Banks get bailed out, hospitals go to the wall / 228 Aug/Sep 2012

Fight Racism! Fight Imperialism 228 August/September 2012

Disaster looms for the NHS. The combination of privatisation and funding cuts is bringing it to its knees. While the ConDem coalition trumpets its claim that NHS funding is protected and is in fact being increased by 0.1% per annum, in reality this amounts to year-on-year cuts of about 4% because of the scale of rising need. The NHS cannot survive this without irrecoverable damage. The story gets worse from 2015, when projected cuts in government spending rise from 2.3% per annum to 3.8%. Further privatisation, a wholesale attack on working conditions, and health care rationing will be the government’s answer.

Private Finance Initiative

The crisis is particularly acute with hospitals bearing the costs of Private Finance Initiative (PFI) buildings. The total cost of PFI projects across the public sector amounts to £301bn for a capital value of £54bn; £242bn worth of payments remain outstanding. The debt burden for individual hospital trusts is enormous: the capital cost for the new Walsgrave district general hospital in Coventry is £379m; the Hospital Trust will have to pay £4bn. South London Healthcare NHS Trust, a merger of three hospitals, two of which have onerous PFI schemes, has been placed in administration. The PFI costs are currently £61m a year; the Trust has a turnover of £440m and made a loss last year of £65m. A special team has been sent in to sort the Hospital Trust out by February 2013. For one of the hospitals, Bromley, this will be at least the fifth change of management over a ten-year period. The problems the Trust faces can only be solved by closing a large number of services or complete hospitals, or by selling off the Trust itself.

There are currently 20 other NHS trusts at risk of bankruptcy due to unaffordable PFI contracts. In the case of Peterborough City hospital, the finance director resigned as the PFI-funded building opened in November 2010. Within six months, the repayments on the debt meant that the hospital faced £40m loss on just £200m of income.

Quality of care is now routinely sacrificed with mounting financial pressures exacerbated by the ConDem Coalition plan for all hospital trusts to become foundation trusts. After much delay, the Care Quality Commission investigated the University Hospitals of Morecambe Bay NHS Foundation Trust serving 365,000 people in South Cumbria and north Lancashire. Its report was damning: inadequate numbers of doctors and nurses, an atmosphere of bullying and fear between staff and management, long waits, poor communication, lack of equipment, bed shortages and serious consequences for the health and lives of patients using the service. The report on North Staffordshire is due in October.

Cutting pay and conditions

With staff costs making up 70% of the NHS budget it is easy to see how the ConDem spending limits will be met: cutting staff or cutting their pay. As if on cue, a group of NHS managers from 19 organisations in the South West NHS have united as a cartel to drive through employment contract changes that include pay cuts up to 5%, the end of overtime payments for nights, weekends and bank holidays, reduced holidays and longer shifts. This will signal the end of the national contract Agenda for Change, which standardised pay scales for health service staff, including nurses, midwives and porters

Virgin and Serco

Richard Branson bought 75% of Assura Medical in 2010 and it is now called Virgin Care. It runs 120 NHS services already, including many GP surgeries, and has links with over 50% of the board members of three of the first wave of GP commissioning groups. Having recently signed a contract with NHS Surrey to run community health services, Virgin has now won a further contract to provide core NHS and social care services for children and young people in Devon. Virgin Care will take over the children’s services for three years from March 2013, taking on 1,100 staff currently employed by NHS Devon and Devon County Council and will be responsible for 2,400 children with disabilities, children’s mental health services, school nurses and health visitors.

The other bidders in Devon were a consortium involving the charity Barnado’s and a partnership involving Serco which is also aiming to become a major private provider to the NHS. Serco already has a contract for £140m for community health care in Suffolk and a 10-year contract at Derriford hospital in Plymouth to provide a helpdesk, ward housekeeping, patient and staff catering, portering and cleaning worth £140m over 10 years. It has implemented cuts in pay, cuts in hours and roster changes in the hospital. Its performance in running out-of-hours services for 500,000 people in Cornwall has proved a disaster for patients and staff. It failed on four out of eight quality standards when assessed by the CQC. One patient complained of having to wait at a clinic for 90 minutes. Another waited so long for a home visit they gave up and dialled 999. Because of staff shortages, Serco made some doctors work extra shifts overnight and other staff work 11-hour daytime shifts. This is the future the ConDem coalition has in store for the NHS.

Hannah Caller

Health privatisation gathers pace

Fight Racism! Fight Imperialism! 227 June/July 2012

The passage of the Health and Social Care Act in England in April is the most destructive step in 20 years of internal market, fragmentation and privatisation of the National Health Service. Out go NHS Primary Care Trusts and Strategic Health Authorities, in come hundreds of Clinical Commissioning Groups (CCGs), partly run by GPs in England who will be responsible for £60-80bn of funds to commission health care – with more layers of bureaucracy and more private companies.

61,000 nursing posts across Britain have either gone or will go since April 2010, according to the Royal College of Nursing (RCN). There are warning notices that staffing levels are not safe in several hospitals including Dewsbury, Leeds, Lancaster, Mid-Staffordshire, Pembury and Queen’s, Essex. Andrew Lansley, secretary of state for health, was greeted with scorn at the May RCN conference and heckled from the floor when he denied the reductions. Meanwhile the government is massaging the data on waiting times and cancelled operations in order to appear to keep its promises. Its techniques include all the old favourites like resetting waiting time clocks when patients cancel dates; prioritising those about to breach the government targets, not those who have already done so and giving last-minute slots that are impossible to meet.

Despite Lansley’s declaration that talk of privatisation is scaremongering, services are being tendered out all over England with increasing lack of accountability or transparency in the resultant deals. Moreover, CCGs can now decide what services they will and won’t provide at local level – their priority is to balance the books. The chief executive of the NHS, David Nicholson, has said that this is acceptable since patients can choose to go elsewhere.

Private health care companies such as Virgin, Spire, Ramsay and others report doing very well in 2011 and attribute this to long waiting lists, with those who can afford it going private. 23 companies made combined profits of over £1.3bn in their last published accounts (2010 or 2011). The top six – Fresenius, BUPA, BMI Health, Ramsay, Spire and Cygnet – each made annual profits over £100 million.

This list excludes other major private companies such as Serco, as not all their profits are made in health care, and Virgin, as they are new in the health market. All these companies are involved in tax avoidance. Evidence of privatisation’s impact on patient care is already abundant.

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Health and Social Care Bill - The taste of things to come /FRFI 226 April/May 2012

Fight Racism! Fight Imperialism 226 April/May 2012

On 20 March, the Health and Social Care Bill cleared its final parliamentary hurdle. Now the road is clear for complete fragmentation of the NHS and the privatisation of many of its services. The result will be an end to universal health provision, charging for more and more services, reduced quality especially for the poor, and widening inequalities. Any possibility of integrating services within the health sector let alone across to social care is at an end. What will now be put in place is a hugely bureaucratic system where private companies will decide what services to cherry-pick and what we will have to pay for them.

Labour has promised to repeal the Act ‘at the first opportunity’. This is as empty as its promise to re-nationalise the railways in 1997. As the Bill wound its way through parliament Health Secretary Andrew Lansley constantly taunted his Labour opponents that he was only continuing along a path set out by previous Labour governments. Labour had no answer: all it could argue was that Lansley was going too far, too fast.

The Act replaces three layers of management with six: DoH, the NHS Commissioning Board, clustered SHAs, Clinical Care Groups (CCGs), Clinical Senates, Health and Wellbeing boards, Healthwatchers. To this can be added a seventh layer not mentioned in the Act, Commissioning Support Groups which the DoH has created because it knows that the GP-led Clinical Care Groups will be unable to do what the Act supposes they should do, buy health care services for local populations.

The ConDem coalition government may have faced opposition from different organisations: professional bodies like the royal colleges, trade unions and the Labour Party. But the opposition was only verbal and often mealy-mouthed. The trade unions professed more practical concern about the future of NHS pensions: striking against the Bill was ruled out because it would fall foul of the anti-trade union laws. In the final days of parliamentary debate, the Royal College of General Practitioners announced that it would cooperate in the Act’s implementation. The hopes of some that the LibDems might oppose it were dashed by the decision of LibDem peer Shirley Williams to support a Bill she once said she opposed so strongly. As for the Labour Party, it was hopelessly compromised by the enthusiastic programme of privatisation it had led between 1997 and 2010.

Increased costs

From April 2013, CCGs will take over the £60bn annual budget for hospital treatment. There have been many reports on the time GPs have to spend preparing for this new system, a chaotic situation that takes them away from seeing patients and replaces them with locum doctors. In some areas, GPs are spending four days a week organising the new CCG system; in others at least one doctor is spending three and a half days a week away from patients. It costs the NHS up to £123,900 a year to replace a GP with a locum. In one CCG alone, where 15 doctors are spending two days a week away from their real work, the cost is almost £1m per year. With 230 CCGs across the country, the final bill just for setting them up will be enormous.

In reality, most of their work will be done by the Commissioning Support Groups. These will absorb PCT staff and will then buy in support from those management consultancies which advised past Labour governments and have helped Lansley formulate his proposals: McKinsey, KPMG and so on. They will be the vehicles through which private companies will drive forward the privatisation of health care services.

Private companies and their priorities

How will the privatised NHS behave? One answer lies in the fate of Camden Road GP practice in north London which will close on 13 April. The practice has been operated by Practice plc, and its decision to close leaves over 4,700 people without a GP. Nearby practices are receiving 150 phone calls a day and have shrunk their boundaries because they can only take on an extra 1,500 patients.  North Central London NHS Trust is struggling to help as it is being dismantled in the current restructuring. At a local meeting, an outraged resident said: ‘We are not chess pieces to be moved around and shoved about…not victims of private companies who are trying to make money out of us.’ Practice plc just decided to pull out. It has a contract to run three practices in Camden until 2013 – but it can walk away from any of these if it so chooses, and if the NHS runs after it, it can declare bankruptcy.

We will never know how contracts with private providers are awarded, nor the terms of the contracts – and there will be thousands of them. Circle Healthcare started its management of Hinchingbrooke Hospital in Hertfordshire on 1 February. Its contract runs for ten years. Both the Treasury and the DoH have refused to release details of the contract claiming commercial confidentiality: the commercial interests of the NHS and/or Circle are more important than transparency and accountability. Under the Act, anyone and any company can claim exemption from Freedom of Information legislation on the ground of commercial confidentiality, making it impossible to discover the truth.

In Devon, two private companies are on the shortlist to provide services for children in the county: Serco and Virgin Care. Neither has any experience of running children’s services, yet they are the favourites for the £130m three-year contract. The winner will be responsible for services for vulnerable children and families: child protection services, mental health services for children and adolescents, respite care for children and young people with disabilities, health visiting services and palliative nursing care for children with terminal illness. The priorities of profit will put the children and young people at risk and leaves them vulnerable to the whims of the market and length of the contract: three years does not allow for any strategic planning.

The writing is on the wall, the stories a taste of things to come – the end of the NHS as a tax-funded system and its replacement by a mixed-funding system with privatisation of provision and commissioning and an increasingly carved-up, inefficient and costly service.

Hannah Caller

NHS sinks deeper into crisis / FRFI 225 Feb/Mar 2012

Fight Racism! Fight Imperialism! 225 February/March 2012

The Health and Social Care Bill continues its tortuous way through Parliament. During January, the Royal Colleges of General Practice, Nursing and Midwifery came out in open opposition; other Royal Colleges are following suit. Prime Minister Cameron’s claim that NHS staff support the Bill is proving ridiculous. The House of Commons Select Committee on Health, dominated by Coalition MPs, is against it – but on the grounds that it is distracting attention from the need to save £20bn by 2014. However, the need to turn the provision of health services into a source of profit for private capital remains overriding, and despite all this opposition, there is no evidence that the Coalition is going to either abandon or significantly change the Bill. HANNAH CALLER and ROBERT CLOUGH report.

Privatisation remains the name of the game despite the lies of the Coalition. Monitor, the regulator of NHS foundation trusts, has issued proposals on licensing hospitals to provide services in the future which focus entirely on their financial solvency. One licence condition ‘would require licensees to maintain an “investment grade” credit rating, either from one of the major credit ratings agencies (Standard & Poor’s, Moody’s and Fitch) or from another agency that we would approve’. There are no proposed licence conditions for quality of care. In October 2011 the Department of Health issued draft guidance which makes it clear that by 2016 support services for Clinical Commissioning Groups (CCGs, responsible for purchasing hospital care) in England will be provided solely by large commercial organisations. The government has now said it will lift the cap on the proportion of income a foundation trust can obtain from private patients from 2% to 49%.

Despite many amendments, the Bill still does not restore the duty of the Secretary of State for Health to provide or secure the provision of health services. This is because its purpose is to abolish the model of tax-financed universal health care on which the NHS is based. It will be up to individual CCGs to decide what services they commission locally, and which hospitals will provide them. Anything outside this will either require individuals to pay top-up fees or take out private health insurance: it will necessarily be a two-tier system, with the poor and working class getting a rotten deal. The self-same companies which run CCGs may also own the hospitals that provide the care or involve themselves in the provision of health insurance. It is a recipe for corruption and fraud on a vast scale.

Just how bad it will get is shown by the PIP breast implant scandal. PIP was a French manufacturer of silicone breast implants, one of the largest in the world and producing 100,000 implants a year, most for export. In 2011 it was revealed both that it was using a non-medical grade silicone in its implants, a mix of agricultural and industrial grades, and that the implants were more likely to rupture than equivalents. Over 40,000 women in Britain had received the implants from private cosmetic surgery companies. Most of these have refused to accept any liability, and some have disappeared altogether. In early January, 60 women demonstrated against The Harley Medical Group and Transform because they have refused to replace the implants for free. Just what will happen when, in the privatised NHS of the future, a company providing hospital care goes bust, closes down or is otherwise no longer viable? What happens if they botch operations, use faulty equipment or fail to provide proper treatment? With the government determined that clinical negligence cases should no longer qualify for legal aid, the poor and working class will once again suffer.

Job losses and service cuts continue to accompany the drive to cut NHS spending by £20bn. On Merseyside 4,000 jobs are to be lost to meet financial targets, and the South London NHS Trust is considering the closure of Bexley hospital to cut a £69m deficit. Nationally, the number of patients waiting more than 18 weeks for treatment has soared by nearly half since the ConDem Coalition came to office. 20,662 inpatients treated in May 2010 had waited more than 18 weeks; in November 2011 the equivalent figure was 29,508. Over the same period the numbers waiting more than a year for inpatient treatment more than tripled from 321 to 1,018. In all nearly a quarter of a million people do not get treated within the 18 weeks guaranteed under the NHS constitution, and 20,000 have to wait more than a year.

In response to the pressures he faced, senior orthopaedic surgeon David Goodier resigned in November 2011 from St Bartholomew’s and The Royal London Hospitals in east London. Five out of 12 orthopaedic surgeons in the department resigned in 2011. In an email leaked to the press, David Goodier said ‘I have been complicit in a poor standard of trauma care and am guilty of negligence by association … I can no longer stand idly by when patients are at best having their human rights breached, and at worst physically harmed by the care they receive.’ He cited a lack of equipment, lack of operating theatre time, too few beds, and insufficient nurses and other staff, and said that what is in fact a crisis is now treated as the norm. It is a story that can be repeated up and down the country and one which will be worse if and when the Health and Social Care Bill becomes law.

Save the NHS!

Health care secondary to profits/ FRFI 224 December 2011/January 2012

Fight Racism! Fight Imperialism 224 December 2011/January 2012

Health and Social Care Bill passes through the Lords

The Health and Social Care Bill has been in the House of Lords where a hundred peers queued to speak and were given eight minutes each. The outcome was a comfortable defeat of attempts to delay or throw out the Bill in the biggest turnout in the Lords for over ten years. Attempts to defeat the second reading and to set up a special committee to study the impact of the reforms were both defeated.

The Health and Social Care Bill removes from ministers the responsibility to provide or commission health care services directly, passing the duties on to ‘frontline organisations, free from political micromanagement’. The Bill removes the cap associated with earnings from private patients, opening up huge opportunities for the private sector.

It is no surprise to find that more than 40 peers have an interest in private health-related companies. They include former Conservative Health Secretary Virginia Bottomley who is a Bupa director; Lord Darzi, appointed by Tony Blair as a Labour health minister, adviser to medical technology firm GE Healthcare; Lord Naseby, chair of Invesco Perpetual Recovery Trust, investors in pharmaceutical and biotechnology companies; Lord Hunt, partner in the commercial law firm Beachcroft which offers lobbying services to private health care companies; and Lord Higgins who holds over £50,000 worth of shares in Lansdowne UK Equity Fund, a major investor in the private hospital group Circle Holdings.

Clinical Commissioning Groups and private deals

In an argument that can only be in the interest of big business and not people, the government says that £20 billion savings in the next four years can be achieved by handing power to private firms and commissioning groups. David Nicholson, chief executive of the NHS in England since 2006, is now chief executive of the NHS Commissioning Board (based in Leeds with an office in London).

This Board is responsible for a budget of £80 billion, of which £60 billion is allocated to the new Clinical Commissioning Groups (CCGs) which are overseen by the Board and which will ‘buy’ health care within the NHS.

Accountable to the Secretary of State through an annual mandate, the NHS Commissioning Board is described as an independent, statutory body, free to determine its own organisational shape, structure and ways of working.

It has recently appointed Malcolm Grant, University College London (UCL) provost as its part-time chair. Grant intends to continue as provost alongside his NHS responsibilities. He owes his appointment to Health Secretary Andrew Lansley: the parliamentary health select committee which interviewed him concluded that it could ‘not endorse Professor Grant’s candidacy’, saying that he ‘did not demonstrate to the committee a robust understanding of the issues’. It also reported that he had received help from the Department of Health in preparing his application and ‘demonstrated an assumption that his appointment was already confirmed’ – which of course it was.

To add insult to injury, Grant revealed that he does not use the NHS – he is a private patient. As UCL provost he achieved notoriety for his extravagant pay (at one time £440,000 per annum) and for outsourcing the UCL cleaning contract to a company paying less than the London living wage.

31 CCGs, representing thousands of GPs in London, have signed a £7 million contract with private companies for intensive organisational support for commissioning services. These companies include all the usual management consultancies –  KPMG, Price Waterhouse Coopers, Capita, McKinsey, Ernst and Young. Other beneficiaries are large legal firms like Capsticks Solicitors and accountants Binder Dijker Otte.

An NHS draft report, Developing commissioning support – towards service excellence, makes clear that CCGs need to procure commissioning support through open tenders from April 2013. The document deems such support to include health needs assessment, business intelligence, support for health care service re-design, communications and media handling, organising tenders for and purchasing health care and contract management of hospital providers, plus supporting ‘back office’ functions such as IT, finance and legal services. In other words, CCGs will be run by private companies with GPs rubber-stamping their decisions.

Private companies to run NHS hospitals

The first deal of this kind has just been finalised – Circle Health will take over Hinchingbrooke Hospital in Cambridgeshire in February 2012. Circle will be responsible for paying off Hinchingbrooke’s £40 million debt. The company’s sole relevant experience is running a boutique hospital in Bath, but it has ambitions to take over 20 ‘failing’ hospitals as part of the government’s new deal.

Circle chief executive is Ali Parsa, a former Goldman Sachs banker. The company is jointly owned by Circle Holdings and Circle Partnership. Circle Holdings, the dominant partner, is in turn owned by Parsa and half a dozen venture capital and hedge funds.  Circle makes much of the fact that Circle Partnership is owned by its 2,500 staff, including doctors, nurses, porters, cleaners, as a ‘John Lewis style mutual’. However, it is registered in a Virgin Islands tax haven, and there is little likelihood that the shares will yield any dividends, especially as the company made a pre-tax loss last year of £44.3 million. How the company will pay off Hinchingbrooke’s debt defies analysis: this is a loss-leader where the contract will be re-negotiated in the future to ensure there are adequate and risk-free returns for the company. The government will not allow the deal to fail: it will be secured like every future NHS privatisation at the expense of patient care.

Hannah Caller