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Killing your own creation

Colin Leys examines how and why Labour is destroying the NHS

April 22, 2009
7 min read


Colin LeysColin Leys is an honorary professor at Goldsmiths University of London. He is the author of Market Driven Politics: Neoliberal Democracy and the Public Interest and, with Stewart Player, The Plot Against the NHS (Merlin Press, 2011).


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In the 1930s slump 20 per cent of the workforce was unemployed. Senior cabinet minister Ed Balls thinks this one will be worse, which would mean roughly five million unemployed, with something like ten million family members in poverty, all of them depending as never before on social services, and not least on health care.

Yet the government is still hell-bent on breaking up the NHS and privatising it. What Thatcher did to long-term care in the 1980s – providing decent care only for the affluent and a basic, residual level of care for people with little or no income of their own – Brown is now doing to every level of the NHS in England. (This does not affect Scotland or Wales to the same degree – they have used their devolved powers to resist the marketisation mania.)

Piecemeal privatisers

The marketisers in the Department of Health would love to go as far as handing over some NHS hospitals to private companies. Their idea is that only competition, or the threat of it, can make any service efficient. But the political and financial risks of handing over hospitals to private companies are seen as too great – for now. Instead they are hiving off parts of hospital work – the lower-risk parts, with lower overheads – and giving them to the private sector.

So first, starting in 2002, some low-risk NHS elective surgery (mainly hip and knee replacements and cataract removals) was given to private firms via the so-called independent sector treatment centres (ISTC) programme. The firms in question were mostly foreign, and the sight of them making a lot of money from no-risk contracts galvanised the big UK private health care companies like BUPA and BMI into changing their business models to follow suit. NHS patients in England are now offered routine operations in any of some 150 private hospitals or clinics nationwide.

Second, hospital outpatient treatment of chronic illnesses like diabetes is to be transferred out of NHS hospitals into ‘polyclinics’ (now renamed as ‘neighbourhood health centres’), almost all of them privately built and operated and owned. Lord Darzi, the minister responsible, says 64 per cent of outpatient work could be transferred, offering ‘huge opportunities’ to the private sector.

On top of this, GP services are being transferred to corporate providers, either through handing new GP contracts to private companies, or through ‘entrepreneurial’ GPs forming joint ventures with private companies in ‘GP-led’ health centres. In some cities almost half of all GP surgeries are to be moved into such joint venture health centres. In many if not most cases this will involve privatisation in one form or another.

Last but very far from least, community health services are being privatised, in two stages. The roughly 400,000 community health professionals in England (plus their roughly 200,000 support staff) are mostly employed in primary care trusts (the local arms of the Department of Health). Now they are being told to resign and set up ‘social enterprises’, which will be given three-year contracts to provide the services. After that, the services will be put out to tender.

No prizes are offered for guessing what will happen when small, local ‘social enterprises’ of district nurses and speech therapists find themselves bidding for their own jobs against UnitedHealth, Atos Origin and other health industry multinationals. They will either become cash-focused businesses themselves, or go under and become employees of the companies that take over their work. Community health care will become a vast field of corporate profit-making.

Labour’s drive to destroy

What explains Labour’s drive to destroy the institution it is most admired for creating? A key part of the explanation has been the desperate desire of Blair and Brown and their allies to be seen as ‘pro-business’. Having decided that anything else was electorally fatal, they eventually became converts to the idea that business is indeed better than public service at ‘delivery’. Thatcher’s contempt for the civil service is more than matched by theirs, and the Department of Health is one of the clearest expressions of this. In 2006, out of the 32 members of the department’s top management, only one was a career civil servant. And in 2007, out of the 190 staff of the department’s commercial directorate, which has been driving the marketisation process, all but eight were drawn from the private sector.

As a result, in the Department of Health what is good for American healthcare multinationals like UnitedHealth is increasingly seen as being good for England. Even now, when markets have plunged us all into economic disaster, Brown and his allies remain in thrall to them, with the sad figure of health secretary Alan Johnson reciting the private sector’s mantras at every turn.

But are the marketisers wrong? Won’t competition make health services more efficient? Anyone who thinks this should start by reading Dr Louise Irvine\’s report from the GP frontline. And ask how it is that the USA, with no public health service, spends almost three times as much on healthcare as we do and yet has worse health outcomes.

A sixth of all Americans have no health cover. A million and a half lose their homes every year as a result of health care debts, while those who have cover spend a large part of their incomes on insurance and ‘co-payments’, often going without necessities to meet the cost. Note, too, that although the US private health industry is universally detested, it is so wealthy and powerful that it regularly succeeds in buying off the threat of reform.

Profits before patients

The underlying point is this: what is efficient in the sense of making money for shareholders is not ‘efficient’ for patients. To make profits out of an unavoidably labour-intensive industry means squeezing the workforce, cutting coverage, reducing quality, providing lower resources for aftercare after cherry-picking profitable treatments and neglecting others, declining to treat patients seen as ‘high risk’ or re-labelling cases as ones that attract higher payments (‘gaming’), charging ‘co-payments’, pushing profitable fee-paying sidelines like aromatherapy, alternative medicine and fitness training, and so on.

This dynamic is already at work in the NHS. As hospital trusts lose income to private providers they have to reduce staff. Unemployed NHS staff have to transfer to the private sector on private sector (invariably inferior) terms. Then, to stay competitive, NHS trusts have to reduce their terms of employment too. Rapid throughput of patients, at the hands of the lowest paid (and so least qualified) staff that hospitals or clinics can get away with, gradually becomes the norm.

As this develops, middle class pressure grows to be able to get better treatment by paying for it. The recent decision to let those with money pay for cancer drugs that will not be offered to everyone else is just the latest example. In some hospitals fees are already charged for properly personalised midwifery, in others for skin care. Those who can’t pay fees experience reduced consultation times with their doctors, the steady erosion of key services like physiotherapy, a reduced ‘skill mix’ on hospital wards and a loss of attention as hospitals seek to expand their income by taking more private patients – the list is long, and growing. A two-tier service is already emerging.

Is it too late to halt this historic betrayal – the destruction of a high-quality health service, available equally to all, by the very party that created it? We have never been invited to vote on this policy, and we must fight what the market evangelists have in store.

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Colin LeysColin Leys is an honorary professor at Goldsmiths University of London. He is the author of Market Driven Politics: Neoliberal Democracy and the Public Interest and, with Stewart Player, The Plot Against the NHS (Merlin Press, 2011).


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