Bringing more competition to the NHS under White Paper reforms would be “potentially damaging” the British Medical Association (BMA) argues.A market-led approach “creates waste, bureaucracy and inefficiency”, Dr Hamish Meldrum, chairman of council at the BMA, said.

Under proposals put forward in July by Andrew Lansley, the Health Secretary, GPs are to be given the power to manage £80 billion of the NHS budget to buy care from hospitals and other doctors, while tiers of management are to be axed.

The BMA said today- Friday, that while it was “interested” in these proposals, the greater efficiencies they could bring might be undermined by more private sector involvement.

Dr Meldrum said: “There are proposals in the White Paper that doctors can support and want to work with. But there is also much that would be potentially damaging.

“The BMA has consistently argued that clinicians should have more autonomy to shape services for patients, but pitting them against each other in a market-based system creates waste, bureaucracy and inefficiency.”

Dr Meldrum said that while he was “not ideologically against markets” he did not believe the evidence showed they had worked in the NHS so far.

Private finance initiatives and privately-run treatment centres, which sold their services to the NHS, resulted in taxpayers’ money leaving the service, he said.

“The private sector is not doing this out of some great social generosity, they want to make a profit,” he argued.

He was talking as the BMA submitted its response to the White Paper: Equity and Excellence: Liberating the NHS.

From: http://www.telegraph.co.uk/BMA-says-White-Paper-reforms-potentially-damaging

The NHS in England faces a total bill of £65bn for new hospitals built under the private finance initiative (PFI)- six times more than the buildings cost.
Figures obtained by the BBC show that some NHS trusts are spending more than 10 percent of their turnover on the annual ”mortgage” repayments.

Under PFI, private companies win contracts to build and maintain new hospitals and mental health units and the NHS pays off the ”mortgage” over around 30 years.

The 103 schemes were valued at a total of £11.3bn when they were built.

But when rising fees and additional costs such as maintenance, cleaning and catering are taken into account, the NHS will have to pay back £65.1bn over the lifetime of the schemes. Some contracts are reportedly so restrictive that trusts are forced to pay hundreds of pounds just to get half a dozen pictures put up.

According to the data, the NHS currently pays back a total of £1.25bn each year but this figure is expected to increase until 2030 when it will hit £2.3bn, the BBC reported.

The final payment will not be made until 2048.

Professor John Appleby, chief economist at the King’s Fund health think-tank, said: ”It is a bit like taking out a pretty big mortgage in the expectation your income is going to rise, but the NHS is facing a period where that is not going to happen.”

Dr Mark Porter, of the British Medical Association, added: ”Locking the NHS into long-term contracts with the private sector has made entire local health economies more vulnerable to changing conditions.

”Now the financial crisis has changed conditions beyond recognition, so trusts tied into PFI deals have even less freedom to make business decisions that protect services, making cuts and closures more likely.”

Nigel Edwards, director of policy at the NHS Confederation, which represents trusts, told the BBC: ”They were planned for a different world. I’m sure that in some cases people feel their hands are tied.”

From: http://www.telegraph.co.uk/NHS-facing-65bn-mortgage-bill-for-PFI

The NHS should be allowed to share the benefits of “efficiencies” made by private companies who have won lucrative contracts to build and manage hospitals under the private finance initiative, according to report from the National Audit Office.
The report into the performance of PFI in the health service praises the private sector for making savings but with the NHS being asked to find £20bn in efficiencies it recommends that the government looks to recoup some of the money by renegotiating contracts – a move that would be fiercely resisted by the private sector.

There are more than 70 operational PFI hospitals in England, costing around £900 million a year and with a capital value of more than £6bn.

PFI contracts are awarded and managed by local health trusts with the private company building new hospitals and in some cases providing ancillary services such as catering, cleaning and portering.

Amyas Morse, head of the National Audit Office, says that PFI hospital contracts are generally well-managed and achieving the value for money originally envisaged but calls on the department of health to ensure that “efficiencies are sought and that an appropriate share of benefit comes back to the public sector”.

There is also some concern over the expense associated with PFI contracts. The NAO says that while catering is on average slightly cheaper in PFI hospitals, hospitals with “PFI buildings spend more on maintenance annually to keep the buildings to a specified high standard”.

The idea of taking on the private sector over the costs of PFI has been rising up the political agenda. Last year management consultants McKinsey said that since NHS contracts were written at a time of high interest rates, by simply adjusting them to today’s lower rates the government could save £200m a year in running costs.

Other experts have questioned whether enough risk is being borne by the private sector or if the end users of the buildings are best served by the contracts.

From: http://www.guardian.co.uk/uk/2010/jun/17/private-firms-hospital-contracts-nhs

The taxpayer’s commitment to pay for hospitals, schools, roads and other projects built under the private finance initiative has topped £200bn, documents published in the Budget showed – a total that would pay to run the National Health Service for two years.

The cash will be paid out over the next 25 years to cover the capital cost and services of the projects, with annual payments set to peak at just over £10bn a year in 2017.

The commitments, totalling £210bn, come as concerns are mounting that public services with big PFI projects may be at a disadvantage as the government seeks efficiency savings to help reduce the deficit.

PFI contracts usually include maintenance requirements that cannot be abandoned and must be paid for.

Although dangerous in the long term, the public sector tends to put off maintenance when expenditure is squeezed.

Treasury officials acknowledge that talks with PFI providers may be required to persuade them to offer more flexibility than the contracts stipulate.

The Budget report on UK infrastructure assumes the PFI will continue to provide finance for schools, hospitals and housing.

However, it warns that the massive demand for private capital to build energy, transport, waste and water projects – at £40bn to £50bn a year for the foreseeable future – means these “may compete for the same sources” of finance, at a time when the government plans to halve its own capital spending.

From: http://www.ft.com/cms/s/0/84618b94-383b-11df-8420-00144feabdc0.html