European Union Rules Open Up £15 Billion NHS Contracts to Private Bidding

Private providers have been given the chance to bid for thousands of NHS services for the first time due to new European Union competition rules.

While the recent Brexit decision has been largely condemned by health service sources, it could be suggested that this is the sort of decision which demonstrates that Brexit may not be all bad for the NHS.

NHS England has published “prior information notices” for its specialised services contracts in the Official Journal of the European Union this month, in line with new EU regulations introduced in April.

The notices say NHS England’s buying department is “looking for potential suppliers” to contact them with bid applications.

This national body is responsible for commissioning about £15 billion worth of specialised services, and has created 278 contract “lots”, which encompass suites of services to be provided in specific geographies.

The public notices signal an intent to award whole contracts for 2017-19 to the incumbent providers, unless expressions of interest are received from alternative operators, triggering a competitive process.

Expressions of interest must be received within 21 days of 14th October, when the notice was initially published.

A private sector source, who asked not to be named, said non-NHS providers “already do more specialised work than is sometimes acknowledged”, often in partnership with an NHS trust.

But they added that “the tight timetable does make it difficult to forge the partnerships that might be needed. There may still be interest but it’ll be at the margins.”

Services such as specialised cancer, diagnostics, cardiac and renal care may be targeted as these are already contracted to private providers in some areas.

In a note sent to providers of specialised services earlier this month, NHS England noted that the arrangement is very much a new initiative.

“This will be the first time the new rules have applied to the contracting round for NHS specialised services. The regulations set out a new light touch regime, which allows commissioners flexibility to design an appropriate, proportionate process.”

This means the contracts must be publicly advertised where they are worth more than €750,000, the process must be transparent and bidders treated equally, and the criteria must not artificially constrain competition or specify organisational form, among other conditions.

The note also outlined more information about the prior information notice.

“The prior information notice will also include notice of our intent to explore the opportunities for longer than two year contracts where this affords opportunities for significant improvements in service quality and efficiency facilitated by using the NHS standard contract option to extend term for up to two years.”

Commenting on the issue, an NHS England spokeswoman outlined the advantages of this approach.

“Setting out our contracts for existing services in this way enhances transparency and provides an opportunity to ensure the NHS and our patients are getting the best value and quality of care.”

Jeremy Hunt recently stated that the NHS in England will become “self sufficient” in doctors after Brexit.

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Junior Doctors’ Contract Row Set to Become ‘War’

A leading union has stated that the dispute over junior doctors’ contracts could yet become a war between NHS staff.

Unison’s Christina McAnea said imposing the contract “sends a very worrying message to other members of staff”.

McAnea added that “everybody else is really worried that if they can do this to doctors, what does that mean for us?”

Health secretary Jeremy Hunt has insisted that he will impose what he considers to be ideal contractual provisions for junior doctors, but these plans increasingly seem to be unravelling.

It is already been reported that individual hospitals will have the right to overrule Hunt, and now major unions are suggesting that a civil war is essentially brewing in the NHS.

Yet he remains defiant on his position with regard to junior doctors’ contracts.

The Health Secretary claims that the contractual plans that he has will improve patient care, and Hunt has also stated that he has made efforts to listen to the concerns of healthcare professionals.

Hunt has also publicly criticised the British Medical Association, suggesting that the organisation has been intransigent in failing to reach a deal over the past three years.

But the walkout of junior doctors recently indicates that NHS staff are willing to play hardball with the government and establishment.

Meanwhile, the aforementioned McAnea believes that ill feeling is brewing in the health service, and that this could have very serious consequences.

“Our feeling is the government wants to extend seven-day services but they don’t want to fund it. They want staff to fund it through accepting cuts to pay and conditions. If there is a cut to unsocial hours payments or an imposition [of a new contract] then I think they would look to take some kind of action.”

Increasingly, public feeling it seems to be with junior doctors, with a petition on the subject having raised 180,000 signatures.

This exceeds the thresholds for a Commons debate by over 100,000, indicating the strength of feeling, and also the fact that the political process will have to acknowledge this fissure.

It is suggested that many junior doctors may consider venturing abroad in order to ply their trade, with contractual conditions threatening some junior doctors’ pay to be reduced by as much as 30%.

With neither side seemingly willing to back down, and still a considerable distance between the two parties, this certainly seems like an issue that will continue to run into 2016.

As the Health Secretary currently faces numerous problems within the NHS, it could be that he is ultimately forced to back down significantly and embarrassingly over this issue.

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Monitor Announces New Contractual Plans in the Mental Health Sector

The health regulator Monitor has signalled its intention to move the mental health sector away from block contract funding in the near future.

Mental health providers will be required to adopt new payment systems as part of the new initiative from April 2016.

As plans for the new payment system accelerate, Monitor has launched a consultation on the subject.

This plan would mean that mental health providers and commissioners would be forced to adopt either year of care, episode of treatment, or capitation payment systems.

Monitor has also signalled its intention to move away from the payment of services based on the clustering of mental health patients according to type and severity.

The health regulator has stated that the existing payment system does a poor job of incentivising early intervention and recovery-focused care.

In addition, block contracts have also been associated with other problems in the NHS.

It is thought that cuts in mental health funding in recent years can be attributed to this contractual system.

But although it is generally acknowledged that a payment by results system would be superior, delays have been multiple in recent years, ensuring that such a system has yet to be put in place.

The quality of mental health cluster data has been a particular barrier to implementation, with the information available not compatible with a payment by results system.

Launching its consultation into the matter earlier this week, Monitor stated that changes would “increase equity of access to evidence-based services and reward quality and outcomes.”

Additionally, the health regulator suggested that block contracts failed to incentivise “delivery of the objectives in the Five Year Forward View.”

The consultation will run until 19th November, and is attempting to collate views on the methods that providers would be most likely to adopt in the forthcoming financial year.

Additionally, any challenges implied in the implementation of these plans will also be assessed by Monitor.

Contractual issues in the mental health sector can be considered particularly important considering the financial challenges that the NHS faces in the coming years.

It is already expected that the NHS will accumulate a financial deficit of £2 billion by the end of the financial year, with this figure already approaching £1 billion after just one quarter.

This is indicative of the overall picture of NHS finances, with the publicly-funded health service required to make £30 billion of savings by the end of the decade.

Although some of this figure will be offset by increased funding, efficiencies are still considered to be extremely important, with the government seeking in the region of £20 billion worth of such efficiency savings by the end of the decade.

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