Monday, September 25, 2006

Chucking NHS cash down the drain

I gave a brief mention earlier to this morning's Times story about private treatment centres and their effect on our cash-strapped NHS.

For me this issue demonstrates just how dogmatic the Blair/Brown Government can be.

If you think back to the 1997 election campaign you will remember that Labour were elected because there was 'only 24 hours to save the NHS'. This was based on Labour's stark warning that the Tories intended to privatise the NHS.

Nine years later and that same Labour Party is forcing Primary Care Trusts (PCTs) to sign up to contracts with private firms to deliver operations. If any PCT dares disagree the local members will be bullied into either agreeing or will be forced out.

There is, however, a small snag.

Within the NHS PCTs pay a fee for each operation that is done to the NHS hospital that does it. Therefore if the John Radcliffe Hospital in Oxford performs 100 cataract operations for South Oxfordshire PCT the PCT pays for 100 cataract operations.

However these Private Treatment Centre contracts work on a different basis. The PCT has to pay an agreed fee to the private company regardless of how many operations are actually done.

On average these private centres are running at 59% of their targets. That means that if a private company performs 59 cataract operations for South Oxon PCT the PCT still has to pay the cost of 100 operations.

The result is that money which could have been used to pay for 41 further operations is simply handed over to a private company.

This is what Labour politicians describe as 'modernisation' or 'reform' or whatever buzzwords are in this week.

It is what I call a barmy way to run a public service.


Tristan said...

Another example of the way good ideas go wrong :(
Using private providers is a good idea, but to pay them like this is a nonsense. They should be paid the same as an NHS hospital would for the same work.

Liberal Neil said...

Yes. Personally I have a pragmatic approach to using private providers for health or other public services.

My objection is the dogmatic approach this Government has taken which deliberatly stacks the systems in favour of private providers in the NHS, the way PFI operates, and by denying local government the ability to make real choices on a level playing field.

The result, as in this case, is taxpayers' money being wasted.

Paul Leake said...

Given what you have written you may be interested in a recent article from Public Finance magazine

Hewitt looks set to end minimum levels of public sector involvement. At the same time they will remove any maximum levels of private sector work while reducing the tariff paid to the private sector in order to prevent 'cherry picking' of profitable services.