Wednesday, March 6, 2013

The margin ain't there

You read all the twitter feed...the angst about the privatisation, especially the worry about what would happen if all services were to be opened up to tender...and you wonder...How many of these folks have actually been through a tendering process, especially in the "new" NHS? Have they ACTUALLY been through one or is this simply scaremongering? Usual resistance to change or just dyed in the wool socialists who simply don't like the private sector? You wonder, don't you?

But you know what...I have some news for you. I have actually been through a tendering process..start to finish. Yep, right from the process of detailing the service, seeing the specifications drawn up, understanding the money on offer and then it finally being advertised. This wasn't a huge service tendering but was important enough. A diabetes community service being tendered in a region where there was none, A service being set up where a quantum leap was being made in NHS speak...moving from the traditional model of "refer to hospital at your discretion" to "refer to hospital only for specific things" and the rest being managed with support, education etc. And I sat and watched as bidders appeared. A couple of NHS organisations and a number of private organisations, some of them who are household names, some of them I had never heard about.
As the enthusiastic local Consultant, I reached out to all of them, signed clauses of confidentiality about their model designs and for me, was a fascinatingly amazing learning experience. Did the lady from Virgin speak with forked tongue or sported horns on her head? Nope- she seemed as normal as any manager I had spoken to in the NHS.But it was interesting to see all the players, fascinating to see how poorly equipped some of the NHS organisations were to exist in a competitive world. It wasn't their fault, it was just that it seemed they weren't...ready. You would believe that they would know more about services, financial realities, possibly more than the non-NHS ones...ermm..nope. 
One manager I spoke to seemed to know the answer to everything..10 minutes into the conversation it was abundantly clear he knew diddlysquat. He had no idea of the demographics of Portsmouth, no idea about GP surgeries, the relations...but he still..had..a plan. And if the local Consultants were not keen to engage.."he would subcontract others". Excellent.The non NHS organisations? Same problem. Any idea? Nope. One even wanted to do everything virtually- including foot clinics. "Why can't a patient Skype you showing their foot?" You had to wonder whether Skype extended to checking vascular supplies or whether we teach the patient to do it themselves. Dear God.

In the end, we decided to go with the NHS organisation and the rest has been history. Did we do it due to some socialist love or in depth love for the monopoly of the NHS? No. It was simply because the NHS ones seem to understand that there is no margin left to make a profit on. The tariff system is so close to the edge that to make profit you can only do one thing. Cut services, cut the nurse time, cut the admin time, reduce the Consultant input...there is no other way. There is no margin to gain in the NHS- thats the stark reality of a tax funded system.

So you know what? I don't wish this tendering process on anyone. And believe me, neither do the CCGs if they can help it. Some will be seduced by the lure of the private bidders, but in the end, without profit, those companies have no reason to stay.And I don't blame them for it. Would you run a business if there is no profit? So maybe the system needs to give the private organisations an honourable way out. Because ladies and gentlemen, from a Clinical Director who has dealt with finances,tariffs, contracts, new to follow up ratios for 4 me...the margin ain't there.

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