Posted by: Witch Doctor | June 10, 2011

Hazards of the Fourth Healthcare Market

After viewing the Panorama programme, it seemed to The Witch Doctor that thugs were employed to look after vulnerable patients in a particular care home.

The Witch Doctor considers the Healthcare marketplace incorporates SEVEN quite different types of market.

The Panorama programme, it seems, illustrated a possible problem associated with The Fourth Healthcare Market. i.e. when private companies provide a service for the NHS and are paid using taxpayers money rather than it coming directly from the pockets of patients or clients or from their private insurance.

These private companies carrying the NHS “kitemark” have a problem.

And it is a serious one.

Labour is costly.

Expert labour is very costly.

It stands to reason therefore, that when private companies are operating within the constraints of The Fourth Healthcare Market, then they will try to cut labour costs. This is exacerbated because if they want to procure work within this “Fourth Healthcare Market” they will have to bid low, i.e. below the NHS set tariff prices.

“But health secretary Andrew Lansley’s original proposal applied to parts of the NHS covered by the national tariff – a fixed price attached to certain services and treatments. His plan was to replace the fixed tariff with a maximum price, allowing providers to undercut each other.”

But what about the government’s “about turn?” you ask.

“That plan was abandoned – prompting the ‘u-turn’ headlines – after various people, including supporters of a market in healthcare warned it could lead to a ‘race to the bottom’ on quality. The NHS must now pay the same price for all healthcare covered by the tariff.”

This item from the Bureau of Investigative Journalism uncovers a flaw. And it is a big flaw.

Note the words:

“healthcare covered by the tariff”


Recently Dr No was pontificating in his bath how he could, if he was a private company, get round the constraints of the tariff in order to win a bid for a particular healthcare activity. Yesterday, in Bad Medicine, he picked up on the above article in the Bureau of Investigative Journalism and explored the loophole further. He doesn’t think it is a loophole though – it seems as if is in fact a barn door that is wide open to the elements.

“Since this is the kind of terminology that gives the rest of us a migraine, we may translate this to mean stuff done outside hospital, excluding normal general practice, is not subject to fixed prices.

If we grab an orthopod, and stick him in a van with some kit, and have him offer drive-by carpel tunnel surgery, that fits the bill. So to does the gynaecologist doing his colposcopies in a Nissen hut, and the gastroenterologist shoving his camera where the sun don’t shine in a bike shed. Because these procedures are being done outside hospital, they all fit the bill, very nicely indeed, thank you very much, because community services are not covered by the mandatory national tariff – and that means commissioners can – and do – invite providers to compete on price.”

If you follow up the links on a post by the Bureau of Investigative Journalism, you find a document dated the 19th April 2011 – “Memorandum of Information (MOI) by NHS Barking and Dagenham


It is a boring document, the kind that nobody ever reads unless they are seeking business, but here is an interesting bit (the green colour is My Black Cat’s highlights)

“1.1 Price
Potential Bidders should refer to the relevant clauses in the NHS Standard Contract in relation to price and payment mechanism. As set out in the NHS Standard Contract, prices will be calculated in accordance with the National Tariff plus the Market Forces Factor (MFF) for all services to which the National Tariff applies. It is currently intended that the MFF will be calculated by reference to the MFF applicable to the nearest Acute or Foundation Trust to the Facility.

The ONEL Cluster is seeking to improve quality and value for money through this procurement exercise. Bidders will be invited describe how they will deliver a proportion of the outpatient appointments at below tariff where it is appropriate for patients to receive the care they clinically require without receiving traditional consultant-led appointments, as defined within the nationally mandated tariff. To achieve this bidders will be asked to develop in their ITN responses care pathways which enable patients to receive the care they clinically require in both traditional and innovative settings, for example nurse led or consultant supervised care. Bidders will also be asked to describe how they would work with the public, GPs and local acute providers to attract patients and respond quickly to ONEL’s priorities.

It is assumed that Daycase and elective procedures will be paid for at PbR tariff. However, as the tariff is based on the average mixture of complexity of services, where a particular service being delivered is different from the normal casemix range, perhaps because of contractually agreed patient exclusion criteria, commissioners would be looking to pay at less than the tariff price if the difference is so significant that it amounts to a change in service provision.”

No revenue guarantees will be offered and the Provider must take the commercial risk on referral levels.

So, it seems there is a very good reason for “The Skills Escalator,” for focusing on protocols and competencies rather than experience and professionalism. “Dumbing down” is intended. It saves money for the private sector. The dumbing down may work some of the time but at times it will also result in thugs looking after patients in care homes. It will, as is already happening, also result in nurses, physiotherapist, pharmacists, scientists and others employed in the healthcare industry running protocol driven clinics.

As far as medical practitioners are concerned, patients will not receive a consultant-delivered service. i.e. a service where they meet their consultant, know their consultant, and know exactly which doctor is responsible for their care.

Oh No!

They will not even receive the consultant-led service as defined by the nationally mandated tariff.

But hey, there needs to be someone to take the blame if things take on the shape of a pear with individual patients who have the audacity to have medical problems that do not conform to protocols.

Those patients who, through no fault of their own, are outliers.

It seems though, at least some of the time there might be a “consultant supervised service”

Whether that is a medically qualified consultant is not clear.

That’s all right then.

This distant consultant will probably not know you, will never have met you but he / she will be the one who will be blamed in court if you dare to fall outwith the protocol driven patient pathway .

Hell mend these consultants who accept extra payment or no payment at all, for such arms length notional supervision in order to keep a private company in profit by cutting costs to the extent that patients are being fobbed off.

However, as The Cockroach Catcher points out, those being treated by other private companies in what The Witch Doctor refers to as The Fifth Healthcare Market, will always see the consultant. Not any consultant, but the consultant of their choice.

True Patient Choice.


There will always be a limited number of consultants.

Where might they be found if and when the new Health and Social Care Bill becomes law?



redapple.jpg a red apple ……………………

The Witch Doctor – Link to a random page





© Dlundin |

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s


%d bloggers like this: