Health Care moves towards the Private Sector

  • The NHS is expecting cuts of £50bn as health care moves over to the private sector.

    Around £20bn worth of contracts will be tendered out from the NHS in the next few years to private companies and according to reports by Catalyst, the NHS expected to face cost cuts of £50bn by 2020 as there are "significant opportunities" for private companies.

    The private companies are expected to take over a range of services, from small clinics to entire hospitals.

    The report says:

    The private sector currently delivers a very small proportion of primary and secondary care. However, if the government is to manage funding pressures and achieve improved outcomes for patients this will need to increase. The Government will need to access the capital investment potential of the private sector and make use of alternative models of healthcare delivery which focus on the community and home and away from hospital care.

    Areas such as primary care, community health services and commissioning support services are potentially worth billions of pounds.

    The impact of the Health & Social Care Act on procurement, delivery channels and models is unclear. Nevertheless, the role of the private sector is increasing. If this is combined with the removal of barriers to higher participation, such as in primary care removing practice boundaries and goodwill on GP practices, investment would be boosted and the opportunity for the private sector to build business with scale will be considerable.

    Private firms can expect to increasing take more of the £8.3bn that is spent on GP services every year in England, as more services are expected to be provided closer to people homes instead of in hospitals.

    In community healthcare, where Circle, Virgin Care and Serco have recently won deals totalling £700m, the private sector could deliver up to 20 per cent, or about £20bn, by 2020.

    It is expected that the new clinical commissioning groups that come into effect from April next year will be buying services worth £1.3bn.

    Justin Crowther, director at Catalyst and co-author of the report, said:

    Despite many challenges, the private sector is increasingly providing healthcare services, whether paid for by the taxpayer or directly by consumers at the point of use. Whether this is to turn around underperforming hospitals, operate GP surgeries, deliver community services or create centres of excellence in areas such as pathology, [NHS] commissioners are increasingly using the skills and capital of the private sector.

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