New providers

The government's move to bring commercial investment and increased private sector involvement into the health service in England has been criticised as dogmatic. It will fragment the service and erode staff's terms and conditions, critics say.

But this is only one aspect of the move to alternative providers. Closer integration with the voluntary sector, including social enterprise organisations, may challenge the frequent silo mentality of health and social care provision, with innovative models of service. NHS foundation trusts - a new type of organisation - have re-engaged local populations and are outperforming ordinary acute trusts in terms of quality of services and financial performance. Article six in our series weighs up the arguments on both sides.

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What's happening and why?

The former health secretary Alan Milburn signalled the new direction of NHS travel in 2002 when he asserted that 'who provides the service [is] less important than the service that is provided'. He set out a vision for a radical shift away from the old 'monolithic, centrally-run, monopoly provider of services' to one where a range of different providers - in the public, private and voluntary sectors - offered services, free at the point of use, to NHS patients.

The move to a mixed health economy is entirely consistent with the other elements of 21st century NHS reforms, such as patient choice, payment by results and practice-based commissioning (see previous articles in this series). All are designed to introduce a quasi-market into the NHS, which is expected to increase efficiency, encourage innovation and make services more responsive to local needs. Although it could be said the health service has been a mixed economy of sorts for some time, the pace of change has accelerated in the last five years. Private provision is now an integral part of patient choice. And a new generation of private healthcare companies has been awarded substantial contracts to run the independent treatment and assessment centres.

Foundation hospitals have created further diversity in the system with 70 trusts now enjoying semi-autonomous status - and the numbers are expected to rise rapidly in the next couple of years. Meanwhile last year's white paper Our Health, Our Care, Our Say sought to open up primary and community care services to a range of voluntary groups, charities and social enterprise organisations. But perhaps most significantly, it aimed not merely to attract existing providers but to encourage the formation of completely new organisations to fill gaps in existing provision and compete with NHS providers.

The home front

Services to NHS patients provided by non-NHS provider organisations are marginal in Wales and Scotland. Indeed recently the Scottish Executive secretary for health, Nicola Sturgeon, said there would be no expansion of the use of the private sector in the NHS in Scotland. Northern Ireland, like England, has a commissioning culture but also has a history of an integrated health and social care approach. Following the establishment of community commissioning associations (see 'Practice-based commissioning', 18 July), there is significant potential for services to be provided by a combination of health, social, voluntary sector and commercial organisations.

What does it mean for healthcare?

The government argues that a mixed health economy offers huge benefits for patients - and staff. Not only will it increase capacity, it will free staff to innovate, make services more locally accountable and offer patients greater choice. However, in practice the benefits have been less clear-cut. There is particular concern that plans to expand the scope of independent treatment centres to cover around 10 per cent of the total elective workload could lead to hospital closures.

But in the next 18 months attention is likely to switch to the role of the third sector - and in particular social enterprises. Social enterprises are defined as privately funded businesses with a public sector ethos, and can range from cooperatives to hard-nosed private companies. But for the government they represent one of the keys to unlocking the potential of local, community-based healthcare provision. To accelerate this process it set up the Social Enterprise Unit last year. It is also funding 26 pathfinder social enterprise pilots and in March announced a further £73 million would be available to help expand the scheme.

There is no doubt the best social enterprises offer something the monolithic NHS has so far failed to provide. The Kath Locke Centre in Manchester, for example, became the first primary care centre to be managed by a third sector organisation in 1996. It maintains close links with the local population - three-quarters of its staff are recruited locally - and provides a holistic range of services from conventional healthcare to yoga, exercise and employment advice.

Frontline graphicCeri Jones, senior policy officer at the Social Enterprise Coalition, says social enterprises can normally outperform the NHS because of their lower levels of bureaucracy, greater staff empowerment and genuine community involvement. In addition, she believes, a free market drives up efficiency. 'Social enterprises are businesses and if they cannot compete they go under, so they must be dynamic and efficient to survive.'

However, many NHS health professionals fear this increasing fragmentation of services will undermine workforce planning and could threaten the seamless service they aspire to achieve. CSP research and policy officer Warren Glover also questions the long-term security of social enterprises. Success could make them ripe for a takeover from one of the larger multinational health companies, he suggests. Alternatively, the business might fail because it has miscalculated the market or overstretched itself. 'What happens then to the staff?' he asks. 'Will they be able to get their old jobs back?'

A recent King's Fund report pointed to another danger - that it will take too long for many staff and patient-led social enterprises to get up and running, leaving the new market wide open to larger, for-profit companies. 'There is a distinct danger that when they do finally enter the marketplace there may be little left for them,' it warns.

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Hopes and concerns

Hopes

  • improvement in quality of care
  • increased capacity
  • more choice for patients
  • better value for money
  • greater equality in access to, and availability of, quality services
  • services closer to local communities

Concerns

  • fragmentation of the health service
  • change in fundamental nature and ethos of NHS
  • weakening of staff terms and conditions

What are the opportunities for physios?

There can be little doubt that opening up the NHS to alternative providers gives physiotherapists, so often taken for granted, the opportunity to show what they can do. All too often, says CSP director of practice and development Jill Higgins, NHS structures inhibit innovation: 'If physiotherapists were freed from that bureaucracy there would be more opportunities for enterprising ways of working.' This has already led to consortia made up of physios, podiatrists, chiropodists and speech and language therapists coming together to bid for services from the NHS.

Other initiatives are more established. Mildmay Mission hospital, for example, a charity providing specialist rehabilitation and palliative care for HIV/AIDS patients, introduced a pioneering physiotherapy programme four years ago with considerable success. Jo Pritchard, joint managing director at Central Surrey Health, has no doubts the social enterprise model offers health professionals huge opportunities to do things differently and better. Although Central Surrey Health has only been operating for nine months, it has already transformed many of its working practices, she says. One of the keys, she believes, is that it is co-owned by all 700 staff, each of whom has a 1p share in the organisation.

'People feel freer and more flexible, and this encourages physiotherapists and others to begin really to develop innovative ways of responding to local issues,' she says. The musculoskeletal team, for example, had already cut its waiting time from 16 to four weeks after re-examining its procedures and adopting new ways of working. It had also freed up space to allow another group to use its clinic for exercise classes when not required for physiotherapy. This, in turn, led to a plan to offer exercise and dietary advice to overweight adolescents.

As to concerns that the new organisation's future is less certain than in the NHS, Ms Pritchard says everyone is in the same boat: 'We're all going to have to demonstrate we are high-quality providers who are the best choice for the local PCT'.

What does it mean for physiotherapy?

The most immediate impact is likely to be on physiotherapists working in primary care where primary care trusts are being encouraged to divest themselves of their provider role and focus solely on commissioning. Where that happens, physiotherapists will need to find a new home. This could be as part of an NHS community foundation trust but so far these remain hypothetical. The stronger likelihood is that physios will have to look outside the NHS, in the private, voluntary or social enterprise sectors.

So far the highest profile example of this shift has been in the former East Elmbridge and Mid Surrey PCT where all nursing and therapy services transferred from the NHS last year to become the social enterprise Central Surrey Health. Hull Teaching PCT is also planning to move 1,200 staff into a social enterprise next year, and no doubt more will follow.

However, trade unions question whether staff will continue to enjoy the same pay and conditions as in the NHS, noting that staff have encountered major problems transferring their pension rights to social enterprises. They also point to a consultation at Central Surrey Health that they claim was less than transparent, with the decision to go ahead being taken despite one survey indicating 84 per cent of staff were opposed.

The underlying problem, says CSP director of employment relations Lesley Mercer, is that social enterprises are still unproven quantities. 'Can a social enterprise really deliver something that the NHS, given some stability, can't?' she asks. 'Is there a tangible benefit to patients?' Another concern is that the fragmentation of services could mean physiotherapists working in greater professional isolation without the support of colleagues or access to the same level of training and development.

A model enterprise?

The largest social enterprise in the field at the moment is Turning Point, an organisation with a £600 million turnover, 1,800 staff and contacts with over 200 primary care trusts and local authorities in England and Wales. Turning Point has been operating for 40 years, starting as a service specifically for people with alcohol problems. It has now widened its brief to include complex mental health problems and learning disabilities.

One of the big criticisms of expanded choice is that it will produce greater fragmentation of services. But public affairs manager Emily Frith says that Turning Point treats patients holistically and works to integrate a range of services around the patient's needs. 'People with conditions that don't fit into certain categories can be bounced around the system, having to explain their problems again and again. Services are often designed to focus on just one specific issue rather than looking at someone's whole needs.' This is what leads to fragmented care, she claims. So, for instance, someone with depression may also have lost their job, be facing eviction and be drinking heavily. Simply treating the depression is not enough.

All Turning Point's projects have close links with the local community. Pilot projects in some of the most deprived areas of Bolton and Hartlepool, for instance, are working with local health and social care commissioners to train local people to audit the needs of their community themselves. It is also hoped to employ 'navigators' to help people through the system.

On the ground - Sports and spinal group

The Sports and Spinal Group in London is an example of the new breed of private physiotherapist banging on the NHS door for a bigger slice of the action. The group has been operating for 10 years and now runs six clinics, with a staff of over 30 physiotherapists seeing a wide range of conditions. It has one NHS contract at the moment, providing 10-12 hours a week for Hammersmith and Fulham primary care trust, but is keen to extend that. Director Matt Todman worked in the NHS for 18 months after qualifying but claims his clinics offer better value than much of what patients experience in the NHS.

Patients can be seen in 24 hours and then receive an integrated approach to treatment, which focuses on the underlying cause of the problem rather than the diagnosis, he says. 'For instance, if the MRI scan shows there is a disc problem, it's no good simply treating the disc without looking at what's caused that in the first place. We treat the cause and that means the patients gets better quicker.'

Choice and competition in the NHS will be good for both physiotherapists and patients, he says. But at the moment small private providers are at a big disadvantage. 'One of the hardest things is getting your foot in the door in the first place. As soon as you say private enterprise the shutter goes down. That has to change.'

On the ground - Shepton Mallet

Shepton Mallett's independent treatment centre has been running for over two years and is helping to ensure that a large number of patients are treated for problems such as hip and knee replacements well within the 18-week waiting time. But the key to this turnaround lies as much with the physiotherapy-run, NHS-based musculoskeletal screening service in Bridgwater as with the private treatment centre. The service sees over half of all patients referred by GPs for problems that might require surgical intervention and ensures most are treated there and then.

Carolyn Nation, the service's development lead and an extended scope physio herself, says they treat most in the clinic - with injection therapy, physiotherapy, podiatry - while others are referred on for pain management. Around 40 per cent of patients can be discharged after a single visit. Twenty-two per cent of patients are referred for a surgical opinion, of whom a third are operated on at the centre. Most interventions will be hand or knee surgery or major joint replacements.

The streamlined process means that some patients will be treated within seven weeks of being referred, with the average waiting time being around 12 weeks. The wait to see the musculoskeletal service in the first place is just three weeks. Because Shepton Mallett is a new facility with dedicated staff and specific targets, Ms Nation feels it operates more efficiently than normal services. But, she points out, this has a knock-on effect on the NHS itself. 'It means the acute providers are now getting more of the more complicated cases. In bringing in the treatment centre, the acute side is getting a completely different workload.'

Useful references and resources

  • Social Enterprise Coalition. Healthy Business: A Guide to Social Enterprise in Health and Social Care (2007). See the website:   www.socialenterprise.org.uk
  • King's Fund. Social Enterprise and Community-based Care. Is There a Future for Mutually Owned Organisations in Community and Primary Care? (2006).
  • Social Enterprise information on the Department of Health website: www.dh.gov.uk
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This text on this page was last updated on 15 Aug 2007.