We’ll never privatise the NHS. Oh yes they would!

Privatisation.

The concerns about fragmentation and competition in the previous section apply whether the providers concerned are part of the mainstream NHS provision, or independent providers; and if independent providers, they apply whether those providers are charitable, third sector, not for profit companies, or private companies.

There are, however, some additional concerns that apply to the use of independent providers, and some that apply particularly to ‘for profit’ companies.

Clearing up the debris after the crash.Many of those promoting the ‘brave new world’ of multiple competing providers fail to take adequate cognisance of the cultural heritage of the NHS. A whole generation has grown up since Margaret Thatcher’s interview with Woman’s Own when she famously said “There is no such thing as Society”. A generation when the laudable aims of self-reliance and ambition have turned to self-centredness, acquisitiveness and materialism. Nevertheless, the NHS continues to be strongly served by a culture of public service and the vast majority of its staff are motivated by the aim to do a good job, to deliver the best possible service and to look after the patient. Those who assume that NHS staff are best motivated by bonuses and performance-related pay grossly misunderstand the culture of the NHS. Many of the comments about competition and collaboration in the previous section apply at the micro-level between individual workers in the NHS. It is possible for individual workers in an organisation to live by a culture of helping out a colleague who is under pressure, or conversely to concentrate only on their own work-load and ensuring that they only do work for which they will get the credit.

Many of the Labour Government’s attempts to micro-manage the NHS with targets and performance payments have had a deleterious impact on the overall quality of care. If a chief executive knows that his future depends on the ability of his hospital to make sure that no-one stays on a trolley in the Accident and Emergency Department for more than fours hours, then he is likely to ensure that long trolley waits are eliminated, and this may well be achieved at the cost of delivering a poorer quality service, moving patients around, discharging patients before they are ready, failing to do necessary tests or even making incorrect diagnoses. The Stafford Hospital experience shows amongst other things what happens when a hospital focusses on the financial rigours of becoming Foundation Trust at the expense of providing good medical care.

Some of these cultural arguments are difficult to define, though that does not make them trivial. What is certain, however, is that independent companies live or die by ‘the bottom line’. Equally clear is that ‘for-profit’ companies must take money out of the business to pay shareholders. Focussing on the ‘bottom line’ and profitability of a company does not necessarily eliminate other values, but observers of the corporate world, can point to innumerable examples of activities that are at best irrelevant and typically diminish or damage the actual performance and value for money that is delivered by the organisation. These might include: mergers and de-mergers, the payment of high salaries and bonuses to executives, expenditure on lobbying and promotion, including the employment of politicians and ex-politicians as so-called consultants or directors, and ‘clever’ financial games such as sale and lease-back and asset stripping.

It is interesting that the single word ‘privatisation’ rings more alarm bells with the general public than any other aspect of the current proposals for the NHS. Much of this, I suspect is associated with a deep suspicion that the public have of both politicians and large corporate organisations. In recent years bankers have vied with politicians to be the group least trusted by the public. We talk of Nolan principles and attempting to limit the problems of commissioners or individual doctors with vested interests, how much more worrying is the string of politicians past and present who have close ties with, and have gained financially from an association with an organisations that serves or sells to the NHS. I shall not name individual politicians, but I shall mention one egregious example of a company whose behaviour is hardly inspiring of confidence. The American multinational United Health has been awarded contracts to the NHS. They are involved in both commissioning and providing, which raises an obvious conflict of interest. They pay $ millions on lobbying politicians, spent further millions to settle charges of defrauding health insurance organisations and took on Tony Blair’s special adviser on health as a chief executive.

Given this background it is not surprising that the public are deeply suspicious of politicians who might be seen to be privatising the NHS.

Ministers have denied the intention to privatise, saying that the NHS will remain free at the point of use. This rather curious definition of privatisation is not recognised by the World Health Organisation. There are five more widely recognised features of privatisation, all present in the current proposals.

The NHS has for decades, and arguably, since its inception been a mixed economy of direct provision services bought in from the private sector. There are a number of features of the present proposals that seem to separate it from previous behaviour. I clearly do not know what the long-term aspirations that Messrs Lansley and Cameron have for the NHS, but concerns include the altered duties of the Secretary of State, the removal of the private patient cap, and the ability to transfer assets including land to non-NHS providers.

Much has been said and written about the duties of the Secretary of State. You will know that these are referred to in schedule 1.1, 1.2, and 3.1 of the 2006 Act. The stubborn refusal of the DH negotiators to re-instate the previous wording, and the disingenuous attempt to pretend that the wording had been restored when in fact only one of the three clauses had been restored was bound to feed suspicion. There is fear that one objective is for the NHS to cease to be a provider of healthcare and to become as Mark Britnell said an insurer. The removal of the duties of the Secretary of State, is compounded by the hands-off clause and the removal of his/her powers to delegate these powers to or direct NHS bodies to fulfil these duties suggests that in the future the Secretary of State may neither be obliged, to, nor indeed able to play any active part in guaranteeing a comprehensive health service to the people of England. This concern combined with the power of CCGs to determine what care is appropriate for their registered population suggest that another unstated objective of the Lansley proposals is to allow the NHS to withdraw certain services piecemeal and in different parts of the country, so that over time, the NHS becomes an insurer of last resort, and only offers to pay for basic services with an increasing requirement for individuals to take out top-up insurance to pay for other medical care.

Given the previously mentioned financial pressures on health services in all developed countries, the fact that this re-organisation is likely to cost between £1bn and £3bn, and that ongoing transaction and administration costs are likely to be increased, the suspicion must remain that the only way that Lansley’s proposals could help to control healthcare spending is by reducing the services provided or bought by the NHS.

The transfer of assets including land from the NHS to other providers and to sell land increase anxieties further. There are memories of previous governments ‘selling off the family silver’. There are fears that we may be engaged in a one-way journey towards private or independent provision. There are anxieties that ‘clever’ providers could engage in sale and leaseback arrangements for land such as the one that caused Southern Cross  much difficulty; after all in some ways the Private Finance initiative (PFI) could be seen as an expensive sale and leaseback arrangement. The assertion that only land surplus to requirements could be sold, does not reassure. It is easy for organisations to take an unfortunately short-term view and what is surplus to requirements today, might prove very useful tomorrow. There are already examples of land sales in one area being followed shortly afterwards by an inability of the local hospital to expand through lack of capital or land.

  • The duties of the secretary of State should be restored to include the option of providing care, so “secure or provide”.
  • Clause 4, the ‘hands off clause’, should be removed.
  • Any NHS assets made available for the use of independent providers should remain in the ownership of the NHS, and a rent or capital charge paid to the NHS for the use of those assets.
  • Monitor should retain the power to limit the private patient income of any NHS hospital. This power could be a reserve power, and could be decided by monitor on a case by case basis.
  • There should be a clear mechanisms for the establishment of a new service directly provided by the NHS, as and when that should be necessary to achieve a balanced, and coordinated service for all patients.
  • Ministers should give an undertaking not to accept donations, gifts, inducements or offers of consultancy or employment from any company associated with healthcare provision while serving as a government minister and for a five year period after leaving government.
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