The Coalition government is on its back foot over its NHS reforms - even if PM Cameron has been reluctant to admit it. The media are already accusing him of another U-turn. But whatever now happens to the "Health and Social Care Bill" - which was paused in its passage through parliament on 4 April and is currently being amended - the ConDem government certainly intends to press on with it.
Suffice it to say at this point, that the ConDem's NHS plan cannot but be seen in the context of the £20 billions-worth of NHS cuts ("efficiency" savings!) over 4 years and 33% saving on administrative costs, which Brown's Labour government had already placed on the government agenda, before leaving. Evidently this is what "ring-fencing" of the NHS budget means to both Labour and ConDem, since all three parties have always pledged not to touch a hair on the NHS head - and moreover, to increase spending on it, year on year!
The new government bill is based on a White Paper, entitled "Equity and Excellence: Liberating the NHS", which appeared just 2 months after the ConDems were elected last year. It proposed a top-down, radical reorganisation of the NHS to be completed within 2 years, and among other things, that GPs must merge their practices into commissioning "consortia" in order to procure patient services themselves, hopefully from the private sector, after the abolition of strategic health authorities and primary care trusts, which up to now have organised all primary care. This was not received at all well.
Cameron had, of course, given so many protestations of good faith, criticising Labour's "too many pointless top-down reorganisations of the NHS"; professing to "love the NHS", saying it was his "priority", and "safe in his hands"!), that this outright attack should really have been entirely predictable!
However it seemed to have come out of the blue to a lot of people. One medical commentator called it a "solution in search of a problem", expressing his doubts as to its necessity. The media pointed to the fact that no such intention to "meddle with the NHS" (which British politicians do at their peril) was in the manifestos of either of the coalition parties. Which is true, of course!
The pause for... a kitkat?
So, the furore created by this proposed reform to "liberate the NHS" (some say it spells the "liberation" of the NHS from all its founding principles) did not and could not die down. By early this year, Cameron was forced to backpeddle. He and his health minister Lansley - the latter amid calls for his resignation, officially announced "a pause, to listen and reflect" on the 4 April 2011, after an almighty hue and cry had been raised, mostly by the very people Cameron would require to help implement the reforms, that is, doctors and nurses, the latter making a resolute stand at their annual Royal College of Nursing conference.
To appear serious about the "pause for thought", Cameron and Lansley appointed a "panel of experts" (45 of them, headed by a professor of general practice) called the Future Forum, which they tell us is completely "independent", nevertheless, in order for them to come up with ways to make the Health bill more acceptable. They did so very quickly, reporting just 8 weeks afterwards, on 13 June.
Their starting point was to pad the bill with a lot of cotton wool. They said the government must place the "opening words of the NHS Constitution" at the forefront of its reform, i.e., "The NHS belongs to the people. It is there to improve our health and wellbeing, supporting us to keep mentally and physically well, to get better when we are ill and, when we cannot fully recover, to stay as well as we can to the end of our lives. It works at the limits of science - bringing the highest levels of human knowledge and skill to save lives and improve health. It touches our lives at times of basic need, when care and compassion are what matters most.".
This was the idea of Professor Field who led the forum. However, (and again this was predictable) the Forum's recommendations were merely to slow down the pace of change, and allow GPs to prepare themselves for the takeover of commissioning, with the addition of a layer of extra advisors and interim support. Their consortia were to be called "practice commissioning groups" instead. As a sop to the Royal College of Nursing (and this has satisfied them, largely) and the doctors, there will now be places on all the commissioning bodies for a nurse and doctor representative.
In fact, probably the only really significant amendment was that "Monitor", which is presently the NHS's regulator for Foundation Trust Hospitals (those hospitals awarded financial independence within the NHS), was not to be given a new role primarily promoting competition, meaning boosting the role of the private sector, as was initially proposed. Said Future Forum, "the place of competition should be as a tool for supporting choice, promoting integration and improving quality. It should never be pursued as an end in itself. Monitor's role in relation to 'promoting' competition should be significantly diluted."
And as one commentator remarked, doesn't that mean that one of the aims of the reform was for competition to be pursued as an end in itself, rather than for the sake of the patients...? Oops.
How to denationalise
Before going any further, it is probably helpful to outline the Bill's main points in more detail with amendments suggested (and apparently taken on board) by the government. In a 420-page document, several times longer than the founding document of the NHS itself, the Bill calls for a major structural reorganisation of the NHS. It would abolish 2 whole tiers of health service management, which are currently responsible for allocating 80% of the £100bn annual health budget. This is, apparently, to go ahead.
These 2 tiers employ around 35,000 people. They comprise first, the 10 Strategic Health Authorities (SHAs) which plan local health provision and health protection on a geographical basis and second, the 152 Primary Care Trusts (PCTs) which are responsible for ensuring access for patients to primary and secondary care, by putting arrangements in place with local services and health care organisations. The purchasing of care for patients, according to the NHS internal market's "purchaser-provider" split is ultimately the responsibility of PCTs - for the time being.
By getting rid of the SHAs (by 2012) and PCTs (by 2013) the new legislation would pass health protection and planning over to Local Authorities and force GPs to take on managing and commissioning of local health care themselves - under the central bureaucratic supervision of a new "NHS Commissioning Board".
The Bill has made and still does make it compulsory for all GPs to join so-called "GP Consortia" by 2012, like it or not. After amendments the consortia will be known as "clinical commissioning groups instead" and the deadline is extended so that those GP practices not ready can take longer. Of course they will still have to buy-in services from providers - which could be private companies, not-for-profit "social enterprises", or NHS bodies.
The National Audit Office puts it this way: "The Department believes that this will create incentives for clinicians to ensure commissioning decisions provide value for money and improve quality of care, through more efficient prescribing and referral patterns". But given that PCTs do not do any prescribing, nor engage in patient referral, who will GPs be measuring their greater efficiency against?
It should be said that while a small number of GP practices have already been commissioning services for themselves, some for many years, on a voluntary basis - and some practices are already managed by private sector healthcare companies which do this on their behalf - this coercive measure was not received at all well by the majority of GPs. Cameron may boast that 1,100 practices wrote to newspapers supporting the Bill, out of around 8,260 GP practices in England, but this is hardly an endorsement!
"Pathfinder consortia" have already been established, to be known as "shadow" consortia - reminiscent of the ludicrous "shadow" privatisation of the railways in the early 1990s. This includes one in 100% Labour-dominated Barking and Dagenham, which complimented Cameron on his reform.
At this stage, these consortia are meant to work with PCTs in order to develop their own new relationships with local so-called "Health and Wellbeing Boards" which are being set up in conjunction with Local authorities. In other words PCTs are meant to facilitate their own undoing, until they are fully undone. Not that this is all fully worked out yet. "The Department is seeking to clarify other issues, including for example the handling of legacy debts and liabilities from Primary Care Trusts"...
The other aspect of the bill is the expansion of the powers of "Monitor" which up to now has been the regulatory body for Labour's flagship foundation trust hospitals. It will still become the so-called "economic regulator" of the NHS, but as explained above, its initial primary remit to promote competition is now watered down with a provision that "cherry picking" of services by private companies will not be allowed...
"Monitor", however, will still have the power to licence all providers of healthcare, jointly with the Care Quality Commission and set prices. It will be meant to "re-level the playing field" to the benefit of the private health sector, thus in fact encouraging private profiteering out of NHS funds. And in particular it will facilitate the closure of so-called "failing hospitals", substituting provision of routine NHS care, by the growing number of private hospitals, at the expense of the NHS budget.
The hospital trusts which have not yet had "foundation status" (73 out of 167) bequeathed upon them would have had to become foundation trusts by 2014, or be taken over (closure or privatisation are really the only open options.) Now, following Future Forum's recommendations, the "blanket deadline" of 2014 will not be enforced, but the aim to implement this "reform" has not been removed. Apparently 22 of these trust hospitals are in financial difficulties and may face whole or part-closure.
Funnily enough, when one looks at these reforms, there seems to be a lot of centralisation going on for a government which claims to be against centralisation. So in place of the various management structures now in place (SHAs, PCTs and others), one single NHS Commissioning Board would in fact become a de facto overall "NHS management board" for the whole of England, holding GP contracts, and overseeing the commissioning of primary and secondary care services. David Nicholson who is the current chief executive of the NHS (and has been since 2006), will become CEO of the Commissioning Board, which, sort of, says it all!
Another change which the government is promoting is its apparent stress on "public health" with both the creation of a specific, central Department of Health responsibility under the auspices of "Public Health England" (PHE) for this - then the devolution of the actual work required around this ( and no doubt the blame when things go wrong) to local authorities - along with the abolition of the Health Protection Agency whose function will either be abolished with it, with what is left, taken over by PHE.
Supposedly "putting patients at the centre of the NHS" which is what Cameron and Health minister Lansley pretend is the aim of their reform, will be realised via "HealthWatch England" (original, is it not?!) - staffed by the health minister's appointees - but which the government claims will be "independent"! HealthWatch bodies will however be set up locally by local councils.
The government conveniently reckons that by 2014-15 the reorganisation will have seen a 33% reduction in administrative costs, and in 10 years £11.8bn (just £1bn a year?) will have been saved overall, against direct costs of the reforms of £2bn. But this is just guesswork.
Liberating the NHS... from the public sector?
What is behind this? Why abolish PCTs, while replacing them with several new layers of "management" in the form of consortia commissioners, the overall Commissioning Board, joint local authority WellBeing Boards, etc.,?
This is what Cameron said on 6 May in a speech to justify his changes in the NHS at Ealing Hospital: "We have a commissioning process where a tier of management, who sit above doctors, are in charge. Yes, these managers do important and valuable work. But they're not on the frontline so sometimes, they don't know precisely what local patients need. Don't take my word for it. Last year, the Health Select Committee said "Primary Care Trust commissioning is widely regarded as the weakest link in the English NHS", citing their "lack of clinical knowledge" in particular. This is what top-down control is doing to our NHS - and I believe it should change."
Of course this is both truth and nonsense. Certainly Cameron and Lansley were not happy with PCTs. But was it because they did not have enough expertise?
PCTs had only been in existence as such, for 3 years, when, in 2006 Blair's health minister Patricia Hewitt decided they should be cut from 300 to 130 or so and that Strategic Health Authorities should be cut from 28 to 9. In the end they were not cut quite so drastically. But this meant that they had to adjust to a really major restructuring which more than doubled the area they were responsible for (to "save" £250m!), after huge job losses and therefore losses of expertise to boot.
Yet even the independent research institute, the Kings Fund, which has been cosying up to the government of late, has explained how much PCT commissioning has improved over the last two years.
The truth, rather, is that by abolition of the pCTs and SHAs, Cameron aims at removing potential obstacles to private sector involvement.
In fact in the last few years there were an increasing number of disputes between private health companies demanding to be "preferred providers" of one or other health provision, because they felt they were being bypassed by PCTs which were inviting "NHS only" bids. They put their complaints to a the purpose-made "NHS Co-operation and Competition Panel". The "guidance" then put out by the Labour government was that procurement should not give advantage to any sector (public, private, third sector/social enterprise).
Just before the last general election, the Financial Times reported that "Private sector hopes that a significant reorganisation of the National Health Service services now underway would rapidly open up a £10bn market in NHS care have been dashed." It went on to explain that not one of the PCTs in England was going to put its district nursing out to tender, because the NHS was being treated as a preferred provider.
At the time it was all down to Andy Burnham, then Labour's new health secretary, who had said that the NHS would now be the "preferred provider" of all such services, rather than "any willing provider" - something which led (albeit very briefly) to a big sigh of relief on the part of the health workers involved in community services. This was despite the fact that the NHS chief, Nicholson, had told PCTs to "find a new home for their community services" which involve some 250,000 staff, and £10bn of expenditure. Of course Burnham was quickly told to change his tune, which he did.
Labour's flagship Independent Sector Treatment Centres (ISTCs, another legacy from Labour's Patricia Hewitt) - the first of which opened in 2003, are having a hard time getting their contracts renewed by PCTs. Only 12 of the original contracts are still running. That said, in total, these contracts are worth £1.47bn to the private sector. Recently newspaper reports have exposed almost £500m in wasted fees paid to such centres because of block contracts for surgery for instance, when operations were not carried out. One of the worst performers was the Greater Manchester Surgical Centre, which received £38m for phantom operations. Run by the South African private health group Netcare, this same company was convicted last year in a South African court for performing over 100 illegal kidney transplants in KwaZulu-Natal, for profit. Five donors were minors, having been paid cash for their kidneys.
Contracts agreed to by previous Labour government mean that "first wave" ISTCs had to be bought back by the government after 5 years on which so far £70.1m out of £186m has been paid. When plans for 2nd wave ISTCs were reduced from 24 schemes to 10, the NHS paid £59.8m in compensation to the losers.
In April this year, the Cheshire and Mersyside ISTC was "forced" to close by the local PCT, much to the indignation not only of its CEO - of the Canadian-owned Interhealth UK - but also the Financial Times, which reported how it just was not fair that its contract was not renewed. This pointed to the fact that the market in healthcare was not operating properly and that "it appears to suit the NHS locally to siphon off the patients to its own hospitals"!
Yes, the NHS, from the ConDem's point of view with the private health care sector breathing hotly behind them, definitely needed "liberating" from these "public sector sharks"!
Last year, before the general election, the Economist Intelligence Unit published a report on "Britain's Healthcare Funding Challenges". Of course the main emphasis was on the so-called £20bn "funding gap" - as "admitted" by the Brown government, before it made its exit.
It had also come to light by then that McKinsey, the giant US consultancy, had been asked to do a report on NHS finances which the government did not dare to publish - but which leaked out anyway. This report, which did not deserve the hysterical response it received, was actually published by Andrew Lansley on 3 June last year. It recommended many "efficiencies", including making agency temps permanent (save £0.7bn) and offering "attractive" early retirement to over 50s given their high proportion in the NHS workforce. It did not recommend any kind of reorganisation! But it did say that without "efficiencies", the funding gap by 2013/14 could be 10% of spend - and that if it is as much as £20bn, then headcount would need to be 10% lower. It seems that was the only part of it that Labour ministers read!
The Economist speculated on what the Tories might do and how they might help the private sector. It made the point that this sector was not expanding as much as it would like and that it had not made great inroads into the NHS - not yet. On its own, it accounts for 20% of the health market nationally, with 12.3% of the population, by 2011, having acquired self-insured medical expenses schemes.
As to hard data on the "inroads" into the NHS though, this is shrouded in "commercial secrecy", so it is hard to find out exactly what the financial returns are to the private sector out of the public purse.
Cameron, in one of his NHS speeches aimed at convincing public opinion that the ConDems were not out to privatise the NHS, said something about this - while explaining how his reform merely continues the "good work" started by Labour!
"And there's now real evidence that England is delivering more for its money than any of the devolved nations, in part because of the competitive reforms initiated by Tony Blair and Alan Milburn. And allowing new organisations in isn't anything particularly new either. If you go abroad, to Sweden, to Germany, to Spain, you will see lots of different healthcare organisations providing care paid for by the state. And our NHS too has always benefited from a mixed economy of providers. Indeed, £1 in every £20 currently spent by the NHS goes to a private or voluntary sector provider."
That is 5% of NHS funds - going to profiteers. Of course that does not mean they make 5% of the NHS budget as profit - since they still have to pay their own costs. But when Care UK tells us its profits were up 44% (it has 40 primary care sites and 9 specialist centres) in 2008/9, that means that private health has every reason to consider the NHS a big, fat, potential milchcow.
It is worth elaborating somewhat on Labour's legacy because what Cameron says above is quite true, of course. Blair carried on the reforms of the NHS begun by Thatcher and Major - outsourcing, the internal market, the purchaser-provider split, the invitation to private providers to sell operations and other health services to the NHS, all the way to the ISTCs and polyclinics now run wholly or partly by private companies at NHS expense, and "for profit" on behalf of their shareholders.
Of course there are now, outside the NHS, so-called not-for-profit, "social enterprise" companies - like Circle, which claimed of the Hinchingbrooke (ex-failing-)hospital contract it recently took over: "This is great news for the social enterprise business community. Circle is more than 50% owned by its employees and has a clear social mission. An employee-owned organisation gives staff a say in how its run, and production and profitability normally increase as a result of a loyal and happy workforce."
But let us remember that whole idea of social enterprise - the so-called 3rd sector of non-profit, private companies coming into the public sector and taking over, was given its huge boost when Patricia Hewitt was in Blair's Department of Trade and Industry as business secretary. She founded a so-called "social enterprise" unit at the time for this purpose. The problem is that when such companies set up (even if they are a bunch of nurses made redundant recently from their NHS units) they have to pay for themselves, and their start-up - partly, if not wholly, as grants for such enterprise are small. But on-going costs have to be met out of what they earn from the NHS, which means they have to make a profit! And that means they have to cut corners or pay wages under the odds ...or provide a "cheaper" service somehow. They will not last long - and are likely to be bought up by the big private sharks, if they are worth it.
Anyway, today, when Cameron (and Clegg) and Lansley write in their NHS plans that they intend the NHS to have "the largest social enterprise sector in the world", it is probably thanks to Hewitt. And she will no doubt appreciate her own "good work" from her vantage point as consultant for Alliance Boots, and her £55,000 advisory "role" role with Cinven, the company which bought 25 private hospitals from Bupa.
The other trailblazer of privatisation in the NHS, Alan Milburn who was Blair's second Health Secretary and who left for a £300,000 consultancy job with Bridgepoint Capital, a private equity firm with a special interest in healthcare companies!
Labour's Patricia Hewitt - who presided over cuts and financial holes in the NHS, was replaced by ex-postal union leader, Alan Johnson. It was on his watch that Lord Ara Darzi published his plans for polyclinics - some of which are now open and running under the auspices of private health companies, like Richard Branson's Assura and CareUK. These are meant to be one-stop shops where diagnosis and certain treatments can be done in the same place - with the expertise and equipment under one roof, and with extended hours of 8am to 8pm, 7 days a week. The main problem is the high set-up cost. So not many of these have been set up in the first place, even if they would be an improvement on what exists in many respects. And those which do now exist are privately run, of course, for profit!
Labour couldn't be more abject
Although PFI (private finance initiative) was not Labour's idea, that is another legacy it has bestowed on the NHS which has placed an enormous financial liability on the taxpayer for generations to come. And it has given birth to a monster son, as contracts get sold on to financial speculators, thus increasing the taxpayers' burden even more.
There are at present 103 PFI hospitals with a combined capital value of £11bn and lifetime cost of £60bn! The Treasury estimates that the total commitments on all of its current PFI contracts for the next 25 years are approximately £200bn. The problem, again, is that the Treasury has not actually presented a transparent accounting of PFI deals. But most experts agree that the cost of PFI is 8 times as much as the cost of borrowing from traditional sources and building the projects within the public sector. Which means that in fact maybe 8 times as much investment could have been made in the NHS! Instead, we are told that without PFI, there would not have been any more hospitals!
Did the banks suddenly start refusing to lend to the Blair government, when PFI deals began to take off? Not at all. PFI was adopted purely to channel dividends into the private sector on the one hand and to hide pblic borrowing on the other, as these deals were off the Treasury balance sheet.
This collective mortgaging of the tax-paying population is outrageous. But it is not even in the same league as the other iniquities which Labour has presided over, like the privatisation of care for the elderly (long-disowned by the NHS) which has resulted in situations where this now "for profit" sector actually cannot even make enough to keep residential and nursing homes open anymore. So scandals like the Southern Cross crisis erupt with the private provider threatening to make thousands of elderly and infirm residents homeless.
Labour leader Ed Miliband has understandably had nothing to say on the ConDem Bill which is even worth quoting. He obviously cannot really find anything hard to hit with, given Labour's own record in this field.
No to a national wealth service!
So what has been the response to the ConDem attack on the NHS? As Stephen Dorrell one of the Tory MPs has said, it is all really about cutting the NHS coat according to the government's smaller cloth. So behind the Bill are the cuts.
The biggest opposition has come from quarters which are usually quite conservative - that is the doctors and their organisation, the British Medical Association - which has had a concerted campaign to "bury the bill". In fact they were well-prepared, because they had already mounted a campaign against Labour's £20bn efficiency savings - which they went all-out to oppose with copious literature against privatisation sent to every member.
As the British Medical Journal editorial said under the subheading "Too soon to let it out of the lab": "What do you call a government that embarks on the biggest upheaval of the NHS in its 63 year history, at breakneck speed, while simultaneously trying to make unprecedented financial savings? The politically correct answer has got to be: mad."
Of course the BMA is not a militant organisation. But at least it is clear. Putting doctors on the panel of the Commissioning Management Board, as the pacifying Future Forum recommends, will not go even a millimetre towards meeting the BMA's demands!
By comparison, the largest public sector union, Unison has really been lame. It first threatened the government with the courts - claiming the bill was illegal - but when that went nowhere, it was left with exhorting members to write to their MPs! This is part of that really brilliant idea that shaming LibDem MPs over "Tory"-Dem policies will have some effect.
Since Unison has done little to mobilise at any level over pensions it remains to be seen if it will have the gumption to organise anything against the huge number of job cuts to come in the NHS. This is not to say that health service workers have been quiet nor passive. There are on-going protests and marches organsed - but these are patchy and isolated.
The NHS was always designed to provide healthcare at a minimal cost to the capitalist class and its state. A service really capable of taking care of the health of all, would require a very different social organisation. But in the meantime, defending the principle of a national service providing health care free at the point of use for all - the sick, disabled and elderly - and defending it from the looting and parasitism of the profit sharks, should remain an objective for health workers and the working class as a whole.