NHS: still on the road to privatisation

The Coalition has agreed to modify the NHS bill, based on recommendations made during the "listening exercise". We must not accept the bill due to these minor tweaks, which simply present a few more bumps on the road to privatisation
Oliver Huitson
15 June 2011

On Monday, the Future Forum unveiled its long-awaited report on the Coalition’s NHS bill. Having now agreed to implement the majority of its recommendations, the Conservatives are keen to portray the episode as an example of a government willing to “listen” and improve “where it hasn’t got things right”. The reality is that their initial bill was a transparent attempt to privatise the NHS. Only the prospect of the Lib Dems voting it down forced any change. This was not a “listening exercise”, it was a last ditch attempt  to push the bill through with the minimum concessions necessary. The primary function of the bill remains in place: to introduce private sector provision throughout our health service. 

The argument for Andrew Lansley’s NHS bill has been tenuous from the outset, encountering continual and vocal opposition. Recognising that the bill’s defeat would be catastrophic for his premiership, Cameron has desperately tried to repackage it whilst keeping the fundamentals in place. It has been a master class in the rhetoric and evasions of privatisation. But with minor tweaks there lies a danger that the bill will be accepted, both in the legislature and by the public, on the basis that it is less destructive than Lansley’s original proposals. This mentality of concessions and minor victories must be avoided. Instead, what must be continually asked is whether the bill is acceptable and legitimate in its current form – does it leave the NHS as a nationalised, coherent health service, and did the public vote for it?

Is major reform to the NHS necessary? 

As tends to be the case with reforms that resemble the P word, the Conservatives have defended the NHS bill with an elaborate and opaque display of rhetoric. A staple soundbite is the statement that ‘everyone agrees the NHS needs to change’; this is repeated in virtually every Conservative speech and briefing on the issue. However, Cameron needs to explain to the electorate why, if change was so clearly needed, he made a public commitment not to undertake any major top-down reforms. That he has broken his word so early in his premiership reflects poorly on his character. Furthermore, far from being broken, the NHS the Coalition inherited was one of the best performing health services in the world:

A US report comparing the health services of 7 major economies ranked the NHS 1st in terms of efficiency, and 2nd overall. The US, which has vast private sector involvement and much greater use of GP commissioning, was ranked last despite spending more than twice as much per head as the UK [i]. In a report compiled by Unison, research is cited showing that the administration costs in the UK are around 12% as opposed to more than 30% in the US. On management costs, the UK spends roughly 3% of its overall budget as against 17% in the USA [ii]. Even GP commissioning itself was trialled in the US; the results were dismal:

“…Dr Lawrence Casalino, an expert on a similar US health care policy, warned that only around a tenth of such consortiums were successful in the states. Casalino [said] that the US experience is that there are ‘a great many ways to get the new system wrong and very few ways to get it right’.” [iii]

The supposed consensus that everyone agrees there must be change is possibly not shared by the majority of the public: before the Coalition came to power, the NHS was enjoying its highest ever levels of public satisfaction [iv]. Despite being ranked as one of the most efficient and equitable health services in the developed world, the Conservatives are determined to remodel it in the image of one of the least efficient - all in the name of “improving efficiency”. Something clearly doesn’t add up here. 

Having finally given up the line that the NHS is in bad shape, Lansley and Cameron changed tack. It is not the NHS in its current form that they are now so concerned over, but rather that “enormous financial pressures loom large on the horizon”, as Lansley told the Telegraph recently [v]. That pressures on the NHS will grow rapidly due to demographic changes is not in dispute, but what must surely be asked is how Lansley’s plans could possibly improve matters. Available evidence and working examples seems to suggest the opposite – that large private sector involvement and GP commissioning will in fact see costs rise. This won’t fix the funding issue, it will amplify it.

For a more thorough examination of the Conservative proposals, Allyson Pollock and David Price’s publication, The health and social care bill: how the secretary of state for health proposes to abolish the NHS in England, is useful reading [vi]. That the proposals apply to England only is frequently overlooked. If the votes of Scottish and Welsh MPs help carry the bill while their own health services remain fully nationalised, the democratic deficiencies of the Union will again be in the spotlight.

Criticisms of the bill

In February, when I last covered the NHS proposals, there were already widespread concerns from the public, nurses, doctors, the media, health professionals, the NAO and the King’s Fund [vii]. Indeed, it was difficult to find support for the bill outside the ranks of the Conservative party, its donors, and private health providers. Since then, opposition has grown only further.

Steve Field, who has led the forum tasked with reviewing the bill, issued a number of serious concerns ahead of his final report on the issue. Describing the bill as potentially “destabilising”, he was particularly critical of the centre-piece of Lansley’s proposal – the use of competition to allocate resources. Monitor’s primary role of promoting competition requires “significant changes” and instead it must be tasked with developing co-operation and integration. The market approach, he argues, would “destroy essential services” [viii]. Destroying services run by the state, however, is a primary function of the bill; it is the mechanism by which services will be moved to private providers – the ultimate goal of Cameron’s ‘top down reorganisation’.

The BMA is equally damning on the role of competition. In a briefing released in March, it states:

“Research indicates widespread disquiet about these changes in the medical profession – 89% of doctors who responded to a recent MORI survey agreed that increased competition in the NHS will lead to a fragmentation of services and 65% agreed that increased competition will reduce the quality of patient care.” [ix]

Competition, it continues, could lead to a reduced emphasis on patient care, decisions being swayed by fears of litigation, fragmentation of long-standing and effective partnerships and the closure of existing, high quality units (ibid). Again, what looks disastrous to the profession and the public is in fact essential to those who wish to transform a unified and nationalised health service into a profit-led market.

When Lansley first launched his bill, he was keen to stress the central role of the local family GP. Yet GPs themselves have voiced continued doubts over the direction the reforms are taking. On May 9th, the Royal College of General Practitioners released a paper setting out a number of areas for concern. As well as fears over pressures on GP’s confidentiality, the possible strains on the patient-GP relationship and potential conflicts of interest in the commissioning setup, the paper is highly critical on the competition issue: 

“Monitor’s role should be amended so that it has a duty to deliver collaboration, co-operation and value for money for the taxpayer rather than focus on enforcing competition… Given our serious concerns about the implications of cost, competition and the role of Monitor in the new NHS we recommend substantial review of all aspects of Part 3 of the Bill.” [x]

On the proposed legislation, Lord Owen, a former health minister, has criticised the “staggering ineptitude” of Lanlsey’s plan. The bill “challenges vital aspects and principles of the NHS”, he says, in clear breach of the Coalition agreement to “stop the top down reorganisations of the NHS that have got in the way of patient care” [xi]. On the use of the external market and competition, his views are very much the consensus.

Even within parliament the response is scarcely less critical. The cross-party Commons Health Committee issued a report on April 5th calling for major changes to the commissioning structure. ‘GP Consortia’, it argues, are inadequate and unsuitable; far wider representation is needed including social care representatives, elected members such as councillors, nursing representatives, a representative of hospital medicine and a public health expert. On top of which, much stronger measures must be put in place to provide appropriate levels of transparency and accountability:

“…the Boards of NHS Commissioners should be required to meet in public, publish their papers and comply with the rules of the Committee on Standards in Public Life with regard to conflicts of interest amongst board members.” [xii]

One might expect the Telegraph to be natural supporters of the bill, but even there the proposed shake-up is causing jitters. On the benefits of current private sector involvement, Max Pemberton notes the difficulty in assessing its merits because, like with PFi, the Department of Health refuses to release contractual details due to “commercial sensitivity”. Where private firms are involved, their interests generally override the public’s. Of the data that has been uncovered, by Allyson Pollock, the evidence highlights: 

“…horrendous examples of profligacy and waste. It also provides the definitive answer that private-sector involvement haemorrhages cash out of the health-care system and does not improve patient care.” [xiii] 

Who benefits?

Even for a man of Cameron’s PR talents it is difficult to run a tight ship in such murky waters. Problems began when it emerged that private health firms had made over £700,000 in contributions to the Conservative party [xiv], including £21,000 to Lansley’s personal office [xv]. Later, one of Cameron’s advisors, Mark Britnell, gave an unusually candid insight into the plans when delivering a speech to health care executives:

"GPs will have to aggregate purchasing power and there will be a big opportunity for those companies that can facilitate this process … In future, the NHS will be a state insurance provider, not a state deliverer… The NHS will be shown no mercy and the best time to take advantage of this will be in the next couple of years." [xvi]

If advancing the role of private health providers is the primary goal the legislation no longer looks so wildly incompetent; it starts to look quite coherent. It is hard to credit the idea that dismantling the NHS is not a long-standing Conservative aspiration (one shared by New Labour, in fact). Lansley’s initial bill was itself very plain in its intent, as were the comments of Conservative MEP, Daniel Hannan, who described the NHS as a “60 year mistake” in 2009 [xvii]. Liberal Conspiracy recently published online a pamphlet written by John Redwood and Oliver Letwin, now Minister of State, in 1988. The proposals sound familiar:

1)    Establishment of the NHS as an independent trust.
2) Increased use of joint ventures between the NHS and private sector
3) Extending the principle of charging
4) A system of ‘health credits’.
5) A national health insurance scheme.

Once private providers have taken over sufficient control of health provision, the step to co-payments and an insurance scheme would be comparatively minor, as Britnell’s comment suggests. The pamphlet goes on to ask,

“But need there be just one leap? Might it not, rather, be possible to work slowly from the present system towards a national insurance scheme?”

Apparently so. The bill is hardly the work of a rogue Health Minister, it is entirely in tune with long-standing Conservative ideology. Asked if the NHS could really become ‘a mere franchise’, Eamonn Butler of the Adam Smith Institute replied “It’s been 20 years in the planning…[xix]

Cameron, Lansley and Clegg have repeatedly stated that there will be no “privatisation” of the NHS. Their platitudes on the issue are so rife with faux-indignance as to be almost believable. This is the same Cameron who recently expressed his desire to see the state entirely rolled back except for in the areas of “the judiciary and the military” and the same Clegg who said “I think breaking up the NHS is exactly what you do need to do to make it a more responsive service” [xx]. As for the Coalition as a whole, since January it has awarded contracts to private firms at a rate of £56.6m a day [xxi].

A privately run but publicly funded health service would constitute privatisation, however much Coalition ministers protest otherwise. There is a common argument, even amongst opponents of privatisations, that marketisation is a very different, more palatable beast. In practice you have to contend with what Adam Curtis called the “uncontrollable force of power”. As with healthcare in the US, our train service or privately run prisons in the US, the system becomes inevitably geared to the commercial interests of the providers. Our train providers, for example, have a contractual right to raise prices in real terms every single year. How many such sweeteners will be offered to private health firms?

If being free at the point of use were a good benchmark for nationalisation, our previously nationalised train service would not in fact qualify, but a publicly funded “NHS” franchise pouring billions of pounds into private coffers would. This makes little sense. If services are provided by private, profit making entities, they are privatised services, even if paid for publicly.

As Ed Miliband rightly said at PMQs, Cameron “has been found out”. The rhetoric of “choice”, evolutionary “reform” and “empowering the patient” are part of a familiar and unconvincing routine. The public and the health profession have little appetite for the grim reality underneath, as Cameron well knows. Sensing defeat, his “listening exercise” was the last throw of the dice, the results of which are now in.

“The fundamentals of our plans...are as strong today as they've ever been.”

These were Cameron’s words yesterday on the revisions proposed by the Future Forum [xxii]. Led by Steve Field, a supporter of Lansley’s overall aims, the forum has returned its findings which will likely be incorporated into the bill. Will the revised plans protect the NHS as a national health service? Probably not, though they may slow the process of fragmentation. A number of proposals are either flimsy, open to interpretation or simply delays rather than changes.

The role of monitor in promoting competition, one of the most contentious aspects of the bill, is to be revised. It will now support “choice, competition and integrated care”. Since choice and competition are effectively synonyms, Monitor’s role still appears weighted towards its initial function. On the “cherry-picking” of services, how it will be stopped in practice is still not clear. Improvements on accountability and transparency are welcome, as is the broader representation on GP Consortia, but they do not alter the basic realities of what this bill will achieve.

Lansley will tell his backbenchers that the fundamentals of the bill remain in place: GP Consortia commissioning services, and the private sector brought in through competition requirements. The involvement of private health firms has always been at the centre of these proposals and nothing in today’s report will worry them overly. In years to come, any niggling public safeguards can be slowly eroded. 

The bill still represents a fundamental change to our NHS; it is a programme for widespread privatisation. Private services will expand, the truly national part of our health service will shrink, and incidents like Southern Cross could become more and more common. John Redwood’s claim on Question Time that providers must put “patients first” was typically disingenuous; corporations have a legal obligation to maximise shareholder value. They will be obliged to seek the maximum revenues and prices possible, and incur the minimal costs possible. They are profit maximisers, not charities, and a patient’s worth is measured in pound sterling.

The Lib Dems should think very carefully about what they do next. For all Clegg’s boyish celebrations, this is a Tory bill for a Tory health service. And the public won’t soon forget who enabled it.





[iii] via Guardian NHS blog 13/06/2011




















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