UNISON - Rethink urged on NHS outsourcing - Dec 08

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(05/12/08) The government needs to rethink its approach to NHS reforms, says UNISON, in the wake of a new damning report on the cost of commissioning and outsourcing.

It should concentrate on giving NHS patients the care they need – and value for money – rather than using reforms to outsource services and 'throw precious money away to the private sector' says the union, following publication of the report, Driven by Dogma, by the Office for Public Management.

The report says outsourcing in the NHS has failed to deliver value for money, patient involvement or improved working conditions.

The government's pre-budget report in November made much of the potential efficiency savings to be made by the NHS from shared services operations with the private sector.

But first hand evidence in the new report, looking at the experience of those commissioning and delivering services, reveals that in fact promised cost benefits have simply failed to materialise, and quality has suffered.

• “At a time when finances are increasingly tight, the NHS cannot afford to be throwing precious money away to the private sector and wasting time and resources on the complexity of the commissioning process,” commented UNISON general secretary Dave Prentis.
• “Patients want more involvement in decision-making and staff want to spend more time on providing excellent patient care than tendering for contracts.
• “Unfortunately this report shows that the various reforms to outsource or privatise parts of the NHS are working against these goals.”

The report draws on the experiences of NHS senior managers and commissioners to highlight the sheer complexity of the commissioning process, and the mountains of bureaucracy and paperwork attached to it.

• “My experience has been that the problems associated with monitoring contracts far outweigh the benefits of the outsourcing,” said one of those intereviewed: “We will go on spending more and more money on this – contract negotiation skills, transaction costs, etc.”.

UNISON points out that there are alternatives - Scotland has recently announced that it will no longer permit any contract cleaning and Wales has done away with the purchaser-provider split in favour of a more integrated system.

The report makes clear that markets should not be the only option and that those working in the devolved administrations did not feel they were disadvantaged by the minimal use of outsourcing in their systems.

• Fully copy of the report...

Press Release...
DRIVEN BY DOGMA - UNISON CALLS FOR RE-THINK OF NHS OUTSOURCING
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The NHS is wasting precious time and money introducing reforms that are failing to deliver better services to patients or value for money, says UNISON, the UK’s largest public sector union. The union is calling on the Government to ‘think again’ about its NHS outsourcing and privatisation agenda, in the light of a damning new report by the Office for Public Management (OPM) – ‘Driven by Dogma’*.

The report draws on the experiences of NHS senior managers and commissioners to highlight the sheer complexity of the commissioning process, and the problems of coping with the mountains of bureaucracy and paperwork attached to it. One of those interviewed reported “my experience has been that the problems associated with monitoring contracts far outweigh the benefits of the outsourcing.” and “we will go on spending more and more money on this – contract negotiation skills, transaction costs, etc.”.

Earlier this year the Healthcare Commission’s staff survey found that less than half of health staff believed that the care of patients was their Trust’s top priority. UNISON called on Trusts to refocus on putting patients before paperwork.

Dave Prentis, UNISON General Secretary, said:

• “The failure to regulate the finance sector has dragged the economy into recession. We don’t want so-called “light touch’ regulation to damage patient care and the NHS. It is a slippery slope when health reforms are brought in without the necessary checks and balances of effective scrutiny and accountability.
• “At a time when finances are increasingly tight, the NHS cannot afford to be throwing precious money away to the private sector and wasting time and resources on the complexity of the commissioning process.
• “Patients want more involvement in decision-making and staff want to spend more time on providing excellent patient care than tendering for contracts. Unfortunately this report shows that the various reforms to outsource or privatise parts of the NHS are working against these goals.”
• “This is not a paper exercise, these reforms have real and serious consequences. Earlier this week UNISON was involved with a BBC investigation into private patient transport services in Birmingham. It revealed a shocking lack of accountability with a failure by the company concerned to vet staff, resulting in the employment of a convicted criminal amongst their workforce. This lack of scrutiny is a very real danger to the public.”

‘Driven by Dogma’ points to failures of outsourcing in the NHS to deliver success in terms of value for money, patient involvement and working conditions.

The Government’s pre-budget report made much of the potential efficiency savings to be made by the NHS from shared services operations with the private sector. OPM’s report, based on first-hand evidence from those involved in commissioning and delivering services, demonstrates quite the contrary. In addition to quality suffering, the promised cost benefits have failed to materialise.

The privatisation of health commissioning functions also comes in for criticism in the report. It quotes the experience of the first PCT to use the Framework for procuring External Support for Commissioners (FESC) and its apparent failure to deliver. The chair of Hillingdon PCT comments “that at this time he could not see how FESC would result in value for money on performance to date”.

Similar to issues with independent sector treatment centres, this study noted decisions by commissioners to outsource the “easier” parts of the health service to the private sector: “it is no surprise they have [outsourced] the easy stuff first”. The more complex, high-profile or litigious elements tend to be less attractive to the private sector: the report closes with a comment from one commissioner that “it will be a brave commissioner who outsources neonatal care.”

There are alternatives: Scotland has recently announced that it will no longer permit any contract cleaning and Wales has done away with the purchaser-provider split in favour of a more integrated system. The report makes clear that markets should not be the only option and that those working in the devolved administrations did not feel they were disadvantaged by the minimal use of outsourcing in their systems.
 

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