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Under the knife

With little public support for private healthcare, the proponents of marketisation are finding new ways to undermine the NHS. Stewart Player and Colin Leys investigate

April 2, 2008
8 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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Tom Nairn recently described parliament as ‘a dry-rot infested ruin where one shame succeeds another’. Decay appears to be spreading rapidly. The speed with which former health secretary Patricia Hewitt, and the former health minister Lord Warner, have transferred their services to private healthcare companies appears less and less shocking. It’s not simply the snouts-at-the-trough aspect that is of concern. What their actions show is that the advance of private healthcare at the expense of formerly public provision is sufficiently entrenched to make them confident of a lucrative future.

It should make what is happening clearer to the public too. Since 2000, the year of the NHS Plan, a central feature of government policy for the NHS has been the concealment of its real trajectory. At the acute healthcare conferences organised annually by private healthcare analysts Laing and Buisson, for example, ministers and top civil servants have for several years given detailed policy briefings to companies on new private sector healthcare opportunities, while Hewitt was constantly assuring journalists that NHS privatisation was ‘out of the question’.

Creeping privatisation

Nowhere has concealment of the government’s real aims been more rigorously applied than in the independent sector treatment centre (ISTC) programme. Ostensibly designed primarily to harness additional capacity from the private sector to reduce waiting times for elective (non-emergency) operations such as knee replacements and cataract removals, privately owned ISTCs – 23 of them, spread across England, plus one in Scotland – have in reality served as a bridgehead for market penetration of the NHS, the first time that NHS surgical care has been systematically handed over to for-profit providers.

So far this has meant ensuring adequate and financially risk-free levels of clinical activity, encouraging companies to set up in business to compete with NHS hospitals and treatment centres. It also involves significant and ongoing transfers of NHS staff. But because the NHS remains one of the most popular institutions in the country, replacing public with private services involves enormous political risk. How many MPs – including Conservatives, at least in marginal seats – would be prepared to declare that NHS treatment should increasingly be handed over to private companies, like the railways? Managing and mitigating that risk involves a wide array of mechanisms.

A key example is an exercise in spin called ‘integration’. In reality the only way the private ISTCs can carry out the number of elective procedures they have contracted to provide is to have NHS staff transferred to them. Originally, because they were supposed to bring in ‘additional capacity’, they were not allowed to employ anyone who had worked for the NHS in the previous six months. This rule was repeatedly diluted, either through secondment of NHS staff, or by applying it to an ever-shrinking number of specialties.

By September 2007 ISTCs could use NHS consultants for almost all surgical procedures. A key method in enabling this change has been calls by various bodies, notably the BMA consultant committee leadership, and the Healthcare Commission, to integrate ISTC facilities with those of NHS hospitals in the interests of patients.

While the overall threat of NHS privatisation is denounced, measures to ensure that NHS staff are transferred to the new private employers are supported. For example, the BMA’s Dr Paul Miller told a 2005 BMA conference that ‘as things stand, I would not accept an MRI scan or elective surgery from these ISTCs’ – yet the leadership firmly resisted a motion opposing the centres, arguing that ISTCs could bring about ‘a sustainable expansion of capacity’ and that NHS consultants should be allowed to work in them. A year later, commenting on the health committee’s report, Miller stated: ‘For the last three years, the BMA has been shouting from the rooftops about its concerns regarding ISTCs. I am particularly pleased to see the committee agrees that the Department of Health needs to go further in enabling NHS doctors to work and train in ISTCs, as I believe this will benefit standards and integration of patient care.’

Revolving doors

Political risk has also been managed through the development of a ‘policy community’ of insiders committed to marketisation. The rapid interchange of personnel between government and the private sector – policy makers, management consultants, and healthcare company executives – has been particularly glaring in health policy circles.

The example of Tony Blair’s senior health policy adviser, Simon Stevens, who left to become president for Europe of the giant US company UnitedHealth, is well known. Another example is the former special adviser to both the prime minister and the health secretary, Darren Murphy, who became director of corporate lobbyists APCO UK. APCO’s clients rapidly came to include all the companies involved in the ISTC programme. By February 2006 these companies had formed an ‘NHS Partners Network’, under the aegis of APCO, and had a meeting with Tony Blair where they were warmly welcomed into ‘the NHS family’.

Tom Mann, formerly head of the Department of Health’s ‘national implementation team’ which imposed the first ISTC contracts on sometimes highly reluctant primary care trusts, subsequently became chief executive of Capio, which won a large number of these contracts. Patricia Hewitt’s defection to the healthcare venture capital group Cinven, which now owns Bupa’s former hospitals, and Lord Warner’s to the health insurer AXA PPP, are only the latest in a long line. And within the NHS itself a new ‘national leadership network’ has been formed, consisting of some 150 ‘clinicians and managers from partner organisations’ (i.e. including the private sector) to provide ‘collective leadership for the next phase of transformation, advise ministers on developing policies … and promote shared values and behaviours’. What these values and behaviours are is kept secret. Access to the network’s webpage is restricted to its members, and publications, resources and contacts are all password-protected.

Concealing data

These restrictions are a good example of another key means of limiting political risk – information control. Such control was particularly sensitive in relation to the quality of operations done in the private centres. The first official quality assessment of ISTCs, carried out in October 2005 by the National Centre for Health Outcome Development (NCHOD), found that poor data returns rendered ‘any attempts at commenting on trends and comparison between schemes and with any external benchmark futile’.

The one direct indicator of clinical outcomes at ISTCs had been completely ignored. This did not stop Lord Warner declaring that the NCHOD’s report provided ‘heartening’ evidence of a ‘robust and comprehensive quality assurance and reporting system’. A further study was undertaken by the Healthcare Commission, but in July 2007 it had to report that the necessary information was still lacking. Yet the data concerns NHS patients, whose health and lives are at risk.

Concealment would appear to have been essential, as many first-hand reports by NHS specialists on clinical quality in ISTCs have been highly critical. For example, the professor of orthopaedic surgery at Nottingham University, Angus Wallace, told the Guardian in March 2006 that: ‘We expect failure rates of hip replacements at approximately 1 per cent a year. But we have got some of the ISTCs that are looking at 20 per cent failure rates.’ A study by Dr Gordon Bannister, a leading orthopaedic surgeon in Avon, found that 9 per cent of hip and knee replacements carried out at a nearby ISTC had to be reoperated on, compared with 0.6 per cent in the local NHS hospital – in spite of ISTCs being able to select simpler cases. Notably the surgical repair work fell on the local NHS hospitals.

Such results are hardly surprising. Most of the surgeons originally involved in the first wave of ISTCs were brought in from overseas. They were often unfamiliar with NHS surgical techniques, sometimes had language problems, and were under pressure to achieve high levels of productivity. Release of information about their results therefore had to be kept to a minimum. Once sufficient numbers of NHS consultants have transferred to ISTCs the availability of outcome data will no doubt improve.

All these measures to limit political risk show that ministers and their advisers are acutely aware that the risk is real. The counterpart of this is that if the public clearly understood what is being planned, there is an excellent chance that this path to privatisation would have to be abandoned.

Stewart Player’s and Colin Leys’ new book, Confuse and Conceal: the NHS and Independent Sector Treatment Centres, is published by Merlin Press at £10.99

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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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