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ppp Friday, 27 September, 2002, 16:07 GMT 17:07 UK
NHS's private plans
Private sector links to the NHS provoke strong feelings
Private sector links to the NHS provoke strong feelings
Private involvement in the NHS is a controversial issue.

The government says it is the only way to increase capacity in the NHS.

Health unions are strongly opposed and say it is privatisation by stealth.

Independent experts lie somewhere in between. They say the private sector can help the NHS to improve but warn it is not a panacea for every ill.


The NHS is tying itself into long-term contracts which might prove embarrassing in 10 years time

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Patients, it seems, are content as long as the policy brings noticeable improvements on the ground, namely shorter waiting times and better facilities.

There has always been a role for the private sector in the NHS not least through the provision of drugs by the pharmaceutical industry.

Going private

But in recent years, the health service at the behest of ministers has opened its arms to a much closer relationship.

In the 1990s, the Conservatives introduced the private finance initiative (PFI) - a scheme whereby private companies construct, manage and lease back capital projects, in this case hospitals, to the State.

The policy was wholeheartedly embraced by the Labour Party after it won the 1997 general election.

PFI is central to the government's hospital building programme - the biggest in the history of the NHS.

Nineteen PFI hospitals are currently under construction and 15 more are in the pipeline.

Have your say

Ministers say the scheme is the only way the country can afford to build new hospitals and modernise the NHS.

However, critics disagree saying it is too expensive and will cause serious problems in the future.

A report by the GMB union last year suggested private companies will make in excess of 3bn profits from PFI agreements with the NHS over the next 30 years.

Long-term risks

Anthony Thompson, of the health think tank the King's Fund, believes PFI could cost the NHS dear.

"From the government's point of view, there's no doubt it is seen as a way of getting a lot of hospitals and bits of hospitals built very quickly, which has been done - so it is a success."

But he added: "The NHS is tying itself into long-term contracts which might prove embarrassing in 10 years time."

Margi Jaffe, national officer for Unison, agrees.

The private London Heart Hospital  has been bought by the NHS
The private London Heart Hospital has been bought by the NHS
"PFI is one issue, which we think is a really bad way of financing public investment.

"There's enough money in the public coffers to pay for the whole PFI building scheme across the public sector," she says.

The government has its own views. It is expected to use PFI to expand the NHS further with new primary care centres and 'fast-track' surgery centres across the country.

In October 2000, private sector involvement in the NHS reached new heights with the signing of a concordat between the government and private health providers.

This agreement formalised the practice whereby the NHS pays private hospitals to treat some patients.

According to the Independent Healthcare Association (IHA), 50,000 NHS patients been treated in private hospitals under this scheme since the beginning of 2001.

Wider options

Earlier this year, the government took the policy slightly further - to Europe in fact - paying hospitals in France and Germany to treat NHS patients.

It is also paying specialists from Europe to come to Britain temporarily to carry out operations and cut waiting lists.

In recent months, ministers have also opened the government cheque-book and paid to take over previously private hospitals, such as the London Heart Hospital.

They have also been keen to bring private sector expertise and its ethos into the NHS.

Managers of failing trusts now face being sacked and replaced if they feel to meet government standards.

These new management teams could, in the future, include people currently working in the private sector.

At the other end of the scale, the best hospitals will, from next year, be able to apply for foundation status.

This will enable them to opt-out of government control and make their own decisions about their clinical and financial priorities.

They will be able to buy additional services, sell off land and keep the proceeds and potentially pay higher rates to staff.

Unions have been up in arms over many of these policies but ministers insist ideology must not stand in the way of better healthcare.

The government has made ambitious promises and has made it clear that when necessary the private sector will be relied upon.

Stormy waters lie ahead. Perhaps an improved NHS will follow.

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