We saved Lewisham hospital - but its future depends on stopping NHS privatisation

Cameron claims that the NHS is becoming more efficient - and is not being privatised or cut. But doctors know these claims are false.

Tony O'Sullivan
5 May 2015

 Image: Save Lewisham Hospital

When clinicians hear Cameron and Hunt’s claims that they have funded the NHS properly, made it more efficient, and not privatised it, we smack our heads in frustration.

Let me tell you about what’s happening in Lewisham Hospital, where I work.

Many people know part of our story. Jeremy Hunt announced the closure of the hospital in Parliament 31 January 2013, six days after 25,000 marched in protest. Lewisham Council and Save Lewisham Hospital Campaign took Hunt to the High Court and won – twice. Lewisham stayed open – though Hunt then changed the law (the ‘Hospital Closure Clause’) to prevent similar victories by other campaign groups.

But where is Lewisham Hospital now?

Along with other NHS trusts, Lewisham & Greenwich NHS Trust (LGT) is facing unbearable financial pressures.

The challenge of finding £20bn ‘efficiency savings’ across the NHS over the last 5 years has hit us as hard as any other trust – particularly the arbitrary 1% a year annual reduction in tariff payments (3/4 of our income) whilst NHS inflation rises at 4% a year. We face a further five years of 5% reduction in real income. 

We’re also crippled by PFI debts that cost us £38m last year, £30.7m of which was for Queen Elizabeth Hospital. The QEH PFI cost will rise to £61.3m by 2029/30.

 No public service can survive such an assault without beginning to fail. Failure brings strident calls for further privatisation.

All the choices left to hospitals are uncomfortable.

If they cut frontline staffing skills and numbers of nurses, as Mid-Staffordshire did, they will fail clinically. As well as the human consequences, clinical failings and rising waiting times also mean being hit with financial penalties from NHS England.

But scandalously, NHS trusts like Lewisham & Greenwich also incur costs of millions of pounds per year - just to survive in the marketised NHS.

If we try to protect frontline services by cutting non-clinical support services instead – as Lewisham and Greenwich has – all this means is that we are stripped of the business, marketing, contracting and tendering skills that we need to survive in a market place. We are stripped of the skills needed to try and redesign services to do more with less, and the skills needed to jump through the hoops put in place by the market’s quangos and regulators (Monitor, the Trust Development Authority, the Care Quality Commission, NHS England, et al).

So – just as frontline staff cuts were found to be unsustainable and were met by running up huge bills for agency nurses – cuts to support staff have meant bringing in the consultancies. McKinsey, PwC, KPMG, Deloitte and 20:20 health have all had their share of Lewisham’s cash in the last four years. The trust had to spend over £6 million on such consultants in one year alone.

More recently, Lewisham has tried to bring such expertise back in house, and has set up its own business team, Cost Improvement Team and Transformation Team, each employing six full time equivalents.

But on top of this we still have to pay consultants to write bids – at a cost of at least £600 per day per consultant. We have to compete with richer Foundation Trusts and the private sector who are trying to snap up our core services (two district general hospitals and community services) and similar services in the area to gain ‘market advantage’.

We have no choice. Like other NHS Trusts, Lewisham & Greenwich is under intense pressure to prove to the Trust Development Authority it is ‘financially sustainable’ enough to become a business-like Foundation Trust itself. The only other alternatives are abolition or dismemberment. So we cannot afford to lose our ‘core business’ to our ‘competitors’, both NHS and private.

And since the Health & Social Care Act came into force in 2013, competition and tendering has escalated in our area. Our three local Clinical Commissioning Groups have wanted to revise and renew contracts with current NHS providers like ourselves. Running competitions costs them dear too. They have put more than 30 separate services out to tender during 2014/15, on occasions under intense pressure from Monitor.

The Daily Mirror estimated average provider cost per tendered contract of £33.9k.  This seems a gross underestimate, and will not include the hidden cost of senior NHS staff working intensely on tender processes often out of hours, diverted from looking after patients, training their colleagues and making local improvements.  At a conservative estimate, the cost of two ongoing recent tenders for children’s services alone in Lewisham has been £60k each – so far.

Commissioners may demand the impossible – such as the local CCG whose opening gambit was to seek a 20% saving when contract commenced.

Trusts may withdraw from such a risk to service quality. Lewisham ‘passed’ when it could not provide a safe musculoskeletal service (MSK) for Bexley at the level of funding offered. Kings took the contract at a 15% reduction, although that change had not been disclosed openly.

But it’s another Hobson’s choice. The loss of musculoskeletal and other elective work to other providers destabilises the rest of our services, particularly trauma. Like other Trusts with emergency cover, we must employ specialist consultants to cover emergency work even if the other providers snap up the majority of our elective (planned) work. 

Such "cherry picking" of more lucrative parts of specialist pathways has happened locally with dermatology, too. Straightforward cases are handed over to private providers through ‘Any Qualified Provider’. They make an easy profit, in our system of tariff payments that are loaded in favour of elective surgery and specialty medicine. But the more complex cases are left with the NHS, paid a tariff based on average cost which does not cover the actual costs of these more complex patients.

Apart from the financial impact, the fragmentation damages training, making it harder for doctors to acquire and retain the necessary balance of clinical experience in both elective and emergency work.

And patients may find inconsistency with different CCGs commissioning different pathways to save money. Queen Elizabeth Hospital in Woolwich treats children from two different CCGs. Each child might receive different levels of care depending on their postcode on pain of the trust not being paid. This creates the risk of inefficiency, inequality and impact on clinical care.  

The Coalition parties deny privatisation and deny the costs of marketisation. But what slowly progressed under the Thatcher, Major and Blair administrations has now accelerated. After five years of coalition and barely two of the Health & Social Care Act 2012 (HSCA, implemented April 2013), the NHS is no longer:

·         National – privatised contracts have spread quickly and the Secretary of State has given up his direct responsibility for the NHS;

·         about Health – competition for contracts has replaced cooperation between trusts and senior health staff are diverted to tendering and cost saving, away from patient care;

·         about Service – market factors break up integrated clinical care and profit-making determines what health provision is available over public health need. 

If the Conservatives come out on top in the General Election on 7 May, renewed attacks on Lewisham will be inevitable, as the break-up of the NHS escalates.

I estimate the costs of the 15-20 extra in-house staff to survive in the market bureaucracy at least £700k per year. Consultancies to do the same are costing us anything from £2m-£6m per year. Tenders involving the time of clinical and service staff are costing at least a hidden £30k each of clinical service time on top of the Daily Mirror estimate – that’s over £500k of clinical service time taken away from patient care.

We cannot afford marketisation in South East London or anywhere else. That is why we must campaign for a new government to take up the NHS Bill 2015. That is why we must vote to end the rule of the Coalition Government and continue to campaign to keep our NHS a public service.

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