The estimate came in a report last year from analysts Laing & Buisson, which listed 23 companies that hold contracts for GP practices, GP-led health centres and walk-in centres.
Corporate analysts Catalyst cited the figure in a separate report last month, which highlighted a '£20bn opportunity ahead for the private sector' in the NHS, in both primary and secondary care.
These findings echo predictions by GP leaders last year that by 2014, companies would run 10% of practices in England (GP, 23 September 2011).
But just how significant are the opportunities for private firms to extend their grip on primary care in the near future?
Private providers
Laing & Buisson's report pointed to barriers for private providers, citing the ban on the sale of goodwill for GP practices, the inability of people 'outside the NHS family' – that is, people other than doctors or nurses, in effect – to hold GMS and PMS contracts, and the inability of private providers to offer employees NHS pensions.
The Health Act pledge to 'remove unnecessary barriers to new provision' left GPs worried that the market would be opened up significantly before the next general election.
But many of the existing disincentives for private companies to become involved in primary care look likely to remain for now.
Removing the ban on the sale of goodwill would make GP practices more like other businesses, which can sell not only the value of their tangible assets, but also a perceived value of the strength of their brand and relationship with customers. But the DH says that it has no plans to change the rules covering goodwill.
The Health Act also set out plans to adopt a single contractual model for primary care, one that many GPs feared would resemble APMS and attract more private providers.
But GP leaders think the government has little appetite for another battle with the frontline by reforming GP contracts in the midst of wider NHS reforms. The current economic climate also means funding to grease the wheels on a deal with the BMA is lacking.
| PRIVATE PROVIDERS |
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£185m Private firms' estimated annual income from the primary care sector Source: Laing & Buisson |
Organisations such as The Practice plc – which holds around 60 primary care contracts – have sidestepped the contractual barrier for private companies. Having members of the NHS family at senior level means the firm can and does hold GMS and PMS contracts, as well as the APMS deals normally open to private companies. But for companies not led by health professionals, the rules around PMS and GMS contracts remain a barrier.
Until some of these factors change, it will remain difficult for new providers to break into the GP practice market on a large scale.
GMS/PMS lead for the NHS Alliance Dr David Jenner says larger providers are best placed to be able to make a profit from general practice. 'If you get a larger market share you can reduce back office costs. And having a practice gives you a foot at the clinical commissioning group (CCG) table.'
Where companies do get a foothold, he says, cost-cutting is likely to see them reduce GP numbers and shift work to nurses and healthcare assistants, who are cheaper to employ.
GP premises
One factor that seems to offer an opportunity for private companies comes from former health secretary Andrew Lansley's announcement in summer that the DH will not invest in GP premises. This leaves the door open for private providers to give primary care the expansion it so badly needs to deal with the transfer of work from secondary to primary care.
But GPC deputy chairman Dr Richard Vautrey says that this investment is unlikely unless time limits on APMS contracts are extended. 'For providers to make any profit on investment in premises, contracts would have to be 20 or 30 years long,' he says.
Private firms may also be able to challenge practices for the right to provide enhanced services under 'any qualified provider' legislation. But other factors working against private involvement include CCGs planning to limit the role of the private sector (GP, 26 September) by adding clauses to their constitutions.
Private providers have also had chastening experiences in primary care. Most recently, an inquiry by Camden Council hit out over a 'serious loophole' in APMS contracts that allowed one firm to transfer its contract to another. The council report said general practice must not become a 'commodity traded in the private market'.
Once the NHS Commissioning Board is established, contract changes will begin. That could bring down the greatest barrier to extending private sector provision. But for the time being, primary care is a harder nut to crack for private firms than other parts of the NHS.
