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‘.

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.

Until recently Centene, a major US insurance company, owned The Practice – the largest GP group in the country which spreads from Birmingham up to the North East and down to London – but it has now sold it to a US private equity group. 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.

 

 

 

 

 

 

 

5 Comments on “How much of the NHS in England has already been privatised?”

  1. Thank you for researching and articulating something that I have intuitively understood for ages. The bastards have been chipping away at this and many other public resources for ages. As soon as someone starts mentioning cooperation between the public and private sectors, we know they are about to slip their hands in our pockets and steal what they can. Now, I just wish someone could work out how to resist these rape and pillage raids.

  2. A reasonable explanation which soon spirals out of control, as is often the case.

    ‘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.’

    What ‘Offshore funds’? Who are the ‘offshore owners who pay little tax’? It may well be true – but without specifics, who can tell?

    Is ‘NHS property services’ a private business?
    How are GP’s ‘losing NHS business to pharmacies’?

    ‘and the problem is that the more sectors of the NHS are thinking about money, the less they are thinking about care.’

    Why would you say that? Do you say that private healthcare providers who provide quality healthcare aren’t thinking about money? Or that the care they provide is inadequate? Why can the NHS not think about healthcare and money at the same time? The more efficient they are with money, the more healthcare they can afford to provide.

    There may be strong arguments against allowing private companies to play any part in the NHS, but there are few on this page, unfortunately. You need to make your case more strongly.

    1. Fair enough questions

      If you look at our other articles where we deal with specific areas of privatisation you will see they have links and are referenced throughout. This piece is a blog which really is designed to be a ‘bullet point’ speedy read which we would hope might lead people into looking at the issues more in depth.

      Taking your points in order: the offshore accounts comes from this report https://www.european-services-strategy.org.uk/news/2017/new-evidence-of-the-scale-of-uk-pfippp-equity-offshoring-and-tax-avoidance

      NHS Property Services (the PropCo) is a private Ltd company https://beta.companieshouse.gov.uk/company/07888110 It caused concern in the Commons and the National Audit Office when it was created in December 2011 in advance of the Act which gave it its powers because public ownership was not even considered as an option. The NAO remarked that there was a real possibility of it being sold off at a later date. Although it is currently wholly owned by the SoS Health there is precedence for these companies being created and sold off later as portfolios. It happened both to the DWP’s JobCentres and to HMRC’s tax offices – the latter, unfunnily, owned by Mapeley whose parent company is registered in the Bermudas https://www.mapeley.com/OurApproach/Customers/HMRC.aspx. Ian Ellis is Chair of the Board of the PropCo. He was previously a director of Telereal Trillium. Trillium is owned by the William Pears Group which owns the property portfolios of the DWP, British Telecom and the BBC. The Sunday Times reported on the running of the PropCo. This link is to a blog site which shows the text in full, as the Times article is behind a paywall https://eastdevonwatch.org/2017/04/02/nhs-property-services-threatens-gps-with-closure/

      GPs losing NHS business to pharmacies is illustrated by the flu vaccine. The vaccines have to be ordered in advance at the beginning of the season. Pharmacies can now offer a range of NHS advisory and treatment options which would previously have been the remit of GPs. One of these is the flu vaccine. https://healthclinics.superdrug.com/services/flu-vaccine GPs are finding that their patients who would normally have the vaccine at the surgery are being asked if they would like to have it whilst they are at the pharmacy for some other issue. This is wasteful (over ordered vaccines have to be thrown away) and damaging to general practice finances. http://www.pulsetoday.co.uk/clinical/immunisation/practice-challenges-nhs-chief-over-4m-wasted-flu-vaccine/20030344.fullarticle

      You ask if we are saying that private providers provide inadequate care. In fact they might (https://www.theguardian.com/society/2014/oct/16/leaked-report-cataract-surgery-revealed ) but more to the point the care they provide is not comparable with NHS care. They do not provide acute and emergency medicine, for example, as it is high risk and expensive. If patients become critically ill whilst in their care they will be transferred to the NHS and if they become critically ill after discharge as a result of something going wrong with an intervention again they will be directed to go to NHS A&E, not come back to the private provider. This leaves the NHS with the high risk and high cost. As NHS funding has not kept pace with inflation over the last 10 years and NHS Trusts can now earn up to 49% of their income from private sources there are instances where the NHS is building facilities on its premises in order to house the private sector providers as the rent they can charge ‘improves’ their accounts (without adding to their ability to provide NHS care). Research showed that the early privatisations of cleaning services had a direct correlation with the rise of MRSA and c.dificil. (http://www.ox.ac.uk/news/2016-12-21-nhs-hospitals-outsource-cleaning-‘linked-higher-rates-mrsa’ ) Low cost healthcare can be the result of well planned services (the public sector traditionally did well at this pre-marketisation). However under the current financial restrictions and in the face of having to direct resources into ever more complicated accounting procedures lower costs are more likely to be the result of cost cutting exercises. These might be employing fewer staff than is safe and reducing the number of highly qualified staff as a proportion of the total. This means not being able to have as many beds available which puts pressure on at all levels to increase waiting lists. It makes transferring patients from A&E to in patient beds difficult. It may also mean people whose recovery would benefit from slightly longer in patient stays being discharged in order to create bed space. The idea that the private sector is somehow endowed with a super-power that means they can both save money (or make profit) and provide universal, comprehensive, accessible, high quality care is not borne out anywhere in the world.

      For further reading on this site we suggest Privatisation from the top down https://publicmatters.org.uk/2018/06/05/privatisation-from-the-top-down-the-corporate-sector-and-decision-making/ and Privatisation from the ground up https://publicmatters.org.uk/2018/05/22/privatisation-from-the-ground-up-property-sales-and-rich-nhs-trusts/

Leave a Reply to Deborah Harrington Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.