NHS for Sale: Myths, Lies & Deception (34 page)

Others view the report as proposing a significant departure from the current model of the NHS, making radical changes that politicians dare not.
¹⁷
Critics have noted
that new structures such as ‘multi-speciality community providers’ and ‘primary and acute care systems’ (PACs) are akin to accountable care organisations modelled on Kaiser Permanente, the US Health Maintenance Organisation (HMO). Some argue their appearance could prepare the way for an insurance based system for the NHS and allow private multinationals to run the NHS as US style HMOs and hospital chains.

Thus while
The Five Year Forward View
carefully skirts around any reference to competition or the free market established by the Health and Social Care Act, it contains avenues that could lead to further privatisation. It has indeed been labelled by some ‘a wish list for privatisers’,
¹⁸
39 pages of sophisticated propaganda dressed up in bland language about ‘integration’ while containing hand grenades for the NHS. As described in
Chapter 11
, the contentious ideas are well concealed between layers of platitudes about the NHS and one has to dig deep to understand what is really being proposed.

Stevens concedes that the Tory plan to freeze NHS spending in real terms up to 2021 is unsustainable, but his answer is to call for a combination of £22bn of ‘efficiency savings’ over the five-year period – together with additional government funding of £8bn above inflation. There is little chance that either element of this ambitious equation will prove to be possible. There are serious doubts over the possibility of raising such substantial amounts of savings. All three main parties – even while welcoming the Stevens plan (which contains sufficient motherhood and apple pie to make criticism seem churlish) – have promised much smaller additional amounts towards the NHS budget than Stevens has requested. Stevens makes no mention of the many problems
arising from the NHS market and its associated high costs, which should come as no surprise given his background of ten years as a senior executive at United Health, one of the biggest US healthcare multinationals.

Genuine integration is vital, even though Stevens has used the concept of ‘integration’ to dress up his new US-inspired models of care. One of our main criticisms of the Health and Social Care Act, competition and the market that has been created in health care since 2000 is that they fragment health services, restrict the proper integration of care and obstruct the planning of services to meet local needs. It’s not integration that is the problem, but the potential role and influence of the private sector, and the fact that social care – funded through local government and not the NHS – has always been subject to means-tested charges (and in recent years almost entirely delivered by private sector contractors) and not, as the NHS, provided free at point of use and funded from general taxation.

This is why any progressive integration of health and social care must be led by the NHS, publicly owned and financed, and not handed over to local government on its present rules. There must also be a campaign for the abolition of means-tested charges and for proper funding of social care, as well as improved wages and conditions for care staff, many of whom are on zero hours contracts and near the minimum wage. It’s time to bring social care services back into public ownership and control.

Throughout
The Five Year Forward View
document Stevens clearly places heavy reliance on an expanded role for health promotion and prevention of ill-health to reduce the demand on frontline services that would in turn result in savings. While every sensible person is in favour of improving public
health, avoiding the excessive use of hospitals and healthcare interventions, and minimising dependence on drugs, any strategy based on health promotion is necessarily going to take a long time before it delivers tangible results, and will make little if any significant short-term difference to the needs of older vulnerable patients for hospital and other health care. Indeed life expectancy has fallen slightly in some parts of England since 2011, the first time this has happened in many years.
¹⁹
Cuts to social services and pressures on the NHS have been blamed.

On 1 October 2014, Cambridgeshire and Peterborough Clinical Commissioning Groups announced that the biggest contracting exercise to date had concluded by awarding an £800m, five-year contract for Older Peoples Services not, as feared, to Virgin or Care UK, both on the final shortlist, but to the NHS bid, headed by Cambridge University Hospitals NHS Foundation Trust.
²⁰

It was a timely reminder that despite the irresponsible actions of some CCGs, tendering exercises do not have to result in privatisation. However they DO inevitably waste huge amounts of money and management time, disrupt cooperative and collaborative working relationships with local providers, and create more complex and less stable systems.

Elsewhere tendering exercises have resulted in worse outcomes. As discussed in
Chapter 8
, companies and privateled consortia have been picking up contracts that seriously destabilise local provision of core NHS services. Private sector inroads are disproportionately disruptive, even if their scale is frequently exaggerated. The damage to the NHS as
a single, comprehensive service, which should be planned around local health needs rather than subject to a maelstrom of competitive markets, goes much further than the amount of money involved.
*

In fact the private sector has never shown any ambition to take over the whole of the NHS, in the way private capital once coveted British Telecom, British Gas, and other utilities. The reason for this is simple: as discussed in
Chapters 8
and
9
, the private sector is profit-hungry but largely risk-averse. Most of the NHS is high risk, and not profitable in its current form. It can only be made attractive to the private sector by paying over the odds for services which the NHS currently provides at lower cost – and thus inflating costs – or by excluding risk, for example by refusing to cover more complex and costly cases.

Private companies want only the sectors of the NHS which they (sometimes wrongly) believe offer the prospects of delivering simple, uncomplicated services for guaranteed profits. But their narrow focus of interest means that their perhaps surprisingly small total share of the cake has become far more significant than it might appear. A Department of Health spokesman said in September 2014: ‘Use of the private sector in the NHS represents only 6 per cent of the total NHS budget [£6.3bn] – an increase of just 1 per cent since May 2010.’
²¹
Much of the budget for patient care, however, consists of services that the private sector does not, and does not wish to, provide. Their main interest, apart from social care, is concentrated in elective care, community health services
and mental health – the main growth areas up to now. So the £6.3bn needs to be seen not as a share of the
total
spend, but as a proportion of the
relevant
spending in the NHS. (For this and other reasons private providers cause disproportionate damage. What is more, the Health and Social Care Act has been in place for only two years, so the story is just beginning).

So more precisely, the £6.3bn in private clinical contracts are focused on £48bn of the NHS budget involving the areas of interest to the private sector (primary care, mental health, community and elective services). That means 13.2 per cent of this sector of the NHS is now contracted out to profit-seeking private companies.

But let’s not forget that the remaining, crucial 86.8 per cent is still (for the time being) in the public sector – along with virtually all of the other clinical services, and 100 per cent of the costly, complex and emergency caseload. This is no argument for complacency: figures show that up to a third of new contracts have been going to the private sector and another substantial share to the voluntary sector, leaving just 55 per cent of new contracts retained within the NHS.
²²

As discussed in
Chapter 9
, there have been some local-level inroads into primary care and contracts for general practice (one profit-seeking company with 20-plus practices in Merseyside, for example) and in particular out of hours contracts. Overall the contract value of corporate provision of primary care remains small in comparison with the total spend, and the contracts have often been short-lived, struggling to recruit and retain appropriately skilled staff on terms and conditions less favourable than mainstream primary care.

The Institute of Fiscal Studies concluded from its 2013 analysis of figures up to 2012: ‘Despite large growth in the role
of private providers in the delivery of some procedures, the vast majority of care is still provided by NHS hospitals.’
²³
The impact of tendering is not evenly spread because not every area has contracted this work to private providers. In some areas the private sector has made little headway, in others it has a disproportionate share of uncomplicated elective care.

As noted in
Chapter 5
, the impact on those NHS and foundation trust hospitals which are affected is magnified by the fact that the private sector takes only the least complex elective services, leaving the NHS with all the more costly complex patients as well as the emergencies. This results in a reduced overall caseload, and thus less income with which to maintain services. It also poaches staff trained by the NHS at public expense and, by taking routine cases, the private sector creates problems for teaching hospitals in training a new generation of doctors and specialist nurses – since the private sector provides no training, and runs an atypical case mix and environment unsuitable for training.

More damage has also been done in community services, where the private sector has won contracts mostly on the basis of loss leaders, and has so far largely failed to deliver any of the hoped-for profits. As they try to extract profits from what were previously often under-funded and neglected services, the private sector scales down the workforce, dilutes the skill mix, and often runs into serious recruitment and retention problems. This is one reason why Serco, previously one of the market leaders, have recently pulled out of contracting, having withdrawn early from some existing contracts, admitting to substantial losses. Other leading companies are known to have serious problems.
²⁴

But as
Chapter 9
recounts, musculoskeletal (MSK) and other contracts are still being tendered by some CCGs. Among the
most irresponsible is NHS Kernow, which is putting elective services out to tender that are worth a quarter of the Royal Cornwall Hospital Trust’s budget – despite the fact that this could seriously destabilise the only acute hospital provider in the giant peninsula county.
²⁵
So the overall share of these service budgets going private could still be set to increase significantly, especially if the Tories win the next election. The trend since 2010, as the NHS Support Federation has shown, has been towards private sector providers.

But let’s not forget that even in elective and community services (which are most affected by privatisation) and mental health, where 14 per cent or more of spending goes to private providers, the vast majority of services – including all of the crucial emergency services and care for chronic and complex cases – are still in the hands of providers rooted in the NHS, and run not for profit. There is plenty of the NHS left to fight for and much to try to recapture.

The Cambridgeshire decision shows that privatisation is NOT a necessary and inevitable conclusion of even the skewed tendering process imposed by the Health and Social Care Act. The level of public awareness, and the resultant local outcry at privatisation, a factor that clearly influenced the Cambridgeshire decision, are growing. The summer of 2014 saw 300-strong meetings in Stoke on Trent to challenge the possible privatisation of the pathways for cancer and end of life care in Staffordshire.
²⁶

A reversal of the Act, along the lines of the NHS Reinstatement Bill
²⁷
would therefore open the door to reclaiming the remainder of the services as contracts come to an end, or private companies themselves follow Serco and pull out for lack of adequate profits.

Forests have been felled in the pursuit of writing about better ways to run the NHS and we do not intend to add to them with this book, but a number of suggestions have already been put forward which are brought together here for convenience:

• The Secretary of State should take back responsibility for the NHS.
  
• There is no place for a competitive market in delivering health care. The purchaser provider split has been an expensive and failed experiment and should be scrapped.
  
• Patient choice should be choice that is relevant to patients and not politically expedient. Individual patient choice has consequences which have to be weighed against civic responsibility.
  
• Patient voice is important for the health of the NHS and should be restored via structures commanding the same degree of influence as Community Health Councils once did.
  
• The NHS must be adequately funded by international comparators. Significant amounts of money can be saved by ending the competitive market and dealing with the loss of money to PFI projects. Opinion polls show that the public is willing to fund a publicly provided NHS via a hypothecated tax
  ²⁸
  (i.e. specific taxation producing revenue for particular expenditure.): but the bulk of the cost should flow from collecting the £120bn of unpaid tax each year
  ²⁹
  and other progressive taxation.
  
• There should be a culture of learning from errors rather than naming and shaming.
  
• There needs to be proper investment in NHS staff and their training.
  
• The main job of managers should be to facilitate clinical activity and not to chase political targets.