NHS for Sale: Myths, Lies & Deception (22 page)

The result of outsourcing this practice had been disastrous. Within four years a well-regarded and stable NHS GP practice (dating from the 1920s) had become a privatised business, to be traded on and then closed down when deemed unprofitable, changing hands twice in the process. 4,700 patients were left without a GP at very short notice. The much vaunted concept of ‘patient choice’ had played no part in the events and indeed patients had not only had no choice but had to turn to the local paper to find out what was going on. (The PCT bizarrely confessed that it had consulted only a few patients on the planned closure ‘in order to avoid a run on other practices’.
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) The patients were the last people who had benefited from this intervention by the private sector, while the companies involved had run rings around the NHS commissioners.

Camden Council’s health scrutiny committee fought hard to hold an inquiry. They were highly critical of the contract and the lack of accountability and transparency, having had to use FoI requests in order to see the original contract. They reported: ‘The contract was inadequate; it couldn’t prevent UH from upping sticks and handing over to another provider. It makes a farce of the whole tender process…. In our view primary care by GPs should not be a commodity traded in the
private market …’

Neither UH nor The Practice plc deigned to attend the enquiry.
The Guardian
reported that the PCT had since amended its contracts, but given the private sector’s access to high level legal expertise it is likely that they will continue to stay one step ahead of public services when it comes to writing favourable contracts.

Local GP Dr Paddy Glackin said: ‘I don’t think there is a single private operator that has seen out the full length of its contract to run a GP surgery in inner London. They cannot deliver the practice at NHS prices.’ A UnitedHealth spokeswoman said that the Camden Road surgery was ‘nothing to do with us anymore’.
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The Practice plc has form in this matter. The same
Guardian
article reported that they had terminated primary care contracts in Woking, Leicester and Nottingham. The accusation levelled against them was always the same – promises to invest while they were bidding for contracts followed by a failure to deliver (including the excessive use of locums
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) and then walking away when there was no money to be made.

Other companies have behaved in the same way. In May 2014 Care UK pulled out of primary care in Newcastle half way through a contract after local campaigners complained about the quality of healthcare provision (see
Chapter 4
). The company left after ‘reviewing (their) business strategy’.
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In July 2014 Concordia Health asked to terminate their contract to run a GP practice in Kent.
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By that stage the practice was staffed by locums, all of the permanent GPs having left within seven months of Concordia’s takeover (a typical pattern after private takeover). There had been angry protests by patients concerned about difficulties in getting appointments, and
lack of continuity of care after the departure of the permanent staff. The local NHS offered patients the unappealing alternatives of another company to come in and run the practice or registering with another.
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Patient choice perhaps but not as patients had understood it.

In November 2014 Concordia pulled the plug on another contract in Dover two years early, leaving 3,650 ‘highly vulnerable’ patients without a GP. The response of the NHS England spokesman is worth quoting: ‘We feel that Concordia’s withdrawal presents an opportunity to enable other GP practices to expand their patient lists, thereby becoming more resilient and better equipped to deal with challenges facing general practice …’ One local surgery showed their appreciation of this ‘opportunity’ by closing their patient list. At the time of writing the fate of the patients abandoned by Concordia is unknown.

In August 2014 Serco, one of the biggest players in NHS outsourcing, announced that it had experienced heavy financial losses on its NHS contracts and would be withdrawing from providing clinical services in the UK.
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It said it would continue to bid for non-clinical services, presumably seeing its future and more money in helping to run the increasingly complex NHS market.

Perhaps it is worth asking in conclusion why the private sector is allowed to withdraw from unprofitable contracts while hospitals collapsing under the weight of unsustainable PFI debts cannot do the same?

The other unanswered question is whether the private sector can ever make a profit by taking over the running of a cost-effective health service without it resulting in deterioration in clinical services. The answer at the moment would appear to be not.

The predatory nature of the private sector in its dealings with public services is well illustrated by the ongoing saga of PFI. PFI has proved to be a costly disaster for the NHS with the financial problems of a number of trusts being traced to their crippling PFI debts (see
Chapter 1
), but one aspect of it that has received relatively little mention is the antisocial financial behaviour of the private companies involved.

In 2012 the
Sunday Times
drew attention to a report by the European Services Strategy Unit that ‘as many as 270 PFI projects were based offshore avoiding millions in tax. These involve more than 70 NHS projects.’
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Locating the firms off shore in places like Guernsey avoids payment of corporation tax and is logical behaviour by companies whose job is to maximise profits for investors – it is their duty to avoid tax whenever possible.

But it means that when taxpayers fund these NHS PFI projects the money is not recycled back into the UK economy but instead goes to tax havens abroad as well as into shareholders pockets. (Ironically one of the early arguments in favour of PFI was that taxpayers would benefit when the contractors paid UK corporation taxes). This looks even worse if you consider the large PFI profits already generated at the expense of the NHS budget, with the taxpayer set to hand over almost £80bn to PFI companies for £11bn worth of infrastructure. Margaret Hodge, chairwoman of the Commons public accounts committee, said ‘it is shocking. Those who write PFI contracts should now insist the companies stay onshore.’
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But it seemed that once again few lessons were learned. In 2013
The Independent
reported that private companies running NHS care services were using a tax loophole to
reduce their taxable profits.
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Margaret Hodge was again outraged:

Companies have a duty to pay their fair share of tax … Yet it seems every week brings a new revelation of another business that is using artificial structures to move profits out of the UK, seemingly for no purpose other than to avoid tax.

The case of these private health companies … I find particularly depressing. These are companies who get their income overwhelmingly from tax payers’ money, for the purpose of providing a vital public service, yet do not appear to be making a fair contribution to the public purse.

The tax loophole in question had been put in place by the government, who had ‘considered removing it’ but then done nothing. In 2014 further evidence emerged about PFI financial sleight of hand at the expense of the taxpayer.
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Private companies were doubling their PFI profits by selling on or ‘flipping’ projects a few years after finishing them, and just four big companies had made profits of more than £300m in this way. Many of the companies buying the contracts were based in tax havens which had been specifically set up by banks and fund managers for this purpose. PFI schools and hospitals were being ‘flipped’ as casually as pancakes and the companies concerned were pocketing the proceeds while the hospitals concerned, saddled with their massive PFI debts, were in increasing financial difficulties.

Margaret Hodge echoed the anger of her Tory predecessor Edward Leigh, who had described the refinancing of the Norfolk and Norwich Hospital PFI as ‘the unacceptable face of capitalism’. She declared: ‘It is a total scandal that the
public sector has privatised these projects so badly. We have all been ripped off.’ She conceded that many of the worst PFI cases had been negotiated under Labour: ‘I’m afraid we got it wrong. We got seduced by PFI.’
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She complained that the government was bad at negotiating with the private sector, but after hearing so much evidence against PFI she failed to reach the obvious conclusion – that the problem was not that the government had privatised these projects ‘so badly’, but that they had privatised them at all. Complaining that the private sector maximises profits at the expense of public services is tantamount to complaining that cats kill birds. It is in their nature and the answer is not to try to legislate against the behaviour of cats but to recognise it and take appropriate precautions. No one would leave their cat in charge of the canary. Equally private companies cannot be trusted to behave well when delivering public services.

Public services are those which have been generally agreed to be so vital that their provision must be guaranteed.
*
It is clearly in our common interest to have universal provision in areas such as emergency services, law enforcement and education. In this country we have had the benefits of public provision of health care since 1948, and we have grown accustomed to a fair, universal and civilised system where we contribute according to our ability to pay and take out according to our need. Few people have any idea of the
suffering that many endured from untreated illness before the advent of the NHS, nor is there a collective memory of the fear that people once had of the financial consequences of illness.

Public services are not profit seeking. Given their nature most public services cannot and will not generate a profit and as a result they are generally highly regarded because of their ethos. ‘Patients before profits’ has been the marching cry of NHS campaigners since the privatisation of the NHS began, and it neatly sums up the difference between the public and the private sector. As described above, the first duty of the private sector is to its shareholders and it shows. In December 2014 Margaret Hodge wrote about the outsourcing of public services:

Too often contractors have not shown an appropriate duty of care in the use of public funds. Too often the ethical standards of contractors have been found wanting. It seems that some suppliers have lost sight of the fact that they are delivering public services, and that brings with it an expectation to do so in accordance with public service standards. The legitimate pursuit of profit does not justify the illegitimate failure to conduct the business in an ethical manner. A culture of revenue and profit driven performance incentives has too often been misaligned with the needs of the public who fund and depend on these services.
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The malign effects of privatisation on those who provide health care are insidious and multi-faceted, as the corruption of the ‘industry’ in the USA demonstrates. The medical profession no longer offers an intellectual leadership or the example of social conscience informed by science and
humanity. The professional covenant with the patient is reduced to explicit contracts. Doctors become mere sessional functionaries.
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Loyal company men and women, whose prime responsibility is to their employers, deny patients treatments that do not make a profit while, as front office salespersons, they recommend interventions that may not be in the patient’s best interest (if their patient can pay). Medicine as a ‘business’ places the responsibility on its practitioners to shift as much product as can be paid for. (In the US even those who can pay have problems with excessive and/or unnecessary treatment, while those who can’t go without.)

This chapter and the next are full of examples of failures of ‘ethical standards’ and of the profoundly antisocial behaviour of some private companies in pursuit of profit at the public’s expense. We hear very little of this from the proponents of outsourcing public services, and when it is uncovered their conclusion is not that we need less of it but, as Margaret Hodge has recommended on more than one occasion, that we need to regulate it more tightly – something that has proved impossible thus far. The kind of regulation that would make the private sector more accountable and truly committed to meeting the needs of the population is at odds with the ethos of the multinational healthcare providers who are currently taking over more of the NHS.

New examples of unethical behaviour appear on a regular basis, and one was revealed recently when BUPA was found to have been offering patients bribes of £500 to £2000 to have their operations on the NHS rather than in their private hospitals. A letter to a cardiac patient explained ‘If you are admitted to hospital under the NHS as an in-patient for any of the above procedures (cancer, heart and gynaecological operations) we will pay you a fixed sum amount’. Dr Clive
Peedell, a cancer specialist, accused BUPA of cashing in on the NHS. ‘It looks as though BUPA have calculated that it’s cheaper for them to pay patients to use the NHS than fork out themselves for private treatment which would cost them thousands of pounds.’ A BUPA spokeswoman denied that the cash offers were bribes and claimed it was simply about ‘offering customers choice’.
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The private sector is not above scaremongering to increase business. In 2013
bestmedicalcover.co.uk
, a private medical insurance company, launched an advert which wrongly claimed that the English NHS had been responsible for 13,000 needless deaths since 2005. They misquoted Sir Bruce Keogh on the subject and went on to advise readers to prevent their health being part of the scandal, adding that ‘health insurance could quite literally save your life’.

The Advertising Standards Authority received 54 complaints, which it upheld, judging that the claims made by the company were misleading and ‘appeal to fear to sell private health insurance and that it was not justified to do so’.
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Even so the advert had undoubtedly done damage by frightening people before it was withdrawn, with no possibility to correct it.