Memorandum by General Healthcare Group
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
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 builtthat
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 availablewhether 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
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
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
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.
3. THE PUBLIC
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 lifeselflessness, integrity,
objectivity, accountability, openness, honesty and leadershipthat
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."
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 themselvesboth nurses and health managersstrongly
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"
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
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 servicesits
burning ambition to serve people regardless of their wealth or
worththat lies at the heart of public support for the NHS."
3.9 If this is the case, as the IPPR research
clearly demonstrated, then this ethos or approach to work cannot
benor is itunique to those working for the state.
It is equally present in those working in service delivery roles
within the private and voluntary sectors.
4. THE VALUES
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 NHSas 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 valuesdecisions 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." 
4.6 The Government has sought to untangle
some of these conflicting principles by creating bodies such as
the National Institute for Clinical Excellencean 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."
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
5. SERVICE DELIVERY
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 statethat 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
6. THE ROLE
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 roleas an incentive
to look for efficiencies and make use of technological and other
advances that can help the provider deliver a better servicebut
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
6.5 It is clear that the overriding concern
of the public is to improve the quality of state servicesas
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 availablewhether in the state or private
sectorsprovided 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
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 entitieseven
those that generate a profit from these activitiesto deliver
services on the ground will not denigrate or dilute these central
7.2 General Healthcare Group would draw
a clear distinction between:
Governmentthat defines the
objectives, sets the standards, and then regulates and monitors
performance of the nation's health services, and
A range of service providerswhich
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 sectorsuch 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
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.
GENERAL HEALTHCARE GROUP
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.
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
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
Final Report of the Commission on Public Private Partnerships,
Building Better Partnerships, p132. Back
Alan Milburn, Speech to the NHS Confederation Conference, July
Alan Milburn, Speech to Fabian Society, Reforming Public Services:
Reconciling Equity with Choice, October 2001. Back
Montgomery Van Wart, Changing Public Sector Values, 1998 Back