Leaked document shows how doctors can profit from NHS reform

At the heart of the doctor-patient relationship is trust. But an investigation by Channel 4 News reveals that under the reforms of the NHS, currently going through Parliament, there is little to protect patients against conflicts of interest.

Our investigation reveals that GPs could end up making decisions based on profit rather than clinical need.

The NHS reforms plan to put up to 80 per cent of the budget into the hands of family doctors. This means that primary care trusts, who currently decide what care to buy for patients, will be abolished. GP practices will instead form consortia and they will buy – or commission – the care.

It is widely acknowledged that not all GPs will want to run or manage the consortia. This means there is a business opportunity for private companies and already many are lining up to offer their services.

But a document leaked anonymously to Channel 4 News shows how one such company plans to work with GP consortia. What is startling about it is how it quite clearly sets out the way in which both the company, in this case called Integrated Health Partners (IHP), and the GPs, might make a profit.

Profits

It talks about plans for five per cent cost savings from patient budgets, and that the less they spend, the more there is left over to share between them. It even proposes that in three to five years, the overall business should become profitable enough to attract City investors. We have established that IHP is involved with a number of consortia in Surrey.

This is an elephant-sized conflict of interest. Professor Kieran Walshe

The head of IHP, who was a former hospital doctor, did not deny that there was the potential for profits and said that it was the case that it would go to the company and the GPs themselves. But Dr Oliver Bernath said there were points for quality of care in order to ensure there was a balance.

At the heart of it, though, is payment for risk.

“What this is trying to do is not just pay someone more and hope that good things will happen but say we only pay a certain reward if good outcomes were achieved and savings were achieved,” Dr Bernath said.

“So in a sense it reduces risk to NHS of overspending as someone else shoulders the risk and has negative consequences if they fail to do so. The whole thing is driven by you can’t just make savings at the cost of patient care quality because the points are related to patient outcomes and patient satisfaction as control mechanisms of course.”

Conflict of interest

But we showed this document to a number of health experts and their reactions were all the same – there is a potential conflict of interest.

In fact, Professor Kieran Walshe, who advises the Health Select Committee on the NHS reforms, said the conflict of interest in this document was
“elephant-sized”.

“What this document says is that the GPs in a commissioning consortium, which is a public body, would let a contract to manage the money of that consortium to a company – an integrated care organisation – that those GPs themselves part own.

Read more in the Channel 4 News Special Report on NHS reform

“So that’s like me as a public servant letting a contract to me or to a company I run and that is a masssive – an elephant sized conflict of interest,” Professor Walshe said.

But, interviewed by Channel 4 News, the Health Minister, Lord Howe, said that the economic regulator – Monitor – would have “substantial powers to bear down on anti-competitive conduct”.

“If there are fears that this sort of thing is going to happen – that money can be saved here and there and lining GPs’ pockets in the process – we will not allow that,” he added.

“That would break the rules that we are setting out surrounding the money voted by Parliament for commissioning of patient care. It will not be allowed – and if there is a lacuna in the Bill, we will put it right.”

There are, of course, already GPs who own private clinics or have shares in them. But currently there is a safeguard in the system and that is that they don’t have their hands on that massive pot of money. Under the new reforms that safeguard will go and all we will be relying on then is that they are totally upfront and honest about their business interest.

And there is more than one way for the conflict of interest to come about.

In Buckinghamshire, Dr Johnny Marshall, runs a “pathfinder” GP consortium. These are the groups of GP practices given the go-ahead by the Government to lead the way on the reforms. Dr Marshall has also been advising the Health Secretary on the reforms.

Dr Marshall told Channel 4 News: “I think we can get a higher quality service and work within an ever challenging financial budget..that is the bit I find exciting.”

Reforms

But Dr Marshall also owns shares in a local company called Vale Health which provides services to the NHS for profit. Currently the local Primary Care Trust decides if a patient can go there. Soon, the consortia will make the commissioning decision. Indeed, the Vale Health website points to the unique business opportunites the reforms present.

Dr Marshall said that the shareholders in Vale Health would not want to see decisions being make about people’s care that were driven by financial gain. But he did admit that there was little in the NHS Reform Bill to deal with this conflict of interest. He said it would be dealt with because “it is something that absolutely has to be managed”.

The Bill is three times larger than the one which set up the NHS in the first place. But there is only one line about conflict of interest on page 227. It, in effect, relies on each consortium to write it into the constitution that they are required to draw up.

'Choice' and the risk to the NHS 
But what if your family doctor had a financial interest in your decision? Perhaps owns the company he is recommending? There is nothing in this bill that precludes a financial conflict of interests, writes NHS trauma surgeon Catherine Blake.  

It is a matter of public record that the Health Secretary, Andrew Lansley, himself has received funds from the very health companies which stand to benefit from his legislation. Publicly funded healthcare will now be delivered by any company or organisation, not just the NHS. Any willing provider is the buzz-word. As a surgeon who has been in intensive medical training for fourteen years (and counting), any willing and able provider might have sounded more reassuring. But maybe that's just my self-interest talking...

Read more from our NHS frontline blog: the reality of 'choice' 

But it is not just individual GPs. Private companies are already primed for these reforms. Elsewhere in Buckinghamshire, The Practice runs NHS GP surgeries, all clustered into a consortium, and owns treatment clinics. At the moment the primary care trust decides where the money goes. Soon, The Practice will make that decision.

No one has really thought about this. Because if they had they would have said it is going to create chaos. Roy Lilley, health policy expert

In a statement, The Practice told Channel 4 News that following the reforms they will “separate, where appropriate, patient care from the commercial commissioning function. Although formal separation is not demanded by pending legislation, we are acutely aware …. that we are not only seen to be transparent and fair, but that we evolve an organisation that supports these objectives.”

Care or cash

Roy Lilley, who is a health policy expert, said that he did not believe that the conflict of interest had been thought through.

“It is certainly not reflected anywhere in the bill and that tells me that no one has really thought about this,” he said. “Because if they had they would have said it is going to create chaos.

“As things stand there is nothing in the bill so you can only conclude that it hadn’t dawned on anybody that you could make a shed load of money out of this perfectly legally.”

Labour’s Shadow Health Secretary John Healey said that they would be arguing the case for an amendment to the legislation to remove the risk of interest.

“We will argue that GPs playing a lead role in commissioning should not be able to profit either directly or indirectly through they companies they are associated with, because I think that is part of the essential ethos of the NHS and is certainly central to retaining trust in their GP and in the NHS itself.”

A spokesperson for the Department of Health said: “The NHS Commissioning Board and Monitor will develop clear binding guidance for consortia to ensure decisions are fair, transparent and avoid any perceived or potential conflicts of interest. Each consortium must also set out arrangements for managing potential conflicts of interest and publish a constitution that details this. The Bill also contains clear duties on the NHS Commissioning Board, and if necessary Monitor, to intervene where there are concerns about the fairness of commissioning decisions.”

But if the Government does not agree to this, the public will ultimately have to rely on doctors being doctors being completely honest because patients will want to know if it is care or cash.