The privatisation of health care services is racing ahead in Britain, outstripping the pace of change in comparable countries: last year almost 9 percent of England’s £100 billion-plus NHS budget was spent on services from private providers writes John Lister.
The pace is increasing. Since the floodgates were opened with the implementation of the Health & Social Care Act in April over 200 new contracts have been offered up to private corporations and social enterprises. Among them are far-reaching new plans to “integrate” services, putting a single company or partnership in charge of budgets and planning services for whole care “pathways”.
The biggest of these so far is in Cambridgeshire, where a massive £800 million contract for the entire range of services for older people and adults has been offered up for grabs – so big a contract that NHS providers have concluded they cannot hope to win the contract without entering a “partnership” with profit-seeking private companies like Capita, Circle, Virgin or Serco.
The Health & Social Care Act has also given foundation trusts the “freedom” to expand their private patient services to as much as 50% of their income: with NHS funding frozen and falling in real terms, one foundation trust in eight has opened up new private treatment facilities since last year, and many others have expanded their private wards and wings.
Why has the Tory-led coalition focused so strongly on opening up the NHS and its budget to the private sector? Why are they prepared to divert countless millions from patient care into the overhead costs of tendering tens of thousands of contracts across 211 Clinical Commissioning Groups?
We have to discard some myths immediately:
- It’s not to save money: private sector provision is never a cheaper way of delivering like-for-like services: apparent “savings” from privatisation centre on reducing the workforce, paying them less, working them harder, or delivering less complex services – and dumping the others on to what’s left of the public sector.
- It’s not to privatise the whole NHS: the private sector does not want big sectors of the NHS which deliver emergency and other services which do not make a profit. And the private sector is not big enough to buy up the whole NHS.
- The private sector is not more efficient. The overheads, running cost and wasted spending under the heavily private provision of health care in the US are staggering compared with those in England. The USA is estimated to waste a staggering $800 billion each year – almost a third of the $2.7 trillion health spend on factors including unnecessary treatment and fraud. Admin costs are estimated to soak up almost $900 per person in the US, covering sky high salary costs, advertising, and the huge bureaucracy of health insurance. In Britain the Competition Commission has just produced a scathing report on private hospital chains, accusing some firms of massive over-charging, and called for the bigger chains to be broken up.
- The private sector is not safer for patients: incidence of avoidable medical errors are at least as high in the US as they are in the NHS. The only difference is that private hospitals in England focus only on elective surgery and less complex cases, leaving any risky treatments to public sector providers. Private hospitals are smaller, see fewer patients and therefore fewer external visitors, and spend more on the environment and in general have kept cleaning and other support services “in house”.
- Nor is does the private sector deliver better outcomes (US life expectancy despite higher health spending is lower than the UK), better quality, or “innovations” that do not rely on research and techniques first developed by the public sector.
No. In England, and every other country where public sector services are being opened up to private providers, the privatisation drive is not based on pragmatic ideas of ‘doing what works’.
On the contrary, they flow from neoliberal ideology, which since the heyday of Thatcher and Reagan has asserted that competitive markets should be the basic form of organisation, and that any public service ‘monopolies’ which impede such markets must be broken up and opened up to a multiplicity of providers. In Britain the NHS is one of the last survivors – and the Cameron government is determined to finish the job that Thatcher started and Blair continued.
This is combined with the notion of the “small state” – and the pressure to minimise taxation on big business and the wealthy, resulting in a relentless onslaught on public sector health budgets.
But neoliberalism is not simply an ideology floating in the ether: it reflects the material interests of the powerful private medical industrial complex, which has in many countries hit the buffers as it runs out of affluent customers willing or able to pay soaring prices for health insurance and treatment. So they are desperate to do more than redivide the estimated $500–550 billion global total of profits.
Easier said than done. One immutable law that makes a pure market in healthcare impossible is the “inverse care law” by wish those who need most health care – overwhelmingly the very young, very old, chronic sick and the poor – are least in a position to pay a market price for it.
These are the very last customers health insurers want on their books. Without public provision and collective funding of health care these millions are excluded from any access to health care.
So a private sector eager to expand has to seek ways to reach into the huge public sector budgets of the richest countries, to carve out a larger slice for themselves.
Hence the piecemeal privatisation in Britain and elsewhere, which has clearly followed a very different model from the “big bang” privatisation of utilities by the Thatcher government in the 1980s – by selling them off to shareholders.
In place of slick advertising campaigns which under Thatcher persuading relatively prosperous individuals to buy themselves a limited share of the newly-privatised utilities (most of which were swiftly sold again), the rhetoric has been of “competition”, and especially “patient choice” – although it is already clear that what once were competitive contracts are being transformed into new private monopolies as bigger corporations move in.
So if you want a one-word explanation of the otherwise completely irrational and expensive drive to privatisation of health care and a massive Health & Social Care Act that has made the NHS less efficient and far less accountable than before, it’s “neoliberalism”.
And if you want a political explanation of why similar policies have been embraced by both Tories and Labour, again the answer is Blair’s embrace of neoliberalism and the ideology of the market which before the mid 1990s were (quite rightly) the preserve of the right wing of the Tory Party and right wing “think tanks”.
Any coherent policy to defend the NHS has to begin from a rejection of this destructive ideology, which is incompatible with the provision of universal health care. That’s why it’s not enough to wait for Miliband and his Labour team to see the light: the left must organise, unite, and develop a serious and consistent socialist alternative.
The NHS has coexisted with capitalism and social democracy for 65 years: but capitalism and social democracy can kill it off unless a political fight is waged to keep services and staff intact and halt the fragmentation and privatisation before the damage becomes irreparable.