What NHS privatisation could mean for the future of healthcare contractors?

July 2022

This year, the UK government signed the Health and Care Act 2022. The bill captured the attention of the public eye for its implications for a privatised health service.

Over 1 million people work under the NHS. The British Medical Association estimates that independent service providers carry out 5.2% of NHS-funded treatments.

They report that health care contractors became an integral part of NHS services during the pandemic. But, while there are benefits to outsourcing health care, there are also many dangers.

This article will discuss what NHS privatisation could mean for health care contractors.

Let’s dive in!

What is the new Health and Care Act 2022

In coordination with the King’s Trust, an independent government adviser, the act aims to create an “integrated care system” (ICS).

The current NHS system works under clinical commissioning groups (CCGs). Wherein NHS services were managed and held accountable by a local governing body. Under the new bill, these will be replaced with smaller ICS groups.

The move formalises relationships with collaborative partners. Using the ICS model, local services will now need to join with a private service provider.

These lead providers will take the role of outsourcing NHS services where they see fit. The lead providers themselves will only answer to the NHS England commissioner.

Advantages and disadvantages of NHS privatisation

On the one hand, privately outsourcing NHS providers could increase the scale and efficiency of national services.

Contrary to popular belief, the NHS has always involved public and private provisions. In fact, the vast majority of GPs providing NHS services are independent contractors.

Under the 1946 NHS Act, local practices operate as their own business entities. The government supplements them based on how many NHS patients registered with them.

But, they are still private employees. This had benefits, such as:

  • Increased public services
  • Better employee benefits
  • Expanded patient coverage
  • Reduced waiting times

But, the increased privatisation of the NHS suggested by the new bill also has disadvantages. For starters, by cutting down local NHS oversight, there’s less transparency.

Private companies don’t have to meet the same accountability standards as public service contractors.

We also see:

  • Increasing expenses going towards private services and away from public funding
  • Less continuity for patients
  • More competition for healthcare contractors
  • Gives private providers the power to terminate services it deems unprofitable

For healthcare contractors, this can mean a loss of employment. Not to mention less financial stability and a potentially unregulated market where they compete to win NHS contracts.

Moreover, it removes many of the safeguards on which those contracts are founded. For instance, adequate pay, healthcare and contracted hours.

A lack of transparency not only disadvantages patients. But under NHS privatisation, workers have less protection against unfair employment practices.

What does the future hold for healthcare contractors under NHS privatisation?

The government has begun an NHS recovery plan backing the new Health and Care Act. This plan is designed to manage the treatment backlog that accumulated during the pandemic.

It also covers expanding workforce capacity. Not least by creating a more sustainable system for future staffing.

In a 2022 parliament debate, MP Matt Vickers stated:

“The Government have no democratic mandate to privatise the NHS, which is why they are doing no such thing. Access to NHS services will continue to be based on clinical need, not an individual’s ability to pay.”

But, their plan suggests somewhat of a contradiction. On the one hand, it advocates using collaborative partnerships with private providers. Whilst also calling for reducing agency workers.

Independent contractors are a fundamental part of the plan. They can sit on lead provider boards which influence local strategy. Yet, they also are not permitted to directly influence local decision-making.

Some have argued that the new act will create a “pay for play” system. The NHS’s authority will become increasingly centralised as actual services are fragmented.

The arguments continue regarding whether the new bill will improve or deprive the healthcare sector.

But, one thing remains clear: Healthcare contractors need to prepare themselves for the new role they’ll play in the future of the NHS. Regardless of the level of privatisation.

How can healthcare contractors prepare for NHS privatisation?

Firstly, with the growth of private healthcare, NHS contracts will become increasingly competitive. Between 2019 and 2020, the NHS spent £9.7 billion on services delivered by the private sector.

This reflects a 7.2% budget devoted to private care providers. Some include social enterprises and not-for-profit organisations. Yet, the vast majority went to independent service providers.

Healthcare contractors working for these organisations are more likely to succeed in bids for NHS contracts. Not least because they often have more resources to compete.

Winning NHS contract bids is a matter of early engagement. As well as being able to meet NHS stipulations of the tender contract.

Getting ahead

For the best possible chance at success, healthcare contractors need to know the dynamics of the healthcare market (including the potential for NHS privatisation).

They must be able to proactively seek out market and contract opportunities. Whilst simultaneously knowing how to reach contract requirements.

To do this, independent businesses need to be aware of the latest data in the UK procurement market. This includes market analysis, contact pipelines and leads.