How PMI policyholders can benefit from NHS reform

The government has recently announced a groundbreaking shake-up of the National Health Service (NHS) involving private firms and the injection of £1 billion.
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A 10-year deal has been agreed allowing private firms to run struggling NHS hospitals.

The deal involves the Circle Healthcare group taking over Cambridgeshireís NHS Hinchingbrooke Hospital in February. This is the first deal of its kind whereby the company will become the first non-state provider to manage a full range of NHS district general hospital services.

Although the Hinchingbrooke Hospital will stay in the NHS, the Circle Healthcare group will assume the financial responsibility of making the hospital more manageable and efficient, paying off £40 million of its debts.

Under the governmentís new deal, around 20 hospitals which have run up a series of debts and financial problems will be taken over by Circle. This deal represents a major step in the evolution of the National Health Service.

The company was to keep certain NHS services such as A&E and maternity. However, it is free to reduce staff numbers. Any significant changes to the local NHS services will have to be agreed with the local NHS and the public will have to be consulted. The deal came about after concerns that the hospital had become unviable and a local campaign was set up to maintain services.

Dr Stephen Dunn, the strategic health authority’s Director of Policy and Strategy, said; “This is a momentous day. Circle secured this operating franchise following an open competition. They outshone the best of the best from the NHS and independent sectors. This will usher in a new era, unleashing innovation into the NHS, with staff and patients firmly at the centre.”

Circle is described as the ëJohn Lewis of healthcareí because the employees all have a financial stake in the company, allowing them to benefit. Staff at Circle including everyone from the consultants to the cleaners, are co-owners in the business.

Circle Chief Executive, Ali Parsa, said; “At a time when some healthcare commentators say the solution for small district general hospitals is simply to merge or be shut down, we believe the NHS Midlands and East’s courage and zeal for innovation will enable us to show how clinician and staff control can provide a more sustainable alternative.î

The NHS is currently undergoing a process of ëmodernisationí and whilst there are some growing concerns over the service becoming more privatised, this could benefit those who have private medical insurance. Private sector firms already operate units that treat NHS patients such as hip replacement centres, as well as private patients.

Fears of change

Critics claim profits will take priority over patient care as Circleís Bath hospital has been designed and built from scratch allowing Circle to consider how the hospitals should be organised. In contrast, the Hinchingbrooke hospital is over 25 years old and might not be able to handle the demands of modern healthcare.

Whilst the Circle deal marks a significant change, professionals are concerned over its lack of experience. The health group has only run two NHS private treatment centres before, carrying out specific routines at fixed prices.

However, Ali Parsa argues; ìCircle arrives not with a top-down plan to impose change, but with a proven methodology of unleashing NHS professionals’ talent through clinical leadership and devolved decision-making.”

A document, seen by the Observer, suggests that patient care could suffer under Circleís plans to expand its empire and make profits from the health service.

Ali Parsa, former Goldman Sachs banker, claims the move is still a “good deal for patients and staff.”

NHS reforms & the Health and Social Care Bill

Patients with private medical insurance will be able to benefit from some of the NHS reforms under the Health and Social Care Bill. This is because some NHS hospitals across England have recently revealed plans to expand their private facilities.

The Health and Social Care Bill was introduced at the start of the year and is a critical part of the governmentís attempt to modernise the NHS.

The bill clears ministers of responsibility to provide or commission services directly, passing the duties onto ëfrontline organisations, free from political micromanagement.í

The government reforms proposed by Andrew Lansley, the Health Secretary, will remove the cap associated with earnings from private companies, creating ìgenuine opportunitiesí for the private sector. However, the Health Secretary has faced heavy criticism over the NHS reforms. Under the controversial reforms, patients are being made aware as to how to ëshop aroundí and compare GPs.

As part of the NHS Commissioning Board, it will oversee new clinical commission groups led by GPs and other clinicians who will ìbuyî care within the NHS. The NHS is currently trying to generate savings of up to £20 billion in the next four years by handing over power to private firms and commissioning groups. Speaking to the BBC, Sir David Nicholson, who has been Chief Executive of the NHS in England since 2006, said; “We need to make sure that we completely rethink the way that we provide healthcare, so we can cope with the greater demand.î

“There’s great pressure on the NHS. We have never made savings on this major scale before. I absolutely understand that people in the NHS are feeling quite hard-pressed. But if people are making short-term cuts, it’s because they haven’t planned.

“They’d better learn quickly that they have to plan for a future which does not have huge amounts of growth for the NHS.”


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