Jul 2, 2013 - 21,000,000 NHS Greater East Midlands Commissioning Support Unit. 05/06/2013. Maternity Services. 63,000,00
April – Aug 2013
Introduction This report shows that the market-led NHS is taking off. The quantity and diversity of contracts already underway proves that the controversial NHS changes are bringing about huge changes. In the past the sums of money going to alternative providers were viewed as small, but this report provides the evidence to show that this can no longer be said. The health market is becoming pivotal in deciding how the NHS budget is spent and who actually delivers our healthcare.
Key points
An estimated £2.5 billion worth of contracts have emerged in the 4 months since the competition regulations were passed by Parliament.
Nearly 200 contract opportunities in the pipeline since April.
Contracts awards made since April show 21 to the private sector and only 4 to the NHS.
Outsourcing is increasing fastest in diagnostics (16%), mental health (8%), home care (8%) and pharmacy (6%) Services
No of contracts
Diagnostics
33
Home care
15
Mental health
14
Pharmacy
11
Out of hours
10
MSK (inc physiotherapy)
9
Community Services (a range of)
8
GP Services
8
Patient Transport/ ambulance
8
Dermatology
7
Ophthalmology
7
Orthotics
5
The iargest contract so far is £1 billion plus, for community services in Cambridgeshire, one of 8 areas where private companies are being given the chance to bid to run community services.
A huge span of services are being brought before the market, through competitive tendering and Any Qualified Provider. They cover every conceivable type of care that we could need as a patient, from maternity to end of life care, from diagnosis to surgery, from prevention to urgent care.
There were around twice the number of contract notices for clinical services compared with the same quarter last year advertised on the Official Journal to the European Union – TED.
April – Aug 2013
Summary of contract notices (Apr – Aug 2013) Advertised contract opportunities - to run NHS-funded clinical Services Type of notice
Number
Total Value
Contract Notices (TED)
62
1,670,829,235
Contract Notices (S2H)
94
420,351,476
Prior Info Notices (TED)
8
118,600,000
Contract Awards (TED)
25
243,198,609
189
2,452,979,322
Total
Summary of largest value contracts (Apr 1 – Aug 13 2013) Advertised contract opportunities - to run NHS-funded clinical Services highest value contracts (yet to be awarded) Apr-Jul 2013 (TED) 16/07/2013
Pharmacy Services
20,000,000 Southend University Hospital NHS Foundation Trust
02/08/2013
Mobility
20,760,000 NHS West Hampshire Clinical Commissioning Group
07/08/2013
Diabetes Services
21,000,000 NHS Greater East Midlands Commissioning Support Unit
05/06/2013
Maternity Services
63,000,000 NHS Wiltshire Clinical Commissioning Group
11/07/2013
Community Health
23/07/2013
Diagnostics (Pathology)
110,000,000 Nottingham University Hospitals NHS Trust
14/05/2013
Offender Health Services
118,000,000 National Health Service Commissioning Board
05/07/2013
Offender Health Services
140,000,000 NHS England (London)
03/07/2013
Community Health
65,000,000 Greater Manchester Commissioning Support Unit
1000,000,000 NHS Cambridgeshire and Peterborough CCG
highest value contracts (yet to be awarded) Apr-Jul 2013 (supply2health) 0CF/13/0003
Forensic Medical Examination
0CG/13/0016
MSK
0AA/13/0001
Mental Health
20,000,000 NHS West and South Yorkshire and Bassetlaw Commissioning Support Unit 81,000,000 NHS Central Eastern Commissioning Support Unit 210,000,000 NHS South West Commissioning Support Unit
highest value contracts awarded (apr-Jul 2013) (TED) 31/05/2013
Community services
33,234,300 Pennine Care NHS Foundation Trust
NHS
21/06/2013
Ambulance Service
50,000,000 Multiple providers: See contracts
non-NHS
02/07/2013
Children’s services
131,000,000 Virgin Care
NB - notices were taken from the supply2health (S2H) website and the TED d/base, supplement to the official journal to the European Union
non-NHS
April – Aug 2013
What is the sample? Our sample is made up of 189 clinical contracts, so not those involving the pure supply of goods. Pharmacy contracts are included as a service that involves providing medical advice, but generally the supply of medical equipment is not. Ambulance contracts listed include those for blue light and patient transport. We counted live contract notices (those not awarded), adverts for awards and a number of Prior Information Notices. The sample is a snapshot of activity between April and August. It is taken from two sources - firstly, the TED d/base, an archive of adverts placed in the Official Journal for the EU (notices of contracts and awards have to appear here under public contract regulations) and secondly, the supply2health website, produced by the department of health - which sets out contract opportunities for potential bidders.
Value of contracts The total value of the contracts in our sample is 2,452,979,322. This includes 243,198,609 awarded contracts. These are based on the maximum values quoted on the advertised notices. The Supply2health d/base includes competitive tenders and AQP tenders (which don’t generally have contract values). Therefore the total value we quote 2,452,979,322 does not include the amount of money that will be paid to private providers under AQP. NB AQP (Any Qualified Provider) is a system where commissioners invite a number of providers to compete to supply services to NHS patients. Providers are paid according to the number of patients that choose to use the service, rather than an agreed contract price.
Competition rises It was predicted that the section 75 regulations (that passed through Parliament in April) would result in a sharp increase in the use of competitive tendering as method of purchasing. This has been reflected in tendering activity in the April-June period compared to the same period last year, where a search through TED archives showed that around half the number of contracts for clinical services were advertised compared to 28 contract notices (worth £1,045,668,000) in the Apr-Jun quarter a year later. There were a further 57 notices published on the supply2health website, of which the majority were competitive tenders, although in some cases the purchasing method appears not to have been finalised. NB An initial burst of activity around AQP happened last year as the now extinct Primary Care Trusts followed Department of Health instructions to select 3 or 4 treatment areas where patients could be given more choice. These initial AQP treatment selections can be seen here, although this list continues to expand.
April – Aug 2013
NHS losing the contract race An analysis of the contract awards notices appearing on the official European contracts website showed that 21 awards for clinical services (see sample description) were made during the period 1 Apr to Aug. Of these competitive tenders only four were won by the NHS. This echoes the findings of an analysis of AQP by Pulse at the end of last year, which showed that the only 30% of awards under this procurement method involved the NHS.
Contracts big and small There is a wide range of opportunities to run services being advertised, from a £50m group of ambulance services in Exeter, including blue light, to an advert inviting competition to provide a package of care for a single patient in Corby. The largest appeared on the TED website at the end of the sample period, a contract to provide a wide range of community health services in Cambridgeshire. It is worth £i billion plus over five years. The contract trumps the value of similar arrangements that have been made with Serco and Virgin to run services in Suffolk (130m) and Surrey (500m).
Many types of care The range of services is also widening. As mentioned above last year the government asked PCTs to increase competition and patient choice by extending their use of AQP for commissioning. A list of thirty nine treatments and types of care was produced. There is growing list of care types that are being commissioned through competitive tendering. These contain some of the largest contracts and have attracted interest from large companies like Virgin and Serco. In Devon, Virgin recently began a contract to run children’s health services after a legal challenge failed to prevent the contract going forward. Despite well publicised problems with outsourced contracts for GP out of hours in several areas involving Harmoni and Serco, 10 further contracts have been advertised (including those in East Midlands, Hackney, North East, Surrey and Sussex, Sutton) In Wiltshire a £60 million contract for community maternity has been advertised, one of the first of its type in the country. Diagnostics, mental health and domiciliary services such as hospice at home are some of the areas where there is the most contract activity. The data set is viewable below and is taken from two procurement websites where notices are advertised in keeping with UK practice and contract law - TED OJEU and supply2health NHS clinical contract Notices Apr-Jun: (cource: TED OJEU) NHS clinical contract Awards from April 2013 (source: TED OJEU) Contract Notices: Supply2Health from April 2013
