As Tories Approve Private Takeover of Hospital, Lords Challenge Plans to Let NHS Be Run By An Unaccountable Quango

11.11.11

As David Cameron continues to cling to his health secretary Andrew Lansley’s widely criticised healthcare reforms, which are generally — and accurately — regarded by defenders of our universal healthcare service as an attempt to destroy the NHS through enforced privatisation, the New Statesman has weighed with an editorial calling on the Prime Minister to scrap the bill. Styled as a letter to David Cameron, the editorial criticises him for imposing £20 billion in cuts while “implement[ing] the biggest organisational change” in the history of the NHS, “a reform that rips up established structures for managing resources and fundamentally changes the service’s founding ethos.”

The editorial states, “You must realise that this is a huge error,” but there is no evidence that this is the case, as Cameron’s entire drive is towards privatisation, and savagely cutting the state, and he has demonstrated, time and again, that, despite claiming to care about the health service, he was lying disgracefully when he promised no “top-down reorganisations” of the NHS, and also promised that the NHS budget would rise every year.

The editorial also notes that, although Lansley’s Health and Social Care Bill “was originally styled as a liberalising reform,” and there is “a case for reforming NHS commissioning, with more GP involvement, and for slimming down PCTs [Primary Care Trusts],” all of this reform “could have been done without legislation.” The editors add, pointedly, “The real purpose of this reform is to transform the NHS from a system where care is mostly provided by the state to one where it is largely provided by private companies,” and, in words addressed specifically to David Cameron, state, “You say that this is not the ‘privatisation’ of the health service. There is no better word” — to which I would only add that there is, in fact, no other word for what is planned, and what, to an alarming degree, is already taking place.

The editorial continues: “The kind of free-for-all that Mr. Lansley envisages would not share best practice or increase efficiency, however. It would sow mistrust and confusion. It would undermine the collaborative process that is vital for the treatment of chronic conditions. It would turn ill-health into a commodity, with some problems more lucrative to solve than others. Cataract operations might thrive in the free market; long-term treatment of mental health disorders would be forgotten.”

The Tories privatise the first hospital in the history of the NHS

The timing is appropriate, of course, because yesterday David Cameron’s government handed over control of an NHS hospital to a private company, for the first time in the history of the NHS. Circle Healthcare, which describes itself as “Europe’s largest healthcare partnership, building and operating a network of UK hospitals co-owned by the clinicians and staff who work in them,” was given the go-ahead to run Hinchingbrooke hospital in Huntingdon, Cambridgeshire, from February next year, in a deal worth £1 billion over ten years, even though the company actually has no experience of running a complete hospital service, despite its grand-sounding claims.

As the Independent explained, “Until now the only experience Circle has had of the NHS is running two private treatment centres, carrying out specific routine procedures for a fixed price. Circle’s other hospitals, such as Bath [a private hospital designed by Sir Norman Foster], are primarily focused on the private healthcare sector which pays far more than the NHS per patient and still provides most of the company’s revenues.”

For those who are concerned about the government’s plans to privatise the NHS, the takeover is indeed troubling. Although the Guardian explained that the takeover “is not considered a full privatisation as the buildings will remain in public hands and the employees retain their pay and pension on existing terms,” and because, although Circle “will be given a free hand to cut staff, any major changes to services will need the agreement of local health chiefs, and the A&E and maternity units must be retained,” there are other troubling signs.

Firstly, Circle Healthcare, run by Ali Parsa, a former Goldman Sachs executive, is at least 40 percent owned by two companies that are donors to the Conservative Party — Lansdowne UK, which owns 18.9%, and is run by Paul Ruddock, described by the Guardian as “one of the Conservative party’s most generous donors,” and Odey Asset Management, which owns 21.4% share, whose founder, Crispin Odey, “also funds the Tories.”

Just as significantly, Ali Parsa’s explanation for why he thinks he can run a hospital better than the NHS hinges on an alarming belief that those who work for Circle, a “mutual” company that is 49 percent owned by its staff, are not fundamentally driven by a desire for public service, but, apparently, by being involved in a business that is only interested in profits. The Guardian explained that the takeover deal “allows doctors to take a slice of the profits,” and Ali Parsa then explained his philosophy. “That’s how we will get people to do more, by giving them a stake in the system,” he said.

In the Independent, Ali Parsa further explained how his business model for running hospitals was the airline industry. The Independent noted that “Circle’s operating system is based on delegating power down,” with staff “divided into clinical teams that meet each month and analyse four sets of data: clinical outcomes, a patient questionnaire, staff feedback and productivity data.” Ali Parsa defended this by saying that it empowered “everyone in the team” to “change things if they believe they can improve the operation.” This sounds good, of course, but his follow-on comments were not so reassuring. “There are not the same incentives or disincentives to deal with problems at other hospitals,” he said. “We model ourselves on the airline industry where safety and service — or in our case patients’ outcome and satisfaction with care — are the key to profitability.”

The airline analogy — and how it leads to profits — may work in Circle’s private sector work, but it is impossible to fathom how the company will make money out of a hospital that has a £40 million debt, unless it drastically cuts services. As the Independent noted, “Successive managements and government intervention have failed to make a dent in its £2.6m-a-year deficit,” and all Ali Parsa seems able to offer is a good incentive and a profit-sharing scheme in a specialised market (private healthcare) where the whole purpose is to run a business for profit, and not to care for everyone, regardless of their income.

Parsa told the Guardian that he planned to turn the hospital’s finances around by attracting more patients and hope that no one would interrogate too closely his claim that profits could be conjured up if his staff  were to be “freed from bureaucracy.” He described “£5m in lost patient income every year” from the 5,000 patients living within a “few miles of the hospital that do not use us,” neglecting to mention that, if he were to attract these people, some other hospital would lose out, and inadvertently, therefore, providing a glimpse into how precarious a butchered, privatised NHS would be.

Unison’s head of health, Christina McAnea, told the Guardian that she worried about Circle’s finances, and also criticised the government for turning to a private company instead of keeping it in the hands of the NHS. “We just don’t accept there is no expertise within an organisation the size of the NHS,” she said, adding that  turning to the private sector, “which has a very patchy record in delivering these kind of services, is an accident waiting to happen.”

The ongoing struggle to stop the Tories from abdicating all responsibility for running the NHS

If it is alarming that one hospital has been handed over to a private company that will, essentially, be able to do what it likes for the next ten years, imagine what this abdication of central responsibility looks like when rolled out across the whole of the NHS. This may sound like alarmist rhetoric, but it is not. Abdicating government responsibility for the NHS is at the heart of the Tories’ plans, as was made clear in  a legal analysis of Lansley’s bill that was commissioned by the campaigning group 38 Degrees, and summarised in the Guardian (in July) by Jacqueline Davis, a consultant radiologist in north London, the co-chair of the NHS Consultants’ Association, and a founder member of Keep Our NHS Public. Davis wrote:

They [the legal experts] found that the bill does indeed “remove the duty of the secretary of state to provide or secure the provision of health services which has been a common and critical feature of all previous NHS legislation since 1946.″ Furthermore, a “hands-off clause” will “severely curtail the secretary of state’s ability to influence the delivery of NHS care to ensure everyone receives the best healthcare possible.” They conclude the government can now wash its hands of the NHS, while the likelihood of a postcode lottery increases and local accountability decreases.

They also conclude that the bill “will increase competition within the NHS at the expense of collaboration and integration and/or make it almost inevitable that UK and EU competition law will apply as if it were a utility like gas or telecoms.” So despite the coalition’s repeated denials, this legal opinion believes that “these plans will lead to a system geared heavily in favour of private companies.”

Moreover, just two weeks ago, in the Observer, Randeep Ramesh revealed how leaked documents obtained by the Guardian revealed that Andrew Lansley is indeed planning to remove the government’s responsibility for the NHS, and intends to “franchise” its running to a quango for up to three years at a time — a move that, as Ramesh put it, “will result in an unelected academic and the nation’s 38,000 family doctors, rather than ministers, being accountable for the day-to-day running of the health service.”

That unelected official, Malcolm Grant, the President and Provost of UCL (University College London), who is “the government’s choice to run the powerful NHS commissioning board,” outlined (in “unpublished evidence” submitted to the Health Select Committee three weeks ago) “an extraordinary transformation of responsibility,” which “appears to undermine claims by ministers that the proposed legislation will not dilute the government’s constitutional responsibilities to the health service.”

In contrast to the government’s “duty to provide a national health service” in England, which has existed since the NHS was founded, Grant told MPs that, “under the new system, the secretary of state ‘mandates’ the commissioning board to run the NHS every ‘two … possibly three years’ and then retreats into the shadows,” as the Observer put it, and he also “admitted there would be ‘a fundamental change of responsibility and accountability under the bill,'” because the commissioning board and GPs will have control of the NHS’s £80bn budget, and “these two groups — not politicians — would run the NHS and ensure patients received an adequate level of health provision.”

As Grant also explained, “If [GPs] are dissatisfied with what happens in a hospital, they need to deal with it and not simply complain to a secretary of state who no longer has this responsibility, nor to the commissioning board which has given them the responsibility, but to complain to the hospital and get it sorted, and, if it is not sorted, to use their commissioning power to ensure that it is.”

In what the Observer described as “a remarkable admission,” Grant also told MPs that, from April 2013, “in the event of a ‘crisis’ in the health service. either he, nurses, GPs or hospital medical directors would be taking to the airwaves as the health secretary would not have responsibility for the daily running of the NHS.”

“It is no longer going to be the case that the secretary of state is wheeled in front of the TV cameras,” he said. “Responsibility has to go back to where it is. It has to go back to within those hospitals. Who is the chief nurse? Who is the medical director. Where is the CEO?” As the Observer explained, “Parliamentary scrutiny will also become a thing of the past,” because, if the bill is passed, “the health secretary will no longer have to answer MPs’ questions every month but will just put forward an annual report on how the board is doing once a year.”

The Observer also explained that the government will “lose ‘powers of direction’ over the health service, depriving the minister of the power to order NHS services to improve,” which would make it “difficult to repeat Labour’s 2007 act of ordering a ‘deep clean’ of NHS hospitals to tackle a rising tide of MRSA infections.” In the case of a national crisis — some sort of epidemic, for example — it is not even worth thinking about what would happen with such a broken chain of command.

Lady Thornton, Labour’s shadow health minister in the Lords, responded by saying, “This completely undermines the 1948 and 2006 acts. The whole point of the debate we’ve been having is that the secretary of state has to be accountable to parliament for the provision of a national health service, and you can’t just start franchising out that role.”

Last week, the uproar over the government’s responsibility for the NHS — which had already been flagged up extensively in the House of Lords by Shirley Williams and David Owen — resurfaced during the Lords’ analysis of the bill in a manner that will give some hope to its many critics, when, as Randeep Ramesh reported in the Guardian, the government “‘paused’ a key part of its NHS bill to stave off an embarrassing rebellion from key Liberal Democrats in the House of Lords.”

In what was described as “a move that ensures peers will now debate the controversial legislation until Christmas,” the government’s “plan to hand over its ‘constitutional responsibility’ to provide NHS services to a quango” came under fire, following Malcolm Grant’s performance, and the findings of the lawyers on the Lords’ constitutional committee, who warned last month about the “extent to which the chain of constitutional responsibility as regard to the NHS [will be] severed” if the government’s plans go ahead.

Led by Lady Williams, a number of Lib Dem peers “insisted the health secretary should be responsible for the provision of health services,” and Williams and the former Lord Chancellor James Mackay (a Tory) “tabled a fresh amendment seeking to accommodate Lib Dem and Tory visions,” but they “agreed to drop their proposals once the government announced it would have a further ‘period of reflection.'”

As the Guardian noted, “This means the issue about political control of the NHS will not be resolved by a vote until January at the earliest,” and it “could also see the constitution committee and other lawyers re-examine the issue again, ahead of the bill’s scrutiny at report stage next month.” Hopefully, it also means it will fail to be passed before the end of the Parliamentary session in April, and its many opponents may still succeed in having it scrapped entirely.

As Labour’s health spokesman, Andy Burnham, said, “After 10 months of debate on the health bill, it is an indictment that the government does not know what it thinks on a question as basic as the responsibilities of the secretary of state. It is yet more evidence that this Tory-led government has failed to establish a consensus on this bill. They should drop the bill and focus on the financial challenges facing our NHS.”

The Guardian also noted that it was “unlikely” that the Lib Dem rebels would back down, noting that Shirley Williams was maintaining the importance of having “an absolutely solid basis on which the whole of the house will understand about exactly what are the accountabilities and responsibilities of the secretary of state,” even while she was still hoping for “a broad political consensus on the issue.”

Although this respite is to be welcomed, it still remains of huge importance to those who oppose the Tories’ plans to carve up the NHS for the benefit of private companies to keep up the pressure to scrap the bill. 38 Degrees’ petition to save the NHS, which I wrote about here, has nearly reached 500,000 signatures, so please, if you haven’t yet signed it, do so now, and tell everyone you know to sign it as well. The NHS is too important to become another aspect of British society to be damaged — and, perhaps, fatally wounded — by the foolish and arrogant ministers of the Tory-led government, who, while floundering out of their depth (and destined to sink without a shred of glory), are still engaged in a seemingly implacable rush to take the whole of the country down with them.

For further information, see: Battle for Britain: Resisting the Privatization of the NHS and the Loss of 100,000 Jobs, Save the NHS! Will the BMA Do the Right Thing, and Reject the Coalition Government’s Privatization Bill?, BMA Emergency Meeting Calls on Government to Drop NHS Privatization, Act Now to Save the NHS, as Government Advisor Claims Reforms Will Show “No Mercy” and Allow “Big Opportunity” for Profiteering, Save the NHS: Make No Mistake, the Government Plans to Privatise Our Precious Health Service, Save the NHS: As Lib Dems Vote to Support Tory Privatisation Plans, The Last Hope is the House of Lords, NHS Privatisation: Protest on Sunday, as 400 Doctors Accuse Government of Planning “Irreparable Harm,” and Lords Prepare Opposition and Save the NHS: The Battle is Not Over, Despite the Lords’ Capitulation on the Privatisation Bill’s Second Reading.

Andy Worthington is the author of The Guantánamo Files: The Stories of the 774 Detainees in America’s Illegal Prison (published by Pluto Press, distributed by Macmillan in the US, and available from Amazon — click on the following for the US and the UK) and of two other books: Stonehenge: Celebration and Subversion and The Battle of the Beanfield. To receive new articles in your inbox, please subscribe to my RSS feed (and I can also be found on Facebook, Twitter, Digg and YouTube). Also see my definitive Guantánamo prisoner list, updated in June 2011, “The Complete Guantánamo Files,” a 70-part, million-word series drawing on files released by WikiLeaks in April 2011, and details about the documentary film, “Outside the Law: Stories from Guantánamo” (co-directed by Polly Nash and Andy Worthington, and available on DVD here — or here for the US). Also see my definitive Guantánamo habeas list and the chronological list of all my articles, and, if you appreciate my work, feel free to make a donation.

8 Responses

  1. Andy Worthington says...

    On Facebook, Dessie Harris wrote:

    Andy, following the present Government’s intentions and plans to make NHS Trusts totally redundant, and transfer power to individual General Medical Practitioners, it would seem that the NHS will change its structure considerably and in a decade or so there will be no NHS at all, which would no doubt put patients health at risk, especially newborn babies and the elderly.

  2. Andy Worthington says...

    Hi Dessie,
    Yes, I believe the intention in transferring the budgets to the control of GP-led consortia is that the GPs will have to call in outside help, which will be private companies, of course, and the result, I think, will be a squeeze on certain services, and decisions that others are unaffordable, as they might bite into the advisers’ profits. So I’d expect certain illnesses to be too expensive to treat, and I’d also expect old people and the mentally ill to suffer. As for babies, I expect there’d be more pressure to ensure that those services are as open as possible, but you never know when such major steps are being made to allow profit to infiltrate a universal service.

  3. Andy Worthington says...

    Malcolm Bush wrote:

    I agree with the comments above, this is the road to privatization, and to a degree health care, more for those who can afford to pay the bill. A fit and healthy credit card will be essential before the rest of you can be considered. There is one aspect that no one seems to consider or care about; the question of who will be involved? The internet, papers, TV, radio and so-forth all consider the state run or privatized issue. If things get privatized, who will be involved, which companies? what, and who will they be involved with? The big question arises once again; who are THEY?

  4. Andy Worthington says...

    Hi Malcolm,
    Good to hear from you. One of the companies that is deeply involved is the US company McKinsey, and here are a couple of recent articles from the Guardian examining their role:
    http://www.guardian.co.uk/society/2011/nov/05/nhs-reforms-mckinsey-conflict-interest
    http://www.guardian.co.uk/commentisfree/2011/nov/10/mckinsey-rainforests-nhs-advice
    KPMG is more involved that any other company, as was explained in a recent article in Health Investor providing a brief analysis of all the companies involved in consultancy from 2010-11:

    KPMG won over 70% of the external consultancy work used to support the government’s NHS reform agenda in the last financial year, new figures show.

    Data provided following a freedom of information request reveals that the Department of Health (DH) spent £5.5 million on ‘organisation and change management consultancy’ in the 2010-11 financial year. While this was divided among 100 external consultants, KPMG was awarded the lion’s share of the work, worth £4 million.

    The next three firms to be awarded the most were PA Consulting, White Consultants and McKinsey, earning between £130,000 and £300,000 each.

    On entering office, health secretary Andrew Lansley (pictured) pledged to reduce the use of management consultants. He used a speech last month to claim the coalition had ‘slashed’ the amount spent on consultancy in the NHS by 50%.

    But it was reported last week that a group of consultancy firms including McKinsey, KPMG and PricewaterhouseCoopers have agreed a £7.1 million contract with 31 GP groups through which they will provide advice on effective commissioning and managing budgets in the reformed health service.

    A full breakdown on the DH’s spend on consultancy is available here.

  5. Andy Worthington says...

    George Kenneth Berger wrote:

    I’m digging and sharing this. So, KPMG won over 70% of the external consultancy work. I didn’t know that. Don’t forget that ATOS ORIGIN bought up KPMG UK and KPMG NL (Nederland).

  6. Andy Worthington says...

    Yes, it’s an interesting breakdown of figures, isn’t it, George? And yes, thanks for the reminder about ATOS owning KPMG. With their involvement in declaring disabled people fit for work through the disability reviews, it makes them a very big player in the Tories’ plans to destroy and/or privatise the British state: http://www.atoshealthcare.com/
    And here’s a Guardian article about ATOS, the disability reviews, and investigations of some of the doctors involved: http://www.guardian.co.uk/politics/2011/aug/13/atos-doctors-improper-conduct-disability
    And another Guardian article about ATOS: http://www.guardian.co.uk/society/joepublic/2011/jul/25/disability-benefits-atos-government-hiding

  7. Peter Smith Talking Cures says...

    Peter Smith Talking Cures

    Many times in the history of the NHS as it been reorganised and the current changes are no exception, it strikes me that the time has come to ask why the NHS needs to change, is it, simply a job for the boys being seen to do something, or is there something much more profound afoot to which we are all guilty of and reluctant to look at.

    All of us are all have the potential to be patients; that is somebody suffering from an illness, disease, pain or post accident symptoms of mind and body. Yet it appears we all suffer with the same, either lack of memory from past our history or a deliberate desire not to remember the health care pathway we have traversed.

    If we had the courage to look back along our health care pathway we will see that from our early beginnings; we presented to our dedicated doctors, a symptom for which the Doctor used all of the scientific evidence of illness to hand, to offer to us a treatment. Following a period of time the symptoms we presented to our doctor disappeared, which seemed to have cured our symptoms.

    Sadly; this is not the case, for almost exclusively our dedicated doctors do not have a clue as to the cause of our illness and in their own words from their scientific papers “there is no known cure.” Therefore; what in reality happened was we, unknowingly and unwittingly, as a result of the only seeming success of the treatment, created a new illness.

    This process happens time and time again in our life and as far as our doctors are concerned, with the multiple symptoms we have collected throughout life and the drugs we are now taking we are medical mysteries and medical failures.

    Or as Doctors call us, “heart sink patients.” That is their heart sinks every time we walk into the surgery as they have nothing to offer in pursuit of a cure of our symptoms and sometimes the offered management is very seriously lacking.

    With this in mind; is it not reasonable to consider that the changes that the NHS has to continually go through are nothing to do with jobs for the boys, nothing to do with making the NHS more financially stable, but more an unwitting desire on behalf of our political masters to hide up the fact; so much money is wasted in our hospitals because of faulty treatments, made worse by the fact the primary care trusts are the holders of the financial purse and as the hospitals now are a business and not a care facility, their only desire is to create more and more invoices, which the primary care trust has to pay.

    This process unfortunately leads to but one conclusion; that we as a country, the United Kingdom can no longer afford a free at point of service treatments and as it is a business model, any business that is no longer profitable will and or perhaps should go to the wall.

    Therefore the abolition of primary care trusts and placing the hospital trust in a position of managing their own financial affairs will no longer be able to create unnecessary invoices and would automatically, based on this premise allowing them to become more profitable.

    At the same time our hospitals would have no option but to look at the true outcome of the treatments applied and that means, cure, not poor management as is so often the case and rightfully so, the doctors should not be chastised for poor outcomes, then the NHS as a body would have to look at the so-called scientifically proven treatments that our dedicated doctors have to work with.

    With this, I’m sure that they will see that the only thing scientific proven in medicine is in every single paper ever written by medical researchers; the cause is not known and there is no known cure.

    This would then have to be addressed and the researchers would have to look to their laurels because they would no longer be funded by anybody to present such a miserable failure as this so-called scientific evidence based medicine.

    As for our doctors being given control of the financial purse; this is as fraught with danger as the time when the primary care trusts placed the doctors on a salary bases of points, what this in reality meant was, every time a person goes to the doctor, the only thing the doctors is interested in is ticking boxes, for every box ticked the doctor received a point or points, these points at the end of a period say a month or quarter converted into pounds and thus supplemented their salary.

    This was then and still is, not only a bad move but has financially bought the NHS to the state that it is currently in.

    Furthermore our doctors would not have the necessary might to manage their business financial processes so would be handed over to other companies which may well include drug companies and instruction from the then master would be “sell drugs at any costs” this would be a self-defeating prophecy as it would be the final nail in the Coffin of the NHS as we know it.

  8. Andy Worthington says...

    Well, thank you, Peter. Your website, for those seeking further information, explains that “all illness, pain and fatigue are a creation of the Mind/Brain caused by Childhood Trauma(s) altering the body chemicals and most seriously felt within the Body.” I’m sorry not to agree with you, but last year I nearly lost a toe through a blood clot and was seriously ill, and the doctors at St. Thomas’s saved my toe. I accept that, along the way, many medical professionals who examined me did not know what was wrong with me or what to do about it, and that in St. Thomas’s they did not know if the procedure I went through would be successful, but it was, and I am very grateful to the team who made sure that I left the hospital with ten toes!

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Andy Worthington

Investigative journalist, author, campaigner, commentator and public speaker. Recognized as an authority on Guantánamo and the “war on terror.” Co-founder, Close Guantánamo, co-director, We Stand With Shaker. Also, singer and songwriter (The Four Fathers) and photographer.
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