NHS for Sale: Myths, Lies & Deception (19 page)

Exploiting the freedoms of the market system that has been put in place, many profit-seeking private companies increasingly treat NHS patients in premises bearing the NHS logo, leaving them confused as to who is actually providing the care even if the NHS is footing the bill. Once again transparency is almost impossible when such details are obscured from public view. This can also mean that when a private provider delivers an inferior or unsafe service under the NHS logo, the NHS takes the blame.

Confidence in Monitor’s scrutiny of contracts and contractors is not enhanced by the fact that since September 2013 it has relied on contracts with ten management and accounting firms to help develop plans for failing foundation trusts, and its resulting bill for consultancy fees has soared to more than six times the amount it was spending before the Act was passed.

Six big firms
*
picked up work worth between £1.7m and £11.3m from Monitor in 2013-2014, adding up to £28.3m that
year. These include the four accountancy firms criticised by Margaret Hodge, chair of the Commons Public Accounts Committee, for providing advice to government on how to design tax laws, while simultaneously advising rich corporate clients on how to evade them.
²⁸

It should be no surprise that Monitor is so closely tied to the management consultancy firms. Its chief executive David Bennett (who for years was also chair), was formerly a senior partner at McKinsey, and half a dozen of Monitor’s directors and senior managers have links to management consultancy and city law firms.
²⁹
Its interim chair until the end of 2014 was Baroness Hanham, a senior Tory and former leader of the London Borough of Kensington & Chelsea.

Another prominent Tory political appointee chairs the Care Quality Commission (CQC), which is the body responsible for checking whether hospitals, care homes, GPs, dentists and domiciliary services are meeting national standards. David Prior was formerly a Tory MP and deputy chairman of the Conservative Party.

The CQC inspects services and publishes its findings, ‘helping people to make choices about the care they receive’ and as such its role has been subject to frequent, withering attacks from commentator Roy Lilley on his website
www.nhsmanagers.net
. Lilley points out that the arrival of coachloads of CQC inspectors seeking to find fault (on what are often relatively marginal criteria and formal ‘checklists’) – while offering no solutions – is not the way to improve performance or morale. He refers to US systems expert Edwards Deming: ‘We know Deming is right about inspection; Cease dependence on inspection to achieve
quality. Eliminate the need for massive inspection by building quality into the product in the first place.’
³⁰

David Prior demonstrated scant faith in the health service his organisation is supposed to inspect (and incurred the wrath of the
Daily Mail
) by going private for a hip operation early in 2014, ‘bypassing NHS waiting times – which are the longest they have been for three years’.
³¹
In March 2014, Prior gave a speech in which he backed the idea of bringing in ‘successful operators of foreign hospital chains’ to turn around what he predicted could be up to thirty failing NHS organisations.
³²
The clear implication that this could open up the NHS to private hospital chains and multinationals was not lost on campaigners.

The CQC is still rebuilding its tattered reputation, having been caught in a protracted row over accountability for the delays in identifying poor quality care at Mid Staffordshire Hospitals Trust in 2006-7. Now it has also been criticised for lacking the leadership, resources and skills to check on the quality of care in hospitals and thousands of privately-run care homes, let alone the work of 40,000 GPs.

The least well-known regulator, the Medicines and Healthcare products Regulatory Agency (MHRA), was shown in the arguments over poor quality breast implants supplied by a French company to be largely ineffectual, and operating under the thumb of EU and European governments.

In 2012 an editorial in the
Lancet
accused the MHRA of having been aware of the risks of serious device failures for some time, and described the PIP implant scandal as ‘an inevitable result of MHRA’s paralysis and inability to correct the failings of a severely flawed system’. It claimed the MHRA
operated under the principle of ‘do nothing until something goes wrong’.
³³

Bad as they may be, all of these organisations are models of transparency and accountability compared with what could be unleashed on the NHS by the full weight of EU competition law, asserting the ‘right to provide’ for private sector companies trying to muscle in on large, attractive public sector budgets, and potentially exploiting the new competitive market created by the HSC Act.

On top of this comes the threat that, urged on by the Cameron government, the EU will sign up for the controversial Transatlantic Trade and Investment Partnership (TTIP) which – under the spurious banner of ‘free trade’ – seeks to stack the odds overwhelmingly on the side of US multinationals seeking rich pickings from Europe’s public sector.
³⁴
This would open up the possibility of legal challenges by corporations being decided in special secret courts – as part of an apparatus that subordinates matters such as patient care, quality of services and collaboration to advance medical knowledge to the great god of ‘competition’.
³⁵

TTIP is unlikely to be the final effort to prise open public sector budgets for a frustrated private health sector that has shown itself unable to develop any genuine ‘market’ without the help of political patronage, tax breaks, concessions and skewed legal systems. Each additional treaty is therefore likely to further override and obstruct any transparency or accountability.

Existing competition laws, the problems of replacing a failed provider once the NHS services have been privatised – and the fear of legal challenge – are already making it difficult
for timid NHS commissioners to get rid of failing private sector providers.
³⁶
All this is set to get worse if these new treaties are signed and more contracts are awarded to private providers under the HSC Act section 75.

As Bones might have said to Captain Kirk on the Starship
Enterprise,
as a one-time public service drifted off the starboard bow, visibly transforming into a competitive market, ‘It’s transparency Jim, but not as we know it’.

_____________

*
The Stevens plan, welcomed by leaders of all three main parties, hopes to generate £22bn of efficiencies by 2021, with further savings to be made through a greater emphasis on prevention, which could lower demand for NHS treatment. Unlike Stevens, McKinsey did at least admit that this was unlikely to generate much in the first three to five years.

*
The contracts themselves were also supposed to be regulated and scrutinised by the other main ‘arm’s length’ regulatory body, the Care Quality Commission.

*
In ascending order of consultancy fees: FTI consulting, Deloitte, KPMG, McKinsey, PricewaterhouseCoopers, and Ernst & Young.

[P]ush ahead with a steady increase in private provision to raise standards and encourage better value for money through the trial and error of the marketplace.
¹

David Green,
Daily Telegraph,
11 May 2011

… privatise and efficiency will almost automatically increase.
²

Oliver Letwin,
Privatising the World

There is no evidence that the private sector is cheaper or more cost effective when it delivers public health care. The only evidence available shows the reverse: that costs go up and the quality of the service goes down.

The Health and Social Care Act moves us towards an NHS where care is still publicly funded but is increasingly outsourced to the private sector. The US system of Medicare runs along the same lines as those being forced on the NHS, i.e. publicly funded but privately delivered. A 2007 paper in the
British Medical Journal
warned the UK not to follow the same route.

There are many well documented problems that arise when health care is outsourced to the private sector, and we are already seeing all of these affecting the NHS since the passage of the HSC Act.

These include

• Worse outcomes for patients.
  
• Cherry picking patients to increase profits.
  
• Greatly increased administration costs arising from the marketisation of the NHS.
  
• Destabilisation of the public service.
  
• Antisocial behaviour by the private sector.
  
• Loss of accountability and transparency.
  

Outsourcing NHS care involves running the service as a market and the associated costs are high. It is imperative to avoid waste at a time of ‘austerity’, which makes it even more surprising that the coalition has chosen to waste £5-10bn a year of scarce NHS resources on marketising the English NHS.

A blind faith in the power of the market to work its wonders is no substitute for evidence of benefit and there is none. Indeed the reverse is the case – privatisation is inefficient and outsourcing public services represents the worst type of mixed economy – private companies take the profits while society underwrites the risks.

* * *

Corporations have been enthroned and an era of corruption in high places will follow.
³

Abraham Lincoln

Why should the private sector be any better at running NHS services than the NHS? The simple answer is it isn’t.
⁴

Roy Lilley

One of the great strengths of the NHS is that until relatively recently it has been largely publicly delivered. The importance of public
delivery
cannot be overstated. Most care has been and still is delivered by NHS staff in NHS institutions, and by GPs who have long been regarded as an integral part of the NHS. This means that taxpayers’ money goes back into the public purse to be spent on the NHS rather than being diverted to shareholders’ profits and tax havens. Patients benefit from collaboration rather than competition between different parts of the NHS, and are less likely to be faced with a fragmented service and a postcode lottery of what is available. Staff throughout the NHS have the same pay and conditions. The public sector ethos is recognised and appreciated by patients, most of whom know only too well what happens when public services such as railways are outsourced or simply privatised. All the evidence suggests that the NHS is a good example of a successful and cost-effective public service (see
Chapter 2
).

Nevertheless all major political parties, for the last twenty years, have to a greater or lesser degree pushed the NHS in the direction of the private sector. The story of how successive governments have introduced the private sector into the NHS through the back door has been well told elsewhere.
⁵
The language is now becoming stale with overuse. Phrases like ‘patient choice’ (the Trojan horse for the private sector
and increasingly a myth as
Chapter 3
has demonstrated), and ‘plurality of providers’ (weasel words for private companies) are now discredited, but still the politicians press on. Much of the move towards privatisation of the NHS has taken place by stealth and behind closed doors but when called upon to defend it the cheerleaders use the free market argument – the NHS will benefit from more private sector involvement because commercial companies will do things more cost-effectively and more efficiently than the public sector, and will bring innovation to the service.

Evidence of the inherent superiority of the private sector in delivering public services is non-existent, notwithstanding the claims of those who advocate outsourcing the NHS. Indeed the available evidence points to quite the reverse. We need only to look at the US which has long provided a stark warning about the perils of outsourcing health care. Politicians dismiss comparisons with the US and reassure us that we are not going down ‘the American route’, but in fact a significant percentage of US health care is publicly funded and privately delivered and thus forms a useful indication of how this market-based system works. For example, the US system of Medicare (the social insurance programme for elderly people, with a budget twice that of the entire NHS) is based on the same combination of public funding and private delivery that is being forced on the NHS.

David Woolhandler and Steffie Himmelstein, two Harvard professors, in a seminal paper from 2007
⁶
asked whether the UK was right to adopt a market model for improving its health services. Their answer was an unequivocal and evidence-based ‘No’, and concluded with a warning to the
UK to quarantine rather than replicate the US experience with Medicare. The paper is essential reading for those who want the evidence about outsourcing national health care, and much of it looks depressingly familiar. It warned that when private companies took over the delivery of public health care it was followed by worse outcomes for patients, cherry picking of profitable patients, soaring administration costs, public money diverted to profits, fraud on an industrial scale, kickbacks for doctors, the abandoning of unprofitable contracts, and eventual government bale-outs for private companies who couldn’t make a profit despite employing all of these tactics.

But such hard facts have never been allowed to dent ideological commitment to the private sector and to the market. The enthusiasts seem to think that mindless repetition will triumph – that if they repeat the mantra about private sector efficiency and cost-effectiveness often enough it will be true or at least that we the public will believe it to be true. So it is vital to collect and lay out the evidence against private involvement in the delivery of health care.