Profiting from crisis
The coronavirus crisis has shaken the world, threatening millions of lives and posing the biggest challenge to public health in a generation.
On the face of it, it also appears to have torn up the economic orthodoxy of the past 40 years. The UK government seems to have abandoned the ‘market knows best’ approach in favour of state intervention.
After a decade of austerity, cuts and privatization, have the Conservatives grasped that the free market can’t serve all of society’s needs? The reality is a little different.
Take the railways. If you were just to read the headlines, you might think that, with passenger numbers plummeting, the government had ended the 25-year experiment of privatization and ‘effectively nationalized’ the railways.
That’s not quite the case.
The government isn’t taking over the railways. Instead, the existing private operators will continue to run them and will be paid a fee to do so. In practice, this means little change. The likes of CrossCountry, First and Abellio will still be running trains. The only difference is that the government is guaranteeing their income for as long as the coronavirus crisis continues.
Far from bringing the railways into public hands, this merely reveals the farce at the core of the privatization project. When business is good, private companies rake in the profits. When business is bad, the government steps in and pays the private companies to continue. As so often the case with privatized public services – profits are privatized, while losses are nationalized.
As in rail, so too in healthcare. With the Covid-19 emergency escalating, the pressure on the National Health Service (NHS) has become increasingly acute. Huge cuts over the past decade – including the loss of 17,000 hospital beds – had left the NHS in a desperate position even before the virus.
The internal market in the NHS is costing a staggering £4.5 ($5.48) billion a year – enough to pay for 72,000 nurses, and 20,000 doctors. Outsourcing of NHS services has led to worse healthcare outcomes. Some £9.2 ($11.2) billion of the NHS budget was spent on private contracts in 2018 – leaking cash from the healthcare system and into the pockets of private companies.
Our health service is our collective immune system and it’s been in desperate need of proper funding and support for some time. So, it is right that the UK government has brought private hospitals into the fight against coronavirus.
But the Spanish government acted much faster and used a better model; the private health sector was requisitioned, bringing it directly into the realm of the public health system indefinitely. The UK government has opted for a contract model, whereby the public pays the cost value of services – for an undisclosed sum in a deal that hasn’t been made public.
Transparency on this deal is crucial – every dot and comma of it. And, with private health companies hungry for long-term NHS contracts, the government must commit to ending these contracts once the current crisis has abated, as a coalition of campaign groups including We Own It, War on Want and Momentum have demanded in their recent open letter to Health Secretary Matt Hancock.
But it isn’t just a matter of increasing the number of beds. Current estimates suggest we need 20,000 more ventilators to treat people who contract COVID-19 and are too sick to breathe without medical assistance – something which over 40 per cent of those hospitalized in China from COVID-19 required.
The UK government has placed an order for 10,000 ventilators with vacuum cleaner manufacturer Dyson, and an additional order for 3.5 million tests from the private sector – again for an undisclosed sum.
And, last week, The Guardian revealed that in 2017, the Department of Health had dismissed high-level medical advice about providing NHS workers with protective equipment during an influenza pandemic, on the grounds that stockpiling it would be too expensive.
Yet, now the government are relying on celebrity donors to fund protective equipment and compete with the ‘commercial market who are trying to sell the same PPE for extraordinary prices’, as one medic, Dr Salaj Masand, put it to The Guardian.
Rather than paying out public money to private companies, the government could create a state-run, publicly-owned company to manufacture vital equipment. This would enable the state to meet NHS equipment needs quickly, efficiently and cost-effectively – whether ventilators and personal protective equipment to tackle the immediate crisis, or any other items for future healthcare needs.
Decisions about how best to fund and source healthcare equipment will be of paramount importance in the upcoming weeks, as three NHS frontline workers have already died from contracting the virus.
In times like these, everyone needs to pull together. People are willing and able to look after each other – whether it’s checking up on neighbours or donating to food banks.
But we can’t do this alone. This crisis has shown just how important public services are – not least healthcare. When this emergency is over we need to ensure that services are built to be resilient to future crises. That means they need to be in public hands, running for public good, not private profit.