Private Sector Healthcare (Hansard, 28 November 2002)

§ Lord Lamont of Lerwick
asked Her Majesty's Government:
What measures they intend to introduce to encourage the growth of the private sector in healthcare.

§ The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath)
My Lords, the Government's first priority is to implement the NHS Plan and deliver a high quality service to the public. It is not our policy to promote private healthcare as an alternative to the NHS. However, it is 901 our policy to use the private sector when it can support the public sector to improve public services, for example, by increasing NHS capacity and patient choice.

§ Lord Lamont of Lerwick
My Lords, I thank the Minister for that reply and I welcome the Government's radical use of the private sector to free up supply to the National Health Service. But is it not time, and is it not logical, to go a step further because is it not increasingly open to argument that however much money is put into a monopolistic state system it will not deliver commensurate improvements? Given that half the hospitals in Germany are in the nonpublic sector and that in France, Switzerland and Germany there are competing independent insurance systems, why do the Government, who have called a debate on the health service, refuse even to consider measures to encourage similar developments in this country?

§ Lord Hunt of Kings Heath
My Lords, the noble Lord will know that the Wanless report examined those matters to some considerable degree. In terms of funding of the NHS it concluded that there is not an alternative funding method to that currently in place in the UK that would deliver a given level and quality of healthcare either at lower cost to the economy or in a more equitable way. The Wanless review was thorough. We see the need for greater diversity and provision of services. That is why we are quite prepared to use the private sector in the way that has been developed in the past few years. Each country has developed its own culture and system in health. It seems surely better to take what we have, improve it, use the private sector where effective but concentrate our focus on building on the excellence of the National Health Service.

§ Lord Clement-Jones
My Lords, we on these Benches certainly support the view stated by the Minister and not the belief of many on the Conservative Benches that the salvation of the NHS seems to lie in the private sector. One of the points made by the Health Select Committee earlier this year was that the NHS simply lacks the procurement and commissioning skills necessary to secure value for money when procuring from the private sector. What steps are being taken to ensure that the NHS will have that expertise and experience?

§ Lord Hunt of Kings Heath
My Lords, we have given clear advice to the NHS that there is potential for obtaining keener prices in the contracts that it negotiates with the private sector. We are putting in place a new financial planning framework for NHS services which will give much greater guidance and encouragement to the NHS to ensure that it has the proper contracting skills and to ensure value for money. As relationships develop between the NHS and the private sector the NHS will become much more skilled at obtaining a good deal.

§ Lord Davies of Coity
My Lords, a Labour government introduced the National Health Service, which became the pride of the world in terms of healthcare. Does my noble friend agree that, following 18 years of neglect of the National Health Service by the previous Administration, at this stage it would be a retrograde step to return to a system where the Government encouraged private medicine? Would that not again introduce a price tag on health benefits, whereby those with the ability to pay would receive the best treatment?

§ Lord Hunt of Kings Heath
My Lords, my noble friend is absolutely right. The NHS was a great service and a wonderful vision for which many people in this country are extremely grateful. It has a great ethos and receives tremendous support from its staff and .from the public. But, as the Kennedy report into the Bristol Royal Infirmary showed, it was starved of resources and capacity over many years. We are putting that situation right. The NHS Plan is the way forward, and I am confident that the NHS, in partnership with the voluntary, and indeed the private, sectors, will produce the high-quality services that we all want to see.

§ The Earl of Onslow
My Lords, how does the noble Lord justify the term "starved of resources" when the National Health Service has received an increase of 43 per cent in real terms over the past 10 years—half under one government and half under another?

§ Lord Hunt of Kings Heath
My Lords, so far as concerns the amount of resources going into the National Health Service, perhaps I may set out what is intended for the next five years. By 2008, NHS resources and healthcare spending in general will be brought to a level of 9.4 per cent of GDP. That is how we shall deliver the targets and priorities in the NHS Plan.
So far as concerns the previous government's record on expenditure, the fact is that they did starve the NHS of resources. When they increased the amount of resources—I refer, in particular, to the early 1990s—that went not on patient care but on the incredibly wasteful bureaucratic system of the internal market.

§ Lord Ashley of Stoke
My Lords, is my noble friend aware that not only would it be illogical to try to improve the health service by transferring funds from the health service to the private sector; it would also be highly undesirable? The stand outlined by my noble friend will receive warm support throughout the country, especially from the many millions of people who depend on the health service.

§ Lord Hunt of Kings Heath
My Lords, my noble friend is right that we must focus on improving and developing the National Health Service. But the issue that we face at present is a lack of capacity. That is why we are embarking on a major hospital building programme. It is also why we are increasing the 903 number of training places and recruiting staff at home and abroad. However, with current capacity being very tight, it surely also makes sense to use the private sector, which at present has considerable spare capacity.

§ Baroness Howe of Idlicote
My Lords, the delivery target for digital hearing aids appears to have fallen behind substantially. Does the Minister agree that it would be useful to go into partnership in respect of digital hearing aids, not least in the fitting of the aids, in which the private sector has considerable expertise?

§ Lord Hunt of Kings Heath
My Lords, I certainly agree that the National Health Service should look for partnerships with the private sector where that sector can provide expertise that is not available within the NHS, whether in relation to services for deaf people or other services. That is the intention of the Government. I believe that over the past few years many schemes have shown the benefit of using private sector expertise.

§ Lord Phillips of Sudbury
My Lords, does the Minister agree that, given that the private healthcare sector has three distinct components—the profit-making one, the mutual one and the charitable one—the most natural partner for the NHS would be, first, the charitable sector, secondly, the mutual sector and, only thirdly, the profit-making sector?

§ Lord Hunt of Kings Heath
My Lords, I certainly welcome the long tradition of the NHS working with both the charitable sector and what the noble Lord describes as the "mutual" sector. I should have thought that the hospice movement is an example of that. But, ultimately, what counts is whether we can increase capacity in the NHS. Even with profitable private hospital care providers, if they have spare capacity which the NHS could use, we should use it.