Select Committee on Public Administration Appendices to the Minutes of Evidence

Memorandum by General Healthcare Group (PSR 27)


  1.1   The private sector has always contributed towards the delivery of public goods. In the delivery of healthcare in particular, private profit-making companies have played a crucial role in providing the infrastructure needed by the NHS and in working in partnerships with the state sector to deliver high quality care to patients. Through "Partnerships in Care", General Healthcare Group (GHG) has, for example, delivered high quality medium secure psychiatric care for NHS patients for the past 17 years.

  1.2  Those working at the frontline of service delivery in the state and private sector share a common ethos. Their motivations and values are based on a desire to deliver the best possible service to the public, irrespective of means or status.

  1.3  The involvement of the private sector in the delivery of healthcare does not undermine either this ethos or the fundamental values on which the NHS was built—that healthcare is universally available, free at the point of use and available irrespective of means. Indeed, partnership with the voluntary and private sectors is invaluable if the NHS is to continue to be able to stay true to those core values.

  1.4  If the Government is to succeed in enhancing the quality and effectiveness of state services, whilst also ensuring that they retain their core values, it will need to draw on all of the resources available—whether in the state, private or voluntary sector.

  1.5  With this in mind, GHG recommends that:

    —  A clear distinction should be made between those that set the standards and direction for state services and those responsible for delivering the services on the ground.

    —  The Government should reassert that the core ideals that underpin the NHS are principles. This is required because they often conflict with one another. This makes their delivery as goals impractical. Public debate can then be held about how these principles should be prioritised within the NHS.

    —  Using this framework of priorities, the Government should set clear operational goals, standards, regulations and monitoring procedures for those tasked with delivering services on the ground.

    —  Private sector providers should not be prevented from delivering necessary services if they meet required standards and deliver real benefit to the public.


  2.1  At the last election the Government was set a major challenge by the electorate: to improve the quality of state services without undermining their core principles. In the case of the National Health Service these are that the healthcare provided should be universally available, free at the point of use and available irrespective of means. This administration will be judged by many on its ability to meet these demands. It has already committed to providing additional investment and is now looking for greater diversity in the mechanisms of provision in order to generate the creativity and innovation necessary to breathe new life into our core services and to help secure higher patient throughput.

  2.2  Those resisting change argue that state services are more likely to serve the needs of the public if they are operated by the state. They maintain that the use of independent sector providers will result in a dilution of the traditional moral and ethical values of state services. It is said that this will occur as economic efficiency and service effectiveness will eclipse the core values on which our state service were built. It is also suggested that the only way to guarantee the preservation of the traditional values of core services is to require that state services should always, in all circumstances, be provided by the state.

  2.3  Yet there is clear consensus that the current system, based largely on monopolistic state provision, is failing to deliver. Further injections of funding are not bringing about the fundamental and necessary improvements in quality and effectiveness that the public expects. There is also a growing realisation that the present system risks becoming more focused on providers' own priorities, rather than those of their users. This can be seen in a number of state services, including the National Health Service where, for example, hospital routines are often organised for the convenience of staff, rather than the patients.

  2.4  Against this background the challenge for Government is to develop a new approach, which reasserts the core values of our state services, whilst enhancing the quality and effectiveness of the services actually provided. General Healthcare Group (GHG) believes that this can only be achieved by strengthening the distinction between those who set the standards and direction for state services and those responsible for delivering the services on the ground. It is only by creating a clear distinction between the role of Government (which should be defining what services are to be provided; setting standards required; and then purchasing, and monitoring the services) and the role of individual service providers (which should be determining how to deliver quality services within the framework set by Government) that we can collectively ensure that such services meet the expectations of the public. Increased diversity in service provision will create the potential for the transformation to ensure that the public gets the improved services it expects.


Abstract Ideal or Practical Value?

  3.1  The term "public service ethos" is commonly used by politicians and the public. Yet this phrase means different things to different people. In every-day terms it is used to express a belief that those who work for the state are tied together by a value system that is ethically and practically unique. This value system is frequently cited by politicians of all allegiances as something that in itself should be valued and preserved. Yet little research has been undertaken on the basis for this belief.

  3.2  Discussion about core values cannot and should not be considered in the abstract. If an ethos is to have practical value, it must be examined within the context of the institutions and people that embody them. One attempt to codify the ethos of those working in the state sector was the Nolan Committee's Report on Standards in Public Life. The Nolan Committee identified seven core principles of public life—selflessness, integrity, objectivity, accountability, openness, honesty and leadership—that it argued should determine the behaviour of all public servants.

  3.3  Whilst these principles may be useful in providing guidance for those working close to policy making within the state sector, GHG would question the extent to which they affect the individual actions of those at the frontline, engaged in delivering services to the public. Clearly a senior official in the Department of Health may be very much concerned with traditional accountability to their minister and with ensuring that their advice remains impartial. However, the experience of GHG is that doctors and nurses are primarily concerned with delivering the best care they can to patients. The difference in "ethos" between those at the centre of policy-making and those responsible for frontline delivery of state services was summarised by Lord Mackay of Ardbrecknish (formerly Minister of State for Social Security) when he gave evidence to the House of Lords Select Committee on Public Service in 1998. In his evidence he stated:

    "Maybe I should not say it to you, but I am a little puzzled as to what is exactly the Civil Service ethos out in the Benefits Office in Truro or in Wick, or wherever it is. The people there do a good job. They do understand loyalty to their employer in much the same way as their brothers and sisters do if they work for the local law firm or the local bank or whoever it is. It is at the centre, where people are near to the policy-making edge, where there is a significant difference in the Civil Service." [7]

  3.4  Further examination of the motivations and values of those state employees engaged in frontline delivery of public services suggests that the values they hold are not determined by either the public they serve or whether (or how much) they are paid for their service.

  3.5  A nurse provides treatment to an NHS patient does not hold different values when she gives the same treatment to a private patient within the NHS. Similarly, a volunteer visiting dying patients in a private hospice is unlikely to have a different value system from the volunteer who is visiting patients in an NHS hospital. Factors such as whether the individual is paid or not, or whether they are administering treatment to a patient who is paying for the service, do not affect an individual doctor's or nurse's approach to their work.

  3.6  That the values held by frontline staff in the state sector are no different from those of their counterparts who are providing the same services in the private sector was borne out by research recently carried out by the IPPR as part of its Commission on Public Private Partnerships (CPPP). The CPPP undertook qualitative research with a number of nurses and health managers, working in both state and private sectors. As the CPP stated in its final report:

    "The research highlighted that healthcare workers themselves—both nurses and health managers—strongly felt that there was no difference in ethos between providers. Nurses were adamant that there was no divergence in attitude or approach between those working in the public and private sectors"[8]

  3.7  Given this, whilst the key principles on which the British Civil Service is based may provide a useful way to characterise the ethos of civil servants at the heart of policy-making, we would contend that it is less useful for comparing the approach of those delivering services to the pubic on the ground. Rather those delivering services, whether in the state, private or voluntary sectors, are linked by a desire to provide the best service possible given the resources available. It is an attachment to service that is today at the heart of the "public service ethos".

  3.8  The equating of public service ethos with a desire to serve the public well was made by Alan Milburn, Secretary of State for Health, in his recent speech to the NHS Confederation Conference, in which he stated:

    "It is the ethos of public services—its burning ambition to serve people regardless of their wealth or worth—that lies at the heart of public support for the NHS." [9]

  3.9  If this is the case, as the IPPR research clearly demonstrated, then this ethos or approach to work cannot be—nor is it—unique to those working for the state. It is equally present in those working in service delivery roles within the private and voluntary sectors.


  4.1  Of perhaps greater importance than attitudes held by individual doctors and nurses is the question of whether private sector involvement, of itself, runs counter to the core values of the state services. There are two issues. First, does the mere use of the private sector represent an attack on those values? Second, can private sector involvement help the NHS achieve its service goals without in practice undermining the core values that we all support?

Conflicts and Trade-offs

  4.2  Although the NHS has never had a formal codification of its core values, a number of key values have been enshrined in legislation and policy decisions. Since its creation in 1948 all governments, whether of the left or the right, have supported the underlying principles of the NHS—as a universal service funded by general taxation, free at the point of use and available irrespective of means.

  4.3  The core principles of equity, universality and "free" access continue to be primary values underpinning the NHS. However, over time they have been supplemented by other principles. With the rise in consumerism and calls for greater public participation during the 1970s, the needs of the users of state services could no longer be considered simply a "bolt on" option. As a result, choice and public participation became more central to the values of the institution, embodied through such measures as the setting up of Community Health Councils in 1974. In the 1980s major reforms to the NHS saw the pursuit of value-for-money and cost-effectiveness join the other core principles, whilst more recently there has been active encouragement of management entrepreneurism through earned autonomy.

  4.4  With more values being applied to the NHS it is perhaps inevitable that these should give rise to conflicts. Every day clinicians and managers are required to make decisions that seek to reconcile these values—decisions that, for example, pit issues of cost against universality of treatment (should all short-sighted people be given access to free laser treatment, for example?), or of cost considerations against individual patient choice (should all pregnant women be allowed to choose to have a caesarean section when they have no medical need for the procedure?). It is left to clinicians to prioritise and reconcile these values on a daily basis.

  4.5  The essential contradictions between some of these values was highlighted recently by Alan Milburn, Secretary of State for Health. In his speech to the Fabian Society in October of this year he noted:

    "The NHS has always been strong on fairness but weak on choice. It was born into a world where everyone was given the same rations. In a top down model where there was rationed care, capacity shortages and a culture of paternalism, the NHS strove for equity for the population but at the expense of choice for the individual." [10]

  4.6  The Government has sought to untangle some of these conflicting principles by creating bodies such as the National Institute for Clinical Excellence—an organisation explicitly charged with reconciling universality of treatment with cost-effectiveness. Yet prioritising these values on a case-by-case basis will not solve the inherent difficulties facing the NHS.

  4.7  At the heart of these difficulties is the fact that the institution is striving towards a number of goals that are not only inconsistent, or at any rate contradictory, but are also probably unachievable. In reaching for ideals of universality and equity the NHS can only fail to deliver. The consequences of this are far-reaching. Despite its significant and manifest successes in a whole range of areas, the NHS is perceived to be "failing" by the public. Public confidence in the ability of the NHS to deliver continues to diminish and staff morale declines. The result is a state service that is perceived to be in constant crisis.

The Need for Direction

  4.8  That these ideals cannot be met does not, however, deny their importance as guiding principles for the NHS. The crux of the problem is that politicians continue to exalt the NHS as capable of meeting all these ideals without proper recognition of the nature of this task. It is important that the public understands that concepts such as equity are principles that can help guide decision-making for the NHS. They are not however goals that are in themselves achievable.

  4.9  Political affirmation of these as principles and recognition that they have to be prioritised to enable effective service delivery will help engender public confidence in the NHS and assist frontline staff to deliver what is required of them. We envisage that this process of clarification and prioritisation would provide the NHS with something similar to a prioritised "mission statement", and below that a series of service objectives. Proper debate could then be held in public about how to achieve a satisfactory trade-off between the various principles and how they should be reflected in the prioritised service provision.

  4.10  The dangers of seeking to reform state services without establishing a clear direction is underlined by Montgomery Van Wart in his book, Changing Public Sector Values (1998). He states:

    "Lack of clarity about the values to be endorsed, their priority, their application in different situations, their support, and their endorsement leads to ineffectiveness as employees work at cross-purposes."[11]

  4.11  This reaffirmation of the values on which state services are based and confirmation that they are principles, rather than goals per se, will help pave the way for the restoration of public confidence in state services. Importantly, it will also enable government to set clear objectives for those who are actually tasked with delivery of services on the ground.

Setting the Framework

  4.12  Establishing a clear direction for the NHS is imperative if service quality is to be enhanced. The role of government is to assert the principles upon which state service provision is based and to use these to determine and then prioritise the services to be provided. The role of government is also to determine the level of funding to be made available. This will ensure that public service delivery remains true to its traditional principles.

  4.13  Ensuring that these principles and values are translated into high quality service provision can only be achieved by ensuring that the right framework is in place. It is for government to clearly define the operational goals, standards, regulations and monitoring procedures. The failure of state services to meet user expectations has unfortunately led to a tendency for government to focus instead of micro-managing the delivery of services (such as by dictating hospital menus). This kind of "top down" command can only lead to worsening standards, as the attention of government is diverted from important strategic issues.


  5.1  Once a properly defined and prioritised framework has been developed, the issue of how models of delivery should be developed becomes clearer. It enables a more productive discussion about the extent to which the private sector can help the NHS deliver service objectives. Private sector providers should not be prevented from delivering services that are of benefit to the public, simply because of dogma. If they can help in service delivery within the parameters established by government, they should be encouraged to do so.

  5.2  Since the creation of the National Health Service private companies and the voluntary sector have played an important role in delivering services to NHS patients, without compromising its core principles. For example, GHG has been providing care for NHS patients for the past 17 years. Operating under the name "Partnerships in Care" GHG delivers over 275,000 days of psychiatric care annually to some of the most challenging NHS and social services referred patients. These patients represent a significant proportion of the third of all state psychiatric patients who are referred to the independent sector. They receive high quality care that complies with the fundamental principles of the welfare state—that it is free at the point of use, universal and comprehensive.

  5.3  The basis of this care is defined by specific agreements between Partnerships in Care and the referring NHS or social services agency, which define service and quality levels, the scope of treatment and care to be provided and target outcomes. The growth in usage of private sector services for the care of these NHS patients has been achieved whilst meeting high quality standards. Referrers have retained control over the service and helped shape the treatment programmes of individual patients.

  5.4  More recently GHG, through its BMI Healthcare hospitals, has also provided acute sector healthcare services to the NHS where additional capacity has been required. Since the Concordat, which permitted local purchasers to purchase care from independent providers, was signed in October last year BMI Healthcare has treated over 11,000 NHS patients. We estimate that, had those NHS patients treated in the independent sector under the Concordat not been so treated, there would have been a significant increase in numbers of people on NHS waiting lists.

  5.5  Denying patients treatment when it could be provided free at the point of use and at the required standards can in no way be regarded as delivering the core principles of the NHS.


  6.1  Is there something morally questionable about allowing private sector companies to provide healthcare to NHS patients? In the past, critics of private sector involvement in state services have put forward the objection that it is wrong to allow any non-state entity to make a profit out of the provision of healthcare, or health related consumables. GHG would contend that this reflects a rather incomplete understanding of the UK health system. The NHS (and its care of patients) is already heavily reliant on private sector companies which in turn are only as viable as their ability to generate profits and re-invest in capital projects and research and development. Private sector companies include those that produce medical equipment, builders of hospitals, pharmaceutical companies, pharmacies and many more. No objections are raised against such companies, all of which generate profits from serving the NHS. Indeed, such companies are crucial to the ability of the NHS to provide an effective and comprehensive service. Would anyone seriously propose that the NHS should manufacture its own scalpels and aspirins?

  6.2  The question is not one of the return available to those delivering services to the state, but rather whether the system is set up sufficiently well to ensure that the focus of service providers remains on outcomes that are defined by government. Putting the right standards and framework in place will ensure that profit plays its proper role—as an incentive to look for efficiencies and make use of technological and other advances that can help the provider deliver a better service—but without taking priority over clinical decisions.

  6.3  Once this framework is in place, if a private sector provider can provide a service that meets the standards set by government and which is of a better quality cost mix to the tax-payer, whilst also generating a profit, it should not be prevented from doing so.

What do the public think?

  6.4  GHG participated in the IPPR's Commission for Public Private Partnerships (CPPP). As part of this process MORI undertook extensive research in a poll exploring public attitudes towards the use of the private sector in the health service. As the CPPP's final report stated, 79 per cent of respondents agreed with the statement that "the country's healthcare needs would be better served if the NHS and private sector worked hand in hand".

  6.5  It is clear that the overriding concern of the public is to improve the quality of state services—as was demonstrated during the last election, where time and again the key issue of priority to voters was seen to be the quality of state or public services. There is little doubt that the public's core concern is that the Government delivers effective NHS services. Meeting this challenge can best be achieved by using all of the resources that are available—whether in the state or private sectors—provided that this is done in ways which does not undermine core principles. In the case of the National Health Service these are that the healthcare provided should be universally available, free at the point of use and available irrespective of means.


  7.1  It is part of the British way of life that structures evolve, whilst still remaining true to core principles. The principles that underpin our state services are set in the standards, objectives and regulations that govern the modern health and education systems. Allowing private sector entities—even those that generate a profit from these activities—to deliver services on the ground will not denigrate or dilute these central principles.

  7.2  General Healthcare Group would draw a clear distinction between:

    —  Government—that defines the objectives, sets the standards, and then regulates and monitors performance of the nation's health services, and

    —  A range of service providers—which deliver the services.

  7.3  In so doing, GHG is not seeking to allow the private sector to "take over" service delivery. There are significant needs that NHS providers will generally meet more effectively than the private sector—such as accident and emergency services. Yet there are also areas where the private sector has built up expertise and has developed new models for delivering services that are better able to meet the needs of the public.

  7.4  Instead, GHG would contend that there can be no philosophical or moral objection to private sector involvement, where such partnership is helping the NHS to deliver high quality healthcare to the public. Ideology and dogma must not prohibit the reform of our core public services.

November 2001

Annex A


  General Healthcare Group is a leading provider of independent healthcare services throughout the UK. The group retains a focus on quality of service and efficiency, with a deserved reputation in the independent healthcare sector for consistent achievement of these values. General Healthcare Group offers a range of services including acute care, long term psychiatric care and preventive healthcare, through its three operating divisions.

  General Healthcare Group is:

    —  The largest private healthcare provider of acute care services in the UK, through BMI Healthcare.

    —  The largest medium term psychiatric care provider in the UK, through Partnerships in Care.

    —  The largest full-service provider of outsourced occupational health, through BMI Health Services.

  In addition:

    —  BMI Healthcare operates 44 hospitals providing over 2,100 private acute care beds.

    —  Partnerships in Care operates 12 psychiatric hospitals providing over 700 beds.

    —  BMI Health Services provides health screening and occupational health services to range of public sector and private sector clients.


  BMI Healthcare is the largest independent provider of its type in the UK, with over forty hospitals serving the needs of their local communities. Committed to providing a consistent, high quality service across the nation, BMI hospitals have built an enviable reputation for providing excellent medical and surgical facilities supported by state-of-the-art equipment and a high standard of nursing care, within pleasant and comfortable surroundings. Equipped with the latest technology, BMI hospitals perform more complex surgery than any other independent healthcare provider in the country. With Intensive Care or High Dependency Units at each hospital, BMI's specialist staff are able to undertake a wide range of procedures from routine investigations to the most complex, high acuity cases such as cardiac and neuro surgery. BMI hospitals attract consultants from a wide range of specialities and most come with extensive experienced gained within the NHS. They are supported in each hospital by a team of Resident Medical Officers, available 24 hours a day. BMI Healthcare's commitment is to quality and value, providing facilities for advanced surgical procedures together with friendly, professional care.

  BMI Healthcare works with and supports the NHS in a number of ways across the country. These include the management of NHS private facilities, the leasing of facilities within NHS Trusts, and working with the Trusts and Health Authorities to help reduce waiting times. A number of smaller BMI hospitals are located on NHS sites and have developed close working relationships with the NHS hospitals whose sites they share. Through links with their NHS host, they are able to provide a sophisticated level of care not always available in stand-alone hospitals of a similar size. BMI hospitals have rapidly established their position as market leaders in such private/public partnership ventures, providing a complementary private patient service linked to an NHS hospital.


  BMI Health Services, is a major provider of preventive healthcare throughout the UK, delivering occupational health services and health screening to organisations and individuals. A network of dedicated screening centres is complemented by outlets in BMI Healthcare hospitals across the country, enabling the provision of services to large corporate clients. Continuous research and development using high quality medical and scientific expertise, information and analysis, help BMI Health Services to provide the most up-to-date, appropriate and ethical services.


  Partnerships in Care (PiC) is the leading provider of specialist psychiatric rehabilitation and non-acute psychiatric care services in the UK. Patients are mainly public sector funded and inpatient stays are usually measures in months or years. The main sectors of the business are secure psychiatric services for those with significant mental illness, personality disorders, learning disabilities and acquired brain injuries. The division also provides telephone counselling services to employees with difficult health, financial, medical, domestic or legal issues. Partnerships in Care therefore has significant presence in all of its markets.

7   Lord Mackay of Ardbrecknish, then Minister of State for Social Security, as quoted in 1998 Report by House of Lords Select Committee on Public Service Back

8   Final Report of the Commission on Public Private Partnerships, Building Better Partnerships, p132. Back

9   Alan Milburn, Speech to the NHS Confederation Conference, July 2001. Back

10   Alan Milburn, Speech to Fabian Society, Reforming Public Services: Reconciling Equity with Choice, October 2001. Back

11   Montgomery Van Wart, Changing Public Sector Values, 1998 Back

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