Under Tony Blair, the threat of the private sector was used to try to change the behaviour of hospitals and consultants.

Independent Sector Treatment Centres (ISTCs), run by private companies and staffed by doctors mostly from overseas, were given contracts for carrying out elective operations such as knee and hip replacements and cataract operations. Although the centres have conducted only a small minority of such operations and many have worked well below capacity, their effects have been very significant, ministers argue.

This is because the threat of competition, when combined with other policies such as patient choice and payment by results, has forced NHS hospitals to improve their own performance. Waiting lists have melted away not because ISTCs have performed millions of operations but because hospitals have raised their game in response.

The primary care services offered by GPs have until now been largely exempt from such competition. But things are now changing. A survey last year by Doctor, the weekly medical newspaper, indicated that 40 GP practices across England were being managed by private companies – including one in Soutwark, South London, by a company set up by two of the BMA leaders who negotiated the GP contract, Dr John Chisholm and Dr Simon Fradd.

The biggest company in the sector is Chilvers McCrea, a company founded in 2002, which runs 15 practices. Aston Healthcare has seven practices in Liverpool, and IntraHealth four (one in Darlington, two in Co Durham, and one in Bedfordshire.)

All these are relatively small companies that have so far won more contracts than the mighty UnitedHealth Europe, despite the US giant employing Simon Stevens, Mr Blair’s former health adviser, and Richard Smith, former editor of the British Medical Journal. UnitedHealth won an early contract to run a practice in Cresswell, Derbyshire, but that went sour when local activists won an Appeal Court ruling to throw out the contract signed by the PCT.

Derbyshire PCT was forced to start again and this time Chilvers McCrea won. Its chairman and founder, Dr Rory McCrea, said at the time: “We are an NHS company run by doctors and nurses, following NHS principles and understand all the issues and public concerns.”

But these contracts have largely been won in areas where GPs have been reluctant to stick up their brass plates. In spite of their aversion to the private sector, GPs are businesses who can pick and choose where they want to practise, and relatively few favour sink estates or inner cities.

When Gordon Brown took over at No 10, there was speculation that the experiment with the private sector was coming to an end. The Health Secretary, Alan Johnson, pledged that there would be no third waves of ISTCs. But Mr Britnell’s letter does not imply that competitive tendering be restricted only to underdoctored areas. The NHS Alliance chairman, Dr Michael Dixon, has said that there may be a “creep” of such alternative provider medical services into areas where there is no problem with provision.

Explore UK News

• Crime News

• Education News

• Health News

• Scotland News

Times Recommends

• Fern Britton: 'I still can't see that I was wrong'
• Extreme cooking
• Easy French: Tarte Tatin