'Perverse incentives' for PCTs to use private firms

Private providers PCTs may be forced to introduce competition. By Tom Ireland and Nick Bostock.

PCTs are under pressure to use the private sector unnecessarily, according to a leading NHS chief executive.

Mike Farrar, chief executive of NHS North West, said the DoH's world-class commissioning (WCC) policy included 'potentially perverse' incentives to introduce competition. In addition, the WCC assessment did not scrutinise the performance of individuals on PCT boards well enough, said Mr Farrar.

The DoH policy assesses PCT performance in nine areas of commissioning and many scored poorly on how well they had 'stimulated the market'. But Mr Farrar said the assessment merely asked PCTs how many different suppliers they used and not whether this had improved services.

'Questions on stimulating the market can be improved,' he said. 'I would be looking for an intelligent presentation by the PCT about why it took those decisions, not a potentially perverse incentive that says "how many different suppliers do you have".

'It was a slightly naive ask of PCTs at this stage. To assume at this stage that PCTs are crap at stimulating the market is not a helpful assumption.'

Mr Farrar said introducing extra providers to stimulate competition was risky in the current economic climate. 'Can you explain why you have created plurality and who will carry the burden of risk?' he asked.

GPC negotiator Dr Beth McCarron Nash echoed Mr Farrar's concerns. 'We believe that offering more providers of primary care services will not necessarily improve care.'


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