Last month it was social impact bonds. By the time you read this another ‘new' initiative will be about to surface from under the radar.
That is the coalition's plans to move the management of ‘failing hospitals' into the private sector. The opportunities for PMI insurers, and some re-insurers with experience of running hospitals in EU social insurance systems, are obvious.
But, so far, they have not been able to compete with the big hospital outsourcers. As with social impact bonds, the seeds of change were planted before the election.
Back in July 2009 the Department of Health advertised for a bidder to run Hinchingbrooke Healthcare NHS Trust. The soon to be abolished East of England Strategic Health Authority despaired of finding a local management solution which could deal with the hospital's £40m debt.
Instead, with central government support, they decided to look for another body to sort the mess out. Inevitably this faced tough opposition from public sector unions. If a private sector company is selected this will be the first time that this has happened in a ‘core' NHS hospital - as opposed, for example, to social care provision. Initially 19 expressions of interest were received from the public and private sectors.
The slow wheels of public sector bidding processes ran on but then we had a change of government and now the Spending Review. Suddenly what seemed like a bold ‘one-off' from an outpost of the NHS could turn into a radical change affecting far larger numbers of debt ridden NHS Trusts across England. Post Spending Review, the NHS may be ring-fenced but it will still need to make substantial savings and Hinchingbrooke is by no means unique in having large accumulated debt despite the years of largesse.
At the time of writing, two companies are in the frame - Circle and Serco Health. On 15 November the ‘preferred bidder' will be announced and they will run the hospital from June 2011. The plan is that this will be done under a franchise contract for a minimum of seven years. The successful franchiser will pay an annual fee which will be used to reduce the existing NHS debt.
The franchiser will not be able to make big decisions which may affect the long-term viability of Hinchingbrooke hospital, like the sale of land, without Trust specific approval. And they will be governed by the same rules as any NHS provider and not be given guarantees of future revenue by the NHS. This is now especially important and risky given the abolition of Primary Care Trust Commissioners and their replacement by GP consortia.
The assurances to the unions and other bodies are that the proposal does not mean that Hinchingbrooke hospital is being privatised. The land and assets are not being sold, and staff will continue to be employed by the NHS. The franchise will not change the fact that it is an NHS hospital and patients will continue to receive free healthcare as part of the NHS at Hinchingbrooke.
But the franchise proposal will transfer responsibility for service delivery - finding ways to improve patient experience and make the healthcare services more efficient. The franchisee will be expected to achieve the same quality of care as the hospital is currently obliged to deliver, but will also be expected to promote further beneficial innovation.
We can now expect many more Hinchingbrookes. How many times have you heard health insurers say they could run the NHS much more efficiently? Well - here's the chance to prove it.
Richard Walsh is a director and fellow of SAMI Consulting www.samiconsulting.co.uk
