The NHS has always involved a mixture of public and private provision. For example, most GPs are not public employees but rather independent contractors to the NHS. This was part of the settlement struck with GPs when the NHS was established in 1948. Dentistry is another profession that has remained largely outside the NHS while receiving NHS funding.
Update: this page was written in the run-up to the 2010 general election. See our more recent article on NHS privatisation that was created in the run-up to the 2019 general election.
What is the current situation?
In recent years, the NHS has become an even more mixed system, particularly in England. Reforms introduced by Labour saw private sector organisations becoming involved in new ways. For example, from 2003 the government commissioned around 35 new 'independent sector treatment centres' (ISTCs), with the aim of helping the NHS to reduce waiting times for hip and knee surgery, cataract operations and other procedures. These treatment centres are owned and operated by private companies, but are contracted to provide services exclusively to NHS patients.
Despite this increasingly complicated picture, the NHS today remains a public system, funded by public money, and delivered mainly by publicly owned providers. ISTCs, for example, perform just 2 per cent of all elective (planned) operations funded by the NHS. In some clinical areas, such as mental health, the proportion of private and voluntary sector provision is far greater than others.
How would the reforms affect this?
The current government’s proposals would open up the NHS to greater competition, with the aim of creating a level playing field between NHS, private and voluntary sector organisations and driving up quality of care.
Under the 'any willing provider' system, patients can choose to be seen by any qualified organisation that is registered with the necessary regulatory agencies, willing to accept NHS prices and agrees to the terms and conditions laid out in the NHS contract. The any willing provider system is already in use for some kinds of health services – Labour introduced it for elective care in 2008 – but the current plans would extend it to new areas such as community services. Importantly, Monitor, the new economic regulator, would be given concurrent powers with the Office of Fair Trading to ensure competition operates fairly in the health system.
The reforms may, over time, result in an increase in the proportion of NHS-funded care delivered by private and voluntary sector organisations; this will depend on both commissioners and patient choice. There could also be new opportunities for organisations to provide support services to the commissioning side of the NHS. Commissioning consortia are likely to need considerable assistance in performing their new role as the custodians of NHS money, and many may choose to purchase such support from the private or voluntary sector, as PCTs do now.
However, the extent of the increase in private sector involvement in the NHS, and the speed at which it might take place, are far from certain. Given the tighter financial settlement for the NHS, the business opportunities for private sector organisations may not be as lucrative or as immediate as some commentators have suggested, with a number of major firms recently pulling out of UK markets for health service delivery and/or commissioning support services.
Is it a myth or a fact?
Myth. The reforms clearly present opportunities for private sector organisations to become more involved in delivering health care, as well as in supporting NHS commissioning. However, the NHS will remain a publicly funded system under the proposals, and at least for the foreseeable future the majority of services are likely to be provided by NHS organisations.
With prescription, opticians' and dental charges the NHS can no longer be said to be free at the point of delivery. With private businesses (GP practices) instead of publicly owned primary care trusts doing the commissioning, the fundng can no longer be said to be under public control. Which makes the NHS under reforms more akin to the rail system, where service users pay some up-front fees and the state provides a subsidy to the private operators, than to the road system, where although the providers are mainly private, the commissioning is done by national and local government organisations and the service user pays through taxation, not up-front fees.