Should private firms commission?

A year after DoH deal to let private firms commission, their impact is limited. Tom Ireland reports.

The Framework for Procuring External Support for Commissioners (FESC) published a year ago was hailed as a way for PCTs to beef up their commissioning skills using the private sector. It was also feared to be the route by which private firms would take control of primary care.

Since then, just two PCTs have announced FESC contracts with private firms; Northamptonshire PCT and Wigan PCT have signed deals with UnitedHealth and Tribal respectively.

However, many more PCTs are making use of the private sector, but either have not announced it or have not used FESC, according to David Stout, director of the PCT Network. So how are these other deals working?

"PCTs are reluctant to give away power and bugets to private firms" Dr David Jenner, NHS Alliance

Contracting advice
One of the most high-profile examples came this month when Eastern and Coastal Kent PCT hired UnitedHealth to advise it on 'contracting and procurement systems'.

Under the two FESC deals to date, the PCTs involved have been careful to point out that the firms running their commissioning would not be allowed to run services. But in Kent, UnitedHealth is not prevented from bidding for contracts.

A Kent PCT spokesman said the firm even made recommendations on how to ensure there was a 'level playing field' during its procurement process.

But the trust and UnitedHealth insist there is no conflict of interest in the firm both advising and bidding on contracts, because contract documentation it gave advice on was 'industry standard' and available to all parties bidding for work.

Kent LMC clerk David Barr said UnitedHealth's role will be 'very restricted' by the PCT, whereas 'some PCTs seem to have given up on commissioning' - a reference to the Northamptonshire and Wigan deals, where the PCTs have handed over large chunks of their commissioning power.

'The PCT's answer was that UnitedHealth's role would be very restricted,' said Dr Barr. 'We weren't impressed. Why can't it do it itself?'

The Kent example is unusual. Most private sector companies perform only administrative roles for PCTs - collecting or analysing data, for example, said Mr Stout.

'UnitedHealth is in two different businesses - there will need to have been careful safeguards in place. United is unusual in that it is both a provider of healthcare and commissioning knowledge - I'm sure that conflict of interest would not apply in many situations.'

The Kent arrangement was not procured through FESC, but very little is, says Mr Stout.

'PCTs are making a great deal of use of the private sector but not necessarily using the FESC procurement. The majority of them do not use the FESC.

The FESC is a means of speeding up and encouraging procurement from private firms, but perhaps it is not doing that.'

Ultimately, Mr Stout is confident that private companies are not influencing major commissioning decisions, even in Northamptonshire and Wigan.

'(PCTs) cannot delegate making big decisions to private companies - ultimately the board is making decisions,' he said.

Working around the edges
Dr David Jenner, GMS lead at the NHS Alliance, agreed that private companies so far have had little impact on PCT decision-making. 'Most of them are working around the edges. The real danger is if they are paid for what they save the PCT, or if the FESC contractor becomes the master rather than the slave.'

Interaction with private firms has been limited so far because PCTs are reluctant to give away power, said Dr Jenner. But there is still a danger that PCTs may be taken over by FESC providers if they are judged to be failing by the Healthcare Commission.

'If we see private companies taking over struggling PCTs, then we have a problem,' he added.

Who is using fesc
Tribal, under a five-year FESC contract, will assist in improving Ashton, Leigh and Wigan PCT's commissioning. It aims to improve financial management and generate savings, and design a programme to improve access.

UnitedHealth has a three-year contract using FESC to provide support for Northamptonshire PCT. Its role includes assessing health needs, encouraging healthy lifestyles, and ensuring PCT resources are well used.

What the experts think

"Private firms are working around the edges. The real danger is if the FESC contractor becomes the master rather than the slave." - Dr David Jenner, NHS Alliance GMS contract lead

"PCTs are making a great deal of use of the private sector but not necessarily using the FESC procurement." - David Stout, PCT Network director

"I'm aware private commissioning exists - but I've had no reports of complaints, or anything positive, at all. There are very few examples so far." - Dr Laurence Buckman, GPC chairman.

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