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If you see Sid, tell him the NHS is being privatised

08/04/2013

NHS 1

The NHS is being privatised. Not in a “if you see Sid, tell him” share issuing kerfuffle with an expensive television advertising campaign. No, this has been a creeping privatisation over two decades that, like a cancer left untreated, has gradually infected almost the entire NHS body. It’s crept up almost unnoticed to many but if you look carefully there are signs of growing private sector influence across the entire health service.

You can see it in the use of the Private Finance Initiative to fund new hospital buildings. In the introduction of an NHS “market” with purchasers and providers. In the wave of private providers like Virgin, Serco and Circle winning tenders to run health services across the country. In the phenomenal growth in the use of management consultants. In the use of language like “frequent flyers” and “bed blockers” to describe chronically ill patients. In job adverts requiring managerial candidates to demonstrate “business acumen” and “commercial experience”. In the removal of the cap on the amount of income that hospitals can earn from private patients. In the focus on profitability and efficiency savings. For someone who joined the NHS over 22 years ago, precisely because of its public sector ethos it is a thoroughly depressing time.

Even on days off, wandering by the river in central London there are reminders. The words “cutting through complexity” are plastered on the side of the river buses that pass every few minutes along the Thames. It’s the tagline for KPMG who, over the last decade and a half, along with the other “big four” accountancy firms of PwC, Deloitte and Ernst & Young have made millions providing financial consultancy services to the NHS. In addition, global management consultancy firms such as McKinsey have also filled their boots. McKinsey helped to draft the Health and Social Care Act enacted last year. Now they’re busy helping GP-led Clinical Commissioning Groups, themselves products of the Act, to make sense of the reforms. McKinsey also drafted a document which set out how the NHS is to make £20 billion of efficiency savings by 2015. And guess what? They’re also offering advice to the NHS on how to achieve this too. Indeed, McKinsey have earned at least £14 million from government health policy since the coalition government took office.

More recently PwC were paid £2.8 million for a report which looked at the quality of care in 14 Trusts with higher than average mortality rates and extrapolated the findings to falsely claim that thousands of lives could have been saved by better care. It was the sort of report that would have struggled to make the grade as a sixth form statistics project yet it received oodles of NHS bashing media interest.

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There’s an oft quoted view that the NHS in its current form is unsustainable, that we simply can’t afford it any more. Those of us who question the view that there is no alternative to a greater role for the private sector are labelled as naive and portrayed as ideological dinosaurs obsessed with an outdated model of health service provision. Get with the times we’re told. People aren’t interested in how their health services are provided, they simply want a high quality service. And somewhere to park. I beg to differ. No one disagrees that the health service should be cost effective but buying services from private firms with commitments to shareholders is very likely to compromise quality or increase cost or both.

The Health and Social Care Act means that Clinical Commissioning Groups must open up the tendering of NHS contracts to the private and voluntary sectors and has changed the NHS from being a provider of healthcare into a purchaser of services from a number of different providers.

Since January 2012 £8 billion worth of NHS contracts have been awarded, or are in the process of being awarded, to private sector providers. This includes the Circle Healthcare takeover of the running of Hinchingbrooke Hospital in Huntingdon, community health services in Surrey and Suffolk, a treatment centre in Nottingham, children’s services in Devon, an urgent care centre in Yorkshire and various contracts to provide the new NHS 111 service.

The message from the Department of Health remains that this does not represent privatisation. It’s all about securing the best service and value for money for patients apparently. In the eyes of the Department of Health it doesn’t matter who provides services. Yet at what point does an increasingly fragmented and privately run service cease to be a public institution and becomes merely a logo?

There are powerful arguments that this creeping privatisation is harmful both financially and clinically. Typically a private health provider plans to make an 8% profit on each contract and in some cases may seek as much as 15%. This means that, of the £8 billion worth of contracts that have already been taken by the private sector up to £1.2 billion is siphoned off in profits for shareholders. This is money leaving the NHS at a time when it faces no increases in annual funding and the “challenge” of generating £20 billion worth of “savings” by 2015. How can this make any financial sense?

At the same time, how can we be sure that private firms will not cut corners in the quality of the service that they provide in order to meet profit margins? This week the privately run Lister Surgicentre in Stevenage has been taken over by the NHS following serious concerns about patient safety at the unit and the deaths of three people following routine surgery. The unit was run by Clinicenta Ltd (part of the Carillion group) but their licence has been suspended and services signed over to the local NHS Trust. The local MP said that Carillion “should never be allowed to manage another hospital facility in the UK”. Of course, this news was barely mentioned by a media hungry to run down a publicly run NHS but largely uncritical of poor quality privately run services.

Interestingly Margaret Hodge who chairs the House of Commons’ public accounts committee describes private firms such as Serco and Circle as “good at winning contracts but, too often, they’re bad at running services”. Often any wrong doing only comes to light through whistle blowers as private firms are protected by “commercial confidentiality”.

When the NHS was formed in 1948 there was much discussion about whether private provision of services should have any place in the health service. It was thought that private healthcare would draw resources away from the service and allow those with money to jump the queue. The NHS was to be a truly national service for all. You can see the hope and the sheer bloody optimism that the formation of the NHS generated in Ken Loach’s brilliant documentary The Spirit of ’45. Nye Bevan famously described the NHS as an example of “real socialism”.

More than sixty years on and that commitment to a health service for all is wavering. Healthcare is increasingly seen as a commodity to be bought and sold in a market place. Whilst private providers tend to focus their attention on making money from routine “conveyor belt” type procedures like hip and knee replacements and cataract surgery, most healthcare is complex, unpredictable and certainly not ripe for generating profits.

Mostly we don’t know when or where we will need care. And often that care can be very expensive. Only a small number of people of people can afford to pay for all their healthcare needs out of their own pocket. The idea that we can all “shop around” for healthcare in some form of market place is nonsense. There are no evidence-based examples of successful healthcare relying on the principles of the free market. You only need to look at the shambles of the US health system (too often used as a beacon for the NHS) to see that.

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So what are the alternatives? Where can we save money that doesn’t mean cutting services? For starters we could try tackling tax evasion and avoidance that costs the economy around £70 billion a year. We could adopt a more well-rounded approach to health that focuses more on prevention of ill health and recognises that decisions taken now about minimum pricing of alcohol and access to affordable housing have implications for the health service in years to come. We could cut back on the amount the NHS spends on management consultants. We could stop using the private sector and end the ridiculously expensive PFI schemes that are crippling many hospitals.

The Bart’s Health Trust in London is losing £2 million per week. The original capital cost of new hospital buildings, funded through the controversial Private Finance Initiative was £1.1 billion but will actually cost a staggering £7.1 billion by the time they’ve finished paying for it in 2048-49. At least twenty hospital Trusts across the country are in serious financial trouble because of PFI repayments.

I’ve worked in the NHS as a finance manager since 1990. In that time I’ve provided advice on costs, budgets and translated often bewildering jargon for an awe-inspiring collection of healthcare professionals providing an incredibly diverse range of services. From substance misuse services for heroin addicts in Scunthorpe to maternity services for women in Kensington & Chelsea. The wonderful thing about the NHS is that regardless of who you are, where you are from and how much money you’ve got you’re treated as an equal when you come through the doors of a hospital or surgery. Long may it continue. But we’re going to have to fight for it. We need to do everything we can to oppose the government’s strategy to run the service down, starve it of funds and then claim that it needs the assistance of the private sector. It doesn’t.

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3 Comments
  1. One of the best articles I have read about creeping privatisation of the NHS

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