After the health bill: The end of the NHS as we know it

With the health bill passed, the government is now setting about forcing the market into the NHS. Colin Leys looks at what is likely to happen next
April 2012

Photo: DulcieLee/Flickr

Andrew Lansley and the Tories continue to claim that under their plans to privatise the NHS ‘services will still be free at the point of use’. But this is seriously misleading. They fail to add a key proviso – provided the service is still available on the NHS. In reality, a growing list of services will not be available, and so won’t be free.

This is already happening. People who suffer from a range of conditions that are not life-threatening, but are often painful and even disabling, are being told to pay for treatment or go without. The health bill will make this more common, and taking out private insurance for such problems will become widespread.

At the same time the government plans to expand the use of personal health budgets, administered for us by ‘intermediaries’. Coupled with the normalisation of private health insurance, personal health budgets could easily become a tax-funded subsidy for private healthcare for the better-off, triggering a further contraction of free NHS care for the poor. New charges or ‘co‑payments’ also look likely for some aspects of NHS care.

It has become urgent to see how this chain of developments is likely to evolve.

Under the bill, clinical commissioning groups, or CCGs, which are unelected and unaccountable, only need arrange for the provision of hospital or community healthcare services that they consider necessary to meet patients’ ‘reasonable requirements’. There will be limits to their power to restrict coverage, but since the justification for introducing CCGs is supposed to be that GPs ‘know what patients need’, a good deal of discretion is going to be left to them. And the private sector ‘support organisations’ that are going to do most of the actual work of commissioning will urge that the list of treatments the CCG will pay for should be kept as short as possible, both to save money and because their personnel will tend to favour private provision.

Services are already being withdrawn

It is already happening, in a semi-secret way. The practice began in 2006 when a primary care trust in Croydon, desperate to save money, put together a list of 34 procedures it considered ‘not necessarily performed for medical reasons’, which it said did not have to be offered to patients in cases where they were ‘ineffective’ or cosmetic. The list included non-cosmetic procedures, including surgery for cataracts, hips and knees, on the grounds that the benefits were minimal in ‘mild’ cases.

Obviously, what is considered a ‘mild’ case of a cataract or an arthritic hip or knee is liable to be modified by financial pressures and by April 2011 the Croydon list was being widely used to save money. According to one well-informed commentator at the time, in some areas only “urgent” treatments – cancer, fractures and A&E – were funded. All other procedures were either delayed or the patient was denied funding. So the ‘postcode lottery’ that used to apply to some prescription drugs now applies to some treatments, or even whole medical conditions, such as varicose veins or disfiguring skin conditions. Some of the conditions listed may sound unimportant, but to a person who suffers from them denial of treatment is far from trivial.

Besides these services there are others that are supposed to be available but are increasingly being denied in practice. Some GPs have been restricted to making four referrals per week, regardless of how many patients in need of a referral they may see. Other GP referrals are intercepted and denied before they reach a hospital specialist. This is being done, explicitly to save money, by privately-run ‘referral gateways’. One of the first was in west London, where the giant US health insurer UnitedHealth has been given the job of vetting, and in some cases overturning, GPs’ judgments.

One west London patient, who had been referred for a replacement after her knee collapsed, was told by the referral gateway to have physiotherapy and painkillers instead. It took more than £1,000 worth of private x-rays and surgeons’ opinions for her to finally prove that she needed a knee replacement and get it done on the NHS. Many patients are less fortunate, or determined. For them, NHS treatment is not free. They must pay to get it privately, if they can. If not, they don’t get treated.

As a result of the health bill, it may not just be GPs’ referrals that are diverted or denied. The more expensive treatments recommended by hospital specialists, which the CCGs are going to have to pay for, could also come under review, and the CCGs could refuse to pay – just like healthcare maintenance organisations in the US. (Remember the doctor in Michael Moore’s film Sicko explaining to Congress how she was paid a bonus related to how many treatments she denied?)

Personal health budgets

Another major change already taking place, and which may have crucial consequences as a result of the health bill, is the rolling out of personal health budgets. At the moment these are to be allocated to some 53,000 people in England who are receiving NHS continuing care for a chronic condition. The personal budgets already used in social care have revealed their inherent problem: they are limited – and financial constraints mean that they are not generous. If a personal budget proves inadequate, the patient has to top it up – if they can afford to. For NHS care, such ‘top-ups’ will be payments for what was previously free.

It is significant that the government describes patients in receipt of continuing care as the ‘first group’ to be eligible for them, implying that personal budgets will be extended to other sorts of patient. The NHS Future Forum, set up by the government in April 2011, went further, recommending that, ‘Within five years all those patients who would benefit from a personal health budget should be offered one.’ The government accepted the forum’s report, and the Department of Health’s impact assessment for commissioning speaks of every patient having a budget allocation.

This raises the possibility that personal health budgets, with personally-paid top-ups, will become the basis of most, or conceivably all, NHS care. This approach is strongly backed by advocates of health insurance. They propose that everyone should have a personal health budget, sometimes called a ‘health protection premium’, paid for by the state, equivalent to the NHS’s average annual spending on healthcare per person. This would entitle everyone to a defined package of entitlements. Anything beyond that would have to be paid for by the individual. For most people that would mean taking out medical insurance for a wide range of other conditions and treatments – if they could afford to, and if insurance was available (pre-existing conditions may not be insurable).

Since 2010–11 the funds distributed by the Department of Health for spending on patients’ acute (hospital) care have been calculated on the basis of the actual health status of every single patient registered with a GP, as reported annually to the department – in just the same way that insurance companies assess whether to offer someone insurance, and if so for what level of premium. This makes a wholesale shift to private healthcare via personal health budgets even easier to manage, especially since insurance companies are going to be involved in the commissioning support groups that will be handling all such data.

The normalisation of private health insurance

To see how this could work, we must start by noting that in 2009, 10 per cent of the UK population already had some form of private medical insurance. This proportion had been more or less static for several years. Greatly increased NHS funding from 2002 onwards had led to a big drop in waiting times and other improvements, which reduced the main incentive to ‘go private’; and then the 2008 financial crisis cut people’s spending power, leading to a small decline in the numbers privately insured.

The insurance industry is confident that there will eventually be a big increase in demand as a result of the health bill. The targets of the costly advertising campaigns recently mounted by health insurance companies are not the rich but people in ordinary jobs. The companies clearly expect private health insurance to become widespread and normal.

This could then easily mesh with personal health budgets to produce a state-subsidised private health insurance system. It would work as follows. Personal health budgets will usually be held and administered by ‘intermediaries’, as they mostly are in social care, and the intermediaries could be insurance companies. Patients with NHS personal budgets held and managed by these companies could then have full private health insurance, with much of their premiums covered by their personal health budgets. They would only have to pay the difference.

This would leave CCGs with the uninsurable patients – those with costly chronic illnesses, and those too poor to pay any premiums. And since the CCGs would no longer have the unspent personal health budgets of the healthier and wealthier patients, who would have been cherry-picked by the insurers, the result would be further restrictions on care for those who remained.

The government will also be under pressure from private providers and the Treasury to allow charges or ‘co-payments’ for some aspects of the NHS care that would still be available free. These would probably begin with charges for consulting a GP and for the so-called ‘hotel costs’ involved in being in hospital, both of which have long been urged by the advocates of privatisation. If and when this happens, the principle of a comprehensive, universal free service will have been comprehensively abandoned.

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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Robin 18 April 2012, 22.24

It is a great shame that in putting the ‘worst-case’ outcome of the introduction of personal health budgets forward you are entirely ignoring the remarkable benefits that they have had for ordinary people who are using them. However much we seek to protect the NHS, we must recognise that some of the practices and restrictions that it has are actually harmful to people’s health and to their ability to live lives as equal citizens. The worst of these examples are those people who were receiving care and support from people they knew and trusted, sometimes for many years, but when their care needs crossed the threshold of ‘Continuing Healthcare’ were forced, often in the last weeks or months of their lives, to accept intrusive and highly personal care tasks being done by a new set of ‘NHS commissioned’ staff, who had no prior knowledge of them. Personal Health Budgets have enabled people in these situations to maintain their trusted carers. There are literally thousands of other examples across a whole range of health conditions where people have been able to retain or regain the level of control over their lives and their health needs which the majority of us are fortunate to take for granted.
I have no problem with you cautioning about the potential for personal health budgets to be used in the ways you describe (that chain of events is a possibility, but not an inevitability), but please do not cast them as simply a mechanism for achieving privatisation. That is simply wrong and does a great disservice to many people who are advocating for them (including many of those who use them and are personally benefitting from improved care and support, not to mention improved health in many cases) to improve the service the NHS can give. Yes, they will bring a change to how the NHS operates, but it has to change anyway. Far better that ordinary people take control of that change than we all sit back pretending the NHS is perfect until unwelcome changes such as you describe are forced upon us.
Like so many things, personal health budgets (which, incidently, the relevant Regulations prohibit being ‘topped up’) are not necessarily good or bad in themselves, they are simply a mechanism: it is how they are used which should be judged. At the moment they are enabling the NHS to provide better support to ordinary people. That seems to me to be a positive result for the NHS itself.
People are managing their budgets themselves, having their budget held by voluntary sector organisations, or having them managed by the NHS. Not a private insurance company in sight that I have ever come across as an ‘intermediary’.
There are many threats to the NHS that are real. Personal health budgets in themselves are not one of them.
With best wishes,

Social Investigations 20 April 2012, 09.14

The evidence is out there that the reason for the changes in how the NHS is structured is not about it becoming more efficient, but about the continued hand over of public money into the hands of the corporations who are increasingly making profits from running public services.

The list of Lords and MPs with financial links to companies involved in private healthcare is scandalous and reveals a massive flaw in our institutional democracy. 142 Peers have these links and the list of MPs is increasing as the research continues.

The Conservatives through their links to the U.S free market extremists who they connected to through the Atlantic Bridge, and what about Mark Britnall KPMG’s head of Global Health and advisor to Cameron who famously said: the NHS would be shown ‘no mercy’.

Lord Popat the founder of TLC group Ltd who runs private care homes, gave David Cameron a donation as a gift for £25,000 a week after the Conservatives’ unveiled their health ‘reforms’. David Cameron made businessman a peer shortly after getting into ten Downing street.

1 in 4 Conservative Lords have these financial interests – they were all allowed to vote on the amendments despite these interests.

This is about privatisation, and if you believe that the likes of Lansley et al are genuine, then I put it to you that you are not looking at the evidence.

This is the list of vested interests:

Social Investigations 20 April 2012, 09.15

Finally if you want the Lords to not be allowed to vote with conflicts of interest as is the case with local councillors when they have a prejudicial interest, then please sign this petition: – and pass it on.

Gracie 20 April 2012, 09.34

Robin if you really believe that many CCGs will not be left with a rising group of “uninsurable patients” sadly I think you are soon to be rudely awoken. This is something that has concerned me from the very first day I learned of the government’s intentions for reform of the NHS.

If CCGs are working to a fixed budget, even if they wanted to, they will simply be unable to treat people who would be deemed “uninsurable”. People presenting with more than one condition, this is usually the elderly and the disabled will receive substandard care, if they receive car at all. I can see health vagrants moving from one practice to another being treated under emergency provision but unable to find a regular permanent GP.

Jason 23 April 2012, 15.53

I worry about my parents. Both pensioners needing long term treatment for illness. What will become of them? A lifetime of hard work for what?
Does a percentage of my national insurance contribution go towards nhs treatment that I may need?
If the NHS goes private will national insurance go down?
We may need that portion of the money to fund our health insurance.

Richard Blogger 24 April 2012, 21.33

I wholeheartedly agree with Colin’s analysis, Personal Health Budgets are about rationing not personalisation.

As a patient with a long term condition, I am passionate about personalisation. I want patients to be fully in control of their treatment, but the way to do that is to have a culture shift towards co-production (where patients work with clinicians), not to hand patients the budget. Robin did not explain why it was necessary for patients to have a budget to get the personalisation they need and he ignores the dangers that Colin identifies.

If a patient has a personal budget, the patient becomes the “employer”. For example, a mental health patient was given a personal budget and her partner used this money to pay for a personal assistant. This is the personalisation we need, because the patient could choose the PA. Unfortunately, the patient attacked the PA who suffered injuries and the PA’s only route to obtain compensation was to sue her employer: the patient. This is unacceptable, but it is inevitable when patients are given the budget. The patient could have been involved in the commissioning process, and the local authority could then have employed the PA: this would *still* have been personalisation.

If we want personalisation, there is no need to require personal health budgets. Will patients be given the option of whether they have them or not? I think not. I think they will be compulsory because the government will argue that it will be too costly to run two schemes in parallel. It seems to me that the pilots that are being run now will be nothing like what we will eventually be forced to accept. The last report from the pilots showed that patients were allowed to spend their personal HEALTH budgets on laptops, smartphones and internet access. Can you imagine those items being available when PHB become policy? Really? Of course they won’t! But they are being offered now because it is how the pilots can get a positive response from patients in the study which the government will use to “justify” forcing all of us to have such budgets.

Martin Rathfelder 29 April 2012, 14.12

All healthcare, everywhere, always is rationed. In most countries its rationed by charging. In the NHS we have better ways of rationing care, based on cost-effectiveness. We don’t defend the NHS by complaining about rationing, or advocating that money be wasted on treatment which is not cost-effective, such as hip replacements before they are necessary. The weakness of the Croydon list is that ignores the much larger sums wasted on hospital admission when it isn’t required.

Caroline Molloy 1 May 2012, 13.19

God, this is terrifying, and plausible. Nationally, we need to look at how much of the ‘worst case scenario’ above is provided for under existing legislation? All of it? Would any of these moves require further primary or secondary legislation? Be good to get the lawyers looking at it. A well informed person has suggested to me that next up, will be the hedge funds moving in to ‘hedge’ the commissioners against the risks of the uninsured. How did we get from ‘Freedom from fear’, to this? Colin I congratulate you on everything you are doing to bring these matters to light.
Locally, I have written a blog piece on False Economy about how people can try and find out some of the answers to what is going on, see here

Beverley James 23 July 2012, 01.04

It’s a controversial elephant in the room, but here goes. Why is so much money spent by the NHS on lengthening the lives (often against their specific wishes) of the elderly and infirm, whose quality of life is negligible.

There was an article in the Guardian yesterday which kind of said it all.

Why is so much money spent on lengthening the lives of those who just wish to “go” in peace. What possible pleasure can there be in a “life” in which loss of bodily function control(and, consequently loss of dignity)and a permanent mental state of confusion and fear is the best case scenario ?

Comments are now closed on this article.

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