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Is Johnson really going to 'rein in' NHS privatisation? Don't you believe it!

The end of NHS privatisation would appear – once again – to have been greatly exaggerated. In fact, things could be about to get considerably worse…

Caroline Molloy
27 September 2019
Prime Minister Boris Johnson meets staff during a visit to The Princess Alexandra hospital in Essex,
Prime Minister Boris Johnson meets staff during a visit to The Princess Alexandra hospital in Essex, September 27 2019
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Stefan Rousseau/PA Wire/PA Images

The Guardian reported this week that Boris Johnson and Matt Hancock plan to "rein in" NHS privatisation in a new NHS Bill to be published next month. NHS England (NHSE) has released a document detailing “22 key changes it believes will be included” in such a bill, and the Guardian tells us their proposals are “likely” to be accepted by government.

Whether any of this will actually happen, given the current level of political uncertainty, is a moot point, of course.

But it’s nonetheless worth investigating. When an election does come, the NHS will be a key battleground, and one in which the Conservatives hope to at least neutralise Labour’s natural advantage. And in the disgruntled words of US President Harry Truman (describing the tactics of his political enemies), “if you can’t convince them, confuse them”. Well, the news – reported in the Guardian, no less – that Johnson will legislate to “rein in” NHS privatisation – is certainly likely to have confused many. Particularly given that Johnson is surrounded by the most pro-free market, anti-state cabinet in recent history, that he’s desperate for a vindicatory US trade deal, and with the US explicitly desperate to profit from our NHS.

So what’s really going on?

OurNHS – working with Public Matters – has delved into the detail for our readers and followers. We are talking to other extremely experienced NHS campaigners, policy experts, and specialist lawyers. At this stage there are many unanswered questions, which we will continue to work to resolve.

But one thing that does seem immediately clear is that partial reform can be a dangerous thing – especially in the wrong hands. And also that if the government really wanted to “rein in” NHS privatisation, there are some better things they could do.

The Guardian reports that “in a break with normal procedure”, the legislative proposals have been drafted by NHS England (NHSE) officials, not the Department of Health and Social Care, raising questions as to why. Is it another attempt to give NHS policy the veneer of bipartisanship, to ‘take the politics out of the NHS’ and make such proposals harder to oppose? That’s certainly a tactic that we’ve seen plenty of in recent years. For example, the Tories' appointment of Simon Stevens as head of NHS England (NHSE) raised some eyebrows, given Stevens’ background as Vice President of one of the largest private health firms in the world (UnitedHealth). But his ministerial bosses were able to point to the fact that Stevens had in fact been Tony Blair’s health advisor, first.

So – what do the NHSE proposals actually say? And not say?

The NHSE recommendations, published on Thursday, start: “An NHS Bill should be introduced in the next session of Parliament. Its purpose should be to free up different parts of the NHS to work together and with partners more easily.”

The most seemingly eye-catching proposals focus on the competition regime - in the words of the Health Services Journal, “Scrapping 'section 75' procurement regulations, removing the NHS from public procurement law, and removing independent competition regulation”.

Scrapping the market? Or just scrapping market regulation?

“The Competition and Markets Authority’s (CMA) roles in the NHS should be repealed”, states the first page of NHSE's proposals (referring for example in its role in pricing and mergers). We’re told that this move reflects the “broad thrust of the proposals”, i.e., (in the words of the Health Select Committee) “collaboration, rather than competition, as an organising principle”. However, it’s not quite as desirable as it may initially sound. As Public Matters have spelt out, the one thing worse than a market, is an unregulated market. It’s not the market regulations that are the problem, but the market itself.

There are early hints that the proposals are perhaps not intended to achieve campaigners' desired ends of removing Health and Social Care from the market and private provision altogether: “We agree with the Select Committee [which earlier this year discussed these ideas and published its own initial take on the plans] that we must avoid services becoming ‘an airless room’, so protection of patient choice [generally the code for marketisation] should be included in the Bill.”

The summary goes on to say “There is strong public and NHS staff support for scrapping section 75 of the 2012 Act and for removing the commissioning of NHS healthcare services from the jurisdiction of the Public Contracts Regulations 2015. Taken together, these changes would remove the presumption of automatic tendering of NHS healthcare services over £615k.”

A quick bit of history is useful here. Campaigners fought hard against the Section 75 regulations, or as we dubbed them, the "NHS Privatisation Regulations", as a last ditch battle after the campaign against the Health and Social Care Act itself had already been lost back in 2012. Indeed, I wrote many of the key briefings on the Section 75 regulations myself. So it is certainly cheering to see some recognition of the unavoidable truth – that the market, far from being a nimble beast, creates a huge amount of costly bureaucracy in healthcare, and that these regulations are part of that.

But the extent to which tearing up a few bits of the legislation – if it happens – will actually achieve the result of 'reining in privatisation’, remains open to question.

As Keep Our NHS Public said a few months ago in response to the Select Committee’s version of these plans: “abolishing s75 is certainly no protection against further privatisation, or even against potential future large scale monopoly contracts…their proposals do nothing to address the underlying marketisation and financialisation of the NHS”.

And in fact, there are concerns amongst some campaigners that – as mentioned above – a less regulated regime within a retained market could benefit oligopolistic private providers, rather than state ones as might be hoped, including via the award of longer term contracts and sub-contracts, particularly through the “integrated care partnerships/systems” (see below).

The proposals also talk rather vaguely about coming up with some other procurement regime, throwing around terms like “patient interest” and “best value” without ever really defining them. They also indicate that “standing rules” would be set up to replace the Public Contracts Regulations. These “standing rules” sound like they’ll have, if anything, stronger wording (p29-30) about “protecting patient choice” and ensuring “non-discrimination” [which has always tended to be code for using the market, and not ‘excluding’ the private sector].

So really, no-one quite knows where this is going to go, and how much of the current regime will really change, or whether in the right direction – and there’s certainly plenty of scope for concern.

Brexit, trade and competition

NHSE also states (p27) that, in terms of removing both section 75 regulations and the applicability of the Public Contract Regulations 2015, “The extent to which this is achievable is contingent on other legislative proposals, as well as broader issues relating to EU law and the UK’s future relationship with the EU.” But they don’t make very clear here what those other legislative proposals are. Nor do they explain what might be different under Brexit – perhaps we’re supposed to assume at this point that these rules will hopefully be more friendly to state ownership of public services, than EU ones are – an assumption which would be entirely false.

It’s also worth noting here that the ‘ACO’ model in the US that has inspired the NHS’s Long Term Plan, and thus these recommendations, has required considerable tinkering with ‘anti-trust’ (competition) law – the validity of which has been a subject of legal debate.

The vital missing piece

Arguably, to actually make all this work, to allow anyone to actually ‘rein in privatisation’ (whether inside the EU or not), would require scrapping far more of the market system (as Scotland has done, for example). Because international rules requiring markets to be opened up to international competition, tend to take effect where a market has been brought into existence in the first place – which itself depends on domestic policy and law to some extent.

So the really crucial thing missing from these proposals is to forget the idea of borrowing bits of American systems, and instead, to restore the public duty to provide healthcare – in other words, our legal right to receive comprehensive, universal healthcare (often referred to as the ‘duty to provide’) – which Cameron’s 2012 Health and Social Care Act basically scrapped. Without this right (or duty), there will always be opportunities for the private sector to make money somehow. These proposals would appear to leave us with most of the post-2012 system, based not on a unified duty to provide or secure healthcare, but to merely a fragmented obligation to ‘arrange’ contracts via markets – with contracts designed to appeal to private providers, and many services they don’t wish to provide on the NHS, left to wither away underfunded, or charged for. This is why restoring the duty to provide has long been a key demand – possibly the key demand – of NHS campaigners.

Peter Roderick, the co-author of the NHS Reinstatement Bill (alongside Allyson Pollock), told OurNHS: “Until the actual bill is published, I can’t form a view, but I see it makes no proposal on the duty to provide key NHS services – which is the foundation from which everything else has to flow.”

But instead of incorporating these demands, NHSE re-iterates the familiar argument that no-one wants re-organisation, though it appears to have been told that by a fairly select group of people (frontline staff rarely express this view in my experience, often articulating instead that they’ll never get stability until the market system is got rid of all together).

Staffing, and the Labour position

On the subject of staff, there appears to be the highly contentious suggestion of shifting away from national tariffs (the money the government pays providers, including NHS hospitals, for providing NHS services) – and thus, also, potentially, for the end of national pay bargaining: “the Bill should also contain the specific flexibilities we originally proposed on tariff…rather than only being able to set a fixed national price", it states, adding “the price payable can reflect local factors”. NHSE's document also recommends scrapping the need for hospitals and other NHS providers to apply to the regulator if they want to apply “local modifications to tariff prices”. I have asked Unison for comment on this aspect of the proposals.

Of course, we know that Simon Stevens is no fan of national pay bargaining, having told the Financial Times in an article supporting Cameron’s NHS reforms that “Some estimates suggest national pay bargaining may have led to more than 3,000 deaths in the past decade”, supposedly through creating a lack of staffing flexibility.

As for Labour’s position on the proposals, they’ve said little so far. The opening paragraph of the NHSE proposals states explicitly that its legislative intentions are that “Once enacted, it would speed implementation of the 10- year NHS Long Term Plan”. And Labour Party Conference has just this week reaffirmed its “total opposition… to the NHS Long Term Plan, which has dismantled and fragmented England’s NHS into 44 local health corporations called Integrated Care Providers / Systems / Partnerships, and which is currently eliminating the family GP system and England’s local A&E hospital network.”

Integrated Care Systems / Providers

The buzzwords these days aren’t ‘competition’, but ‘collaboration’ and ‘integration’. But what does that mean?

The NHS proposals set out (P4-5) two alternate routes to developing systems that were formerly known as ‘Accountable Care Organisations’ (a term borrowed from the US) – on the one hand, “Integrated Care Providers" (ICPs) and on the other “Integrated Care Systems" (ICSs). ICSs are currently further down the path of development. But there is intense vagueness set out about how these ICSs – described as “joint committees” – should be governed. We’re told little about how (or even if) they will be accountable to the public. And we’re told nothing really about the extent to which they’ll be allowed to be filled by representatives from private companies ‘helping’ make decisions about our local healthcare. NHSE does note very briefly (on p53) that "other relevant organisations" may sit on these committees (a point that the US-owned Priory Group lobbied for, they acknowledge).

At this point, it’s worth noting that controversial US Medicaid privatisation specialist Centene are already well established ‘boots on the ground’ in the most developed ICS systems such as Nottingham – and equally controversial Optum (a subsidiary of Stevens’ old firm, US giant UnitedHealth) is also closely involved in ICSs in the West Midlands, South East London, and elsewhere. I’m told these firms are making the shift from an advisory role, into a more integral part of these systems, as they develop. Of course, you wouldn’t know any of this from reading the NHSE paper, which tends to use formulations like "voluntary organisations and other providers" to gloss over private sector involvement.

The NHS document also fails to specify whether there are any restrictions on the level of ‘risk share’ agreements that private ‘partners’ involved in ICSs may benefit from – where private firms get a cut of any savings that are made on treating patients. In the US ‘ACO’ model (which then Health Secretary Jeremy Hunt famously told parliament a couple of years ago that he wanted to "find his way towards"), this model has resulted in a controversial system which many American patients feel has a financial incentive to deny patients healthcare. A comment I heard repeatedly from patients with this kind of plan during my recent trip to the US was “it’s great – until you get sick!”

The other, more formal arrangement, the ICP, has run up against legal challenge, and has so far had limited uptake. It involves a single (possibly new) organisation with overall responsibility for the health area. The NHS indicates (p5) it wants to be able to create new NHS Trusts (something which it currently can still do, and which in itself is a good thing) to “support the creation of ICPs”. But despite the impression given at this point, it later states (p41) that “providing the option of the creation of a new NHS trust…does not preclude an existing statutory provider being awarded an ICP contract”.

So what exactly does that mean? A number of campaigners have asked for absolute clarification that the term “statutory NHS provider” or “statutory provider” does NOT include all “NHS providers”, because “NHS providers” is in fact a term that includes private companies providing services to the NHS. Concerns have also been raised regarding the fact that the Select Committee spoke repeatedly of “public statutory NHS provider”, but the word “public” has been dropped from NHSE’s latest proposals. After rather a lot of to-ing and fro-ing in the Committee on this point, it’s rather overdue that the NHSE give a simple yes/no answer to a simple question – could a private provider be allowed to become an ICP?

Importantly, too, there does not appear to be anything in these proposals to stop ICPs (or indeed, other NHS bodies, including devolved administrations such as Manchester) extensively sub-contracting to the private sector. Indeed, Keep Our NHS Public’s assessment of ICPs is that is exactly what they are designed to facilitate. Nor does there appear to be anything to stop ICPs, like ICSs, having extensive private sector involvement in their governance, even if private firms are not themselves holding the master contract.

Overall, these proposals keep the door open to many existing forms of NHS privatisation – from the detested Any Qualified Provider, to procurement processes that could well be enforced after all. And there’s a range of new forms of privatisation, from increased sub-contracting, to cuts forcing patients to go private or in future make more co-payments, that they could well open the door to. And that’s even before Boris Johnson (or his successor) get stuck into these proposals.

With additional research by Deborah Harrington of Public Matters

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