The NHS needs reform and accountability – not the opening up of the market


By Debbie Abrahams MP (Labour, Oldham East and Saddleworth) with Clive Peedell, Vice-Chair of the NHS Consultants Association, and Lucy Reynolds, a research fellow at the London School of Tropical Health and Medicine, writing in a personal capacity

This government have insisted the recommitted Health and Social Care Bill shows they are listening. In spite of the NHS Future Forum’s recommendations, there are many reasons why this Bill is still a threat to our NHS.

Andrew-Lansley-David-CameronAs a starting point the government failed to recommit the full bill, leaving the Opposition unable to scrutinise how clauses in the amended bill would interact.

Although the recommitted bill did include amendments to Clause 1, the duty of the Secretary of State for Health to secure and provide a comprehensive health service – fundamentally, the original duty of the Secretary of State – has not been reinstated in full. Why?

Of deep concern is how the role of Monitor, the economic regulator, has barely changed. Instead of having to ‘promote competition’ they must now ‘prevent anti-competitive practice’. No doubt the lawyers will have a field day with that one.

Other aspects that have not been amended include removing the private bed cap and allowing foundation trusts for the first time to sell assets and raise loans. Linked with this is the introduction of a new insolvency regime.

Collectively these will enable private equity companies to buy NHS facilities and asset strip them, with direct parallels to the demise of Southern Cross (Reynolds, 2011, in the British Medical Journal).

The recommitted bill does nothing to allay fears about the true reasons the government is opening up competition under the guise of increasing patient choice and clinician-led commissioning. It is certainly not to improve the quality of healthcare – there is little evidence to support this.

Instead, we should look to a speech health secretary Andrew Lansley made in 2005:

“The statutory formula should make clear that choice should be exercised by patients or as close to the patient as possible, thereby maximising the number of purchasers and enhancing the prospects of competition.”

This explains why the government is transferring power and financial decisions to GP commissioners – they are closest to the patient and GP commissioning will help increase competition and the number of purchasers (through greater choice) in the system, especially if driven by private FESC (Framework for Procuring External Support) companies.

This also explains the patient held budgets policy.

So the government wants a system where the number of both purchasers and providers are maximised, creating a citizen-consumer competitive market to drive forward the forces of “creative destruction” on the NHS.

Unfortunately, creative destruction causes constant entry and exit from the market, which is prohibitively expensive in healthcare because of the costs of medical infrastructure, technology and staffing.

In a single payer system with a fixed budget such as our NHS this will inevitably lead to financial meltdown. The only way this can be avoided is to get extra capital into the system.

And this is where we come to the heart of it – the Bill is achieving this in the following ways:

• Firstly, foundation trusts can borrow money from the City to invest as already mentioned. They will have to repay this by treating more NHS patients and more private patients. This will be aided by the abolition on the cap on private patients’ income for FTs;

• Secondly, there will be an increasing demand for healthcare insurance as waiting lists go up. We are seeing this already under so-called efficiency measures and it happened under Thatcher;

• Thirdly, there will be a new insurance market set up for top ups and co-payments; and

• Fourthly, in the next Parliament, it is likely that more direct patient charges will be introduced.

Since the budget is fixed, the drive for excess capacity and a consumerist approach to healthcare will drain the NHS budget rapidly. This will result in clinical commissioning consortia increasingly becoming rationing bodies, driving up waiting lists and reducing the number of NHS core services.

This will drive foundation Trusts into further debt burdens forcing closures, mergers and private management takeovers. This is already happening. In fact, this whole process is crucial to stimulating the private healthcare insurance and private provider industry.

This is why the duty of the Secretary of State to secure and provide a comprehensive health service is such a key issue and needs protecting – it should not be changed at all.

Although the government has supposedly made concessions – recognising that attempting to privatise the NHS in the same way the utilities were in the 1980s would just not be acceptable to the public – it has changed tack not direction.

QIPP (Quality Innovation Prevention and Productivity) allowed politicians to say the NHS would continue to receive year on year increases in funding. However, the efficiency savings are clearly so harsh (no health system has ever attempted such a feat) that the NHS is inevitably going to fail and drive the need for private investment into our health service. Taxpayers will pick up most of the bill, but get less and less for their money.

In addition, English citizens will increasingly have to consider taking out healthcare insurance policies. This clearly has the most adverse effect on the most vulnerable in society because of the Inverse Care Law.

Finally, opening up the NHS to EU competition law will dramatically increase the amount of capital available to bring into our health service, but ultimately this capital will flow back to the investors at a profit, which will be at the expense of the UK taxpayer, private healthcare insurance payments, and out of pocket healthcare expenditure.

This will only increase income and healthcare inequalities, which are both known to damage economic growth. This is in direct contradiction to Clause 3 – the new duty of the Secretary of State for Health to reduce health inequalities.

This is the Secretary of State’s view of the EU situation in that 2005 speech:

“I said it is a developing consensus. Much of what I have described is like the EU’s developing framework for services of a general economic interest. I recognise this and I welcome it.

“A vital aspect of our relationship with Europe should be to encourage the EU to be concerned with promoting competitive markets. Although we don’t want the EU to intervene directly into domestic legislation, I see no difficulty with encouraging EU trade in services, by ensuring that a strong market orientated regulatory framework is in place in each member state.

“And it will come, I dare say, for the education and health in the future – as it did for telecoms in the recent past. I see good reason to plan positively for it, rather than ignore it. The time has come for pro-competitive reforms in public services including health and education.”

It is clear that a single payer system cannot survive these policies. This bill will be a disaster for the NHS. What the NHS needs is appropriate reform and proper accountability – but definitely not the opening up of the market.

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  • Dave Citizen

    Excellent piece Debbie – it is crucial that as many people as possible are made aware of the underlying rationale behind moves to open up public services to private capital investment and the long term damage that will be caused to our society as a result.

    Prof. David Harvey calls it the ‘capital surplus absorption’ problem where continued economic growth depends on finding ever more opportunities for re-investment of the constantly increasing capital pool. Trouble is, in a world with abundant labour but a constrained environment, growth increasingly has to ‘eat’ profits out of what we already have – things like public services being perhaps the most obvious example.

    Troubling stuff – no wonder most politicians are burying their heads in the sand! For wealthy societies like ours, reducing inequality is perhaps the only clear way in which to counter the damage as it would help ensure that the available rewards are distributed to maximise general prosperity while maintaining widespread incentives to contribute.

  • http://f Mr. Sensible

    Couldn’t agree more Debbie; the government is in a complete mess on its NHS reforms, and in the middle of all this are patients, doctors and nurses trying to work out what on Earth is going on.

    As for the accountability to which you refer at the end of the article, I personally think a better and less disruptive way to introduce such accountability would be to retain the existing structures, but have seats on PCT boards for GPs, hospital doctors and nurse, patient groups and local councillors.

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  • Mr. Sensible

    BTW not sure where that link came from; stray character was in website box! Ignore it.

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  • william waters

    Great stuff Debbie.Has the issue of DUE DILIGENCE been fully considered?
    My background is in engineering and quality assurance and some years ago i was tasked with insuring that the retail company i worked for (current t/o £6billion p/a)was meeting all its legal obligations in terms of Due Diligence legislation.This was a ‘root and branch’ project which required establishing that any company who supplied us with either products or services had in place all the necessary ‘checks and balances’that would ensure on an ongoing basis the goods and services they provided complied with all statuary regulations in terms of safety,fitness for purpose,trade description etc,etc.
    In order to meet these strict requirements all suppliers, manufacturers and service suppliers had to be formally appraised by qualified lead assessors and only when they had been appraised and sanctioned as being ‘fit to supply’suppliers were then allowed to begin negotiating with the buying team.
    Once the buyer had agreed terms with the supplier a Supplier Contract was drawn up which fundamentally included a section on a commitment to comply with all the Due Diligence requirements of the retailing company.(Explicit details were specified in the contract).It was also part of the contract that Audits would be carried out on a regular basis and any ‘failure to comply findings’ could result in the immediate cancellation of the Supply Contract.
    On top of this we were also obliged to develop and install a comprehensive monitoring system(most of which we already had) in order that at any time the performance of each supplier could be monitored to provide evidence of compliance with the companies Due Diligence procedures.This would reveal information of supplier starting date,appraisal date,ongoing audit dates and findings,quality defects and supplier responses,change of manufacturer,product safety certificate documentation and so on.This system could be accessed by all authorized senior management,trading standards officers or court officials should it be necessary in any cases of litigation.
    This is a simple summary of the arrangements we had to have in place in order to meet the ‘duty of care’ obligations we were governed by and i have outlined it as an example of what the proposed G.P.groups will have to demonstrate they have done, in terms of meeting ‘due diligence’ legislation, before they can purchase medical services from ‘any willing provider’.
    In a retail environment the consequence of not meeting these requirements would initially result in selling poor quality or even unsafe products or services with all the resulting effects on customer confidence and in extreme cases prosecution.However in the Medical and Healthcare environment we would be talking about people being wrongly diagnosed,improper treatment being prescribed and potentially putting peoples live at risk.
    The point i am making is that these proposed G.P.Groups cannot pass on the responsibility of meeting Due Diligence legislation onto their ‘willing providers’ as the ultimate responsibility for ensuring compliance with this legislation remains with the original ‘dispenser’ i.e The G.P Surgery who offered ‘their’patient treatment from ‘their’contracted supplier.It therefore means that if this Bill goes ahead then all these previously outlined requirements and obligations must be in place and operational before the responsibility for buying in medical services from ‘any willing provider’ can proceed.To go ahead without same would be a ‘dereliction of duty’ and criminally negligent (opinion) and would leave the G.P Groups or individual surgeries open to a criminal prosecution.
    Do we know if Lansley has already considered all these Due Diligence obligations and will they be written into the Bill that will be submitted to parliament. William Waters Milton Keynes.

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