UK’s national health service bill is stealth privatization

Privatization of health care policy itself worries opponents.

by Bob Hudson

The deal that made Circle the first private company to take over an NHS hospital has created a stir and given opponents of the NHS bill a focus for their discontent.

What is less well known is that the Hinchingbrooke takeover deal began under the watch of the last Labour government, and the health secretary, Andrew Lansley, has merely (doubtless with relish) signed it off. The fact that Labour initiated significant parts of the privatization agenda — most notably setting up a commercial directorate within the Department of Health and rolling out the disastrous independent sector treatment centres — has undoubtedly muted their own response to the NHS bill.

There will doubtless be more potential business for the private sector in hospital management, with the NHS bill requiring all NHS trusts to achieve foundation trust (FT) status — the Department of Health estimates that 48 are unlikely to meet the regulator Monitor's financial tests. They will either merge with existing FTs or be put up for grabs in the market — the Department of Health has already held talks with the German company, Helios, about just such an eventuality. In addition, FTs themselves will be tempted to increase their private work once the current private patient cap is lifted.

Opponents of privatization of the NHS would, however, be unwise to focus solely on the issue of hospital management, because the slipperiness of the NHS bill is that it stealthily advances the privatization of healthcare on several fronts. It does this in primary care, in community health services, and in commissioning — all of it concealed behind the publically trusted NHS logo.

In the case of primary care, the option to opt out of out-of-hours care (given cheaply to GPs by Labour) was an important entry point for the private sector, and companies were quick to react — sometimes with disastrous results.

Now it is mainstream primary care that is being penetrated by corporate interests like The Practice PLC and Chilvers McCrea Healthcare, with over a hundred practices between them. The proposed relaxation of traditional GP practice boundaries will further attract corporate giants such as supermarkets. Their tactic will be to employ salaried doctors to cater for generally healthy mobile young patients, whilst traditional practices are left to cope with the burgeoning elderly population with long-term conditions.

The fate of community health services — community nurses, therapists and others working outside of hospital — is already subject to the Any Qualified Provider (AQP) diktat.

A further service tranche will be identified for 2012/13 and will probably include maternity, speech and language, and community chemotherapy services. All of this will involve high transaction costs, ever lower staff morale, and fat fees for lawyers if localities try to keep services in-house.

Then, crucially, there is healthcare commissioning. The thrust of the health bill is said to be the empowerment of GPs to make decisions on commissioning healthcare for their local populations. Since they have no track record of doing the job, it was recognised in the white paper that they would have to buy in support — existing PCT staff, local authorities and the third sector were all mentioned. In practice the role of commissioning support looks likely to be mostly awarded to the private sector — in London all 31 clinical commissioning groups have signed a £7m deal to work with the big private management consultancies, and the same companies have secured the national contract for clinical commissioning leadership development.

But there is a final underpinning factor that rarely gets mentioned — the privatization of policy-making itself. There are two aspects to this. First there is the revolving door between the private consultancies and the Department of Health. This is not a case of individuals acting as political advisers or of engaging in Werrity-like practices, but of taking substantive posts and then taking the knowledge and information back into profit-making companies. This merry-go-round is dizzying, with no proper boundary between the public and private sectors. And the second aspect is that of former senior ministers themselves hiring their experience out to the private sector after leaving office — Alan Milburn, Patricia Hewitt, Norman Warner and Tom Sackville amongst them. Where is the public interest in all of this?

Andy Burnham's new pledge to repeal the NHS bill will have warmed the hearts of many, but there is a danger that it is too little too late. It is not simply a case of putting the frighteners on firms like Circle, for the privatisation tentacles go much further and deeper than private hospital management. The cleverness of Lansley's approach is that it is incremental rather than confrontational, yet with every year that passes the NHS is changing perceptibly, and repeal could be unworkable.

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