Private health bosses and analysts do not share the conviction of many campaigners that the new NHS White Paper and the establishment of Integrated Care Systems (ICSs) with statutory powers will open up a fresh wave of privatisation.

Indeed there is little excitement or interest in ICSs. That’s the clear message from the latest issue of Healthcare Markets magazine, produced by the main private sector analysts LaingBuisson.

The coverage of the Bill is not especially extensive, and the main message is that despite the government spin suggesting that the white paper heralds the end of the age of competitive tendering, the new proposals will essentially make little difference to the core contracts and flow of NHS funds into the private sector.

David Hare, chief executive of the private sector’s lobby group the Independent Healthcare Providers Network, reminds readers that despite the attempts in the Cameron coalition government’s 2012 Health and Social Care Act to make it compulsory:

“the reality is that competitive tendering has always been a minority sport in the NHS, with just 2% of NHS contracts by value let by competitive tender in recent years, so the impact risks being overstated.”

Indeed the bulk of the clinical contracts won by the private sector in recent years have been relatively low value community health contracts. Back in 2019 findings from IHPN Freedom of Information requests to England’s CCGs showed the proportion of NHS contracts awarded through competitive tendering had fallen from 12% of all contracts in 2015/16 to 6% the following year, before recovering partly to 9% in 2017/18.

However the value of these contracts as a percentage of CCG spending on clinical services had fallen from 3% to just 2% over the same period. NHS Providers had also found while the private sector had won many more community health services contracts than the NHS, the 21% of contracts won by NHS trusts represented 53% of the contracts by value.

Now Laing-Buisson boss William Laing concedes the White Paper could mean that contracting out of community health services might “grind to a halt,” affecting firms like Virgin Care, Serco and Mitie: but it was unlikely to have much impact on the big money contracts – mental health, elective care and diagnostic services where the NHS lacks sufficient in-house capacity.

“The government’s new policy probably won’t make much difference in most market segments because the NHS uses the independent sector mainly to do things it can’t do itself.”

Private bosses are also pleased to see the White Paper retains “patient choice” and includes “clearer rules on the circumstances and processes around the operation of Any Qualified Provider.”

A comment article from Tim Read of the US-based Marwood Group begins by marvelling at the low-key Labour response which indicated “the extent to which the Conservative Party has managed to gain the centre ground on NHS reform”.

Read, too emphasises that “it is unlikely to mean wholesale change overnight. Ultimately, the independent sector is heavily enmeshed into the fabric of service delivery…” Indeed “in mental health any reduction in the use of private sector high-acuity services would first require significant investment in the NHS mental health estate” – and we all know that’s not going to happen.

Read also predicts that with “political alignment” in parliament plus Covid and Brexit issues in the media, the “critically important Bill” is unlikely to be subject to the “intensity of scrutiny that health reform would normally attract”.

Hare also tellingly points to the 225,000 patients now waiting over a year for NHS treatment, and reassures private sector bosses that with no relief in sight for the public sector, “independent healthcare providers will continue to be vital in supporting the NHS over coming years.”

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