Should private providers sit on Integrated Care Boards?

Under the new Health and Care Bill working its way through Parliament, Integrated Care Boards (ICBs) will replace CCGs in planning and commissioning health care services in local areas. In a way that CCGs are not, ICBs will also be directly accountable for NHS spend and provider performance in their local area.

The composition of ICBs is currently a matter of debate. And this debate matters because these Boards will have a really important job to do, both to meet the needs of patients and to make sure that taxpayers get good value from every pound spent in the NHS, especially now that the government has increased National Insurance contributions to fund the recovery.

So, who should sit on a local ICB?

Given that virtually every major health reform is described by its opponents as a “Trojan Horse for Privatisation”[1] it’s no surprise that some argue that the law should prevent private companies from sitting on ICBs. And the government has acknowledged the concern and said it will come up with a solution.

But would it be right to exclude independent providers from ICBs?

The bad argument

The bad argument for excluding independent providers is that having a representative from a private provider on an ICB would somehow undermine the core principles of the NHS and lead, in the words of some critics, to a “US-style health system”[2] that charges patients for care and replaces tax-funding with insurance providers.

This is a bad argument for two reasons. The first is that independent healthcare providers are just as committed as everyone else to what the NHS stands for. This may be an unpopular statement, but it’s true and it needs saying. We believe in the NHS too, and we think it’s important that it remains free at the point of use and funded through taxation. So, the idea that having an independent provider on an ICB is somehow likely to lead to the end of the NHS just doesn’t stack up.

The second reason is that ICBs have no power at all over big political decisions like charging patients or raising NHS funds. These powers rightly sit with Parliament. So again, having an independent provider on an ICB makes it not a jot more likely that the NHS will ever be replaced with a different kind of system.

The better argument

The better argument against having independent sector providers on ICBs goes something like this: “Independent providers have their own Boards and (sometimes) shareholders. This means that they will act in a way that meets their own organisational self-interest rather than prioritising the needs of the whole healthcare system.”.

This is a much better argument. As health economist Professor Alan Maynard wrote many years ago in the BMJ, “Self interest is an integral part of every human’s programming.”[3] Organisations can in some circumstances look after their own interests rather than those of the wider system of which they are a part. We need to guard against that happening if we want patients to get the very best from local health services.

Does that mean that the critics are right, that we should bar independent providers from this important role on ICB?

Well, no.

The problem is that if you accept the fact that independent providers might act in their own self-interest, you also have to accept it of every other provider organisation that could be part of an ICB, including NHS Trusts and FTs, social enterprises, primary care providers, and the voluntary sector.

All provider organisations have an inbuilt tendency to act in their own interests. We know this. Simon Stevens knew it when he described the “institutional self-interest” of an NHS hospital in Manchester.[4] All providers will find it difficult to make commissioning decisions that might involve deciding that their own services aren’t working for patients.

It doesn’t mean they don’t care about patients – of course they do – it’s just what organisations do.

It doesn’t mean they have the wrong values – of course they don’t – it’s just what organisations do.

And in the case of Foundation Trusts, their leaders are even legally obliged through their fiduciary obligations to take decisions that will help their own organisation to survive and thrive.

Denying this tendency towards organisational self-interest is ultimately to deny the devastating conclusions of the Francis Report, which showed what can happen when organisations focus on ‘doing the system’s business’… [in a] a culture which tended to prioritise the smooth operation of the healthcare system above the safe and effective care of patients.[5]”

This is what makes blurring the purchaser-provider split such a challenge. And it’s open to question whether some of the other safeguards (such as Conflict of Interest registers) put in place within ICBs can ever be adequate to address this problem of organisational self-interest and prevent “cosy local monopolies”[6] from emerging when you’re asking provider representatives to act as commissioners too.

And the risk is that by targeting independent providers we kid ourselves into thinking that we’ve dealt with all the potential problems of having provider organisations as part of commissioning Boards. We haven’t, and we need to start with an honest conversation about how to manage these challenges across all types of providers.

A better way

The truth about the NHS and the independent sector is that we need each other. And the pandemic has shown what that looks like, with 3.2 million NHS patients treated ‘at cost’ in independent hospitals over 2020 and 2021 under the unprecedented deal to make virtually all independent hospital capacity available to the NHS to support with the pandemic response. And with over 5 million people waiting for treatment, the capacity of the independent sector is needed more than ever.

1 in 4 NHS mental health beds are in an independent provider. Over 40% of community services providers are not NHS organisations – something like 1700 different providers of care. Independent sector providers deliver 10% of all NHS cataract operations, one in 10 NHS-funded MRI scans, and a quarter of all NHS hip and knee operations.

What are we going to do to make sure that they can play a meaningful role in the new integrated care systems? In some areas, denying the independent sector a seat at the table will mean no place for mental health or community services – the very opposite of what integration is supposed to achieve.

I’m not sure of all the answers, but I do know that starting off with legislating to exclude these providers from local health systems is to do patients a disservice. What we need to do is to build genuine partnerships across organisational boundaries. We’ve started on this journey – trying to show what great system working looks like when it includes all different provider types – building bridges, not walls. We are on a journey to design a system which works for patients not providers and needless distractions like the role of independent providers on ICBs won’t help us get there.

David Furness, Director of Policy, Independent Healthcare Providers Network

[1] See, for example from 2021 and from 2009