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Illustration: Stine Deja (c)

Unhappy birthday NHS?

Health
Privatization
United Kingdom

On 5 July 2018, the National Health Service will celebrate its 70th birthday. It appears to stand as a monument to the era of social democracy in defiance against the tide of neoliberalism. It remains free at the point of use and for the most part publicly funded. It is a cherished, national institution more popular in polls than the monarchy, the army or the BBC. Its status is so sacred that any government contemplating full-scale privatization would likely confront electoral suicide.

Yet, in reality, there may not be very much to celebrate. In the winter of 2016/17, the British Red Cross took the unprecedented step of declaring a humanitarian crisis inside the NHS. This year, there was another winter crisis of similar magnitude. A recent paper found that there have been 120,000 excess deaths in England since 2010 linked to austerity. Nearly £40 billion ($55.5bn) of ‘efficiency’ savings over this decade have contributed to this state of affairs.

Dismaying trajectory

The health system has come a long way from its Bevanite origins as a publicly funded, run and owned healthcare system. The past four decades have seen it on a familiar, dismaying trajectory from a public system towards a privatized, two-tier insurance system. Beyond cutbacks, the NHS insignia has been reduced to a logo; an umbrella brand obscuring the operations of a market system in full swing.

It has been a piecemeal privatization by stealth. The outsourcing of non-clinical services in the 1980s was followed by the limited, internal market of the 1990s. This internal market introduced a split between providers and purchasers of services attempting to use competition in order to supposedly improve efficiency.

In fact, a study commissioned by the Department of Health (and then hushed up) showed that the internal market led to a significant increase in administrative costs from 5 per cent of the NHS budget in the 1970s to 14 per cent in 2003. This is consistent with international evidence that market forces and privatization increase costs and reduce efficiency through fragmentation, while public healthcare systems are generally more cost-effective. The skyrocketing of costs is ironically due to increased layers of bureaucracy, such as payment tariffs and contract tendering administered by tiers of staff. It is also due to wealth extraction from captive, public sector budgets for corporate shareholder dividends.

New Labour’s NHS Plan 2000 signalled the transformation towards an extensive market through public-private partnerships, most notably the Private Finance Initiative (PFI), as well as the expansion of outsourcing and the setting up of foundation trusts – in effect turning hospitals into semi-independent businesses.

The sky­rocketing of costs is due to wealth extraction from captive, public sector budgets for corporate shareholder dividends

The flagship Health and Social Care Act 2012 accelerated privatization under the Coalition government. The opening up of NHS contracts has seen the figure for private sector outsourcing double in recent years from 4 per cent of the budget in 2009-10 to around 8 per cent in 2015-16. This figure does not represent the true extent of privatization. Foundation trust hospitals can make up to half their income from private patients now that the cap on private patient income has been lifted from 2 per cent to 49 per cent. The NHS PFI debt could reach £80 billion ($111bn) for hospitals with an original value of £11.5 billion ($15.9 bn). The costs of running the internal market are estimated at between £4.5-10 billion ($6.2-13.8bn) per annum (for more information, see reports by Full Fact and Centre for Health and the Public Interest).

Wrong prescription

Under the present Conservative government, there has been a consolidation of privatization with moves towards an American concept – Accountable Care Organizations (ACO). US-style accountable or integrated care essentially means diverting care away from high cost hospital settings towards low cost, home-based self-care with a greater burden on individual payments, such as insurance deductibles and co-payments.

Many of these prescriptions have been translated from Davos – specifically two World Economic Forum projects examining the transformation of global healthcare. In fact, current NHS England CEO Simon Stevens was the project steward for the first of these reports and was, at the time, the President of Global Health operations for UnitedHealth – the largest US healthcare and insurance corporation.

We appear, therefore, to be in the endgame for the NHS. But the destination is far from assured. Recent political earthquakes indicate that the neoliberal status quo is starting to break down, perhaps irrevocably. Yet despite being at the fag-end of an ideology that is no longer persuasive, Brexit and Trump represent a turbo-charged, full throttle mix of neoliberalism and economic nationalism. This may explain the breakneck speed with which Accountable Care Organizations are being pushed through without recourse to legislation or parliamentary scrutiny. Admittedly, a planned and crowdfunded judicial review in the High Court may, albeit temporarily, put the brakes on this process.

Times they are a-changin’?

Meanwhile, PFI is in the process of unravelling, with the bankruptcy of construction firm Carillion, the collapse of the market value of outsourcing giant Capita and profit warnings issued for other government contractors. For the first time, the very notion of outsourcing is being seriously questioned. The prospect of a Corbyn government is also cause for optimism for those fighting for a public NHS. The Labour leadership has endorsed the NHS Reinstatement Bill that would aim to repeal the Health and Social Care Act 2012, reverse privatization and the market and restore a publicly funded, publicly run and publicly owned healthcare service.

However, there is no doubt that powerful forces are aligned against a Corbyn premiership, not least from within the Parliamentary Labour Party and the Labour machine. PFI companies are already arming themselves with talk of compensation and litigation should contracts be nationalized. Extensive corporate and financial interests in the City of London, benefiting from the dismantling of the NHS, stand to lose including big banks, insurance companies, private healthcare, magic circle law firms, and accountancy and management consultancy giants.

Labour shadow health secretary Jonathan Ashworth is inconsistent, speaking of ending privatization and repealing the Health and Social Care Act yet, in the same speech to Unison last year, also stating that he will retain its integral structures – Clinical Commissioning Groups – as well as outsourcing. This approach is sickeningly familiar from the Blairite playbook of triangulation: signalling to the Left while moving to the Right in order to reassure vested interests.

It is necessary is to define what a 21st century truly public NHS would look like. Renationalization in the traditional sense is not sufficient. The NHS should not simply be run either by the state or the market. It should be run by healthcare professionals, patients and communities while remaining funded by the taxpayer. In practice, this would mean that hospital and other health service boards would be run by these constituencies in order to protect the public interest. However, it would also be necessary to overhaul central policy and decision-making such that these groups are represented. Legislation would need to be implemented to counter damaging corporate capture strategies, such as the revolving door, lobbying and political donations.

Beyond this, the burgeoning local campaigns mobilizing in response to cuts and closures will need to be joined up into a broad-based mass movement to support a progressive government. Finally, far-reaching change must be effected across society. The NHS cannot be saved in isolation but must be part of progressive agenda incorporating the reversal of financialization’s death grip, democratic public ownership of the economy, a green agenda and massive public investment and spending.

Youssef El-Gingihy is a GP and author of How to Dismantle the NHS in 10 Easy Steps (Zero Books). He tweets @ElGingihy.

New Internationalist issue 512 magazine cover This article is from the May 2018 issue of New Internationalist.
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