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NHS private sector contracts cut

The UK Health Secretary cuts back on the proposed expansion of the private sector's participation in the National Health Service

The UK Health Secretary, Alan Johnson, has cut back on the proposed expansion of the private sector's participation in the National Health Service.

A 16 November Financial Times (FT) report said the original contracts were in the region of GBP 6bn for surgical treatment and diagnostics services, but will now be cut to less than 50 per cent of that value.

Johnson revealed that three small contracts for scans and renal dialysis, which amount to GBP 40m annually, will continue, but six further surgical treatment centre contracts have been torn up since the procurement was launched in 2004. As a result, only one of the nine original contracts for diagnostic services remains active.

The FT said that procurement will continue on seven more treatment centre deals, which have been scaled back. The final decision on these will be made in March 2008, according to a Department of Health (DoH) spokesperson, who added that there was no guarantee that they would go ahead.

Johnson insisted that the independent sector had an important and increasing role in the NHS, despite the cutbacks. However, the FT cites the example of Care UK, an independent provider, which has been dismissed from an already operational diagnostic contract in the West Midlands region of the UK.

Johnson insisted that the reduction in size of the procurement does not indicate a policy change, but that the improved productivity of the local NHS was a major factor in the reduction in procurement.

However, the FT quoted Chris Ham, the ex-head of the strategy unit at the DoH, who said: "That is not a credible statement. The contribution of the private sector will be much smaller than planned, and the potential for innovation reduced. This is the strongest signal yet that the Prime Minister is distancing his government from the policies of his predecessor."

Johnson, in an attempt to mollify the private sector, promised a campaign to raise the awareness of patients' right to choose, and a new advisory forum of private providers.

30th September 2008

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