Outsourcing of health-care services to the private sector by English Clinical Commissioning Groups and mortality rates, 2013–20: an observational analysis

Abstract Background Outsourcing services to for-profit organisations within a publicly funded health-care service, which runs alongside private provision in a two-tier system, aims to increase competition between health-care providers, driving up their performance. However, there are concerns that this approach might lead to cost-cutting by for-profit providers and poorer outcomes for patients. We aimed to assess whether increased outsourcing to the private sector is associated with changes to treatable mortality rates, and, therefore, with quality of health care. Methods We constructed a database compiling every procurement contract over 7 years (2013–2020; n=647 541, total value £204·1 bn) across England's 173 Clinical Commissioning Groups (regional health boards). We identified institutions registered with Companies House that supplied regional commissioners in England's NHS and aggregated this information with local mortality data for each year. By analysing the different changes to commissioners' spend on private sector providers, we estimated the association between outsourcing and the following years' age-standardised treatable mortality rates (deaths that can be mainly avoided through timely and effective health-care interventions, including secondary prevention and treatment). We accounted for year and individual fixed effects and controlled for multiple covariates, including average household income, Local Authority spending, and population demographics. Findings Average levels of outsourcing increased over this period, from 4·9% of the £14·8 billion total spend from April to December, 2013 to 6·8% of the £5·0 billion recorded in the first three months of 2020, but the extent of change varied substantially between regional commissioners. An annual increase of one percentage point of outsourcing to the private sector corresponded with an annual increase in treatable mortality in the following year of 0·34% (95% CI 0·12–0·55; p=0·0080), or 0·23 deaths per 100 000 population (from a mean population of 275 840 per commissioning group). Interpretation The incorporation of private sector providers into England's NHS appears to correspond with a decline in the quality of health-care services. Strengths of this research lie in the novel dataset, which enables longitudinal evaluation of outsourcing. Unfortunately, precise mechanisms driving our finding are hard to isolate because the services delivered by providers and their case mix are not recorded in the contract and mortality data. Funding Wellcome Trust.