Andrew Lansley's recent announcement that the government is embarking on a two-month "period of listening" about its NHS reform plans has been seen by some as a U-turn over a deeply flawed policy.
There are, however, some areas where the government is not prepared to listen: the commitment to abolish primary care trusts, to transfer major powers to commission services to GPs, and the ambition to vastly increase the participation of the private and, in theory, voluntary sectors in providing health services. In future, the NHS will continue to be funded from taxation and (for the time being) will be free at the point of delivery, but the government will step back from running the service.
Private sector involvement in the NHS is not new. Dentistry, worth £2.1bn, opticians and pharmacies are already in the private sector. GPs themselves are effectively private contractors, accounting for £8bn, or almost 10% of the entire NHS budget. Under Labour, private involvement was extended via independent sector treatment centres (ISTCs), handling mainly non-emergency elective treatments, as a way to bring down waiting lists.
But the current proposals are much more bold. Plans are under way to further outsource central services, such as workforce development (total budget £5bn) and procurement management. Even NHS Direct (worth £146m) is in the firing line.
But what about core and non-core clinical services provided by NHS trusts and community health organisations? These could be harder to outsource. This is especially true of the most complex, unplanned hospital admissions that are costly and inherently difficult to plan for. The Department of Health's (DH) own statistics show these account for approximately £12.5bn of a total budget for "hospital and community services" of £51.5bn. But that still leaves £39bn that could potentially be subject to private sector competition.
