“Since 2000 governments have pursued a policy for the NHS that the electorate haven’t voted for and doesn’t want.” Jacky Davies, p.vii, Plot Against the NHS, 2011. Merlin Press, Pontypool
Private Interests in Public Healthcare
To understand a little of the issues currently facing the NHS we need to understand a little of the history that has led us to this juncture; and how underhand politics have played a particularly nefarious role in the conscious destruction of a public service. Recent events in politics (at the time of writing Summer 2016) have illustrated how little faith professional politicians are due: it is complicit or compliant politicians, private interests and rich lobbyists which have instigated and perpetuated this unwanted change.
The NHS delivers very good results with high levels of public satisfaction, a 2010 survey of 20,000 patients in eleven industrialised countries showed that the NHS was amongst the best – survey here . Note that the worst performing service, the US, is essentially the model being foisted on the UK.
The NHS has been undermined by those seeking to marketise and privatise it. in 2000 The Independent Healthcare Association, representing the UK’s private healthcare providers signed a concordat with Alan Milburn: Milburn strikes private sector deal Tim Evans, the IHA’s negotiator, spelt out what it wanted “The NHS would simply be a kitemark attached to the institutions and activities of a system of purely private providers.” George Monbiot’s article on the subject A Death Foretold , quoted here, is an essential read:
The difference between David Cameron and Tony Blair is that Blair was better at disguising his intentions. He would never have announced, for example, the sale of public forests. Instead he might have promised “a world-class forest estate” in which “walker-led beacon foundation woodlands” would be managed through “partnerships with a plurality of recreational providers”. Ten years later we would discover that our forests had mysteriously fallen into the hands of timber companies and were being felled in the name of customer choice.
To create the opportunity for private providers to enter the Health market three things had to be put into place: Tony Blair, his senior health adviser Simon Stevens (who later went on to work in US private healthcare before returning to be NHS England CEO), along with Paul Corrigan and Penny Dash were largely responsible in implementing these changes, the plan was called the NHS Plan 2000 and “The most controversial aspect of the plan was the introduction of more private sector providers and a more competitive internal market.”
At the time George Monbiot wrote, The NHS is Being Privatised , which concludes: “People are slowly coming to see that this government is implementing plans the Conservatives would scarcely have dared to suggest. We will defend the NHS only by fighting the party which built it.” Allyson Pollock has a detailed article in her NHS History Labour’s Decade 1998 -2007.
1) Opportunities for Private Providers to take on NHS Work
One of the big names in this is Tim Anderson an American involved in private health and also AMEY .who manage roadworks, apparantly. By 2009 there were 30 privately run Independent Sector Treatment Centres (ISTC) operating in England, all using the NHS logo.
Primary Care Trusts (PCTs) the forerunners of Clinical Commissioning Groups (CCG’s), and superceded Primary Care Groups (PCG’s). The PCT’s were responsible for ‘buying’ services for their districts; but were were effectively determined by directives from the strategic health authority (SHA), but were ultimately answerable to the encumbent Secretary of State for Health. Anderson’s private health centres needed contracts from the PCT’s and many were heavily influenced to give the contracts to the ISTC’s. In one instance regarding cateract operations:
Primary care trusts (PCTs) were cajoled into signing ISTC contracts to provide extra capacity they did not need. The starkest example was south-west Oxfordshire, where the PCT board was refused the right to withdraw from a cataract surgery contract when it realised damage might be done to the viability of the NHS’s Oxford eye hospital. In an interview with Society Guardian in June, the recently retired chairman of the PCT described how it was bullied into signing the contract by the Thames Valley strategic health authority, which was itself under heavy pressure from the department.
Full article here See also:
NHS privatisation keeps on failing patients – despite a decade of warnings
NHS trusts bullied into private contracts
Much of this was done under the smokescreen of reducing waiting lists, improving services and saving money; there was no evidence that services improved and the services were often more expensive.
2) Foundation Trusts
In 2001 the then SOS for Health Alan Milburn visited Madrid, here he was shown by his equivalent, the (right-wing Partido Popular/People’s Party) Celia Villalobos a hospital paid for by the government but run by a private company, it had a large degree of autonomy to set its own budgets and set terms & conditions for staff – hospitals managed in this way were called Fundaciónes sanitarias roughly translated as ‘health foundations.’ Milburn liked what he saw and as there were already ‘Trusts’ he proposed to call them ‘Foundation Trusts.’ This was to convert hospitals from publicly accountable institutions providing care to communities into businesses that could be run by private companies..
Trusts were pushed to become Foundation Trusts, although set to mirror the Spanish model, in practice this was watered down. Initially too there were restrictions applied to trusts not achieving the necessary quality qualifications. Legislation was required and in due course the Health and Social Care (Community Health and Standards) Act 2003 A new regulator appeared ‘Monitor’, and Foundation Trusts were supposed to be run like businesses, with a small ‘surplus.’ These new organisations were able to operate with less transparency and take far reaching decisions with only reference to the regulator. As businesses their financial viability was their priority.
Many Trusts were pushed into adopting Foundation Trust status: Mid-Staffs suffered cuts to front-line staff of between 150 – 250 positions and the quality of care suffered as a result:
Monitor also rubber-stamped Mid Staffordshire’s application for Foundation Trust status after minimal scrutiny, overlooking the desperate cuts in staffing that were necessary in order to wipe out the £10 million deficit and achieve a balanced budget – usually with ‘surpluses’ built in to pay for the development of the services – as required for foundation trust status.
John Lister, p27, NHN SOS, 2013. Oneworld Press, referenced to the Francis Report
Robert Francis QC noted in his summary:
What brought about this awful state of affairs? The Trust Board was weak. It did not listen sufficiently to its patients and staff or ensure the correction of deficiencies brought to the Trust’s attention. It did not tackle the tolerance of poor standards and the disengagement of senior clinical staff from managerial and leadership responsibilities. These failures were in part due to a focus on reaching targets, achieving financial balance and seeking foundation trust status at the cost of delivering acceptable standards of care.
Robert Francis QC Press Statement
Ultimately it proved impossible to convert all trusts to foundation trusts, to amalgamate Trusts & FT’s a new regulator was created NHS Improvement.
3) The Internal Market
Under Margret Thatcher The 1989 White Paper Working for Patients was published
1990 the NHS and Community Care Act the internal market is introduced,this was originally just a budget managing tool
PFI – Private Finance Initiative
The private finance initiative (PFI is a way of creating “public–private partnerships” (PPPs) by funding public infrastructure projects with private capital. In 1992 PFI was implemented for the first time in the UK by the Conservative government of John Major. Initially supported by the National Audit Office, see Economist Article here, soon every new hospital had to funded by PFI.
From the late 1990’s onwards more and more private sector personnel were active inside the Department (of Health), often in leading roles…By 2010 a total of 103 PFI hospitals had been built originally valued at £11.3 but expected to cost £65 billion.” Leys/Player, ‘Plot Against the NHS’, p.6
Allyson Pollock, professor of public health research and policy at Queen Mary, University of London describes in her book, NHS plc, described how during a business lunch a merchant banker working for BZW said PFI would ‘take the fat’ out of the NHS and introduce new efficiencies, and enthused about the savings to be made from cutting hospital staff. (A Pollock p.5, NHS plc, 2005, Verso).
By 2015 following the 2008 global financial crisis and years of continued Conservative underfunding (more later) , the UK as whole owed more than £222bn in PFI payments with over £2 billion per year being spent on hospitals alone. For every £1 borrowed, the average paid back is £7, and can be more, it has been compared to buying a house on a credit card.
Particularly illustrative of the issues with PFI is the case of Barts Hospital in London: the hospital costing £1.1 billion, total repayments £7.1 billion, current cost is £127 million a year: Barts current deficit is £134,881 million.
A 4% increase in health spending is required in order to just to maintain existing services, is a figure I have often head quoted; as most are aware the cost of drugs and equipment are always increasing due to pharmaceutical and technological developments. Since the inception of the NHS spending has risen on average at 4%. The previous Labour government did significantly increase Health spending, but since the global crash and the subsequent Conservative Government the increase is about 1% per annum.
The Steady Growth of Health Expenditures
Public spending for health services increased steadily through most of the 20th century, from 0.3 percent of GDP to six percent of GDP by 1980. Following a mild decline in the 1980s and 1990s, health spending increased rapidly in the 2000s to a peak of 8 percent of GDP in 2009.
: Health Spending 1900-2020
At the beginning of the 20th century, government spent about 0.5 percent of GDP on health. But spending began to increase in 1909 after passage of the National Insurance Act, reaching 1.14 percent of GDP in 1921.
Health spending increased steadily in the 1920s and 1930s reaching 1.91 percent of GDP at the start of World War II. Spending kept steady during the war and then increased briskly after the war, reaching 3.07 percent just before the National Health Service was set up in 1948.
Costs rose sharply in the early years of the NHS, reaching 3.6 percent of GDP by 1950 and then dropping to 3.0 percent of GDP by 1955. Spending increased steadily after the mid 1950s, running at about 3.5 percent of GDP in the early 1960s and increasing to 4.0 percent of GDP by 1970 and peaking at 4.98 percent of GDP in 1975.
Health spending declined in the late 1970s, down to 4.7 percent of GDP in 1979 and increased thereafter, reaching 5.24 percent of GDP in 1981 before beginning a decline to 4.28 percent in 1988. Then spending began increased to 5.35 percent of GDP in 1993 and declined to 4.9 percent of GDP by 1998.
Spending began increasing sharply after 1999, and reached 8.01 percent of GDP in 2009. Planned health care spending in the mid 2010s is expected to hold just below 8 percent of GDP.
From ‘Challenges for Health Spending’ – Institute of Fiscal Studies:
Under the last Labour government, real health spending grew at an average rate of 5.6% between 1996–97 and 2009–10. Spending as a share of national income increased from 5.0% in 1996–97 to 6.7% by 2007–08 (and further to 7.8% in 2009–10 as national income fell during the recession). These increases were in part driven by the explicit goal set in 2000 to close the gap between total health spending (as a share of national income) in the UK and in the remainder of the EU15.
In contrast, the three-year period between 2010–11 and 2013–14 presents a very different pattern, with average real growth in health spending of just 0.8% per year. Aside from the three-year period 2009–10 to 2012–13 (over which average growth in UK health spending was 0.0% per year), this is the tightest three-year period of real UK health spending since the period 1951–52 to 1954–55 (when it was cut by an average of 0.3% per year as a result of the introduction of prescription charges and dental fees in 1952).
Existing estimates from the Nuffield Trust (2012) and NHS England (2013) suggest the combined impact of demographic changes and other pressures could increase demand by around 3% per year. For this rising demand to be satisfied without the quality of the care provided deteriorating, either the NHS would need an associated increase in its budget or productivity would need to increase in order to reduce the average cost of providing healthcare (or some combination of the two). Alternatively, the increased demand could not be satisfied, in which case careful consideration would need to be given to the most appropriate form of rationing.
Challenges for health spending, P179, accessed 23/08/2016
The UK’s 2012 ‘current’ spending (public and private, not including investments) on health as a percentage of GDP is 8.5%. This is lower than the EU-15 average of 9.5%. The UK spends less on health as a percentage of GDP than 11 other EU-15 countries. However there was a relative increase since 2000, when the UK spent less than all but one (Ireland) of the other 14 EU-15 countries. Only the Netherlands, Belgium and Ireland have had a higher percentage point increase in their spending on health (as a percentage of GDP) between 2000 and 2012. – See more at: http://www.health.org.uk/health-and-care-funding-nutshell#sthash.6ou30TH3.dpuf