Tag Archives: nhs privatisation

We Need To Talk About Jeremy… Corbyn

Dr Clive Peedell explains why we cannot afford to wait for Labour to wake up:

It’s impossible to avoid the Labour leadership competition, whether you feel you have a stake in it or not. It’s equally impossible to avoid the fact that people who left the Labour Party for another party (or simply stopped their membership) are now wondering whether they should go back.

I am not going to hazard any guesses about the leadership campaign. The Labour Party’s decisions are theirs to make. What I do know is that the election doesn’t take place until the end of September. They then have to return to Parliament, and a shadow cabinet has to be formed.

Their disarray gives the Tories a clear run, and being in summer recess has not slowed them down.

But it’s not just about the time frame. Whether they coalesce or fragment around Jeremy Corbyn’s challenge to the status quo, the Labour Party’s very open disagreements may actually contribute to the formation of a new political landscape. The SNP has shown itself capable of reigniting political passions in Scotland. The Green Party grew in the 12 months leading up to the general election. Labour’s own membership has increased since the general election. There is an appetite for a new politics. All this against a backdrop of a Tory government claiming a mandate on less than 24% of the eligible vote. Clearly our democracy itself needs an overhaul.

What concerns us, however, and with pressing urgency, are the actions of the government on the NHS and our public services during this period when the Labour Party is otherwise pre-occupied.

On Thursday, the first CCG announced it would be passing its responsibilities on to an as-yet-unspecified provider led accountable care organisation. Reported in the Health Service Journal, Northumberland CCG’s proposal is part of its overhaul of its care and contracting. It was one of the 29 national vanguard sites identified in March. We heard from campaigners in other vanguard sites that they were expecting similar announcements to follow soon. And it was very soon, as NHS England announced a support scheme for those vanguards on Friday.

There is precious little debate or publicity around these changes.

There is no explanation in the media of where this path is leading. The use of US insurance based ‘buddying partners’ such as Kaiser Permanente to develop the NHS is now established as the model of choice. American hospital managers from Virginia Mason have been brought in to teach ‘lean management’ to five NHS Hospital Trusts.

Meanwhile, Jeremy Hunt has set an ultimatum for a September deadline on negotiations over doctors’ contracts, warning he will impose a contract unilaterally.

The doctors are fighting back and Saturday’s Independent supported them. But we are seriously concerned that this frames the debate as Jeremy Hunt’s personal failure to understand the NHS or respect the doctors. And we note that he also says a ‘huge effort’ is required to keep the NHS publicly funded.

Which brings us back to Jeremy Corbyn and the Labour leadership contest. I agree that a huge effort is required to keep the NHS publicly funded. I can also see that every step towards the adoption of US systems of management and ‘accountable care’ takes us one step further towards co-payments and insurance instead.

I just can’t see anyone taking time out from the Labour leadership contest to shout very loudly ‘look what’s happening right now, this summer, to the NHS’.

And since that isn’t happening I ask you to stay with us, stay with our fight to keep this on the agenda, help us to spread the word and fuel the rightful anger that first prompted me and my colleagues to form this party. It’s an anger which should be spreading like wildfire.

There’ll be time enough to reconsider allegiances if and when the Labour Party rejoins the fight for public service. But I firmly believe we don’t need an oppositional democracy with only two parties that take turns. That way leads to stagnation and the systemic corruption of the revolving door. We need a progressive alliance.

Greece, the NHS, and Democracy

Deborah Harrington draws parallels between the Greek economy and England’s health service.

Three things stand out in the documents Wikileaks published showing the detailed bailout terms for Greece: the removal of political power, giving them no other option but to the privatise their services; the sequestration of their public assets into a private holding company; and the removal of choice over their economic policy. Together these form the effective removal of their democracy.

It is not only the immediate decision that has that effect, but in the long term, what is left for a Greek government to legislate on, other than the deployment of their armed forces and police to quell the riots?

Has democracy in the UK already gone the same way, but with the cooperation of the government in our case? Our public assets are being sold off at extraordinary speed, and have been transferred into private company portfolios pending sale. The NHS is being privatised in profound ways. The Health Secretary is no longer legally responsible for the NHS. We no longer have a right to healthcare. Austerity and privatisation were forced on Greece; here our government accepted them voluntarily.

Selling England By The Pound

Hospitals we used to own are being demolished whilst the new PFI ones are not in our ownership, but in private consortia. We have to lease them back and are tied into maintenance contracts whose combined cost can be more than 20% of the annual budget, financially destabilising the hospital and damaging patient care.

All this and more – contracting out, complex relations between different fund holders – has enormous cost attached. This is not about ‘NHS management’ but about the proliferation of private healthcare management companies involved at every stage – negotiating contracts for PFI, drawing up tender documents for every kind of service from cleaning to cancer care and advising on the financial ‘viability’ of hospitals, which can now be bankrupted as they are businesses, not public assets. When the Trusts are put into liquidation the administration process is also run by these companies.

We are so deeply enmeshed in this ‘depoliticising’ of our administration that we can’t even see it. Where was the outcry when the ownership of some of our schools and hospitals was found in the offshore tax avoiding accounts of HSBC who had been advised by PwC? Why is PwC still involved in advising at government level and running our public sector at operational level when the Public Accounts Committee said they were responsible for ‘industrial scale tax avoidance schemes’?

Like Pasok in Greece, the Labour Party agrees with the political Right that management of the economy under austerity rules is the only acceptable proposition. They may (possibly) deviate on the means to achieve it, but not the principle. We have a dominant political voice agreeing that There Is No Alternative. Labour and Tories alike have called for the state to be reduced and ‘resilient’ communities built. (A resilient community is one that can survive on an individual and collective level without state support mechanisms.)

NHS Healthcare on a par with NHS Dentistry?

The list goes on… but the NHS won’t. The devolution project will split the national NHS budget into a hundred pieces to be privatised by local councils and city mayors. As with social care the NHS will become a last resort for the poor, whilst the rest will end up as means tested and chargeable, either through co payments or insurance. Imagine the health service being operated on the same lines as dentistry and you’ll get the picture. Local authorities will provide a minimal service for the poor, in health, social care and social security combined. At the dentist the free or low cost treatment is called ‘NHS’ treatment, but it’s as far a cry from the principles of universal, comprehensive and equitable treatment that have characterised the NHS as it can possibly be.

Those people who keep saying ‘it doesn’t matter who provides the service’ had better buck up their ideas and start fighting against this. Otherwise we may well find, as in Greece, that when the NHS is gone, democracy has gone with it.

Six Reasons Why Privatisation Is Bad For Our Health

Public health expert David Lawrence explains why competition and marketisation aren’t the change that the NHS needs. 

The NHS in England was once a collaborative and cooperative public service, with the aim of reducing our suffering, and improving our health. Over the last 30 years, successive governments have introduced more and more elements of competition, contracting and privatisation, including the purchaser-provider split, the Private Finance Initiative and ‘any qualified provider’. There are several reasons why this is not good for us.

1. Competition Creates Bureaucracy

Public financing, using general taxation and public, non-profit healthcare, has lower costs than a part-market system with for-profit providers and mixed public and private financing. The traditional NHS (pre-1980s) had low management costs of around 5%. That was perhaps too low, and required more expenditure on expert management data collection and systems management.

The Health Select Committee has noted that, by 2005, the internal market had increased the administration costs of the NHS from 5% to 14% of the total NHS budget. Large costs are associated with the purchaser-provider split and competition, such as accountants and lawyers, and transaction costs associated with tendering, contracting, procurement and the regulation of for-profit companies. This management cost difference is nearly a tenth of all NHS expenditure; the amount wasted is estimated conservatively at £4.5bn per year.

2. Markets and Healthcare Don’t Mix Well

Certain conditions have to be met for market-based systems to be effective and efficient; they are not met in health care.

First, consumers have to know what they want and understand what they have been given (‘consumer sovereignty’). As patients we do not know always know enough to assess what is being offered to us, and thus rely on the clinicians and hospitals to treat us fairly. This creates an asymmetry in the market, making less knowledgeable patients vulnerable to being ripped off by exploitative market practices.

Secondly, a market requires multiple firms competing in the same area. Having several competing hospitals in one place is wasteful, even in cities. Outside cities, it does not work at all. The inevitable result is one of the firms going bust, or both firms becoming mediocre in order to cut costs.

Thirdly, competition works well with mass-producible goods, whereas healthcare is a bespoke, craft service – economies of scale do not apply. Building two competing hospitals would mean doctors and nurses not getting enough experience and expertise, forcing both hospitals to try to take on simpler cases in order to increase throughput and maintain funding. Regional centres of excellence depend on collaboration, not competition, being the norm.

Finally, use of a market requires management strategies to focus on targets, threats of competition and closures. In healthcare, attention also has to be paid to matters such as quality improvement, morbidity and mortality, and training of junior staff.

3. Pay-For-Access Will Become The Norm

The more a privatised competition-based market system is introduced, the more there will be restrictions on the publicly-funded NHS, forcing many NHS users to pay more for care, or get top-up insurance, as in many other countries. This is already happening with certain rationed operations in the UK, with NHS patients charged five figure sums to jump the queue.

4. Private Firms Cherry-Pick The Easy Work 

Competition-based marketisation, especially from using private providers, produces ‘cherry picking’ of less expensive patients, leaving the NHS public service to pick up the tab for more complicated and long-term cases. In the cases where private companies do take on unprofitable work, they will either drop their contract after a few years or end up taking on further NHS contracts in order to stay in the black.

5. Competition Prevents Integrated Care

Service fragmentation, characteristic of marketisation, allows the government to have a more ‘divide and rule’ regime. Separate service providers can blame each other for failures. It also makes it far more difficult for patients to access services, as their GPs have to climb false walls to organise integrated care. Transfer of staff expertise is restricted.

Though there is already a ‘postcode lottery’ in the NHS, there is at least a recognised NHS ethical-legal basis for clinical decision making policy which limits it. A market-based system makes it more difficult to allocate resources fairly and ensure equal access to care.

6. Private Firms Don’t Pick Up The Pieces

The existing legal duties on the public NHS are in danger of being undermined if private corporations make treatment funding decisions and provide care. The various forms of creeping privatisation will soon put control in the hands of firms who have little interest in the long term outcomes of patients, provided that contractual obligations have been fulfilled.

The sorry saga of deficient PIP breast implants shows up a situation that will now occur much more widely. In the case of failure of a private health care organisation, private insurers are unlikely to pay out, leaving either the public or patients themselves to cover the cost of remedial treatment.

The NHS Privatisation Bubble

Some investigative work by Private Eye has uncovered a worrying new development in the world of NHS privatisation. Private firms that are failing to turn a profit on NHS work are surviving thanks to the promise of further contracts, thus creating the potential for a huge equity bubble funded by taxpayers’ money.

Until now, we’d assumed that private companies would want to cherry-pick the easier, more profitable work. There’s more money to be had in minor surgery than in complex and unscheduled care, so companies would tend to build surgical centres rather than emergency departments and geriatric wards.

So why, then, are private firms taking on work that doesn’t pay? The answer is that the firms are in many cases owned by hedge funds who make large profits using the money given to the firms by the NHS. This can only continue as long as the firms continue to win new contracts – as the Eye puts it, “private companies losing money from NHS work survive entirely on funding secured on the promise of… yet more NHS work”.

Such a system sounds like a Ponzi scheme, but it also has all the hallmarks of a bubble. Firms desperate to be given more money will take whatever contracts they can get, growing their share of NHS work for as long as they can. If the bubble bursts early on, the firm goes bankrupt and the NHS is left to pick up the pieces. However, if the bubble grows for long enough, these private companies could become too big to fail, leaving the government to choose between a massive bailout and a healthcare collapse.

NHSpace has chosen not to name individual firms, for obvious reasons. You can read about the specifics on page 37 of the current edition of Private Eye (issue 1393).

NHS Funding: The Price Isn’t Right

Here’s an excerpt from an excellent piece on NHS funding by Jonathan Allsopp:

In the midst of the most important election ever for the future of our NHS, the poverty of the debate about the funding of the health service is, at times, astonishing. Too often the NHS is described as “unaffordable” when it was perfectly affordable amidst the ruins of the second world war. Not for the first time there are calls for charging for some NHS services such as GP visits or A&E attendances yet there is barely a mention of the billions spent on propping up the “internal market”.

A 2014 report by the Centre for Health and the Public Interest (CHPI) estimated that the costs of the internal market (with its need for contracts, billing, costing, activity data, computer systems, legal advice etc) at a conservative £5 billion per year. A more likely figure of £10 billion has been suggested by the National Health Action Party.

And this ignores the one-off costs associated with repeated reorganisation and restructuring. The bill for implementing the Health and Social Care Act of 2012 is estimated at more than £3 billion. These are staggering sums of money (as much as 10% of the total NHS budget) that are barely mentioned in any debate around the affordability of the NHS.

You can read the full article on the SHA blog.

Dear Andy: Labour Need To Sort Themselves Out

Dear Andy Burnham,

We know you probably haven’t heard of NHSpace. That’s fine; everyone has to start somewhere. What matters is we believe in something, and we’re willing to stand up for what we believe.

We thought you were too, Andy. We saw you give a talk to NHS staff last year, and we took notes. You said:

  • “I prefer the NHS model over a more marketised system. A more marketised system means more costs.”
  • “The NHS model avoids the inflationary pressures, rising costs and fragmented care that affects a market-based system.”
  • “We will repeal the H&SC Act, and we will include that in the first Queen’s Speech of the next Labour government.”

So why, Andy, are you now supporting the marketisation of the NHS? You would reverse the H&SC Act only to replace it with a different flavour of privatisation in which the NHS and charities are ‘preferred providers‘. Such a system will still welcome private firms, be governed by European competition law, and waste billions on contracts and tenders.

You’re a nice guy, Andy, and you give good speeches. But what you’ve got lined up for our NHS just isn’t good enough.

Labour have strayed too far to the right and are now helping the Tories sell off the welfare state that Aneurin Bevan helped create. The Labour Party isn’t the same party that you joined at age 14 to fight the Tories, and it’s certainly not a party that  Bevan would recognise. You of all people should be able to see that Labour need to sort themselves out.

Yours sincerely,


5 Forms Of NHS Privatisation You Should Know About

Anyone who knows what’s happening to the NHS should know that a large part of the NHS budget is now controlled by CCGs, who are forced to offer NHS contracts up to private companies. You’d be forgiven for thinking that was the only form of privatisation taking place in the NHS. It’s not. Here are five forms of NHS privatisation that you really should know about.

1 – PropCo

NHS Property Services Ltd (PropCo) was launched in April 2013 and now owns £3 billion worth of NHS land and buildings. These assets were once held by the now-abolished Primary Care Trusts and Strategic Health Authorities; now PropCo is responsible for selling them off to property developers. Furthermore, while the government currently owns all of PropCo’s shares, the Act that created PropCo allows for private firms to buy the majority of these shares. Thus large swathes of NHS land could quickly pass into private hands.

2 – PFI/PF2

You’ve probably heard of the Private Finance Initiative and its sequel, PF2. You may think these are merely expensive loans with Wonga-style interest rates. Certainly these deals are bad value for the taxpayer and have pushed many hospitals into the red, but they’re more than just that. For at least the 25-30 year repayment period, the private firm providing the loan actually owns the hospital. Thus, more than a hundred NHS facilities are owned by banks and shell companies.

3 – Commissioning Support Units

Although CCGs were created by the 2012 Act to decide where the money goes, it is the CSUs that provide the infrastructure. CSUs are there to run tenders, manage contracts, provide IT and HR services and other back-office admin functions. The Act created CSUs as part of the NHS structure, but from 2016 the CSUs will become independent businesses to be bought out by private firms. In fact, the sale has already begun. If private firms take over the CSUs they will have a huge influence on the funding and rationing of healthcare in this country.

4 – Personal Health Budgets

Personal Health Budgets (PHBs), in which an individual is allocated a limited amount of money to cover their healthcare needs, are already being introduced in England. While there is the obvious spectre of ‘top-up’ payments for those who exceed their allocated budget, there is another issue here. The classical pattern of funding in the NHS is that money is allocated to Trusts according to the amount of work they need to do. PHBs allow for a move to the private insurance model, where everyone pays in a premium (in this case their PHB) and the private firms then decide who gets treated/which claims to pay out on. You can just imagine the worried well opting to pay their PHB into a private insurer in return for cheaper gym membership and money off their holidays. Meanwhile, the genuinely-ill would end up paying top-ups to access increasingly rationed basic NHS treatment. Combine universal PHBs with privatised CSUs and you get an American-style health system.

5 – Foundation Trusts and Mutualisation

If the land, buildings, back office and budgets have all been privatised, what does that leave? That’s right, the NHS Trusts themselves. All hospital trusts now have a mandate to become independent businesses known as Foundation Trusts. These are standalone organisations which have to keep themselves in the black, and can do so by taking on as much private work as they want. As with the CSUs, the FTs are units ripe for privatisation, which in this case is dressed up as warm and fuzzy “mutualisation“. This means passing from public ownership into the hands of ‘stakeholders’. That’s right, privatisation.

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