The effect on patients' rights of private commissioning of NHS services

Thames Valley Strategic Health Authority has proposed procuring “the provision of management services to the Oxfordshire PCT(s)… Bids would be welcome from NHS teams, the voluntary and private sector” (www.tvsha.nhs.uk/board-papers-12th-october-2005/Board_paper_62-05_CPLNHS.pdf). This, the authority says, will increase the culture of “choice and plurality in the NHS.” But this is not just a matter of NHS policy: there are also serious questions concerning patients' rights.

Private companies' fundamental duty is not to serve the public interest

Until now, the commissioning function of the NHS has been done by public health authorities, currently primary care trusts. Public authorities are governed by judicial review, which regulates public bodies in the performance of their statutory activities. The values of such bodies are based on public service and were stated in the first report of the “Nolan” Committee on Standards in Public Life as selflessness, integrity, objectivity, accountability, openness, honesty, and leadership (HMSO, Cm 2850).

Does this framework apply to private commissioners? Private sector companies are different from public authorities. They are not created by statute. Their fundamental duty is not to serve the public interest. Instead, they are often motivated by profit and the interests of their shareholders. These legitimate objectives are often achieved by entering into contracts with third parties, but this gives rise to difficult questions.

How would it affect patients' rights and remedies if they were refused treatment by a private commissioner?

Credit: THE SENTINEL

Take Barbara Clarke's claim for trastuzumab (Herceptin) (BMJ 2005;331: 796). Would her rights and remedies have been affected if she had been refused treatment by a private commissioner? The first question is whether private bodies are subject to judicial review. As the Court of Appeal has said, “If the source of power is a statute… then clearly the body in question will be subject to judicial review. If, at the other end of the scale, the source of power is contractual… [it] is not subject to judicial review” (R v Panel on Take-overs and Mergers [1987] 1 All ER 564). For example, Barclays Bank, Esso, and GlaxoSmithKline are private sector companies. They are not subject to judicial review.

Equally, we now live in a “mixed economy” welfare state. Many private sector companies provide public services, and courts have begun to conclude that judicial review may be available against them (for further discussion on this, see C Newdick, Who Should we Treat? Rights, Rationing and Resources in the NHS, Oxford University Press, 2005). However, exactly when and how has yet to be settled. Logically, if judicial review is available, the effectiveness of the review must depend on the contract entered into with a public authority. Mrs Clarke's claim, for example, would depend on knowing what the company had contracted to commission. These questions can be answered by seeing the contract it has entered, but this may be difficult, because of the Freedom of Information Act. This act does not apply to private sector companies. If an NHS body enters a contract with a private commissioner, although the NHS body is subject to the act, the act specifically excludes disclosure of information that is confidential or likely to prejudice commercial interests. Private sector companies are entitled to seek the protection of this exclusion, as their obligations are primarily to their shareholders.

Contracts between the Department of Health and independent sector treatment centres provoke the same problem. Until now, at least one of the parties to such contracts has been a public body and therefore subject to the remedies mentioned above. But what if the contract is between a private commissioner and a private provider? This is likely to make it very difficult to get useful information about the contract, because the private organisations would often wish to prevent disclosure in their own commercial interests.

As a result, we cannot be sure whether the act would give Mrs Clarke access to commercial information on what private contractors have promised to do. Alternatively, could she pursue her rights under the Human Rights Act? This presents a third question. This act applies only to public authorities and bodies providing “functions of a public nature.” Does this exclude private commissioners? Perhaps private bodies making rationing decisions about NHS resources are performing functions of a public nature, but this remains to be decided. There is a limited case law on the subject. The High Court has ruled that a private psychiatric hospital treating NHS patients was a public body (R v Partnerships in Care Ltd (2002). However, in the same year the Court of Appeal deemed that the charitable nursing home caring for local authority residents was not, saying: “The fact that [the home] is a large and flourishing organisation does not change the nature of its activities from private to public” (R v Leonard Cheshire Foundation [2002] 2 All ER 936). This difficult issue remains to be resolved in relation to private NHS commissioners.

Patients who are subject to private commissioners may not enjoy identical rights to those within statutory primary care trusts. Does this present the prospect of two tier rights in the NHS? In an era committed to the agenda of choice, well informed patients might choose to be served by public authorities that are unambiguously subject to judicial review, freedom of information, and the Human Rights Act.