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Firms 'cherry picking' easier NHS work

Private firms working in primary care are under-cutting hospitals and destabilising secondary care services, a report for the Department of Health warns.

The official evaluation of the Government's Care Closer to Home pilot sites reveals an unintended consequence of the programme – that it has made it much easier for private firms in the community to poach services.

The report warns ‘cherry picking' of clinically straightforward cases may allow private firms in the community to bid for services at a lower tariff price than NHS hospitals.

The potential for private providers to outbid hospitals for specialist services may arise because of conflicts caused by ‘complex and sometimes contradictory interactions' in the national tariff, which determines fixed prices for NHS services.

The report - by the National Primary Care Research and Development Centre and the University of Birmingham - warns: ‘Creaming off or cherry picking of easier work from secondary care to primary care leaves the more complex cases to be managed in secondary care – to a tariff that does not fully fund the cost.'

‘Such creaming is also naturally attractive to private providers who can bid to offer part of a dermatology service at a cost below the tariff.

‘Further reforms to the Tariff, including its extension into community services, are necessary to ensure a more transparent commissioning system.

‘Without reform to the Tariff, there is a risk that some expensive secondary care-based services could become financially non-viable.'

Professor Bonnie Sibald, deputy director of the centre, said: ‘In comparison to hospitals, Care Closer to Home services treated patients with less complex problems. They were allowed to undercut the fixed tariff set for the provision of hospital services.'

The study also warns that for dermatology, referral management schemes and applica-tion of patient choice through Choose and Book could result in ‘variable quality' of care.

‘In many local health communities pressure on costs has meant straightforward cases are managed through locally developed referral manage-ment schemes. The result for many patients with skin disease is that there is no choice of provider other than a locally implemented service.'

Private firms take advantage of loophole

Private firms take advantage of loophole

Private firms take advantage of loophole

The national tariff provides the NHS with fixed prices, and is intended to ensure that providers bid on the quality of their services rather than local price negotiation

But while hospital providers are restricted to bidding at tariff price, community providers do not need to, opening up room to under-cut on cost.

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