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November 2006

by Gail Cartmail / November 13th 2006

The NHS: privatisation by stealth

How Britain's National Health Service is being given away to the private sector: an analysis introduced by Gail Cartmail, Assistant General Secretary of Amicus. (This version of the article contains formatting which causes errors when viewed in Internet Explorer- there is another version available on this site)

Amicus is Britain’s fastest growing union and has a Health Sector of 100,000 members. In 2005 Amicus affiliated nationally to Keep Our NHS Public (KONP). A decision based on our activists being confronted with creeping privatisation, which in their experience is closely linked to historic debts and deficits that are decimating jobs and services. KONP locally based organisation is proving an asset in building alliances between trade union and user groups. Nationally, KONP information is a reliable source for campaigning - see http//:www.keepournhspublic.com

In January 2006, Amicus organised a lobby of Parliament with three slogans: Stop Privatisation; Stop the Cuts; Stop Fragmentation. It was a huge success but even better was the NHS Together Parliamentary Lobby held November 2006, which for the first time united all health unions including the non-TUC affiliates the RCN, RCM and BMA.

Amicus members have experienced first hand the employment practices of contractor companies they are forced to work for as their jobs are transferred to the private sector. The majority of transferred workers are denied the new nationally negotiated agreement now in force for NHS employees. Worse still we see the economic impact of PFIs on jobs and services. The Labour Government in 1997 failed to pull the plug on PFI and instead encouraged NHS organisations to use the PFI formula for major capital spend. The result is unaffordable interest repayments that lead to recurring debt. It is the equivalent of buying a house on a credit card. Despite being aware of the economic insanity Chief Executives and Finance Directors described PFI as the “only show in town”, there is no alternative funding mechanism.

Will a new, New Labour leader reverse the current Number 10 Policy Unit’s desire for ever more privatisation and PFI type financing schemes? The CBI have predicted that Blair’s resignation would “kill off” public service reform, however at the 2006 Labour Party Conference Gordon Brown was keen to emphasise “there will be no reversal on reforms” if he takes up the leadership.

Below is an analysis of current trends that are adding up to the privatisation of the NHS, based largely on research by KONP. Amicus believes that the period between now and the next general election is absolutely critical. We do not think for a moment that Labour will succeed in winning a fourth term until and unless there is a serious root and branch change to the Labour Government’s policies and a priority for us is ending the market madness that is wrecking the NHS.

Gail Cartmail

 

How our NHS is being privatised 

The government has a vision for the NHS. It wants to transform it from a comprehensive, equitable provider of healthcare into a tax-funded insurer, paying for care provided and even commissioned by others. What emerges will still be called the NHS, but it will not be the NHS as we have known it. It will be a mere logo or kite-mark attached to approved services. This amounts to the privatisation of the health service. Here are just a few examples of the evidence for this.

Handing over the management of primary care trusts. The cat was let out of the bag in late June when the Department of Health placed an advert in the Official Journal of the European Union inviting companies to tender for all the management functions of PCTs. This would have handed control of NHS commissioning to the private sector, meaning US companies like United Health and Kaiser Permanente would be able to decide what treatment patients receive and who provides it – a giant leap towards privatisation. Amicus spotted the advert and raised it in a face to face meeting with Patricia Hewitt and Lord Warner, Secretary and Ministers of State for Health at the same time that KONP activists alerted the press.

Facing front-page “NHS privatisation by stealth” headlines in the Guardian and the Times, and outright opposition from the unions, the government suddenly pulled the advert, blaming “drafting errors” for giving a “false impression”. Two weeks later the advert was back, this time couched in vague and inoffensive language, but every bit as dangerous.

Privatising GPs. The case of United Health Europe (the British arm of America’s biggest healthcare corporation, headed by Tony Blair’s former health adviser Simon Stevens) winning contracts to run family doctor surgeries in Derbyshire, alerted people to the privatisation of GP services. Locals were opposed to the deal, and alarmed at the lack of ‘patient choice’, but lost the first round of a legal challenge. The government has opened the door for corporations to run GP surgeries, and the private sector is charging in. The Department of Health has taken control of the procurement of GP services in 30 areas to speed up the process, undercutting the rhetoric of community involvement. The deals will be worth £150-200 million.[2] Meanwhile it has already awarded the contract for a 7,000-patient practice in Barking and Dagenham to private company Care UK, and several more contracts are waiting to be signed. Under political pressure, other NHS primary care trusts have begun to put practices out to tender – a survey showed that one in three plan to strike a deal with the private sector by the end of the year.[3]

Subsidising the private sector. The government wants the private sector to set up in “competition” to the NHS in order to create a market. To do this, it has subsidised Independent Sector Treatment Centres (ISTCs) – clinics carrying out simple operations like cataracts, run by private companies for profit but paid for out of the NHS budget. The Department of Health admits that on average these centres have been paid 11% more than the NHS for each procedure, despite only taking on simple and cheap cases and not having to train junior staff. With these factors added in, ISTCs are being paid around 30% more.[4] Companies are also given guaranteed contracts for a set number of operations – whether they perform them or not. The Health Service Journal (21 September 2006) published a damning report showing the shortfalls in procedures undertaken compared with what has been paid for, in one case the PCT reported only 66 per cent of the contracted value was carried out. Quite literally money for old rope.

The role of the private sector is set to be greatly expanded. Tony Blair has said that by 2008, 40% of the work carried out by private hospitals will be paid for by the NHS.[5] Of course companies know very well what is going on – hence the arrival of huge foreign healthcare corporations like United Health, the merger of South African giant Netcare with BMI (Britain’s biggest private hospital group) and a surge in the share prices of companies like Care UK.[6]

More subsidising of the private sector. Recent Department of Health guidance on commissioning seeks to “reduce the risk for providers and consequently make the provision of new services more attractive to... new entrants”. It advises that this be done by paying a “supplement… to cover the set-up or development costs faced by a new provider”; by guaranteeing the “minimum income to be provided”; and by “lowering the barriers for new providers” through “reducing the capital investment required from the provider” – i.e., supplying the buildings.[7]

Charges. With privatisation comes charges for services that were formerly free. This is already happening, as NHS trusts scramble around for money in order to survive in the new market environment. Hospitals are hiking up parking charges and privately installed telephone systems levy 49p a minute for incoming calls to sick relatives.[8] More serious are clinical top-up fees. Queen Charlotte’s and Chelsea Hospital is charging pregnant women £4,000 for a one-to-one midwife service – despite this being the NHS standard. Others are exacting fees for removing moles and warts.[9] Privately NHS Trust Chief Executives are reporting an additional 15 per cent administration cost to keep the internal market balls in the air.

In their own words. From inside the Department of Health, Andrew Foster, the outgoing workforce director, described the situation well when he said: “The NHS Plan is no longer the blueprint for the NHS. What has really emerged over the last two to three years is that the vision, and it's a prime ministerial vision of all public services, is one where you create a self-improving system by using a mechanism of markets.”[10]

Tony Blair’s vision was revealed when he said that the Tories had been heading in the right direction with their internal market reforms of the 1980s and 1990s. In his opinion they only failed because the reforms were carried out “at a time of chronic underinvestment”. In opposition Blair had taken a different tone, asking John Major in 1995: “Is not the effect of government policy on the health service now to pit nurse against nurse, hospital against hospital, and doctor against doctor? The result will be to divide and rule; and the commercialisation, demoralisation and break-up of the health service, when people want to see the National Health Service run as a proper national service for the people.”[11]