Primary care in Hackney, east London, is facing a shake-up. Nearly 50 GP practices are coming together to form what the government hopes will be among the first of many new "social enterprises" supporting the NHS. This is not a privatisation, or a new arm's-length branch of the public sector, but the creation of a not-for-profit business model that the government hopes will redefine the notion of public service provider.
East London Integrated Care (Elic) is being set up to help local GPs carry out new responsibilities as "practice-based commissioners" - taking control of resource decisions formerly made by the local primary care trust (PCT) about what NHS services patients receive and where. Elic will also begin to provide care directly, starting with ear, nose and throat services supplied by a GP with specialist skills rather than a hospital consultant.
The idea is that services will be more local, cost effective and will make use of the skills already available in the community. However, what makes this initiative stand out is that Elic will be set up with general practice staff in ultimate charge. It will be legally constituted as a "society for the benefit of the community", a form of industrial and provident society, with all 220 GPs, practice nurses and general practice managers in Hackney as its members. Elic will be overseen by a members' council with 10 professional representatives and one representative of patients' interests. Financial surpluses will be reinvested for the benefit of local patients.
If successful, Elic will embody the government's new approach to healthcare delivery. Health policy in recent years has been preoccupied with driving up quality and efficiency by treating patients as consumers and giving them a right to choose among NHS (or even private) hospitals. Now the government wants to broaden its approach by giving patients not only choice but also "voice", with greater direct involvement in the planning and delivery of care.
Social enterprises have come to the fore as a means of both involving patients and encouraging healthcare providers to act as businesses rather than as public monopolies. This is particularly important as some PCTs are beginning to pull out of the provision of community services to focus on their commissioning role, so a new cadre of service providers must be found.
As illustrated by Elic, social enterprises have the potential to give more power to frontline clinicians and to foster a real partnership between professionals and patients. The hope is that this will lead to greater innovation and to services that are responsive to patients' needs. Foundation trusts are currently the most visible face of the social enterprise movement in health. These trusts are "public benefit corporations" and collectively have more than 500,000 members, drawn from patients, the wider public and staff.
Members elect governors who sit as a governors' board, with the power to hire and fire the foundation trust chair and non-executive directors and to approve the appointment of the chief executive. Governors have the right to be consulted on the corporate strategy of the trust.
Clear affinity
Social enterprises have another important attraction for the government. They can retain a clear affinity with public service values while being outside the direct control of the Department of Health - something successive secretaries of state have been keen to engineer. They replace the highly centralised model of public ownership with a new breed of locally responsive and competitive organisations. They are not public sector bodies in the traditional sense, but nor do they fit most people's view of privatisation.
But is this simply a sleight of hand whereby the NHS will be dismantled as a first step in handing it over to the private sector? There are reasons to believe not. The social enterprise sector is already significant in many commercial areas and making a substantial contribution to the general economy. The social enterprise model is not an experiment; it already works, with an estimated 15,000 businesses turning over £18bn annually. The question is whether it would work well in healthcare.
International evidence broadly suggests that not-for-profit healthcare providers offer higher quality care and lower costs than their for-profit competitors. It is too early to judge whether or not foundation trusts are offering a distinct advantage over their predecessors, and there is evidence that the new accountability to members is taking time to bite. However, foundation trusts are large hospitals - many could be quoted on the FTSE 250 - with highly complex management and, on a day-to-day basis, remote from people's lives.
In contrast, primary care presents a rather more encouraging environment for the social enterprise movement. On average, people visit their family doctor four or five times a year, and GP surgeries are located in the heart of the community. Community nurses and health visitors are frequent visitors to many houses. The stake that people have in their community health services is highly tangible; it affects all of us a lot of the time and we are able to judge what it is we want from those that serve us. These are ideal conditions for social enterprises to thrive and for an active membership among staff and patients to develop.
But while the vision may look attractive, a forthcoming report from the King's Fund health thinktank casts doubts about how easily it may be to put it into practice. The government has promised a dedicated development unit and funds to help give birth to new social enterprises in primary care. However, experience in other sectors suggests strongly that such initiatives take time to engineer. Gaining agreement among diverse groups of professionals is not easy, nor is finding the right legal constitution suitable for the particular project. Perhaps most difficult of all is the raising of enough capital to start trading.
The government has made clear that it expects PCTs to raise performance in primary care and make sure that patients have sufficient providers to choose from. It is clear that change is on the way, but will social enterprises be able to constitute themselves quickly enough to take advantage of this?
There is a danger that the desire to deliver rapid improvements will see contracts go to those organisations that can respond most quickly. Many of these will be in the traditional for-profit private sector, and rumours already abound that large high street corporations, among others, are preparing to enter the primary care market.
There is no reason in principle to object to new private sector providers. After all, despite acting as the front door to the NHS, traditional general practice already operates in the private sector. Nevertheless, if the government's vision of a social enterprise presence in primary care is to materialise, more support will be needed - and quickly. Without this support, an opportunity will have been missed.
· Richard Lewis is a senior fellow at the King's Fund. The King's Fund report, Social Enterprise and Community-based Care, will be published in the spring
