How the Coalition plans to abolish the National Health Service

Under the name of Equity and Excellence: Liberating the NHS, the ConDem coalition plans to destroy the NHS. Health Secretary Andrew Lansley’s White Paper will abolish 150 Primary Care Trusts (PCTs), 10 Strategic Health Authorities (SHAs), and place the management of £80bn annual funding in the hands of 600 consortia run by GPs. These consortia will buy health services from hospitals and community service organisations. All hospitals will have to become Foundation Trusts, and will be able to offer as much private practice as they choose. Hospitals that become bankrupt will not be bailed out.

The government says that this will save the NHS money: they want £20bn cuts by 2014. It also says that this will put GPs and nurses in charge of health care. These are lies. The only way that money can be saved will be through huge cuts in services since the proposed system will be very expensive to run. First, around 30,000 managers and workers will be made redundant as PCTs and SHAs are abolished by 2013. Making them redundant will cost over £1bn. Then 600 new organisations, which will be run by private companies, will have to be set up and recruit new staff, again by 2013. They will have to organise tenders for clinical services as they will be subject to Public Contract Regulations (2006), and to the EC’s Public Procurement Remedies Directive (2009) which can impose fines, demand bid costs and annul contracts if the new consortia fail to perform according to market rules.

These 600 organisations will have to do what 150 did in the past – necessarily requiring more staff. Workers and managers to run contracting and accounting functions will multiply. Hospitals will have four times as many organisations to deal with when they arrange contracts and seek payments – they will need more administrators. There will need to be huge extra investment in untried computer systems. There is no way that this can be a cheaper system – so services will have to be cut.

The groundwork for this was laid by the Labour government. It established the internal market with Payment by Results, set up Foundation Hospitals as quasi-independent organisations able to enter into commercial arrangements with private companies, set community services off on the road to privatisation, and made sure that private services would be on a ‘level playing field’ in competing for NHS work. The self-same organisations which advised on ‘world class commissioning’ will be the ones that will run the GP commissioning consortia.

No wonder Allyson Pollock and David Price of the Department of International Public Health at the University of Edinburgh argue that the changes constitute the ‘abolition of the NHS...[removing] the government's duty to provide a universal healthcare service...[and leading] to full privatisation’.

Private companies are open and vocal about the possibilities they see ahead for themselves. Spokespeople for private companies already involved in the NHS, such as Assura Medical, Tribal, Bupa Health Dialog, and US health giants Humana, UnitedHealth, Aetna and MCCI, have all expressed their support for the White Paper changes and predict increased involvement as the consortia will need help with finance, management, accountancy and data analysis. Capita's business development director says the White Paper opens up opportunities for companies to manage ‘billing services, human resources, IT and administrative back up’. Inevitably they will also accelerate the takeover of GP services. A recent report NHS Unlimited? Who is running our GP services? notes 23 commercial companies that run between them a total of 227 GP surgeries and health centres, a figure that will certainly rise.

In July 2010 US-based UnitedHealth won the contract to advise the soon to be abolished Primary Care Trusts. They beat Bupa and Humana (another US health insurer). UnitedHealth already runs two GP practices in Derbyshire, three in London and in April announced a 21% increase in profits – £784 million – in the first three months of 2010. Many of these private companies are involved in dubious practices and in the US, the FBI recently launched a campaign against the fraudulent activities of medical companies. In 2008, UnitedHealth paid out $50 million after being sued by the New York attorney general regarding pay for doctors and hospitals not in the companies’ networks, and its Californian subsidiary was fined $3.5 million for mishandling claims against patients and doctors. These are the companies which will be running the NHS.

Foundation status hospitals

In requiring all NHS trusts to become Foundation Trusts (FTs) by 2013/14, the White Paper is merely accelerating Labour’s plans. Being FTs makes them independent businesses outside the NHS. The cap on the amount of income FTs can get from other sources will be removed, encouraging private medicine within the NHS. As semi-commercial organisations, FTs which hit financial problems will not be bailed out. Given the chronic overspent position of many hospitals, in particular on the outskirts of London, there will be a further threat to services. There is absolutely no way in a privatised system that the current configuration of acute hospitals will continue since there is no possibility of spreading financial risk. The result inevitably will be hospital closures, chaos, reduced services and patient deaths.

Equally inevitably, more and more people who can afford it will take out health insurance. It will be the working class who will suffer, the chronically ill, those with mental health problems and long term needs – those with high health care costs.

The impact this will have on ordinary people was foreshadowed by Prime Minister David Cameron’s refusal to commit to Labour’s two-week wait target for cancer treatment, one of the very few health achievements the last Labour government can boast about. At the same time, it had presided over a continued widening of health inequalities which are now worse than they were before World War II. Between 1999 and 2007, there were 212 deaths before the age of 65 in the poorest tenth of areas for every 100 deaths in the richest tenth of areas, This compared with 191:100 deaths from 1921-1930 and 185:100 from 1931-1939. The ConDem’s privatised system will widen the gap further. It is up to all of us to stand and fight these class-ridden proposals.

Hannah Caller

FRFI 216 August/September 2010