The Government may be obliged to give public funding to private healthcare companies to ensure essential services survive under plans to radically reshape the National Health Service , according to the representative body for NHS foundation trusts.
Under Health Secretary Andrew Lansley’s NHS white paper published this week, publicly funded health providers such as hospital trusts will compete on an equal footing with the private sector to sell services to “consortia” of GPs, who will be handed
£80 billion to commission healthcare. Primary care trusts and strategic health authorities will be abolished. Labour and the biggest unions have attacked the proposals as an unnecessary reorganisation.
But Sue Slipman, director of the Foundation Trust Network, said private providers may become eligible for state funding to prevent them leaving a hole in healthcare provision if they run out of money.
Ms Shipman told Tribune: “In an open market where you have not just public providers, you may well have other kinds of providers who get to a position where they provide a strategic role. It may be that in the end public capital is not the preserve of the public sector services.”
Under the white paper, all NHS trusts will be forced to become foundation trusts run at arm’s length from government and overseen by regulator Monitor, who will be responsible for ensuring they remain financially viable. Ministers will refuse to bail out failing trusts.
But Ms Slipman cast doubt on the plan: “I can’t see banks giving more money to foundation trusts without the Secretary of State standing behind them.”
A Department of Health spokesperson said they would take a “consistent approach to economic regulation regardless of the type of provider” and did not rule out public funding for the private sector. To help fund them, trusts will be allowed to raise an unlimited amount of income from treating private patients for the first time in NHS history. National pay bargaining will end, with individual employers such as foundation trusts setting pay. This would kill off the NHS pay review body and the trade union staff side, which represents 10 unions. Unions would instead be forced to negotiate locally with up to 280 different foundation trusts, as well as any private providers where they may be recognised.
George Georgiou, employment relations advisor at the Royal College of Midwives, said: “National pay and conditions work. There’s no point having wage competition in the health service. If one trust paid more than its neighbour, everyone would simply leave.” He pointed out that only one foundation trust out of 130 – Southend University Hospital – currently exercises its powers to set pay. The right-of-centre think tank Civitas suggested the change could waste the £20 billion in health savings that the Government is seeking, and set the NHS back three years in terms of what it could achieve without the distraction of structural reform.
