Outsourcing NHS services to the private sector is associated with reduced quality of patient care and increased death rates

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Protest outside Parliament against the NHS Health & Care Bill – the quality of healthcare since the bill was introduced has declined as more and more services are outsourced to the private sector

Outsourcing NHS services to the private sector is associated with reduced quality of patient care and increased rates of deaths from treatable causes, according to an analysis published in The Lancet Public Health journal.

Findings from the study suggest increased privatisation of health services in England between 2013 and 2020 was linked to higher rates of treatable mortality – deaths considered avoidable with timely, effective healthcare – indicating a decline in the quality of healthcare over the period.

The study is the first comprehensive assessment of health service privatisation in England conducted since the introduction of reforms in 2012 encouraging greater outsourcing.

The effects of the Health and Social Care Act on healthcare quality have been contested. Since it was introduced, worsening trends have been observed for some indicators of healthcare quality, including treatable mortality rates.

However, a lack of data suitable for analysis meant no studies until now had investigated links between outsourcing at regional health board level and health outcomes.

‘The unparalleled data utilised in this study enabled us to conduct the first rigorous analysis of one the most controversial health care reforms in England’s recent history,’ said study author Benjamin Goodair of the University of Oxford.

‘While some have argued the Health and Social Care Act would improve the performance of health services by increasing competition, our findings add merit to long-standing concerns it could instead lead to cost-cutting and poorer health outcomes.’

The authors analysed a new data set showing how much each regional health board spent on outsourcing between 2013 and 2020.

Changes to the quality of health services were determined using a statistical analysis to investigate associations between outsourcing and treatable mortality, a key measure of the effectiveness of timely healthcare interventions.

Further analysis looked for any association between outsourcing and preventable mortality – deaths mainly avoidable with effective public health, not medical interventions – which is not regarded as a measure of healthcare quality.

The data contains more than 12,700 files containing details of outsourcing expenditure from regional health board websites.

This yielded data on over £204 billion of expenditure – comprised of more than 645,000 individual payments – for 173 of England’s 191 (as of 2019) regional health boards between April 2013 and February 2020.

The analysis suggests overall levels of outsourcing in England increased consistently from 2013, rising from less than 4% to more than 6% of total regional health board spend by 2020.

In total, £11.5bn was spent outsourcing health services to the private sector over the period, with the amount varying considerably by individual health board.

The largest increases in outsourcing spend were on business and IT support, with steady increases in spending on healthcare businesses, social work, and transport companies.

The statistical analysis showed that an annual increase in outsource spending of 1% is associated with a rise in treatable mortality of 0.38% (0.29 deaths per 100,000 population) the following year.

Based on observed changes in outsourcing spend and treatable deaths for each health board, the analysis shows 557 additional deaths between 2014 and 2020 might be attributed to changes in outsourcing.

There was no association between outsourcing and rates of preventable mortality.

This further suggests that the relationship between outsourcing and treatable deaths is linked to quality of care, rather than a consequence of general trends in health outcomes in the population.

Study author Dr Aaron Reeves, of the University of Oxford, said: ‘These results clearly have implications for the NHS privatisation debate, suggesting that increased outsourcing to the private sector could lead to a decline in the quality of care provided to patients.

‘While more research is needed to determine the precise causes of the declining quality of healthcare in England, our findings suggest that further increases in NHS privatisation would be a mistake.

‘The findings of this research are timely as the way England’s health boards are organised is set to be overhauled. This creates a key moment where the role of the private sector within the NHS must be closely scrutinised.’

The authors acknowledge some limitations to their study.

Major changes to regional health boards since 2013 limited the ability to precisely measure outsourcing before then, or to conduct before-and-after analyses.

The findings are not evidence of a causal relationship between outsourcing and mortality rates, so it cannot be ruled out that other factors may also be involved.

Files on outsourcing do not contain details of specific services provided by suppliers, meaning more research is needed to determine if certain services are the main cause of the trends observe.

Writing in a linked Comment, Professor Andrew Street of the London School of Economics and Political Science, who was not involved in the study, said: ‘Arguments have long raged about what role the private sector should play in the United Kingdom’s health system, where provision is dominated by the National Health Service (NHS).

‘Despite the inability to establish a causal mechanism, the study adds to the evidence base examining the impacts of privatisation on the health system in England.’

On the prospect of further privatisation in the English health system, Professor Street said: ‘For-profit providers may secure greater profit for their shareholders by being innovative and quick to adopt the latest technologies. But a faster route to making profits might be to compromise quality.

‘The only protection against this double-edged sword is via the contract: quality standards must be fully spelt out, there must be careful monitoring of performance, and there must be strict enforcement when standards fall short.’

Meanwhile, although patients and doctors expect drug regulators to provide an unbiased, rigorous assessment of new medicines before they hit the market, an investigation published by The BMJ today has found that industry money permeates the globe’s leading regulators, raising questions about their independence, especially in the wake of a string of drug and device scandals.

Over the past decades, regulatory agencies have seen large proportions of their budgets funded by the industry they are sworn to regulate, explains investigative journalist Maryanne Demasi.

Industry fees to the US Food and Drug Administration (FDA) have increased 30 fold – from around $29m in 1993 to $884m in 2016, while in Europe, industry fees now fund 89% of the European Medicines Agency (EMA), up from 20% in 1995.

In 2005, the UK House of Commons’ health committee evaluated the influence of the drug industry on health policy.

But nearly two decades on, little has changed, and industry funding of drug regulators has become the international norm.

The BMJ asked six leading regulators, in Australia, Canada, Europe, Japan, the UK, and US, a series of questions about their funding, transparency in their decision making (and of data), and the rate at which new drugs are approved.

Of these, Australia had the highest proportion of budget from industry fees (96%) and in 2020-2021 approved more than nine of every 10 drug company applications.

Australia’s Therapeutic Goods Administration (TGA) firmly denies that its almost exclusive reliance on pharmaceutical industry funding is a conflict of interest (COI).

But in Australia, experts have called for a complete overhaul of the TGA’s structure and function, arguing that the agency has become too close to industry.

Sociologist Donald W Light of Rowan University in New Jersey, US, who has spent decades studying drug regulation, said: ‘Like the FDA, the TGA was founded to be an independent institute.

‘However, being largely funded by fees from the companies whose products it is charged to evaluate is a fundamental conflict of interest and a prime example of institutional corruption.’

Concern over COIs is not just directed at those who work for the regulators but extends to the advisory panels intended to provide regulators with independent expert advice, notes Demasi.

Of the regulators approached by The BMJ, only Canada’s did not routinely seek advice from an independent committee and its evaluation team was the only one completely free of financial COIs.

European, Japanese, and UK regulators publish a list of members with their full declarations online for public access, while the FDA judges COIs on a meeting-by-meeting basis and can grant waivers allowing participation of members.

Joel Lexchin, a drug policy researcher at York University in Toronto, said: ‘People should know about any financial COIs that those giving advice have so that they can evaluate whether those COIs have influenced the advice they are hearing.

‘People need to be able to trust what they hear from public health officials and a lack of transparency erodes trust.’

Demasi acknowledges that there have been improvements in the transparency and accessibility of trial data, but points out that most regulatory agencies do not undertake their own assessment of individual patient data, but rather rely on summaries prepared by the drug sponsor.

Industry fees are also used to help speed up approval of new treatments, she adds.

Today, all major regulators offer ‘expedited pathways’ but there is concern that quicker approval decisions have resulted in new drugs that were more likely to be withdrawn for safety reasons, more likely to carry a subsequent black box warning, and more likely to have one or more dosage forms voluntarily discontinued by the manufacturer.

Critics also point to a regulator-industry ‘revolving door’ that has seen many agency officials end up working or consulting for the same companies they regulated.

Experts say that both small and large structural changes are necessary to help restore regulators’ ability to carry out independent decision making, free of industry influence.

Donald Light argued that regulators now need their own watchdog and called for a drug and vaccine safety board, independent of the drug regulator, with the authority, staffing, and funds to investigate incidents of patient harm, saying: ‘Countries have independent safety boards for airlines and their passengers. Why not for drugs and patients too?’