Fight Labour plans to privatise the NHS

In September, the Labour government awarded contracts for the next phase of its plans to privatise the National Health Service. Over 30 Diagnostic and Treatment Centres (DTCs) are to be built and run by private firms. The centres are meant to provide fast-track diagnostic tests and routine surgical treatments such as hip replacements and cataract surgery and are expected to be treating more than 250,000 patients by 2005. The contracts were awarded to companies from Britain, United States, Canada and South Africa, though British firms have a stake in most of the successful consortia.

Labour lies obscure threats to health
In announcing the plans, Labour’s health secretary, John Reid, persistently claimed he was motivated by the need to prevent patient pain and suffering. This has as little truth in it as some of Labour’s earlier assertions about DTCs. Initially, Labour said that DTCs would be for NHS patients only. Now they admit that private patients will be treated as well. In fact, fewer than half of the 250,000 patients will be transferred from NHS hospitals. Labour also promised that DTCs would not be allowed to poach NHS staff. Now they admit that as many as 70% of DTC staff could be seconded from the NHS. How this is supposed to ease staff shortages and enable expansion in the NHS was not explained. Labour had initially said that as a means to ‘improve efficiency’ (sic), DTCs would compete with NHS hospitals on an equal basis. Now it emerges that DTCs will be allowed to charge more than NHS hospitals but still be guaranteed a minimum number of patients. Recently three Primary Care Trusts (PCTs) in the Oxford area decided not to use the proposed local DTC there, but to continue sending all their patients to the Oxford Eye Hospital. However, they were then forced by the Department of Health to transfer 1,000 of their patients to the DTC thus threatening the viability of specialist equipment, services and jobs at the Oxford hospital.

By such deceptions Labour is steadily passing control of the public health service into private hands without most of the population understanding the devastating consequences it will have on their health care. Labour’s plans have nothing to do with improving efficiency, choice and quality in health care. Their purpose is to allow British private health companies and associated construction and service companies to grow big enough to compete
in the expanding international health market.

How health became a commodity
There are two main aspects to the privatisation process that will result in the destruction of the public health system and the collapse of reliable and decent health care for the majority of people. First there is the ever-greater expansion of private companies into the public health sector. This alone is bound to reduce facilities and services since private companies demand profits which must be taken from public funds that would otherwise be spent on health care. It began with the privatisation of non-medical hospital services such as cleaning and catering. Then followed the Private Finance Initiative (PFI), started by the Tories but enthusiastically expanded by Labour. Under PFI private firms are allowed to build hospitals and operate non-clinical services in return for lucrative leaseback contracts from the NHS.

The first wave of PFI hospitals has led to reduced services, a 30% reduction in beds and a 25% reduction in budgets for clinical staff together with further crippling lease costs facing hospitals for the next 20 to 25 years. Health authorities in Greater Manchester recently reported a funding crisis created by PFI. At present rates they expect to be a staggering £730 million in debt within seven years. In 2000 Labour opened up the NHS to the provision of private clinical as well as non-clinical services. DTCs are part of these. Labour’s plans also include the use of spare private hospital capacity, joint private sector ventures with NHS organisations, providing private intermediate care in nursing homes and the community and providing private management to run ‘failing’ NHS hospitals; the latter in spite of the massive differences in size and complexity between private and NHS hospitals and despite the dismal record of private management brought in to ‘failing’ schools.

It is the second aspect of Labour’s privatisation plans, however, that will finally unravel any remaining threads of a national public health system and allow a rampant free market in people’s health. This is the establishment of independent foundation hospitals and trusts together with the decision to allow funds to follow patients. In other words instead of giving health authorities and institutions annual grants to cover all the services they will be paid according to a set of tariffs for each treatment and each patient. Rates paid to the private sector will be higher than those for the NHS. Foundation hospitals will have NHS assets transferred to their ownership but be freed from NHS control. They will be free to set their own terms and conditions for staff, run joint ventures with private companies, borrow for capital investment, generate their own income and retain the proceeds from the sale of hospital land and other non-core assets. The only obligation on foundation hospitals will be financial – not to lose money. There will be no obligation to provide a full range of services and no obligation to serve everyone in a local community. They will compete with private providers and be driven by the same priorities – not health, but costs and profits. Essentially they will be indistinguishable from private concerns. Indeed, in order to raise finance for new equipment and wards, foundation hospitals could contract out the running of part or all of the hospital, including clinical services, to the private sector or even sell the whole hospital and lease it back. In effect this would be an extension of PFI.

Pursuit of profit will corrupt health
Given the only obligation on foundation hospitals will be to make money and that they will be competing with private providers, the trend will be for such hospitals to concentrate on those routine treatments and low-risk patients that are most easily dealt with and provide the most profit. Complex and risky treatments will be difficult to get or not provided at all, except for those able to pay. The old, the frail and the chronically ill will be given short shrift. Hospitals will redefine illnesses and treatments to maximise tariffs or put them outside the scope of the NHS so as to claim private fees. They will cut the time patients have to recover in hospital so that recovery risks and costs are pushed onto social services or the patients themselves. New streams of revenue will be exploited such as ever greater charges for non-medical services like parking, catering and telephones for patients, staff and visitors. Huge inequalities will emerge as hospitals with higher land asset values and a healthier client base in affluent districts leave behind sink hospitals serving poor and working class areas. This system is being extended to primary care. Under their new contracts, GPs will be paid to provide only a core of basic services, the rest will be optional, with a system of tariffs and open to competition with private providers. It is clear that GP practices will soon go the same way as NHS hospitals.

Back to the 1930s
The NHS is rapidly moving towards the health system of the United States where major operations are rushed and patients with serious conditions hastily discharged, where low-risk patients are carefully selected and the costs and risks of care are displaced to the patient, where private hospitals inflate charges and doctors check the size of a patient’s wallet before checking their pulse, where millions of people cannot afford health insurance and so have access only to the most basic health care.

The days of universal access to a full range of NHS treatment are numbered. As Professor Allyson Pollock of the Public Health Policy Unit has said, ‘Profit will compete with needs and as the experience of railway privatisation and long-term care shows, universal care, equity of access to services, and high quality care will be sacrificed. Health care will be a lottery decided at local level and there will be a return to the fear and uncertainty that were part and parcel of life before the NHS’.
Jim Craven

FRFI 175 October / November 2003


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