Magazine article Public Finance

Private Sector Loses out in NHS Policy Shift

Magazine article Public Finance

Private Sector Loses out in NHS Policy Shift

Article excerpt

Health secretary Patricia Hewitt has removed the symbolic ceiling on private sector involvement in the NHS - but has also conceded an important element of finance policy that experts say will curtail the potential profits of private providers.

The moves came as the Department of Health prepared for two 24-hour strikes as union members protest against the outsourcing of NHS Logistics to parcel firm DHL.

In a lecture to the Institute for Public Policy Research on September 19, Hewitt said: 'We don't need to set arbitrary targets or limits for one provider or another.' Instead choice and payment by results meant patients and GPs would decide the future shape of NHS provision.

Her comment was widely taken to be a reference to her predecessor John Reid's statement that 'up to 15%' of elective NHS treatments would be provided by the private sector. The same limit appeared in the 2004 NHS Improvement Plan.

Speaking to journalists after her speech, Hewitt implied that the move also meant an end to minimum levels of private sector involvement, the most controversial of which concerns the centrally procured independent sector treatment centres.

The centres were paid set fees, regardless of the volume of work done. …

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