Over the past 25 years, the NHS has been insidiously converted into a market-based healthcare system. This process is accelerating under the Coalition government and the very existence of a National Health Service is in danger. How did it ever come to this for Great Britain’s most cherished institution?
1) Create an internal market
Speaking at the 60th anniversary of the NHS in 2008, Kenneth Clarke remarked that “In the late 1980s I would have said it is politically impossible [to do what we are now doing.]” It being the conversion of the NHS into a market-based system. After 30 years of neoliberalism, the impossible has become possible. That’s progress for you. As Health Secretary under Thatcher, Ken Clarke got the ball rolling by introducing the internal market into the NHS. As a direct result, overhead costs rose substantially; in the main due to increased administrative and managerial staff. In 2009, it was estimated that spending on management consultants alone was upwards of £300 million a year. New Labour’s NHS Plan (2000) resulted in the internal market expanding into an extensive market based on the premise that the private sector would introduce choice and competition.
2) Public-private partnerships
In 2000, a ‘concordat’ between the NHS and private health firms paved the way for the provision of elective care and diagnostics; paid for by the NHS. Tim Evans, who negotiated the Concordat, on behalf of the private sector, said he looked forward ‘to a time when the NHS would simply be a kitemark attached to the institutions and activities of a system of purely private providers’.
New Labour expanded Private Finance Initiatives (PFI) to build and run infrastructure projects. These projects were tendered out thus reducing government borrowing costs. The completed PFI projects have been leased back with repayments at high interest rates. The net capital worth of the Department of Health PFI projects is estimated at £11.6 billion. The repayments however are projected to reach approximately £80 billion. PFIs came with strings attached in which “facilities maintenance” was also subcontracted out. A Daily Telegraph investigation flagged up several examples– one hospital was charged £52,000 for a job, which should have cost £750.
The total PFI tab for the taxpayer will top £301bn despite a net capital worth of £54.7bn. That’s a difference of nearly £250 billion lining the pockets of PFI executives and shareholders. Just think what that could buy you? Well it would pay for all 350,000 nurses, all 40,000 consultants and all 40,000 GPs in the NHS for 10 years. Training the next generation of surgeons would cost a further £7 billion. You would then still have more than enough left over to build 80 state of the art hospitals and pay for 100,000 cancer patients over 4 years. If you wanted to keep it simple then it would cover the entire NHS budget for nearly 2 and a half years. And there would still be enough loose change to cover Wayne Rooney’s salary should Manchester United ever require a government bail-out. Or George Osborne’s first class train fares until the next election.
3) The corporate takeover
From 2003, foundation trusts were introduced. This empty-sounding label essentially converted hospitals into semi-independent businesses with financial and other freedoms. The flip-side is that foundation trusts are allowed to ‘go bust’ as they are no longer eligible to be bailed out by the Department of Health (DoH).
One bandies around the platitude that you never know when you will need the NHS. But as a fit young man, you don’t seriously believe it. Until something happens; as I discovered recently when I ruptured my Achilles’ tendon playing football – the textbook injury of the dilettante weekend sports-player. I was recently invited to a patient workshop at a large, central London teaching hospital at which one of the consultants spoke of the increasing numbers of patients and how this would be good news if only they were a business. The irony did not pass by unnoticed as I thought to myself gosh you are a business in all but name. As a foundation trust, they are paid by results in a market based system. They are free to make partnerships with companies and up to half their beds can be occupied by private patients.
The GP contract was also renegotiated in 2003. This allowed GPs to opt out of Out of Hours (OOH) care whilst opening the door for the corporate takeover of OOH by companies like Harmoni and Serco, which have since been beset by allegations of cost-cutting and sub-standard care. It also facilitated GP services to be run by private companies, such as UnitedHealth. Virgin claims to employ 1500 GPs looking after 3 million patients. Astonishing figures when one is accustomed to thinking of the NHS as an impervious and timeless institution. As of 2010, there are around 230 privately-run GP centres. The NHS is fragmenting before our eyes.
4) Legislating for the dismantling of the NHS
Professor Martin McKee dubs the Health & Social Care Act’s complexity as the Jackson Pollock effect. The Act is said to have been drawn up by a group of corporate lawyers and this explains the need to decipher the legalese. McKee also compares it to the Schleswig-Holstein question – an arcane complex of diplomatic issues arising in the 19th century relating to the two eponymous duchies. It was the British prime-minister Lord Palmerston, who is reported to have said “Only three people…have ever really understood the Schleswig-Holstein business—the Prince Consort, who is dead—a German professor, who has gone mad—and I, who have forgotten all about it.”
In other words, the act amounted to deliberate obfuscation that left critics floundering whilst the government gets on with the real business of carving up the NHS. Don’t take my word for it. Those are the words of Mark Britnell, who became one of the most powerful civil servants in the Department of Health. As James Meek has assiduously documented in the London Review of Books :– Britnell went on to work as “global head of health for the consultants KPMG. In 2010 Britnell was interviewed for……a conference in New York on how private companies could take advantage of the vulnerability of healthcare systems in a harsh financial climate. ‘In future,’ Britnell said, ‘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.’ ”
That Britnell was a serious candidate for the most important position in the NHS is a damning indictment. The Coalition emphasised the motifs of the Health & Social Care Act as improving patient choice, empowering doctors, cutting management costs. All of which is nothing less than a smokescreen for the implementation of free market reforms opening up NHS contracts to providers from the voluntary and private sectors. Already, £250 million of NHS services have been tendered with 105 private firms awarded Any Qualified Provider status. Coalition plans to force open a further £750 million of services to competitive bids were pencilled in for this year. Private providers will “cherry-pick” lucrative contracts; taking away income from NHS providers.
I spoke to Clive Peedell – a Consultant Oncologist in Yorkshire and co-founder of the National Health Action political party. I posit to Clive the Cameronista line on why does it matter who provides your care as long as it remains free at the point of delivery? He replies that “NHS hospitals [will have] less money….to provide comprehensive services.” This will lead to “rationing…..tighter budgets leading to waiting lists going up and patients going private plus foundation trusts effectively operating as partially privatised entities – rather than NHS hospitals – treating up to 49% of patients privately”.
5) The revolving door
How did all of this happen? The short answer is the revolving door. Two successive secretaries of state for health (Milburn & Hewitt) and one minister for health (Lord Warner) went off to work for the private healthcare sector after leaving government. Further down the pyramid, Simon Stevens – the new chief executive of the NHS – went to work for UnitedHealth after a stint as Blair’s senior health policy advisor as did British Medical Journal editor Richard Smith. And the revolving door, of course, turns smoothly in both directions. The top tiers of the Department of Health and NHS management were infiltrated by management consultants. This is how the health policy community was hijacked. The notion of a boundary between the public and private sectors, which should be policed in the public interest, has long been expunged. Monitor, the new independent regulator for the NHS, exemplifies this culture of regulatory capture with virtually the entire board having a corporate background.
6) Cui bono?
A new book NHS SOS traces the story of the marketization of the NHS. It is co-edited by Dr Jacky Davis – a Consultant radiologist and one of the founders of Keep Our NHS Public – and Raymond Tallis – the philosopher and writer. It’s garnering good reviews and has been featuring in various booksellers’ charts. Somewhat surprising as the NHS is not usually the staple of bestsellers. Perhaps an indicator that these are not ordinary times for the NHS.
Raymond Tallis trained as a doctor and neuroscientist. I managed to catch up with him at a book launch in Edinburgh for NHS SOS. He describes to me the Damascene moment at a British Medical Association meeting when the scales dropped from his eyes. At the launch, Raymond speaks of a democratic deficit and a banana republic, “We need to be tough on Lansley and tough on the causes of Lansley”, which raises an almighty laugh from the audience. This I take to be a reference to how Care UK – a private healthcare company – were caught red-handed funneling funds into Andrew Lansley’s office. Care UK have since gone on to win several contracts. It is difficult not to concur that something is indeed rotten in this unsatisfactory state of affairs.
The largest contract yet is for older people’s services in Cambridgeshire and Peterborough and could be worth up to £1.2 billion. It is attracting bids from Virgin, Circle & Serco amongst others. The Financial Times recently reported that private sector companies are engaged in an “arms race” to win NHS contracts. In future, it is quite conceivable that a diabetic patient will attend education courses hosted by Serco, be registered at a GP surgery run by UnitedHealth and have his eye screening done by Specsavers. The prospect of sexual health services run by Virgin should be a gift to news editors. Integrated care may be the buzzword de jour but this will surely lead to fragmentation.
7) Run a PR smear campaign
A day hardly seems to go by without a new story casting the NHS in an abhorrent light. Certainly the Francis report into Mid-Staffs as well as the failings at other hospitals require urgent remedies and soul-searching. But the British public is on the receiving end of a hideously distorted picture. Following Bruce Keogh’s recent report, the Conservative PR machine went into overdrive wilfully distorting the facts in order to tarnish New Labour’s achievements in the NHS. So much so that Sir Bruce felt it necessary to apologise to Andy Burnham. The government’s case for change largely rests on the premise of the NHS no longer being affordable and that it needs to be modernised. While there is evidently room for improvement, research debunks this picture and overwhelmingly shows the NHS performs well internationally, is cost-effective and rated highly by patients.
Andrew Lansley’s departure in the cabinet reshuffle was almost inevitable. That his successor was Jeremy Hunt is a V sign to the NHS – the man officially on record as saying that the NHS should be privatised. Back in 2009, Hunt co-authored with Michael Gove, Tory MEP Daniel “the NHS is a 60 year old mistake” Hanaan and Greg Clark a book called Direct Democracy in which they called for the NHS to be dismantled. It’s touching to think that a few years ago, in freezing winter, Jeremy Hunt – then a little known MP – joined constituents for a vigil outside Parliament to highlight that his local hospital was at threat of closure. Even the leader of his party, an apple-cheeked, smooth-faced David Cameron, dropped by to lend his support. How power doth corrupt. It’s no surprise really that Jeremy Hunt looks so guilty the whole time.
8) The plot against the NHS
Dr Lucy Reynolds – a public health academic and health policy analyst – has written extensively on NHS reforms. Her recent work highlights the germinal role of a series of 1980s thinktank papers (one of which was authored by Conservative MPs Oliver Letwin and John Redwood). Virtually every concept over the past 25 years was hatched in these documents; from the internal market, public-private partnerships and foundation trusts to the prospect of introducing universal health insurance in the UK. It makes for jaw-dropping reading. If this sounds like the stuff of 1970s political conspiracy thrillers then you can check it out for yourself – it’s all a mouse-click away in the digital age. That something can be so faithfully executed over a quarter century is testament to Machiavellianism.
9) The perfect storm
There are now at least 20 NHS trusts, comprising around 60 hospitals, in danger of going bust with PFI debts as a major contributory factor. This is very much watch this space territory. Monitor has earmarked a £300 million failure regime fund with the money being siphoned to the McKinseys, PWCs and Deloittes to administer the final rites. An image of vultures circling round the carcass springs to mind. Yet hope springeth eternal. The Lewisham hospital campaign aided by 38 degrees has defeated Jeremy Hunt and the government in the High Court. A judicial review ruled that government plans to close down Lewisham services after neighbouring South London Healthcare Trust went bust (in large part due to £2 billion in PFI debts) are illegal. This sets an important legal precedent that when PFI trusts are bankrupt, they should not be restructured at the expense of their neighbours. Similar plans at the Whittington hospital in North London have been shelved following a vociferous campaign. Bartshealth NHS trust, the largest trust in the country and home to the most expensive PFI, has been the latest casualty announcing it is in dire financial trouble and will be forced to make redundancies and cut services.
The government consistently claims the health budget is protected. In reality, the NHS is being forced to make cuts dressed up as efficiency savings of up to £20 billion by 2015. Tens of thousands of NHS staff are being made redundant with more to come. A picture of service cuts is steadily emerging across the country. To take just one example, NHS North-West London has recently made the decision to downgrade four A&Es with plans to virtually close down Ealing and Charing Cross Hospitals. This means there will be no A&E for the boroughs of Hammersmith & Fulham, Ealing and Brent – a population of 750,000 or a city the size of Leeds. The prospect of 1,000 bed cuts by 2015 in North West London without investment in local community & GP services is surely the recipe for pushing already overstretched resources to breaking point. The Royal London Hospital recently had to close its doors for 2 days due to a bed crisis. In the light of the recent A&E crisis hitting fever pitch, this winter is likely to spell trouble ahead.
And yet it seems that these efficiency savings will be extended beyond 2015 for years to come. The Nuffield Trust recently produced a document entitled A Decade of Austerity? (the question is presumably rhetorical) in which cuts are projected into the next decade. Recent soundings have also focused on a £30 billion funding gap in the NHS by 2020. Never mind that buying out or renegotiating PFI contracts would solve this problem at a stroke.
10) The final act
How will all of this play out? Once you combine all of the above factors then you have a perfect storm in which the NHS withers away. Rationing of care will become more widespread until we have a two-tier system in which the haves will be forced to take out private insurance and the have-nots will be looked after by a third-class health service.On the horizon lie personal health budgets and user charges. Right now user charges are mooted to be restricted to migrants but they will facilitate the introduction of a charging mechanism within the NHS. They have already been touted as one way of reducing GP and A&E visits.
So where to from here? Tony Blair’s hushed advice to the Coalition was to apparently ram through the Health & Social Care legislation as quickly as possible because it would be forgotten by the time of the next election. This prophecy is unlikely to be fulfilled. The NHS has barely been out of the headlines this year mainly due to the relentless smear campaign. Expect more of this. But also expect the performance crisis to continue unfolding. And, with more trusts hitting the buffers and hospitals facing closure, expect greater resistance as the NHS campaign takes off nationally. The legalese of the Health & Social Care Act was a Tory wet dream – far too amorphous and abstract for the public to grapple with. Yet when faced with the visible threat of the hospital down the road closing, the Lewisham campaign demonstrates that people can mobilise and quickly. Even the Daily Mail gets hot under the collar and launched its Save Our Hospitals campaign. The government has shown that it can handle a few lurid headlines not to mention the opposition of whole swathes of the NHS. But there is one thing that utterly terrifies them and that is people taking to the street to defend their NHS.