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Private hospital scheme gets City backing

A health entrepreneur's ambitious plan to build a chain of private hospitals across England in partnership with NHS consultants has raised more than £100m of investment capital from the City

A health entrepreneur's ambitious plan to build a chain of private hospitals across England in partnership with NHS consultants has raised more than £100m of investment capital from the City.

Iranian-born Ali Parsa, a former merchant banker, told the Guardian that he is planning to build a network of health centres across England, with his company Centres of Clinical Excellence (CCE). The company is a joint venture in which doctors, nurses and other professionals will share in the management and profits.

He said: ìWe wish to act as a conduit for the City to invest in UK healthcare. One of our investors is a multibillion pound institution.î The company has had informal contact with the Department of Health (DoH), but its progress does not depend on NHS contracts.

The venture has gathered impetus from a government plan to increase patient choice, cut waiting times and introduce competition/help from the private sector, including plans to redirect some funding to private firms. From 2008, people needing an operation will be able to select any hospital - public or private - and the NHS will foot the bill within its own cost limits.

Patricia Hewitt, the health secretary, told the Labour Conference that her second wave of independent treatment centres would bring private firms up to 10 per cent of the market for elective surgery. Furthermore, she has refused all attempts to mark 10 per cent as the ceiling, so investors are understandably optimistic, especially as privatisation has been a huge financial success for private dentists, if not the public.

Parsa's investors clearly expect people to prefer private care to existing NHS facilities. He has already signed up 300 consultants, probably the largest partnership of doctors in the UK, who will also share at least 50 per cent of the profits.

Apart from the attraction of money, many have reported frustration with the NHS for their lack of innovation, over-management, and lack of opportunities. However Parsa said that he would not steal staff from the health service, preferring staff to work for him in their spare time.

ìWe're not telling consultants they must work exclusively in our hospitals,î he said.

Whether staff drift into the private sector remains to be seen - Ms Hewitt has promised not to let that happen, but many think it inevitable.

The British Medical Association (BMA) said it was not in direct opposition to Parsa's ideas and said it recognised that there was a need for more innovation, less bureaucracy and better training and job opportunities for staff in the NHS.

A BMA spokesman told PMLive: ìThe development of CCE is an inevitable consequence of Department of Health policy. Consultants are currently frustrated, they are deterred from being innovative and for the first time in many years they are facing redundancies.

ìMany consultants are now in favour of being part of CCE and similar organisations, as they believe such a system will be beneficial to the doctor/patient relationship and will enable doctors to work in partnership. The NHS would do well to mirror this spirit of partnership and work in cooperation with consultants.î

The DoH declined to comment.

30th September 2008

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