Why patients get a raw deal from private health care

ARE THE middle classes wasting their money in buying medical insurance? Subscribers have been put on notice by a report on private healthcare published by Parliament last week. For the findings of the Health Select Committee's enquiry into the regulation of the sector raise the question whether it can really be trusted - unless significant reforms are made.

The risk of something going wrong in independent hospitals are greater than in National Health Service establishments. Patients occupying single rooms tend to be less well supervised than those in wards. Independent hospitals often lack specialist facilities and the relevant staff. There can also be a lack of resuscitation and other emergency back up equipment. Moreover, as clinicians tends not to work in teams in the private sector, as they do in NHS hospitals, sub-standard staff are less easily noticed. The fact is that independent sector is, on average, less competent.

In the provision of health care, then, the familiar mantra, "private good, state bad" appears plain wrong. Why should this be so? As an industry, private healthcare has a number of undesirable features. There is insufficient competition. Three providers dominate it - General Healthcare Group, BUPA Hospitals and Nuffield Hospitals. Between them, the three control over half the total number of beds. In particular BUPA is both a provider and, through its role as an insurer, a purchaser: this gives rise to conflicts of interest. The average size of private hospitals - with many having fewer than 100 beds - is too small to be run efficiently.

The private sector, too, is handling more difficult procedures than it used to. Ten years ago, it largely dealt with varicose veins and hernias: now coronary artery bypass grafts, widening of coronary arteries, hip and knee replacements and cancer treatment are commonplace.

The management of private hospitals also leaves much to be desired. Often more attention is paid to decor, and to achieving hotel levels of luxury, than to standards of treatment and care. Internal controls, too, are weak. Consultants working in independent acute hospitals rarely have a strong commitment to a particular institution. Usually they are self-employed and have been granted practising privileges, or what are known as "admitting rights". Many of them also work at more than one private hospital and in the NHS as well. In this sense, independent hospitals are freelance operations.

Worse still is the fact that there are instances where doctors, consultants and other medical staff found wanting by the NHS, and suspended, have later turned up in the private sector. For instance the Chartered Society of Physiotherapy told the Select Committee of a case where serious allegations of indecent assault brought against a chartered and State-registered physiotherapist resulted in the person's name being removed both from the Chartered Society and the State Register. Even so, the physiotherapist had been able to continue working.

To find the underlying explanation for these shortcomings, one will have to look into two areas. Are consumers sufficiently powerful in relation to the providers? Is the state vigorously policing the sector so as to establish minimum standards, and to root out anti-competitive practices? As to the first, customers are often badly informed and obliged to take everything on trust. And while it may be convenient that the insurer generally pays the bill, the presence of a third party in the transaction, concerned only with cost and not having any regard to quality, weakens the customer's position. There is a further factor. By definition consumers arranging medical attention are unlikely to behave robustly in relation to the supplier either before an operation, or in the immediate aftermath.

This point is well brought out in the Select Committee's comments on the state of mind of people seeking cosmetic surgery. Research shows that often they suffer from low self-esteem and it is to counter-act that feeling that they seek appearance-enhancing treatments. Rather than turning to psychotherapists, they seek surgical solutions to their problems. I don't want to make too much of this point, other than to emphasise that healthcare customers are often in a fragile state of mind, and may need extra safeguards.

In fact the regulatory framework is perfunctory. The Government has paid very little attention to the state of the independent sector even though it has close relations with it and uses it quite a lot. One fifth of the private sector's acute beds are in NHS hospitals - pay beds. Almost half the abortions carried out by the private sector are funded by the NHS. Patients themselves often move between private and state provision. It is common to see a consultant privately and then undergo any treatment as an NHS patient. Yet despite all this, the Government appears not to notice - quite literally.

The latest annual report of the Department of Health makes no mention of the sector at all. As the Secretary of State told the Select Committee: the existing regulations were drawn up "when there were not very many private acute hospitals and most of those that there were, did not do anything very complex". So there we have it - weak consumers, weak regulation. You cannot sit back and assume that market forces will inevitably produce a good result. The Department of Health was wrong when it told the Select Committee: "At the end of the day, it is for those using these establishments and the management to ensure quality, and with the recent growth in private health provision, market forces and competition can only improve the services offered." Market forces will do a good job only when a regulatory framework has been established which both outlaws anti-competitive behaviour and ensures that consumers are provided with the information they require if they are to make informed choices.

But it's not enough just to make the case. Changes in legislation only come about if enough people demand it. Normally such movements are led by lobby groups and by the press, radio and television. Investigative journalism can have an important role to play. The Health Select Committee has given a lead. Consumers are beginning to make a fuss when they experience poor service. But they will have to get much angrier still. The horror stories will have to be publicised. Then, given that 11 per cent of the UK population has private medical insurance, the Government will act.

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