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Editor's blog Wednesday 2 March 2011: Does IHP spell the end of the NHS? No, probably not.

Guardian social affairs editor Randeep Ramesh has, in association with Channel 4 News, broken this story about private healthcare firm Integrated Health Partners' plans to turn underspends in GP commissioning consortia's annual budgets into profits by treating patients at 95% of the cost of the NHS.

The Channel 4 News web copy on this story, by Victoria MacDonald, is here.

This assumed 5% saving, which the Guardian / C4 News report puts at £40 per patient, would be booked as "profit", and IHP's aim is to float on the stock market in 3-5 years' time. If the scheme works - for which it would need to cover a minimum of 2 million patients, registered with 1,000 GPs. The article says that if it achieved that coverage (c. 5% of England's population), IHP's potential annual earnings would be about £80 million, potentially earning individual GPs almost £1 million.

If it works.

Will it?

There are some abstract caveats. A lot of people will hate this idea of profiting from underspands of public money viscerally, and a way might quickly be found to block it. If it is allowed, it will be scrutinised from all sides relentlessly.

Then, the question of reinsurance would arise. A few high-cost patients would blow the savings budget in short order.

That might or might not happen - but is it too much to assume that someone with an expensive illness and a bloody mind might pop down to a practice in the scheme and register?

Because the Bill is quite clear that practices will not be allowed to select their patients.

Track record
It's always fun to have a nose through the track record.

Integrated Health Partners, which styles itself the UK's first managed care organisation, is run by ex-McKinseys ex-neurosurgeon Oliver Bernath as managing director.

Bernath launched IHP in October 2007, announcing it as "a new business model that redesigns the General Practitioner/specialist interface by integrating primary and secondary care for National Health Service patients. IHP integrates doctors, consultants and all other clinicians in one team to create better and more efficient care for patients.  This model has been used in the U.S. (in companies such as Kaiser Permanente) and Europe"

IHP was partnered with property firm Babcock and Brown, which went bankrupt in 2009.

However, B&B's successful PFI / PPP bit was hived off in 2009 - and became Amber Infrastructure Group, taking with it B&B's various NHS LIFT projects.

You'll be astonished to hear that three former Babcock and Brown managers run Amber Infrastructure Group.

In 2008, Bernath spoke at a Civitas debate on polyclinics (the audio of his speech is here). He told delegates, "Commissioning as it’s set up in England is trying to do too much; the commissioner should determine what they want to buy and at what price but not get into the business of trying to tell the provider how to do their job; you need someone on the provider side to do that. Otherwise, the buyer and the seller end up being managed by the same organisation, which makes no sense.

"It should be up to the providers to display value, in order to see where the waste and value lies. For example, a patient waiting eight weeks for an MRI scan is eight weeks of waste, but there’s no price tag put against this wait in terms of value to the patient. If there was, and if the utilisation rate of an MRI scanner fell from 120% to 80% yet there was no wait, in pure cost terms this would be less profitable, but in value terms it may well be more".

IHP were co-producers of the 2009 NAPC manifesto, which stated, "Within 'Community Health Collaboratives' the patient voice should not only be heard in the design of local services but also in the prioritisation of the use of freed up resources, what we are calling the 'Health Dividend'."

How are IHP doing now?

They tell Ramesh that they are in discussion with three aspiring consortia (one of whom is probably Mid-Surrey Commissioning Group, by the look of their November 2010 board minutes.

The IHP website shows that they work across two former PBC groups in Guildford, Surrey, covering 23 GP practices covering c. 180,000 patients.

Anything we should say about Guildford, Surrey? Well, if you look it up on the Index of Multiple Deprivation Health Disability and Deprivation Domain, it will confirm i data whjat I can tell you anecdotally - Guildford is a seriously well-off area.

So generalising your assumptions from improving primary care performance a bit there might be on the heroic side.

But Bernath might have written his commercial obituary with his tone-deaf comments to Ramesh: "I don't understand the emotional arguments over public and private in the NHS. If you ask most people whether they could have private healthcare or the NHS they would choose private".

This is not a man who seems aware of the declining take-up of private medical insurance, nor of the NHS's highest-ever public popularity.

Anyway, here's a nice photo of Our Saviour Andrew Lansley with Bernath and colleagues. Enjoy.