The NHS, starved of funds and damaged by privatisation

The National Health Service was founded to be

  • Free at the point of use

  • Paid for from general taxation

  • The best available medical and surgical service

  • Not for profit

  • A universal service, so virtually everyone used the same service.

  • Publicly provided. not provided for profit

  • Publicly accountable to us the taxpayers and patients

  • Comprehensive care: all the care we have come to expect.

As such for many years it was a huge success. In comparison with the healthcare systems of ten other countries (Australia, Canada, France, Germany, Netherlands, New Zealand, Norway, Sweden, Switzerland and USA) the NHS was found to be the most impressive overall by the Commonwealth Fund in 2014. 

The NHS was rated as the best system in terms of efficiency, effective care, safe care, coordinated care, patient-centred care and cost-related problems. It was also ranked second for equity. In 2014 the NHS was the worlds’ most efficient and most effective health service.

Adding to the problem, there are major cuts in social care budgets for Local Authorities, which have helped create a shortage of hospital beds. Convalescent hospitals and cottage hospitals which could have eased the strain were closed down.

There is a huge shortage of money in the NHS because of government policy.

An investigation by the Guardian and the campaign group 38 Degrees has revealed that the NHS at local level could be facing a financial shortfall of about £20bn by 2020-21 if no action is taken.

In an attempt to head off the crisis, NHS England has divided the country into 44 “footprint” areas, with each asked to submit a cost-cutting “sustainability and transformation plan” (STP).

Privatisation, restricting funds, and marketization are each different aspects of the Government’s project.

Under marketization (which started before the Health and Social Care Act), each hospital has to be financially independent and balance their own books. As different hospitals have to work together this means that hospitals have to reach legal and financial agreements with each other over shared services. This is not necessary unless the marketization model is used. This is itself a money waster.

These are troubled times for the NHS.

The NHS is being starved of Money, being subject to privatisation, to the break-up of services, to constant reorganisation and relentless political intervention from the government.

Current health expenditure in the UK is lower than many major economies. It was 8.46 per cent of GDP in 2013. This compares to 16.43 per cent in the USA, 11.12 per cent in the Netherlands, 10.98 per cent in Germany, 10.95 per cent in France, 10.40 per cent in Denmark, 10.16 per cent in Canada and 8.77 per cent in Italy.

The NHS now faces significant threats from privatisation, lack of funding and constant organisational changes.

The government believes in privatisation.

Jeremy Hunt, now the Health Secretary wrote a pamphlet called “Direct Democracy” advocating the privatisation of the NHS in 2005. Nick Seddon, health adviser to David Cameron and continuing in that role for Mrs May is an advocate of privatisation. Simon Stevens who is the senior executive officer in the NHS comes from the biggest private health provider in the USA and was previously an adviser to Tony Blair.

Marketization means getting the service ready for the market. so bits of it can be chunked up and put out to tender. This is now well advanced in the NHS. For example, if you live in Birkenhead or Chester and want an ambulance to take you to hospital you have to get an ambulance provided by West Midlands NHS. Other services across the country have been out sourced to G4S, subsidiaries of Virgin, and similar companies.

They all take a profit from the NHS. Nearly 40% of contracts have gone to ‘for profit’ contractors

vulturesPrivatisation is well under way

 Since 2010 the NHS is being offered to private, for profit, companies, to make money.

What are the problems of having private, for profit, providers in the NHS?

  • They take a lot of money out of the NHS by making a profit. They generally are able to do this by cutting wages or cutting corners or not having the expensive back up services the NHS has to provide
  • The private provider does not have to ensure continuity of provision. One private provider just gave up on running a hospital when it suited them “On the day inspectors gave the hospital they were running, the worst rating for ‘caring’ of any hospital in the country, the firm announced they were giving up and walking away, three years into the ten-year contract.”
  • They take resources away from core providers and cherry pick less complicated cases. If a company bids to do 10,000 operations but only does the straight forward ones, the unit cost of the complicated ones is much higher to the remaining NHS cases. Recruiting staff to support only the very complicated cases gets harder
  • There are teams of talent scouts looking out for chances of privatisation and the NHS pays them to do it!

“Change is a combat sport.’ So said Strategic Project Team co-founder, Stephen Dunn, at SPT anniversary celebration. A “ninja” team of privatisers advise on how next to extend private involvement. This team is employed by different NHS bodies.

For six years, these ‘change-makers’ have been, in their words, ‘supporting the brave’ and ‘encouraging the timid’ to reform health services and hand them over to the private sector.

  • Training suffers in Privatisation.

  • Privatisers won’t match the training provided by the NHS. Initial and ongoing Training and supervision of staff can only match NHS standards with considerable investment, which will hit the profit levels.

  • Standards of care can slip because making a profit is core to the business
  • These companies lack the long developed monitoring procedures of the NHS so mistakes happen.
  • The government is now suggesting that private providers have access to all the NHS backup services including it appears the NHS insurance systems, yet be expected to charge only their upfront costs plus profit to the NHS.
  • Privatisation helps develop a two tier system; one treatment for the rich and one for the poor.
  • Private hospitals rely on the NHS for back up. Patients in the UK are frequently transferred from the small number of private hospitals to the NHS.

Privatisation began with the contracting out of ancillary services (the cleaners and others) under  the Thatcher government in the 1980s. This is blamed for major hospital infections.

She split the NHS into sections which bought services from other parts of the NHS who were called providers (purchaser-provider split). Then private companies could bid to provide the services instead of the NHS.

Then Tony Blair started a wave of PFI hospitals and private provision of clinical services. Major private companies were brought in to advise on the “commissioning” of NHS services. Commissioning means parceling services up so private, for profit, providers can bid for them

Trusts Each Hospital became a “Trust” and as such supposed to be financially independent. Trust are monitored, measured, judged and cut so a whole industry has grown up disciplining them. Many trusts have been starved of funds by the government.

Private, “voluntary” and community services, hived off from the big trusts are not treated in the same way at all.They are not measured in the same way and it is far easier to close a service once it has been hived off to a different provider.Private providers are treated much more easily, especially outside of hospitals general practice and mental health. There is less data collected, less oversight of the workforce and they do not have to meet the same rigorous targets.

In 2010 the Coalition Government’s Health & Social Care Act dismantled the underlying principles of the NHS, including “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.


This diagram from the Kings Fund shows how  services are put up for tender.

So the proposals for the Liverpool Women’s hospital arein this vortex of change.

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