FINAL 22 September 2003 190903 1200hours
23September 2003
Latestdevelopments in independent healthcare
- Improving the quality ofhealthcare and services
- Partnership working withthe NHS
- The future role of theindependent sector
Chairman, ladies andgentlemen, good morning and thank you for the opportunity to speak today. Illbe talking to you mainly in my role as managing director of BUPA Hospitals butI can perhaps add a further dimension as Chair of the Independent HealthcareAssociation. I hope, therefore, that I can represent the thoughts andaspirations of the sector as a whole as well as those of BUPA Hospitals.
Iaddressed the Laing & Buisson conference in October 2000, as a relativenewcomer. Much has changed for the better - in the space of three years. Wehave seen the Concordat signed between the public and independent sectors, theintroduction of DTCs, the concept of Foundation Hospitals sparking an interestingdebate, and of course, a new Health Secretary.
Lasttime I was here I talked about the opportunities for working with theGovernment and some of the pressures the industry faced from the more informedconsumer.
Thistime Ill again look at how we can work in partnership with the NHS, and witheach other, to improve the quality of healthcare. Ill explain what I think weneed to do as an industry to embrace change but crucially withoutalienating our existing constituency. And, as we all need to operate on a levelplaying field, Ill suggest what that might look like.
Theconclusions I will invite you to draw are:
the environment in which we operate is changingsignificantly;
Doing nothing in response is not an option
part of the new landscape is an improving NHS whichoffers both opportunities and challenges, not least because it aspires to speakour language;
And, we are at an important point in ourdevelopment that requires serious joined up thinking and that will includeRefining possibly redefining - our core proposition and deciding what role wewant for ourselves in a future mixed economy of provision.
AsI mentioned, much of the change in the last few years has been for the better.The Concordat, for example, - which was described in the NHS national plan asthe start and not the end of a more constructive relationship between the twosectors - is working and it has led to reduced waiting lists. BUPA has treatedover 30,000 NHS patients - the sector as a whole is treating 80,000 a year.However, as we repeatedly tell Government, the sector has the capacity, now,to treat appreciably more.
Butthere is much more that the independent sector can do and I would like to sharesome thoughts with you.
Ifthe independent sector is to continue to play a greater part in delivering NHScare, and take a more substantial place in the wider health care economy, ithas to think more broadly.
Itsnot just about 50 operations here, or 100 operations there, Its about movingfrom spot contracts with NHS Trusts to better value through longer termpartnerships. We need to work more constructively with the Government and theywith us. For example, developing the Financial Flows proposals so that we canoffer NHS treatment at prices that make commercial sense for us, and the NHScan afford. This initiative alone willhave a profound effect on our business. Yet somewhat surprisingly, a recent IHAmeeting on the subject attracted only a handful of people.
Weneed to take a long hard look at what we offer and ask whether there are newthings we need to be doing; or whether we should be doing differently, some ofthe things we do now. Questions like: is the delivery of a wide range of procedures,often in low volumes, sensible? Should we remain wedded entirely toconsultant lead treatment in every case? How do we square the circle of lowercost and higher quality? These are some only some of the questions thatdecide whether we achieve the goal of plurality of provision.
Wealso need to embrace competition. The sector is seeing the introduction of newplayers some new to healthcare, some not; some from the UK and a significantnumber who arent. Each brings something new to the party. The single thingthey all bring, however, is competition and thats good. Competition is goodfor the industry and its good for the customer. It forces us to look morecritically at what we have to offer and at what the customer wants.
But,as I mentioned earlier, established UK providers still have capacity. We needto push for real freedom for local purchasers to take up this capacity. Why addexpensive new real estate to the industry when there are already additionalfacilities that the NHS could commission?Overseas operators may bring additional manpower, but it should not beforgotten either that established UK Healthcare providers offer valuablebenefits too. We have significantdirectly relevant experience, we survive through the innovative deployment ofall resources, and we are alreadyintegrated into the local healthcare economy.
Thesector has to face up to the challenges of new technology; of attracting andretaining the best staff; and the need to demonstrate, constantly, quality ofservice. On top of that, competition may be fiercer if Foundation Hospitalstruly start to give NHS managers the type of autonomy and accountability moreusually found within the independent sector.
Grumblingabout change and its inevitable challenges is unproductive and unattractive. Itis a reality; the future will look very different and we must deal with it. Andwe need to do it in a way that helps the patient and does not dent our corebusiness. We must be clear about what our proposition is, as providers of highquality elective surgery. We need to make sure that the patient, the NHS andhealthcare as a whole, understands what that looks like and how it works.
Thischanging environment will, longer term, provide more challenges andopportunities. What we need to do isconsider in a robust and constructive way, what role we want to play in any newmodel. We need a radical reappraisal of the new world and our collective place in it rather than - asI sometimes feel - trying to deal with a collection of individual agendas. Weare seeing a fundamental shift in health policy and as with all major events inlife, there are people who makethings happen, people who watch whathappens and people who wonder whathappened. I know which group I would rather be in.
Forits part, the Government has made its contribution to the changing environment.Its delivered the money and responsibility for patients care pathways and ithas started to talk about expanding patient choice. But the independent sectorneeds to see further and faster movement towards a freer market for healthcare.This means real freedom for purchasers to commission high quality healthcare.Freedom, too, for providers to demonstrate the quality and cost effectivenessof their services.
Letme deal now with two other Government-related issues: partnership andregulation. I said that our goal should be long term partnerships with the NHS.In my mind, partnership means shared goals, good communication, creativeproblem solving and an appreciation of what each is bringing to party. It does not mean mixed messages. It does notmean embracing the independent sector when it suits the health agenda and usingit for target practice when it suits the party political agenda. I said amoment ago that a lot has happened, but I cant say that I have always felt asense of real partnership.
Let me turn toregulation. Having one body, the new CHAI, to oversee two different regulatoryregimes one for the NHS; another for the independent sector will confusepatients, doctors and providers and is unnecessarily bureaucratic. We mustcontinue to press the Government for a single regulatory approach to clinicalstandards. This will require greater transparency in all areas of ouroperations. That may sound a little unsettling to some. It should not. We canbear the scrutiny.
Isaid I would talk a little about the informed patient. Firstly, like all patients, they wantconstant improvements in quality. Patients have every right to expect us to usethe latest technology and they look for evidence of high standards of clinicaland personal care.
TheGovernment has clearly decided that it wants greater transparency for thepatient on performance.We may not agree with all of the tables and targets they are applying toget there but the broad principle is quite clear. The patient wants more datawith which to make his or her informed choice. What is our sector going todo? What data are we happy to makeavailable? There will be a cost, but in my mind the consumer and reputationalbenefits, for individual facilities and the sector generally, far outweigh thatcost.
Wehave to be able to show that we really are doing the right things to improvethe quality of healthcare. To this end my colleagues in the IHA are producingthe annual report for its Quality Indicator Project. This is designed tomeasure the levels of safety in independent hospitals and to illustrate thatindependent hospitals have good quality systems in place to safeguard patients.
Theresanother dimension to the informed consumer. Some of you may be aware that BUPAhosted a Health Debate at the beginning of September. It was entitled Trust meIm a patient can healthcare afford the informed consumer? Among otherthings it looked at whether the public and private sectors could actuallyafford the time, money and effort needed to meet the demands of the more awareand demanding patient.
Italso looked at choice, something the Government increasingly says it intendsto introduce. It examined what choice looks like and how the patient knows whatchoices he or she has.
Byway of context, BUPA commissioned a MORI survey of the public and GPs. It foundthat less than half of the general public expected the NHS to improve as aresult of extended patient choice. A third of GPs said they worried that thestandard of care will actually get worse.For those in this room, this potentially means an equal number ofpatients looking for alternatives. Its other main finding was that the publicand independent sectors have a big education process on their hands to ensurepatients understand what choices areavailable and how they can access them, because at the moment they dont..
Theconclusion to our debate was that neither sector has any choice about choice.The informed consumer is here and we have to adapt to his or her needs or facea very difficult time ahead.
If choice andresponsiveness really start to feature in NHS care, then the independent sectorwill face much greater challenges in demonstrating value for money. Theindependent sector routinely provides more choice over when, where and howpatients are treated. The questions for us is whether that will always beenough of an edge..
One final point, before Iclose, on the generality of a mixed economy in provision. The greater involvement of the independentsector does not have universal approval. We all still need to rebut the oftenunjustified jibes about our industry that get peddled about: that private health care offers little to'UK plc'; or that in some way theUK mirrors the US healthcare system with its perceived imperfections.
We should not allow thesecharges just to go unchallenged. The independent sector contributesapproximately 1.7 billion a year to the UK economy through a combination oftax revenues and the value of privately funded care had it been performed bythe NHS). Without us there would beanother 250,000 NHS people on waiting lists.We undertake approximately 1m elective surgery procedures a year.
These figures are not newto us but they are new to the 87 percent of the population with whom, hitherto, we have had no contact but forwhom, in a changed healthcare environment, we are becoming more relevant.
I said earlier that thenew landscape produces opportunities and challenges. I hope I have given equalweight to both. But in case anyone feels I have been unduly pessimistic, let mebriefly give you an example of what I believe is a successful partnership bornout of this changing environment. Asmany of you know BUPA has worked with the NHS to set up and run the diagnosisand treatment centre for NHS patients, at our Redwood Hospital in Surrey..
The project team involvedin bringing it to fruition was working towards a new model of partnership withthe NHS but, crucially, one that made sound commercial sense for us. BUPA is a provident association but thatdoes not mean we are a not for profit organisation. The Redwood contract hasgiven us an opportunity to significantly increase the volume of patientstreated at Redwood and to achieve very high levels of utilisation from thestaff and facilities we have in place.This combination has enabled us to make some efficiency gains withoutcompromising the clinical quality of our services to NHS patients. We are now treating around 1,000 patients amonth in line with our contract and our first Customer Satisfaction Survey hasindicated that 95% of patients rate their experience as good or excellent.
As the first anniversaryof Redwood approaches I can report that while negotiations were thorough and attimes arduous, there was always commitment from both sides to get this done.The centre is open, patients are being treated and waiting lists for thoseprocedures are falling.
Redwood and initiativeslike it will continue to attract media attention for some time. They do improvethe delivery of healthcare and, theyproduce a proper commercial return.
But I have alreadyalluded to one of the possible pitfalls of the changing model and that isalienating our core business. It would be more than careless to lose loyalinsured members or discourage potential self pay patients because they feltBUPA or indeed any other private hospital operator had simply become an outpostof the public sector. The balancing act for us is to reinforce the idea thatgoing private is still an attractive proposition.
When parliament sitsagain next month health will again be top of the domestic political agenda. TheHealth and Social Care Bill went to the Lords at the beginning of the month,more DTCs have been announced and morewill follow, more choice initiatives will be unveiled, and the Agenda forChange will signal improving conditions for NHS staff. Performance targetswill be in the spotlight - ambitious ones:- 7,000 extra hospital and intermediate care beds by 2004. One hundrednew hospitals by 2010; 7,500 more consultants by 2004; four hour maximum waitfor A&E from arrival to admission, transfer or discharge; and a threemonths maximum wait for outpatients by 2005.
These are momentouschanges and we need to respond. At Bupa, NHS work still represents under 10 percent of what we do. As an organisation we are equally focused on what we can dofor the other nine out of ten patients. I suspect the same applies to many inthis room.
We have to show, that theindependent sector still has something significant to offer beyond some of thetraditional USPs of choice of surgeon and hospital, quick access, and customerservice.
Let me close by sayingthat I am encouraged that this conference is looking at how the two sectors areworking together and what they may do together in the future. I look forward toseeing what opportunities there are in the whole health care system for all ofus to continue raising our game and making sure the patient gets the very bestout of the improved choice and enhanced outcomes harmonious working canproduce. The Government has begun toopen up its doors to an integrated health care system: we need to step throughit. In short I look forward to real Partnership
Thank you for your attention and I hope thatyou enjoy the rest of the conference.