How much of the NHS in England has already been privatised?

The question, ‘How much of the NHS has already been privatised?’ popped up in a Facebook group this week (it’s a frequently asked question). The answer that Deborah gave seems to have developed a life of its own and has been shared quite widely on Facebook and Twitter. At the request of several people to make it into a more easily shareable blog, we are copying it here, slightly modified. At its heart it really poses another question: ‘what are we talking about when we talk about the privatisation of the NHS?‘ We think the usual answer is limited – as it only includes clinical services, as if all the supporting and ancillary services aren’t ‘the NHS’. We do include them, which is why our answer to the question asked on Facebook ‘How much of the NHS has already been privatised?’ is…. ‘pretty much all of it‘. This post has been updated since it was published.

While all eyes are on companies like Virgin, the NHS itself has been broken up into over 500 ‘provider bodies’.  These are a mix of arms’ length public companies (Foundation Trusts are not under the direction of the Secretary of State for Health), private health and the voluntary sector.

The ‘NHS’ Foundation Trusts are set up in law under the Health and Social Care (Community Health and Standards) Act 2003 as legally independent organisations called Public Benefit Corporations which can and do: compete with one another and with the private and voluntary sectors for contracts; sub-contract to the private sector for ‘extra capacity’; and set up their own subsidiary companies (either wholly owned or part owned with the private sector).

They are now merging with other organisations to form Integrated Care Systems to lower their financial ‘risk’ of insolvency but also to profit share and some have already created ‘special purpose vehicles’ (the kind of company with multiple partners used in PFI) . That will move them from public companies into private ones and some of the ‘collaboratives’, as they are also known, have the private sector in the new systems with them.

That’s absolutely the case in the first groups of mental health providers because the private sector is such a huge player in mental health.

Clinical Commissioning Groups (CCGs) don’t have the same function as a public sector planning body would have. The government provides the money for what has become in all but name a state insurance scheme, rather than funding for comprehensive public provision. CCGs aren’t obligated to provide the same level of care as each other. They have core services they must provide but, rather like health insurance companies, they can ration or refuse to provide a lot of other things.

That includes cataracts, hip and knee replacements, hernias and varicose veins, unless they have thrombosed, prolapsed or otherwise create an immediate danger.

Other treatments such as IVF and vasectomy are also on the reduced or removed list. Of course this creates a market for those who can afford to pay outside the NHS or, alternatively, you can be an ‘NHS private’ patient.

Some hospitals have greatly increased their private patients and some others have formed joint companies with US hospital groups like HCA to provide private health care. The newest of these is the US Mayo Clinic’s first clinic in the UK  in partnership with Oxford University Clinic – a partnership itself between Oxford University and Oxford University Hospitals NHS Foundation Trust.

Many hospitals, clinics and GP surgeries which used to be publicly owned or owned by the GP partners have been sold or taken into ownership of NHS Property Services and have had to move either into PFI buildings or otherwise rent in purpose built accommodation owned and provided by the private sector (and very profitable business it is too…). Offshore funds have bought up about half of the equity in PFI and PF2 projects so that the projects’ owners are increasingly remote from the public service being delivered. In addition, offshore owners of these projects pay little tax.

Maintenance, cleaning, hospitality and portering services, plus ambulances and patient transport started moving over to the private sector decades ago, sometimes with serious consequences. Those that remain are being subjected to their Trusts forming Subsidiary Companies which will over time erode their terms and conditions of service as much as any other private company would.

Centene, a major US insurance company, owns The Practice – the largest GP group in the country which spreads from Birmingham up to the North East and down to London. It has just acquired 49 more practices spread across London from AT Medics. It now has 500,000 registered patients. Optum, the UK subsidiary of US giant United Health, provides services to the second largest GP group, Modality, and is the fund holder for the new GP Primary Care Networks.

Optum also runs referral checking services in various parts of the country where it decides whether your GP’s referrals for tests or to see a consultant are permitted or not.

GPs are ‘losing NHS business’ – as are community pharmacies in rural areas – to large pharmacy chains like US-owned Boots and supermarkets, through competition for profitable work or through withdrawal of essential funding.

With the increased complexity of operating all the billing systems and new legal arrangements to make, not to mention the backroom services such as developing and running IT systems (and patient facing ones too like the GP at Hand app) there’s a lot of lucrative work for major accountancy, legal and management consultancy companies to be had too.

There is vested interest in promoting the idea that ‘privatisation’ means the private sector taking over the whole of the NHS, as happened to the utility companies, (rather than profitable sections like property and certain significant sectors like community care, mental health and GPs) with private health insurance replacing ‘free at the point of need’. It deflects from the real extent of what’s happening. It’s more the case that the NHS has multiple layers of profit opportunity within it – and the problem is that the more sectors of the NHS are thinking about money, the less they are thinking about care.

What we don’t have anymore is the NHS as a unified provider of universal and comprehensive services. Funding the NHS to provide what is needed, where it’s needed, is no longer the prime objective. We are half way to Medicare (which will be and may already be, depending where you live, the second tier of a two tier system) with all the right business processes, billing systems, etc, already in place. #Medicare4All might be a huge step up for America, but it’s a big step down for the NHS in England.

The Centre for Health in the Public Interest (CHPI) did a study of privatisation in social care which parallels what is happening in the NHS. They said “Worryingly, the early talk of a ‘mixed economy of care’ with local authorities, private and voluntary sector competing on a level playing field rapidly disappeared from political discourse.” Its statistics show the extent of the takeover by the private sector from local authority and NHS provision, “In 1979 64% of residential and nursing home beds were still provided by local authorities or the NHS; by 2012 local authority share was 6%; in the case of domiciliary care 95% was directly provided by local authorities as late as 1993; by 2012 it was just 11%.”

Have we defined privatisation in a way that makes sense? We think so. It spreads to every part of the NHS in England – and we haven’t even included here the clinical services or pathology lab services which tend to be everyone else’s focus. That’s why Professor Allyson Pollock wrote her NHS (Reinstatement) Bill. Not just to get rid of the likes of Virgin (which it will also do) but to return the whole of the NHS to public service.