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

Report by Debbie Abrahams MP, Clive Peedell, Lucy Reynolds
Published here: 18/07/11

source

By Debbie Abrahams MP www.debbieabrahams.org.uk (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 Hygiene and Tropical 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 (see also), there are many reasons why this Bill is still a threat to our NHS.

As 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 www.bmj.com/content/342/bmj.d3760).

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.

Available online at

www.leftfootforward.org/2011/07/debbie-abrahams-mp-health-and-social-care-bill-recommitted-to-parliament/