PRIVATISATION 2: IMPACT OF PRIVATISATION ON CLINICAL SERVICES
THE EXTENT OF PRIVATISATION IN CLINICAL SERVICES
The 2012 Health and Social Care Act has led to a sharp increase in NHS privatisation. Information about the extent of privatisation is not publicly available so relies heavily on independent research and willingness of CCGs to respond to FOI requests. The best resources are probably the BMA’s 2016 and 2017 reports of their own surveys of CCGs, together with The NHS Support Federation website which is a mine of information about private companies with significant NHS contracts, an invaluable resource for campaigners. Both sources have been used extensively in this article.
Other easily accessible sources with basic registration information about the private companies involved in healthcare are Companies House and the Care Quality Commission (CQC) which regulates all health and social care providers.
The BMA’s 2017 report into privatisation revealed:
- Between 2013/14 and 2015/16 the amount spent on Independent Sector Providers (ISPs) (ie private, for profit providers) rose by £2.1 billion, from £6.6 to £8.7 billion, an increase of 33%.
- These figures exclude general practice, dentistry and community pharmacy which are predominantly delivered by the private sector
- NHS spending on non-NHS and independent sector provision has grown each year (there was an increase of £2.6 and £2.1 billion respectively between 2013/14 and 2015/16);
- The proportion of the total Department of Health budget spent on ISPs increased from 6.1% in 2013/14 to 7.6% in 2015/16;
- 44% of NHS spending on ISPs was spent on community health services;
- 25% on general and acute services
- 11% on mental health and learning disability
- 2% on primary care
- CCGs spending a higher proportion of their budget on ISPs received worse ratings from NHS England than their counterparts.
Arriva have contracts totalling £11,431,216
BMI have contracts totalling ££76,900,797
BUPA have contracts totalling £25,135,042
Cambian have contracts totalling £14,051,148
Care UK have contracts totalling £41,673,404
Circle have contracts totalling £39,617,609
Cygnet Healthcare have contracts totalling £4,269,721
Four Seasons have contracts totalling £7,405,575
Nuffield Health have contracts totalling £42,620,053
Ramsay have contracts totalling £84,464,099
Spire have contracts totalling £69,558,517
Virgin have contracts totalling £39,979,351
Tax: the missing £billions
Many private companies with NHS contracts are part of larger corporate structures, including partners based in tax havens across the globe. Research into tax avoidance reveals how UK tax rules and complex trading structures make it possible for companies in the UK to show no profit, and hence pay no UK tax, while their partner companies shore up collective billions in tax havens. Consequently we have no way of knowing either the true extent of profit made from NHS budgets, or the extent of tax avoidance by private companies with NHS contracts.
Virgin is one company with a complex financial set-up. Companies include Virgin Care Services Ltd, Virgin Care Ltd, VH Community Services Ltd, Virgin Care Corporate Services Ltd and several limited liability partnerships (LLPs). The combined turnover of the companies for the year ending March 2016 was over £215 million. According to the accounts none of these companies paid tax in this year. For example, Virgin Care Ltd had turnover for the period of £40.5 million, with a loss of £10.5 million and no tax was paid. Virgin Care’s income is entirely derived from NHS contracts and from work in the UK.
The holding company Virgin Healthcare Holdings Ltd reported a loss of £1.4 million for this year. Virgin Healthcare Holdings is a subsidiary of Virgin Group Holdings Ltd, which is registered in the British Virgin Islands Virgin is quick to point out that it complies fully with UK and international tax requirements, and we have no reason to doubt this is so.
PRIVATE SECTOR ROLE IN THE NHS
GP and other primary care services
Across the country, the traditional model of GP surgeries run by a sole or small group of independent GP contractors whose primary commitment is to their patients is gradually being replaced by commercial companies with profit making intent and a traditional corporate management structure.
The Practice Group - which is majority owned by the US company Centene - lists 37 GP surgeries on its website as well as other NHS services including complex care, ophthalmology and in immigration removal.
Care UK provides over 60 NHS primary care services, including GP and walk-in services, 11 NHS out of hours services, providing health advice and support for over 10 million people, and 13 NHS 111 services handling on average 240,000 calls a month covering a population of over 11.0 million people.
Practice Assist is Care UK’s ‘latest, innovative service designed to help practice partners run their surgeries more effectively and efficiently. With our background in urgent care and our tried and trusted network of healthcare professionals we are ideal partners, helping to bring resilience to any practice. Working in partnership with GPs across the country, we are helping practices to enhance their call-handling and appointment prioritisation
Privatisation is also changing the shape of primary care services, with a range of new approaches constantly being trialled, though often with little success. Some examples include:
Walk-In Centres / Urgent Care Centres: By 2010 there were around 200 NHS Walk-In Centres in England, mainly privately run, staffed mainly by nurses and healthcare assistants and often using a strict protocol-based assessment. These centres typically advertise that ‘any member of the public can simply walk-in and see a clinican at the centre for advice and treatment for common illnesses that are urgent but not life threatening’. The intention was to relieve pressure on GPs, and, more importantly, to create an alternative to A&Es. However, many walk-in centres face closure as research has found little reduction in A&E attendances.
Family doctors in Bournemouth have set up the first private GP service at which people who pay up to £145 a time will be seen faster and get longer appointments than their NHS patients.
In November 2017, North-Central London announced the introduction of a new NHS 111 app, offering ‘fast, free, urgent health advice in one easy-to-use app …. powered by Babylon’. A few days later these plans were withdrawn after tests of the system found that patients were using the app to speed up access to GPs, rather than as a symptom checker.
Babylon and the like won’t go away, though. The 5YFV makes it clear that people will increasingly be expected to ‘self-care’ with the help of apps.
Another Babylon-app-based ‘GP at Hand’ alternative to a traditional GP is the subject of a legal challenge. Patients using the Babylon service will have their GP medical records transferred to the service. There is an extensive list of patient conditions such as frailty, pregnancy and mental health conditions that are the essence of general practice and which GPs deal with every day, but which are not eligible for this service. Dr Richard Vautrey from the British Medical Association said: "This approach risks undermining the quality and continuity of care and further fragmenting the service provided to the public.".
STP plans for GPs and primary care
Government plans, echoed within England’s 44 Sustainability and Transformation Plans, could reduce the number of GP practices from around 7,500 replacing them with just 1,500 ‘super hubs’, each with dozens of GPs and delivering care for 40,000 patients. Detailed plans are yet to emerge, however they involve the need for development new premises, financed through a new public private partnership (PPP). In the government’s long-term vision for the future NHS, these GP hubs will be an integral part of the overreaching contract for a local Accountable Care Organisation.
Dorset, for one, is considering plans to reduce the number of GP surgeries from 131 to as few 36 surgeries
Private care in NHS hospitals
Prior to the Coalition Government’s 2012 Health and Social Care Act, hospitals were only permitted to make 2 per cent of their income from private sources, but the 2012 Act raised that limit to 49 per cent. Five years on, the Independent found:
In 2016/17, the NHS made nearly £584m from private patients, up nearly 29% from 2011/12. This global figure masks the scale of change in major metropolitan hospitals:
Different hospitals use different approaches. The Royal Marsden has an ‘integrated model’ with beds used by both NHS and private patients. Its income from private patients has risen by 105% to £91.9m – nearly a third of its total funding.
Other private hospital provision is managed separately from NHS provision yet still located within NHS Foundation Trusts. Just one provider, HCA Healthcare (formerly known as Hospital Corporation of America) runs private hospital facilities at several NHS Foundation Trusts including Christies NHS Trust in Manchester, ‘Harley St at Queen’s’ Hospital in Romford (BHRUH NHS Trust), ‘The London Gamma Knife Centre’ at Barts Health NHS Trust, ‘Harley St at University College Hospital’ and ‘Private Care at Guy’s’.
Many consultants treat both private and NHS patients on the same site and it is common for NHS junior doctors, nurses and other staff to be asked by consultants in charge to provide support to their private patients in NHS hospitals, and NHS hospitals frequently provide diagnostics, including X-ray, CT and MRI scans, on-call services and ITU facilities
NHS care in private hospitals
Private hospitals are used by the NHS to reduce lengthy waiting lists. They undertake many routine ‘elective’ (non-emergency) procedures such as hip or knee replacements and cataract operations. Most private hospitals operate strict exclusion criteria; they only accept patients with no complex conditions and deemed to be low risk, leaving NHS hospitals to manage patients with complex needs or other risk factors.
CQC inspectors have raised many concerns about private hospitals, including insufficient pre-operative checks, poor incident handling and inadequate arrangements to cover emergencies. 18 out of 54 BMI hospitals were rated as ‘requiring improvement’. A senior Surgeon at one of BMI’s hospitals is also accused of both fraud and carrying out unnecessary and substandard operations.
In the wake of scandals involving surgeons at private hospitals, the independent thinktank the Centre for Health and Public Information (CHPI) has identified a number risks to patients in many hospitals, including failure of private companies to take responsibility for monitoring activities of surgeons, anaesthetists and physicians who work at their hospitals; lack of facilities to deal with situations where a patient’s life becomes endangered following operation; reliance on a single junior doctor working alone on extreme shift patterns to provide post-operative care for patients; absence of requirement to adhere to the same reporting requirements as NHS hospitals; absence of legislation ensuring CQC-registered managers are fully liable for all services.
Tax issues: One in four private hospitals are registered as charities, giving them an 80% reduction in business rates, while NHS trusts must pay these in full, and face a £300m increase over the next five years. Nuffield Health, which runs a number of private hospitals is Britain’s third largest charity, and is expected to pay just £3.2m in tax over the next five years, saving £12.7m as a result of its charitable status
Most private sector contracts are for community services. Virgin Care is one of the leading players. Between 2000 when it entered the healthcare market and 2017, Virgin Care has been awarded contracts worth well over £2bn, mostly for community services. At the end of 2017, Virgin Care reported that it provided over 400 services around England.
With the Bath and North East Somerset contract won in 2016, Virgin Care became the first private company to take over adult social care services, including social workers. An Essex contract won in 2017 also contains a large chunk of social care. This combination of health and social care services puts Virgin Care in a strong position to tender for future ACS and ACO contracts.
In October 2017, following an outcry from campaigners and press, Southend University Hospital abandoned a scheme to discharge patients deemed medically fit but unable to return home into the care of untrained, unregistered local residents with spare rooms
Poor regulation gives drug companies the power to hold the NHS to ransom over supplies. In 2017, one manufacturer Actavis UK hiked the price of ‘lifesaving’ drugs by over 12,000% compared to branded versions, the Government’s competition watchdog has alleged. Actavis charged ‘excessive and unfair prices’ for generic versions of hydrocortisone, the Competition and Markets Authority (CMA) claimed in a provisional ruling on the case today.
Ambulance trusts are increasingly using private firms amid soaring demand and staff shortages. In 2016/17, £78m was spent on private ambulances, an increase of 22% on 2014/15. Arriva has contracts worth £3.6m pa to provide non-emergency patients transport.
Prisons and secure facilities
In November 2017 Care UK website states ‘we also operate 42 prison services where we work with all types of offenders in all categories of prisons. These are a community like any other and we offer all of the health services any community needs in one place and with a single team. These range from reception health checks and regular GP services, to help with substance misuse, chronic or long-term conditions, podiatry, physiotherapy and optometry’. Care UK insist they are: ‘leading the way in this sector with a range of initiatives that are moving provision on from the traditional disease-led approach to a more holistic model focused on health and wellbeing that involves service users more fully in their own long-term recovery’.
Care UK’s rosy picture contrasts sharply with warnings from prison doctors that ‘the conditions in which they operate are so unsafe that the services would be closed down had they been outside the prison system’
Care UK also run a Sexual Assault Referral Centre where victims of rape or sexual assault are supported in the immediate aftermath of an attack, and throughout their journey of recovery.
A 2017 report by the Centre for Disability Research (CeDR) at Lancaster University found that the Government spent £477m last year on keeping just 2,500 people with learning disabilities and autism in hospital, with more than half of those in beds provided by the private sector. Patients who have been in care for five years generate close to a million pounds in income and therefore substantial profit for private companies. The study found that the number of such businesses is on the rise.
One hidden casualty of privatisation is an increasing reliance on staff with lower levels of skills and training, using any number of job titles. In the absence of regulation of professional staffing, private providers have led the way in replacing professional staff with cheaper unqualified staff, often working to a strict protocol-led approach as a substitute for professional expertise.
‘Registered nurse’ is a protected term, requiring three years of education and training and registration with the Nursing and Midwifery Council (NMC), a regulatory body with the ultimate power to strike off anyone not adhering to its code of conduct. However, in the UK, ‘nurse’ is not a title protected by law or regulatory framework; anyone can be given the job title ‘nurse’ regardless of background or training. While an NMC-registered Advanced Practice Nurse will generally have a masters degree level qualification, research in 2017 found many unqualified support workers given job titles that implied high level clinical qualifications, such as ‘specialist nurse’ or ‘associate advanced nurse practitioner’. The private sector leads the way, and the dangers are obvious.
But similar de-professionalisation is occurring in the NHS, with the development of a host of professional assistant roles replacing qualified healthcare professionals. In 2015, Jeremy Hunt announced that 1,000 Physician Associates (PAs) would be introduced into general practice to assist GPs in tackling workloads; others in hospitals. In future many patients seeking a GP appointment may be referred to a PA instead. PAs undertake a 2-years post graduate diploma training, but may have no previous healthcare experience. By February 2016, it was estimated there were 260 PAs and 550 PA students in the UK. As of 2017 the PA title is still not protected and not subject to regulation. Doctors have expressed concern that PAs will be used as a cheap, and potentially unsafe, substitute for qualified doctors.
Hospital catering, cleaning and security
These services were the first to be privatised in the 1980s, and in many hospitals they remain outsourced. Researchers at Oxford University and London School of Hygiene and Tropical Medicine have argued that the savings are a false economy, and shown that outsourcing is clearly linked to increased spread of MRSA
In July 2017, more than 700 cleaners, security guards, catering staff and porters at Barts Health NHS Trust began a dispute with Serco over low pay and job cuts. In 2016, Serco made an overall profit of £82m
Rationing and denial of treatment
If the NHS will not provide care, people who can afford to pay will turn to private provision. In January 2017, the 18-week target for waiting lists for elective surgery was scrapped for ‘non urgent’ operations including hip or knee replacements, cataract operations and hernia repairs. CCGs are increasingly rationing treatment and considering new options for denial of treatment. Only 27 CCGs continue to offer the NICE recommended three full cycles of IVF treatment, a reduction of 46% from 2013. In October 2017, Hertfordshire CCG announced that patients would be refused surgery if they continue to smoke or have a body mass index (BMI) over 30. In 2015, over a quarter (26.9%) of the UK population had a BMI of 30 or above, so would be denied surgery under Hertfordshire’s criteria.
Migrant charges and ‘health tourism’
Up until 2014, migrants living in the UK on a ‘settled basis’ were eligible for free NHS treatment. From October 2917, substantially more restrictions apply. Government portrays migrants as a drain on public resources and encourage the public to blame migrants rather than government for NHS decline. The Government has openly declared its aim to create a ‘hostile environment’ for migrants, and has openly permitted data sharing between the DH and Home Office as a way to track illegal migrants.
The increasingly hostile environment has the impact of greatly deterring migrants from seeking healthcare, even when they are fully entitled to it. So, for instance, many pregnant migrants are losing out on vital ante-natal care.
Developing new systems to support charging
The detailed systems required to check eligibility for free NHS care and to chase payments for ‘health tourists’ are likely to cost as much the implement as could be brought in by charging migrants. However, there is another, unspoken, agenda: these are the systems that are also required to support charges and transactions with private healthcare insurance. They will also be needed to bill people for a future ‘social care’ element of treatment in an integrated setting. Hence charges for migrants are being used as a Trojan Horse for implementation of systems that will support privatised future services.
There are numerous examples of poor services run by privatised companies. For instandce, Capita won a four-year contract from NHS England worth up to £1bn to provide a range of support services between 2015-2019 to GPs in three areas of England. The BMA believes hundreds of doctors have been left out of pocket as a result of errors by Capita
Circle, withdrew from its 10-year contract to run Hinchingbrook Hospital after just two years and just before publication of a damning report from CQC.
An £800m contract for older people’s services in Cambridge was awarded to UnitingCare following a procurement costing over £1m. Eight months into the contract UnitingCare withdrew stating that the contract was not financially viable.
Serco withdrew from delivering clinical healthcare services in Suffolk after making a £9m loss on a three-year, £140m deal
In Nottinghamshire, the CCGs ignored warnings from consultants and appointed Circle to take over elective dermatology services. This triggered a mass exodus of consultant staff unwilling to work for Circle, and collapse of dermatology in the area.
In September 2017, a vigorous campaign by unions and campigners, with support from MPs forced the Government to abandon plans to sell of NHS Professionals, the state-owned agency that supplies doctors and nurses to hospitals, and estimated to save the NHS some £70m a year by supplying staff more cheaply than other agencies.
Politician links to private healthcare companies
In 2015, Labour research found that seven of the eleven private health firms which jointly won a £780m NHS contract for diagnostics and operations had links to the Conservatives. The seven include three companies which have been criticised for providing inadequate care to NHS patients or care home residents they were looking after. Two of them, Circle and Care UK, have been criticised by the Care Quality Commission while a third, Vanguard, was under fire after 31 eye operations it performed under contract to the NHS last year left patients with continuing sight problems.
Vanguard is majority owned by MML Capital. Rory Brooks, its founder and chief executive, has donated £300,311 to the Tories and gets privileged access to David Cameron as part of the ‘Leaders Club’ of Tory donors. Care UK’s chairman until 2010 was John Nash, who was made a peer by Cameron in 2013 and is now an education minister in the House of Lords. He and his wife Caroline have given £251,000 to the Tories. Circle, which pulled out of running Hinchingbrooke NHS hospital in what was hailed as a pioneering extension of the private sector’s role, is part-owned by Lansdowne Partners and Odey Asset Management. Their founders, Paul Ruddock and Crispin Odey, have given £843,783 and £241,000 respectively to the Tories, and Odey’s firm another £20,000.
A series of interlocking cogwheels recycles government ministers and advisors (from all major parties) onto think tanks and healthcare company boards, as shareholders and back, often via the Lords, into new roles as government advisors and NHS managers. Here their undoubted expertise in the corporate sector is regarded as a major asset and not, as others might see it, as a blatant conflict of interest.
Simon Stevens rose from being a key advisor to the Blair Government promoting PFI and use of private hospitals, to senior positions within United Health, a major US provider of healthcare insurance, and from there to his current post as Head of NHS England.
(Labour) Lord Carter of Coles founded Westminster Health Care in 1985 and has served on various boards of US and UK healthcare, insurance and technology companies. He chaired the NHS Co-operation and Competition Panel in 2012, despite also chairing US Healthcare company McKesson, from which he earned £799,000 in 2014. He has conducted a number of Government NHS reviews, including into pathology services despite personal investments in pathology services.
Alan Milburn, Health Secretary under the Blair government currently works in the healthcare sector of management consultants PricewaterhouseCoopers.
Ex-GSK chief to be UK chief scientific adviser Patrick Vallance (below), president of research and development at GlaxoSmithKline, has been named as the government’s chief scientific adviser.
This is just an overview of ways that privatisation impacts on the NHS. There are many more examples, and local campaign groups will have much more information about how privatisation impacts on the local NHS.