Health for sale

NHS plc: the Privatisation of Our Health Care, Allyson M Pollock, Verso 2004, 271 pages, £15.99.

Allyson Pollock, a public health doctor, is Professor of Health Policy and Health Services Research at University College London. Her book is a powerful and clear description of how a system of health care provision in Britain through the National Health Service (NHS) is being systematically destroyed. Initially, she argues, this occurred covertly through severe under-funding and now it continues overtly with the introduction of the internal market and private-public partnership – the complete abandonment of the NHS founding principles.

Nothing better sums up the state of the NHS today, she argues at the start of the book, than the people who run it. A significant proportion of the senior managers are people with no training or experience in public health or the principles of health care delivery – arts graduates, ex-army officers and people who want a change from private enterprise. There are virtually no doctors or nurses or public health specialists in these posts.

The book examines the reasons why the Labour government has been able to move so fast in the direction of privatisation over the last seven years, and exposes the role of the companies and corporations who have moved their exploitative practices into health care. It shows why privatised health care delivery is more expensive than a state-funded service and devotes several chapters to specific sectors of health care provision, such as hospital services (which account for two thirds of health spending), primary care and long-term elderly care.

The early years of the NHS
Allyson Pollock argues that some of the founding principles of the NHS were compromised from the very start. In the post Second World War years Aneurin Bevan (Labour health secretary) was unable to persuade the Treasury to buy out general practitioner (GP) surgeries and so GPs remained self-employed small businesses, as did dentists, opticians and community pharmacists. While hospitals were nationalised, community health services, preventative services, child health and public health and ambulance services remained the responsibility of local government, though NHS funded. The existence of independent contractors was a weakness that was to be exploited (from 1980 onwards) in the dismantling to come. The most serious of Bevan’s compromises, however, was the retention of private practice. NHS legislation, that private care was never to be given at the expense of NHS care, has never been strictly enforced.

Labour extols the market
The NHS was very economical to run prior to 1980. There was little invoicing (only private patients and external suppliers) and no bill payments. By the late 1970s, the NHS was the most cost effective health service in the world – but it was already being labelled unaffordable as the economic crisis hit home.

In 1991 the Conservative government in Britain opened the internal market in the NHS and brushed aside the costs both in money and loss of universality and equity. The internal market forced hospitals to supplement income from commercial retail rentals and private patients. This led to hospital foyers becoming the shopping malls we see today and the contracting out of hospital car parking and television and telephone patient services: it is now more expensive to park at the new out of town Private Finance Initiative (PFI) Royal Infirmary in Edinburgh than to park at Edinburgh airport; the use of television costs in-patients an average of £16 per week – one fifth of the basic pension.

Allyson Pollock’s book shows that the Labour party became dedicated to destroying the NHS, with the end of comprehensiveness, universality and equity. The newly elected 1997 Labour government continued a savage squeeze on public services by staying within the spending limits laid down by the Conservatives for two years. It began to denigrate existing public services and to extol the imaginary superiority of the market-based services in other countries. Simultaneously, it silenced internal critics, dismissed scientific evidence and discredited, marginalised and intimidated anyone brave enough to show people what was happening (including Allyson Pollock).

When the Labour Party took office in 1997, there were no Private Finance Initiative (PFI) hospital building contracts finalised. Within months, the first wave had been signed. PFI was paid for by major cuts in clinical budgets and the largest programme of service closures in the history of the NHS. Paying back the debt and the interest and the shareholder’s profits rests with the hospital trust. The money comes out of the annual budget for patient care and is paid back over a 30 to 60 year period. Allyson Pollock points out that PFI is more expensive than government procurement of funds because the private sector cannot borrow as cheaply as the government can and it has to generate profit. For example in Dartford and Gravesham PFI, the initial cost to build the new PFI hospital was set at £94 million but ended up being £115 million. The cost of servicing this capital rose from six percent of the annual budget to 32 percent. PFI completely undermines any planning for the health needs of the local population. The first wave of PFI hospital deals led to an average reduction of 30 percent in beds and in some cases a 25 percent cut in the salaries budget, mainly for nursing staff.

Companies and corporations line their pockets
The NHS has an annual turnover of £74 billion, which provides corporations and companies with lucrative new openings thanks to the Labour government’s strategy of privatisation and public-private partnership (PPP).

Companies involved in PFI and PPP include Balfour Beatty, Tarmac, Jarvis and Siemens. They can expect to get 12-20 percent of the hospital’s annual income for 30 or more years. Large legal and accounting firms are now lining their pockets with fees paid out of NHS funds.

Public expenditure data do not reveal how much NHS money is being diverted out of clinical care and into the private sector. Some companies’ profitability and stock market positions depend entirely on their relationship with the NHS.

Allyson Pollock argues that Labour’s appointment of mainly young male policy advisers to number 10 and 11 and other offices of cabinet ministers is about the receptiveness of this generation to market ideology, thus making these areas of government full of people from policy think-tanks sponsored by and networked into industry. Added with this is the Labour government’s use of people from the private sector on secondment to the civil service, creating a ‘revolving door’ between public and private spheres. For instance, Robert Osborn, seconded from Tarmac Construction Company who headed the PFI unit in the NHS. Richard Granger, 37, former management consultant to Deloitte and Touche, was appointed director general of NHS information technology at £250,000 per year. The book gives many further shocking examples, including, after leaving the cabinet, former health secretary Alan Milburn’s £30,000 advisory role to Bridgepoint – a venture capital firm involved in financing private health care firms moving into the NHS.

Health care is moving further and further away from being a right to being a commodity. Similarly the initial aim of the NHS in Britain, that there should be no link between service and payment in the minds of the giver or the recipient, is receding. Allyson Pollock’s research and writing is a brilliant exposé of the post war governments in Britain, be they Conservative or Labour. It contains invaluable information and deserves as wide an audience as possible.
Hannah Caller

FRFI 181 October / November 2004


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