Is Britain a plutocracy? According to the NHS reforms...

The effective privatisation of the NHS, currently passing through the Commons, manages in one bill to sum up so much of what is wrong with British politics.
Oliver Huitson
5 February 2011

The effective privatisation of the NHS, currently passing through the Commons, manages in one bill to sum up so much of what is wrong with British politics. The economic orthodoxy on which it is justified is crumbling, hastened by the colossal market failure that was the banking collapse of 2008. It is heavily opposed, not just by the public and the GPs, but by countless health officials and institutions. It is almost completely lacking in democratic legitimacy; teetering only on a solitary and deeply misleading line in the Conservative manifesto. It is a direct breach of an explicit campaign pledge, that there would be no more “top-down reforms” of the health service. And, it has emerged, the health firms who stand to profit have bankrolled the Conservative party to the tune of £750,000. This would shame a banana republic.

Under the proposed upheaval, the NHS budget, all £80bn of it, will pass to GPs who will assume responsibility for commissioning treatment. Your health needs will no longer be governed by faceless apparatchiks, but will be in the hands of your familiar local doctor. This, advocates claim, will return ‘power’ and ‘choice’ to the patient. In reality, GPs are doctors, not accountants; they are trained in medicine, not the complex world of commissioning services in public-private markets. In addition, the bonds of trust between GP and patient are likely to erode as doctors will no longer be judging treatment on medical grounds alone. As has already started to materialise, commissioning will likely be dominated not by GPs but by private consortiums acting on their behalf.

The regulator charged with overseeing the new system, which is called Monitor has had its primary role changed to that of “promoting competition”. The NHS will be operating in a market exposed to the full force of EU competition law which can mean that if a commercial bidder decides to lower its price to push out, say, an otherwise preferable local consortium, the GPs will be obliged to contract with it or be exposed to legal action. In this way "competition" can mean the removal of ‘choice’.

Like most privatisations, the bill is heavily opposed; only a quarter of GPs support the move. The National Audit Office issued a candid warning on the scale and nature of the reforms, suggesting there was a real likelihood that the NHS may buckle under the pressure. Serious concerns have also been raised by the independent King’s Fund, the Commons health select committee and the Royal College of General Practitioners. As for the demos, only 27 per cent of the public support the move.

At first sight it appears difficult to find anyone who does support the bill. Indeed, backing seems largely restricted to Tory party donors. So strong is support amongst owners of private health firms that they have donated around £750,000 to the Conservative party under Cameron’s leadership, including £21,000 of direct funding for the Health Secretary, Andrew Lansley. To understand the forces that are really driving this privatisation, the SpinWatch video on healthcare lobbying is essential viewing. If former Health Secretary Patricia Hewitt’s example is anything to go by, Lansley can expect to enjoy his retirement from frontline politics if he can force this bill through. Hewitt cashed in on her time at the Health ministry with highly paid positions at Boots and Cinven, a private equity firm specialising in health.

Short of support from almost anyone except those who will directly profit, namely health firms, on what authority is the nation’s largest institution being turned into a market place? With no hint of shame, ministers point to the fifth bullet point of their manifesto section on health, which reads:

“We will strengthen the power of GPs as patients’ expert guides through the health system by enabling them to commission care on their behalf

In the space of those eight modest words, the Coalition is claiming legitimacy for the dismantling of the NHS as we know it. In its duplicity and cynicism, this is hard to match. Even were the proposal candid and honest, as such an enormous change requires, the Conservatives failed to win the election; less than one in four of the electorate voted for them. Nor is there any mention of the bill in the Coalition agreement. Asked why the plans were kept secret on the BBC’s This Week, Michael Portillo replied “they didn’t believe they could win an election if they told you what they were going to do”. 

As to how the reforms will unfold, I suggested recently that the NHS would have its prices pegged artificially high to accommodate their new and supposedly more ‘efficient’ competitors: the private health firms. It has now emerged that “levelling the playing field” may instead be achieved by, in effect, artificially lowering private sector prices for tendering purposes. In the “Health and Social Care Bill 2011 Impact Assessment” document, it is alleged that for every £114 of costs incurred by private firms, the NHS would only pay £100. The alleged “distortions” responsible are the result of reality jarring against economic dogma – no private firm can match the NHS on price. In a forensic post in OurKingdom Brian Landers examines the absurdities of the argument here. The likely result will be that this “distortion” ratio will mean a bid of £114m from a private firm is ‘cheaper’ than a £100m bid from the NHS. This is the Orwellian world of market fundamentalism: 2 + 2 no longer equals 5, it equals 3.51. 

A market system relies on failure and its natural conclusion - oligopoly. When failure has shrunk the market far enough, lack of competition could see prices soaring. The “failure” of a hospital could also lead to some explosive scenarios. Not only will local residents have to travel much further away for treatment, but under our PFi commitments we could still be paying for those disused hospitals for decades. Health is too important to “fail”, rendering market solutions not only unwanted but dangerous.

Founded in 1948 when the nation faced far more severe economic pressures, the NHS remains the most substantial legacy of the post-war era. The neoliberal decades by contrast have produced not a single institution that bears comparison; the political class have instead busied themselves selling off the national inheritance, leaving nothing to future generations but debt. The NHS is now being privatised without a public mandate, in the face of warnings from across the medical profession and independent bodies and in clear breach of an electoral pledge. Both the Tory party and Lansley himself have received substantial payments from the firms who will profit from the break-up of our health service. We may not quite be an “elective dictatorship”, but this does have the feel of a nation sinking into an elective plutocracy

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