rebuttal

This "fact" displays a confused logic and is contradictory. Competitive tendering means that suppliers offer a tender to perform the work and the lowest tender is accepted. We know the effect of this policy: the competitive tendering of catering and hospital cleaning in the 80s has led to poor hospital food and to shockingly bad cleanliness in hospitals that led to hospital infections like MRSA. Competitive tendering failed abysmally with hospital cleaning and catering and it is pure madness to attempt to apply the same policy across the NHS. The government is desperate to distance itself from this terrible policy, and this is the reason why they are distancing themselves from the term and make the claim.

"allowing patients to choose themselves wherever they want to be treated"

This suggests that a patient can choose from any of the 500 or so hospitals in England. This is misleading. Commissioning is complex, it results in a contract drawn up between the purchaser (in the future this will be GP consortia) and the provider. Part of this contract is continual assessment of the provider to ensure value for money, equity of access, performance and safety. It is not feasible for a GP consortium to perform this monitoring with all possible providers in the country.

The small scale commissioning that the government's response implies ("allowing patients to choose themselves") does not reflect what will happen in practice for the simple reason that hospitals will not be able to plan for the resources they need if they implement this "supermarket" approach to care. (If you go into a supermarket to buy milk, there will be milk there because there are regular deliveries, and the size of the delivery can be changed day to day. If a hospital has more patients than it has planned for, it takes months to employ the skilled staff that are needed to provide the extra capacity.)

Thus, in reality, commissioners will block book care from providers and the patient "choice" will be from these block bookings. There may not be just one provider (there isn't at the moment), but there will be a restricted list of "single provider to offer a service exclusively". Inevitably, the contracts for these block bookings will be competitively tendered. The imposition of a competitive market will result in the "race to the bottom" that low tenders encourage and which is the source of concerns. It is, of course, the commissioner who decides the list. Indeed, Any Qualified Provider provides extra choice for the commissioner rather than the patient.

As an aside it is interesting to speculate why the government mentioned ISTCs. This programme was intended to provide extra capacity to shorten waiting lists, but it was ill thought out. The private providers were given the work at a higher tariff (payment per treatment) than the NHS, they were also guaranteed payment regardless of whether they completed the work, and when the ISTC contract finished the contract the NHS was required to buy the ISTC clinics off the private provider. In effect, the private provider shouldered no risk at all, they were paid an estimated 11% more than the NHS and only treated 85% of the patients referred to them. This was such a lucrative business that Lansley's favourite provider, Circle Healthcare, was one of the ISTC contractors.

The ISTC programme stalled when Gordon Brown became Prime Minister, but this was not enough to let Labour off the hook. The Liberal Democrats, in particular, were incensed by the waste inherent in the programme. In their 2010 manifesto the Liberal Democrats said:

Giving Local Health Boards the freedom to commission services for local people from a range of different types of provider, including for example staff co-operatives, on the basis of a level playing field in any competitive tendering – ending any current bias in favour of private providers.

Clearly the Conservative government's response is an attempt to placate their coalition partners. However, the Liberal Democrats have been duped. That phrase "level playing field" is used frequently by Lansley, but the intended consequence is to pay private providers more. The "level playing field" is designed to pay the private sector 14% more than the NHS (or rather, to pay the NHS 12% less).

Further, evidence from the East of England SHA is that commissioners are now creating "integrated care pathways" which will be offered to GPs. This means that the patient will not be allowed to pick and choose the provider through out their care, but will have a restricted set chosen for them by the commissioner. Pulse magazine report:

Ms Parbinder Kaur, project lead for the hubs, said: "The push has come from GPs. They are open to the market coming in with new ideas."

She said a string of meetings with GPs and private providers had shown both had "appetite" for the idea, with the next stage a bidding process for contracts, which are due to go live in April 2012 to fit with the Government’s ambitious transition timetable: "It will involve a competitive tender. We expect this to involve a combination of third-sector, independent-sector and NHS providers."

The "hubs" are being created by NHS East of England SHA well known as a pioneer of privatisation in the NHS (they oversaw Circle taking over the management of Hinchingbrooke trust). The "hubs" are entire "integrated pathways" rather than individual patient choice.

The government plans to create a healthcare market, it intends NHS hospitals to be businesses and GPs to be the customers of those businesses. At a time when the NHS has to sustain unprecedented cuts it is inevitable that healthcare providers in this new market will be awarded contracts through a competitive tendering process. Imagine the result of 80s competitive tendering of hospital cleaning applied to NHS treatments.