Replace our failing hospitals with private clinics, demands CBI

The highly-influential CBI report, obtained by the Standard, calls for badly run health services to be shut down to improve competition and raise standards of patient care.

And as a last resort, it could mean closing entire hospitals if they fail to meet new healthcare standards.

The report comes just before Lord Darzi's review of the NHS and will raise fears over the wholesale privatisation of the service.

Its publication also comes amid anger over the introduction of polyclinics, proposed by Lord Darzi himself. The report, due to be published on Friday, calls for health bosses to deal with consistently under-performing hospital departments, GPs' surgeries and clinics.

It states: "Failure in the NHS - clinical and financial - is not new. But until recently it has often been unspoken. Patients often feel the need to take what they are given: often this is very good, sometimes it is poor. This inertia in the system also prevents poor providers being driven from the market.

"But when underperforming providers are propped up, the NHS cannot improve."

The report calls for failing services to be incorporated into successful hospitals, and also for the introduction of privatelyrun centres within the NHS, which will increase competition and improve standards while remaining free to patients.

A senior CBI source added: "If hospitals are rated as weak for consecutive years then potentially they should be shut down. We are talking about addressing failing services.

"At the moment you are stuck with your provider depending on your postcode. By bringing in new private companies, patients could chose a GP or hospital on their level of service. It could lead to a radical overhaul and mean fewer people having to go to hospitals."

The recommendations will send shockwaves through 14 underperforming hospitals and trusts in London, which were given the worst ratings - classified as "weak" - in the most recent Healthcare Commission assessment.

But health professionals immediately criticised the CBI report, claiming the proposals were not workable.

A BMA spokeswoman said: "You can't dismantle hospitals sector by sector. They are inter-dependent. If you take away one you threaten to destabilise it - it becomes unviable. It is a vicious spiral of descent.

"If there are problems within a hospital, the answer is to look at what is causing those problems and put them right, not sacrificing services."

Dr Neil Bentley, the CBI's director of public services, said: "This is not about privatisation. Most GPs are already private contractors to the NHS and run their surgeries as businesses. It is instead about value for money about fairness.

"Tackling health inequalities requires taking radical action to fix these problems."

But Shadow Health Secretary Andrew Lansley said more regulation was needed if there was to be valuable healthcare competition.

He said: "You need proper regulatory structure where failing hospitals are not just subsidised and allowed to carry on as before but where action is taken to step in and change management."