Frank Dobson’s announcement, that he remains an advocate of separate regulatory systems for the private sector and the NHS, came as quite a blow to the private healthcare industry. It was also contrary to much of the evidence supplied to the Health Select Committee over the last few months.
But now, although the consultation document is yet to be written, early indications suggest that a distinct regulatory system for private healthcare is the probable result.
At the moment the Commission for Health Improvement (CHI) is the principal body proposed to cover the NHS. And while the final decision on regulatory authority will not be made until next autumn, it had been hoped that the remit of this body would be extended to the private sector.
The prospect of this occurring now looks increasingly slim given current Millbank thinking. But this stance is not a huge surprise. After all, a private health sector does not sit well with the ideals of a Labour government. And if an old-school Labour minister is seen to support the private sector, his ethics are inevitably called into question.
Some in the private sector believe that if Dobson were to agree to a shared regulatory body, not only would he be effectively endorsing the existence of the private sector, he would also be encouraging it by agreeing to the most cost effective option. Ultimately, the shared body would mean shared costs which, in turn, would mean Dobson’s final surrender to the notion of a private-public partnership.
However, since the establishment of the Health Select Committee, insurers and providers of private healthcare have been actively promoting the implementation of a common regulatory body – and as a result they are extremely unhappy with Dobson’s latest statement.
As Gillian Gibbons, public relations manager at Prime Health, comments: “The industry welcomes regulation of private healthcare but is very disappointed that Frank Dobson is implying that there will be two bodies, rather than common standards across the country regardless of where they are being treated.
“Surely it would be more beneficial for the consumer to have a single system.”
Pat Miller, hospital liaison manager, Exeter Friendly Society, agrees: “It is an industry that needs uniformity and if both sides can come together it would be a great thing. The patient will be assured that a framework would be in position if they went private or used an NHS hospital.”
One particular reason why many have advocated a single body is the frequency of cross-treatment between the NHS and private sector. Where someone suffers a heart attack, for example, initial care may be carried out in an NHS hospital, but a recuperation period may be spent in a private facility. What’s more, the NHS openly utilises private facilities to treat patients – and vice versa. For these reasons it seems sensible that a set of universal standards should apply to both sectors.
Dr Peter Brand, member of the Health Select Committee, raised this problematic area when he questioned Dobson’s reasons for having two separate systems. “I cannot quite understand why emphasis is being put on the distinctiveness and the need for a distinct regulatory system for the private as opposed to the public sector health services,” said Brand.
“Hospices are technically in the private sector, the voluntary sector. We have got voluntary sector service agreements with things like Relate, Mencap and alcohol treatment services. We have the NHS paying for patients in private nursing homes. We have private patients in NHS hospitals. If you are going to have two sets of regulators it is going to be quite crowded in individual wards if something happens.”
But Dobson maintains that a separate body is preferential, believing that a universal system may lead to complications for all sectors. He explains: “I think you would almost certainly get a situation where either the private sector did not get as much attention as it needed or it distracted the attention of the organisation into spending more time looking at the problems of the private sector and things going wrong there than they did for the NHS or social services.”
Critics of Dobson’s approach have pointed out that his concern for the private sector and the NHS is disproportionate. Brand himself took up the argument when he said: “You said something very interesting, that the government’s main responsibility was to run the NHS. I would accept that if you said it was your department’s main responsibility, but clearly the government’s main responsibility is to look after the safety of its citizens in healthcare whether they are being looked after by the NHS or in the private sector.”
This is an area that the opposition has been quick to comment on, as it is keen to stress that the private healthcare sector is as much Dobson’s responsibility as the NHS. As Jonathan French, press officer at the Conservative party central office, said: “Frank Dobson is secretary of state for health. But he seems to think he is the NHS secretary.”
But another part of Dobson’s proposal has raised a different note of concern. During his speech to the Committee, Dobson implied that NHS pay beds would also be monitored by the system regulating the NHS. “It is our view that the NHS should have responsibility for all patients being treated in NHS hospitals, whether they are private pay bed patients or not, so they would be covered by all the machinery of the NHS.”
While this is only a suggestion and by no means set in stone, the proposed system could have serious financial impact on the private sector.
The cost of regulation to the private sector will be significant – even more so if it has to fund an entirely separate body. But the deeper concern is that pay beds on the NHS will not be subjected to as great a cost burden as the private hospitals will. For this reason, pay beds may appear to be the more attractive option and therefore generate more revenue for the NHS and, in a sense, privatised sections of the NHS could prevent fair competition in the market. As a result, some in the industry believe the move could be anticompetitive.
The Competition Act of 1980, defines anti-competitive practice as: “Any practice that has or is intended to have or is likely to have the effect of restricting, distorting or preventing competition on some market in the United Kingdom. It is not the nature of the practice itself but its effect on competition that is the crucial factor.”
However, despite this controversy, others have questioned whether the status quo would really alter. Avril Handscombe is chair of the NHS Private Healthcare Association. She asks: “Is that any different to the situation we have now? We already have a high level of competition.”
But members of the insurance industry are concerned. The issue was raised and discussed at a meeting of the Association of British Insurer’s Private Medical Insurance Committee – and subsequently research is being carried out Some believe that Dobson’s suggested outcome is not only a danger for the private sector, but may also be detrimental to the NHS: the two territories are inherently linked, and the government is quite happy to employ private sector facilities in order to reduce waiting lists.
French comments that should Dobson’s suggested regulatory tactic be enforced, not only will the private sector suffer, but public services also: “If the private sector is regulated out of existence that is also bad for the NHS.”
But whatever the theory, what is needed now is action. All corners of the industry are becoming impatient with the rumours and suppositions currently flying. The Select Committee has been listening to evidence since February but lack. of clarity is still a problem.
Hazel Berill of OHRA agrees. “It is a great shame we have been left to read between the lines. It should be a lot clearer as to what the government intends,” she says. “We need a long term plan that the government supports.” She adds: “We need the government to stop the fudge and to come out and say what it means. That way we know what it wants and we can get on and do it.
While the final outcome remains to be seen, the private healthcare sector is anxious to act. Should a single body be decided upon or a separate system be needed, it is clear that the industry views regulation as vital. “Clearly the private sector wants regulation,” observes French. “ If you are going to have regulation in both sectors you need a level playing field. There is no good reason not to have one.