Guidance recently issued by NHS England could lead to entire networks of diagnostic imaging services being run by the private sector.


NHS trusts have until 2023 to set up separate entities to run their diagnostic imaging services as part of a reform of diagnostic services. NHS England notes in the guidance that the networks will be “significant operating businesses in their own right”, and must have a “degree of autonomy” and “separation from the trusts”. 


NHS England has given the trusts seven options for setting up a network, one of which is “outsourcing” of the entire network to a commercial partner, which is marked in its guidance  as one of the only two “highly feasible” options, alongside “collaboration” between two or more NHS trusts.



The other options are: collaboration or alliance contracting, which both rely on all trusts being involved with decision making; a “host trust” that would use delegated authority from other network members to make decisions; a joint venture with a limited liability partnership model; a joint venture through a limited liability partnership; or a community interest company (CIC). The joint ventures and the CIC would all need HMRC approval and only be possible for NHS foundation trusts. 



The document acknowledges that government funding is the cheapest way of funding new equipment, but stresses that competition for central funding may mean that the new networks have to look at more expensive options like leasing.


Some fears have already been expressed by clinicians discussing the document on social media, such as the prospect that more control for private companies will undermine the professional standards of NHS care, with one consultant radiologist stating:


“The described models risk stifling innovation and will separate Radiologists from patients and clinicians with an associated negative impact on patient care. Off-site reporting battery farms are the natural progression of these models.”


“I have major concerns about the risks to training under commercial entities which is simply forgotten or ignored because there is no money to be made from training. I have seen this first hand from existing models of privately delivered imaging.”


NHS England acknowledges in its previous national imaging strategy, written in November 2019, that there is an “increasing spend on outsourcing”, which totalled £139m in 2017/18 and notes that it is “increasingly difficult to find independent sector companies to report certain types of examinations and this will drive up the cost of outsourcing due to market forces.”


Demand outstrips resources

England’s diagnostic services have been in need of reform and investment for many years. There has been a significant increase in demand over the last decade, with more attendances at A&E and more referrals from GPs. From 2014/15 to 2018/19 CT scanning increased 6.8% per year, MRI scanning was up 5.6% and PET-CT up 18.7% per year. There were also significant increases each year in other diagnostic procedures, including endoscopy.


Even before the pandemic the six week standard waiting time for a diagnostic procedure was being breached more frequently and since the pandemic there has been a significant increase in the number of patients waiting more than six weeks.


Lack of investment over the previous decade has led to the NHS in England lagging far behind the OECD averages for scanners (CT, MRI and PET-CT) per million population, ranking lowest among 23 countries for CT scanner provision and 19th out of 21 for MRI equipment. 


Many NHS trusts have had to rely on charity efforts to buy large diagnostic equipment, such as MRI scanners. Charity appeals to upgrade MRI scanners currently live include ones at The Great Ormond Street Hospital and the Darlington Memorial and Bishop Auckland Hospitals.

Following the publication of the Long-Term Plan in early 2019, which proposed the diagnostic networks as a way to decrease waiting time for scans and make more efficient use of staff, Professor Sir Mike Richards was commissioned by NHS England to review diagnostic services and make recommendations for reform. 


The report, published in November 2020, had several major recommendations, including the setting up of community hubs where MRI, CT and other scans could take place in a Covid-19 free situation. However, a major component of the report is that major investment is needed if diagnostic services are to recover from the effects of the pandemic and the years of underfunding. 


The report also recommends expanding the NHS’s pool of scanners and other diagnostic equipment, such as buying in bulk to get good deals. However it also notes that staff numbers are an issue and the training of additional highly skilled staff will take time.


Staffing too low

The problem of staffing is acute – according to the Royal College of Radiologists, England is short of 35% of radiology staff and needs at least another 1,613 full-time consultants to keep up with safe staffing quotas and the demand for scans, but at the current rate, the RCR, note that the workforce will only increase by 571 consultants over the next four years. 


The RCR report is based on census data from December 2019 before the pandemic and shows how the services were struggling, with the majority of hospital imaging managers stating that radiologist shortages were threatening patient safety.


During the past decade of underfunding, instead of investing in replacing old equipment and buying new equipment as demand increased, NHS England, CCGs and NHS Trusts all sought to expand capacity by paying private companies for diagnostic services. As a result, over the years, private companies have become firmly embedded in the system. 


A history of outsourcing

In the NHS Support Federation’s annual review of privatisation in the NHS, diagnostics services were often in the top three services outsourced by contract number. 


A good example is the two phase procurement procedure for PET-CT diagnostic imaging services begun in 2014. In late 2014, NHS England selected the Molecular Imaging Collaborative Network (MICN), led by the private company Alliance Medical, to provide PET-CT scanning services across 30 locations in England – the company now provides services over much of the North of England, the Midlands and Eastern England under this contract. The contract is for 10 years and was valued at £350 million. As part of this contract, in July 2020 Alliance Medical opened a new digital PET-CT unit at Queen Mary’s Hospital, Sidcup, in partnership with Oxleas NHS Foundation Trust.


The phase II round of procurement in 2018 gave a large contract to InHealth in the Thames Valley. 


Private companies are also listed on a number of framework agreements covering many aspects of diagnostic services, such as teleradiology services, endoscopy, and MRI scans. The most recent is the November 2020 framework contract NHS Increasing Capacity worth in total £10 billion, which runs until November 2024. This covers both elective surgery and diagnostics. Included on it are companies, such as InHealth, Alliance Medical, Medical Imaging Partnerships Ltd and Mediscan Diagnostic Services.


In community health, many CCGs have for several years outsourced diagnostics to private companies. InHealth alone has 100 community diagnostic sites across the country where patients are sent for diagnostics by their GP under agreements between the company and CCG. One such agreement was signed in March 2019 by NHS Ealing with InHealth to provide community radiology services.


Private companies embedded

The guidance given by NHS England seems to take a somewhat simplistic view of the different options for creating a diagnostic network. The extent to which the private sector is embedded in the NHS will make for complications. For example, what will happen to the scanners paid for by charity appeals if the hospital trust decides to give these assets to a commercial partner.


In February 2021 it was widely reported that the leaked government white paper contained plans to do away with competition in the NHS. This was interpreted by some to mean also a move away from privatisation. This new Guidance from NHS England, however, shows that privatisation is still an approved and feasible option that NHS trusts can take. 


The level to which the private sector is already embedded within the diagnostics sector, might well now tempt NHS trusts to take the “outsourcing to a commercial partner” option leading to complete privatisation of large sections of diagnostic services in England.


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