The new Health Secretary, John Reid, made an important but little reported announcement on 18 July 2003 - that as from the summer of 2004 all patients waiting more than six months for elective surgery will be offered the choice of faster treatment in at least one alternative hospital. More importantly, from December 2005 all patients who require elective surgery will be offered the choice (of four to five hospitals) at the time their GP refers them for treatment. The choice will be made from a range of providers including NHS Trusts, Foundation Trusts, Diagnostic & Treatment Centres (DTCs), private hospitals and practitioners. Facilities abroad may be included depending on the speciality and the patient's needs.
Nine pilot programmes are currently running nationally and over half the patients in the pilot schemes have chosen to move to another hospital to obtain faster treatment.
Initially choice will be offered in all specialities other than ENT and orthopaedics; these will then follow later in 2004. The Government estimates that some 600,000 patients will wait for more than six months between April 2004 and December 2005. Of these 150,000 will exercise their option to move to secure faster treatment.
How does it envisage that the system will work? The originating NHS Trust will be responsible for identifying patients having to wait more than six months and will establish a system of Patient Care Advisers (PCAs) who will guide patients through the alternatives and make the necessary bookings. PCAs may be new or existing staff seconded from other duties. In areas of high activity they may even be attached to call centres. Transport will be provided for those patients with significant transport difficulties. Patients with "a firm to come in date" will not be offered a choice. There will also be certain clinical exclusions.
Primary Care Trusts (PCTs) will be responsible for commissioning treatment and arranging for the payment of these services whether to an NHS hospital or to a private sector operator. PCTs will commission the range of hospital facilities they judge to be needed to achieve their service priorities in the first place allowing for the expected mix of patients and according to a standard national price tariff adjusted for regional variations. From December 2005 a more substantial change is planned when choice at the point of GP referral starts. All patients requiring elective surgery will, from then on, be offered a choice of four or five hospitals and the process of offering that choice will be underpinned by the roll out of the Electronic Booking Service accessible to GPs and the Primary Care Team. It is still to be decided how this new system will work since it is itself part of the Government's new £2.3 billion IT programme. Not all GPs are happy with this initiative and some feel the Government is being unduly secretive according to "Doctor" magazine in a recent article. There is also disquiet at local level with one GP quoted as feeling "they never ask our opinion". However the Department of Health (DOH) emphasises that the newly created PCAs will form a vital part of this booking service though the exact format is still being worked on.
But how will the new Choice initiative affect independent hospitals and other independent medical providers? It depends how the Primary Care Trusts react according to Carol Friend on behalf of BMI, a major independent hospital group. She says " What the private sector needs to do the best job, is to have a long term (say 12 months) contract so we can provide them with the most efficient costings". She cited by way of example BMI's current contract for 150 heart surgery patients in the Birmingham area. The NHS provides them with the list of patients and BMI contacts them on a ten day waiting list. What is not efficient is trying to cram too many procedures into a short space of time. March for example is a busy month anyway but in the current year independent sector hospitals handled 28% of the procedures (18,000) for the first three months of the year of which half took place in March.
Another independent sector operator, WPA specialising in health insurance feels the new initiatives may help in a different way. "Currently" says Charlie MacEwan "costs are spiralling and premiums are not under control. If you separate patients from buying you get uncontrolled medical care. Patients need to be made a purchaser."
But will the offer of choice help bring down costs as well as waiting lists? PCTs will have the power to choose who they wish to fulfil their contracts including the new DTCs . There are already ten NHS DTCs open and a further nineteen in development. However some recent disquiet has arisen as to whether these new units will not themselves present a threat to the private sector since their aim is to bring down NHS waiting lists - a current source of significant income to private sector hospitals. Will the recent growth in self-pay be maintained if patients are guaranteed rapid treatment on the NHS, possibly at a private hospital?
This may well explain why a number of private sector operators are hoping to run their own DTCs. The Department of Health is seeking bidders for eleven local schemes and eight Chains or multiple DTC units and is poised to announce the winning bidders in the first tranche of PFI DTCs in the next few weeks. Among the bidders qualifying are BMI, BUPA and Nuffield Hospitals as well as bidders from Canada, New York, Switzerland and South Africa. One of the stipulations the Government has placed on the private sector role is that the staff to run the private sector DTCs must be additional staff over and above those available to the NHS i.e. staff either currently working wholly in the private sector or coming from abroad.
The critical elements for success or failure appear to depend on whether the bureaucratic system of the NHS can swing from being a wholly provider-dominated organisation to one where the consumer for the first time begins to call the tune, albeit still in rudimentary fashion. The sensitivity to consumer choice, from the selection of the hospital providers geographically to the training of the PCAs, will affect whether this new initiative really brings the visible benefits that the Government has pinned so much of its electoral hopes on. As Sarah Pearse of AXA PPP Healthcare the worldwide private medical insurer puts it "Clearly Choice is a laudable aim, however it will not be achieved simply by exhorting the NHS to deliver it. To be successful, it is imperative that rewards for success and penalties for failure are built into the structures and functioning of the system."
Also involved is the new NHS IT system, a £2.3 billion programme; any late delivery of this system, involving GPs at the time of initial referral of the patient for surgery, will cause delays that will ripple through the NHS; and any intransigence or misunderstanding by GPs themselves will add to the problem.
Whether the private sector will benefit depends in no small measure on their ability to react to the changing NHS; to learn how to profit in a multi-sector provider system, to be willing to take part in new initiatives such as DTCs and patient choice at the GP point of referral; as well as tailoring their own costs and systems to an NHS which is certainly going to be different from the old. More of the simpler elective surgery will be carried out by the DTCs and not necessarily in private hospitals and clinics. There will be pressures on costs and a more competitive environment as the new NHS DTCs illustrates. And now there is a new threat as overseas operators may appear in a significant way.
While NHS Choice clearly offers an upside to independent hospital groups, can it be anything but bad news for private medical insurers? One of the main drivers for PMI purchase is the ability to be treated quickly in the context of long NHS waiting lists. "Not so" says Fiona Harris of BUPA speaking for their insurance arm, "private medical insurance is about more than gaining quick access to a waiting list; it enables patients to select the consultant, time and place. And access a quality assurance network with qualified staff 24 hours a day." Referring to insurance premiums she comments "premiums rise to match claims but it is much more complex than just a supply/demand model. It is about choice and accessibility to medical advancement"
In summary, the next few years are going to test and challenge the whole healthcare system, both public and private; it will become a much more dynamic environment - if Choice works, it will create a revolution in health care in the UK. Success in the private health sector will go, to the nimble, the shrewd and the courageous.
This article was written for health insurance magazine COVER in October 2003 by CareHealth director Dominic Leahy.