NHS for Sale: Myths, Lies & Deception (21 page)

The potential for fraud and corruption in the NHS has traditionally been low. The conditions in which they flourish – lack of accountability and external oversight, doctors working in private systems who are incentivised to generate income by over investigation and overtreatment of patients, and a culture that accepts corruption – are lacking. But some of that is set to change after the HSC Act.

A marketised NHS means there are escalating numbers of financial transactions to monitor, but adequate oversight of the increasingly fragmented system is nigh on impossible, and will remain so as more ‘qualified providers’ come onto the scene. In addition there was previously little or no financial incentive for NHS doctors to refer patients for unnecessary investigations and treatments, a potent source of fraud and waste in the US. But as a result of the HSC Act GPs control much of the budget and, as a signifiant number of GPs on Clinical Commissioning Groups (CCGs) have financial interests in healthcare providers, concerns about financial conflicts of interest are bound to increase.

In 2013 the
BMJ
used Freedom of Information requests and CCG websites to discover that more than a third of GPs on CCGs had ‘a conflict of interest due to directorships or shares held in private companies’. The
BMJ
editor Fiona Godlee commented:

Some of these conflicts of interest are too great to be ‘managed’. We think those GPs who have positions at executive board level in private provider companies need to choose between their competing interests and, if need be, step down from the commissioning boards.
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But later that year
Pulse
magazine reported that one in five GPs sitting on CCGs had a financial stake in a private company which was currently providing services
to their own CCG.
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When, in 2014, the West Sussex CCG awarded a £235m contract for musculoskeletal (MSK) services to BUPA it was reported that only seven out of a possible 21 people responsible for the decision were actually able to vote on it, as the others all had financial conflicts of interest. The process was halted after local protests and the discovery that the CCG had done little to determine how their decision would impact on local hospitals.

West Sussex Hospitals NHS Trust, who had unsuccessfully bid for the contract, pointed out the obvious problems arising from the decision. The staff working in the trust MSK service were also responsible for emergency trauma care in their A&E department, so moving the MSK contract out of the trust would threaten their ability to staff the emergency services. Dr Armstrong, the chief officer of the CCG, said there was no intention to destabilise local A&E and trauma services, although she didn’t explain how these would be maintained with the profitable part of the service contracted out. At the time of writing the decision is still under review.
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The story illustrates the problems facing CCGs and raises important concerns. Even if those with conflicts of interest leave the room for the vote it is difficult to think that they will not influence the decision made by a small group of their colleagues who remain behind.

In Bedfordshire they didn’t even bother to vote. The CCG awarded a five year £120m contract for MSK services to a consortium led by Circle which included a company (Horizon Health Choices) whose website announces that it is owned by 25 of the 55 GPs practices in Bedfordshire. When challenged
on the propriety of GPs on the CCG board voting on this the response was that no vote was taken since the policy went through by consensus. This effectively ignored the massive potential conflict of interest in agreeing a decision that would benefit colleagues, if not the board members themselves.

It eventually emerged that with the chutzpah characteristic of the private sector Circle intended to subcontract part of the work back to Bedford Hospital, the local NHS trust. The trust refused to become a subcontractor, preferring to compete with them, having seen a 30 per cent drop in its MSK referrals after Circle won the contract.
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This does not mean decisions made by CCGs are likely to be fraudulent, but that for the first time a culture has been created in which fraud and corruption are possible. Until now patients have trusted their GP’s advice to be untainted by suspicions of financial gain. Once GPs are known to have financial interests in local health providers from whom they are purchasing services then patients will inevitably be concerned that decisions will be made and advice given that may be skewed by financial considerations. In the US, for instance, the overuse of MRI scans has been linked to the fact that many scanners are owned by doctors who refer their own patients to them for unnecessary scans.
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As for fraud on an industrial scale, there is no lack of evidence and many of the companies moving in on the NHS have already been successfully indicted in the US. A comprehensive account of cases brought and eye-watering fines paid is outside the scope of this book but the interested reader will find plenty of material. Of course monitoring fraud and pursuing it through the courts costs money which is lost to frontline care. In the US healthcare fraud is well recognised and dealt with by the FBI among other government agencies.
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Here in the UK we are babes in the wood and it is unclear how the NHS, in thrall to commercial confidentiality and struggling financially, will even know when it is the subject of serious fraud.

Private companies have only one legal requirement and that is to make a profit for their shareholders. They are therefore anxious to avoid risk and unprofitable activity, which in health care means choosing straightforward low-risk patients whenever they can. High cost patients – typically emergency patients and those with multiple, complex and/or chronic problems – mean lower profits, and the private sector will when possible make sure the NHS has to deal with them.

The cherry picking of low-risk high profit patients by the private sector means that the NHS bears the cost of the difficult patients while the private sector makes its profits from the straightforward work, a pattern seen repeatedly when public services are outsourced – profits are privatised while risk is socialised.

Cherry picking first came to light when Blair’s Labour government set up Independent Sector Treatment Centres (ISTCs) to deal with long waiting lists. Unlike NHS hospitals (paid per case treated for elective work) ISTCs were paid by block contract for a pre-agreed case load over five year periods, regardless of how few patients they treated. The more patients who could be turned away, however spurious the reason, the higher their profits would be. There was abundant anecdotal evidence that ISTCs were refusing to deal with unprofitable patients, for example with the elderly, the obese and patients with additional health problems, however trivial. There were stories of patients with previous
mental illness or a history of drug misuse being turned down for routine surgery.

In a landmark paper (2009) Pollock and Kirkwood showed that ISTCs were indeed referring the difficult, i.e. unprofitable, patients back to the NHS and they calculated that the taxpayer had paid up to £3m for patients referred to ISTCs who had never received any treatment.
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When the Health and Social Care Bill was published concerns were expressed that with the greater role of the private sector would come a danger of increased cherry picking.
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The government originally promised there would be safeguards against it in the legislation but the plans to pay a reduced rate for treating less complex patients were quietly shelved.
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A Department of Health spokesperson said: ‘We are committed to preventing cherry picking but there is more than one way to tackle this.’
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They didn’t go on to provide any details, nor have they become apparent since then. Indeed, as one writer pointed out,
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since the HSC Act allows private companies to apply commercial confidentiality clauses to their NHS contracts it is highly unlikely that we will ever know whether and to what extent they are cherry picking patients.

Since the private sector’s aim is to maximise profits it is quick to avoid unprofitable patients or to return them to the NHS whenever possible. The cherry picking of NHS patients is one end of a spectrum of behaviour that runs right through to dumping sick patients in NHS A&E departments, as documented in the CHPI report. Dr Max Pemberton, in his article ‘Superior private health care is a myth’, recounts his personal experience working in an A&E department in
central London where it was common to see acutely unwell patients arrive from nearby private hospitals and clinics, often ‘without any proper hand over notes or details of the procedures that had been carried out’. Most of the hospitals didn’t even have an ambulance to take the patients to an NHS hospital, but relied on dialling 999.
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Providing emergency care is expensive which is why the private sector would rather leave it to the NHS. As the CHPI report uncovered, many private hospitals have limited out of hours medical cover and little in the way of resuscitation teams or intensive care facilities. In 2007 an NHS patient died in an ISTC during routine gall bladder surgery after he had a haemorrhage on the operating table. There weren’t enough swabs to stop the bleeding, and no emergency blood was stored, scandalous omissions by any standards. There was no phone in the operating theatre and eventually a porter was sent by taxi to the local NHS hospital to collect blood. When he arrived back with it two hours later it was too late.
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When the coroner criticised the clinic involved they replied ‘We met all the criteria and all the regulations. (Blood) was not a requirement.’ It turned out that the private sector, even when operating on NHS patients, was not offering the same checks and safeguards as the NHS because to do so would cost money. The NHS does what is necessary to safeguard patients; the private sector may do only what is stipulated in the contract, which in this case was not enough.

One of the most egregious cases involving the NHS being left to pick up the pieces was the breast implant scandal. In 2012 a French company, Poly Implant Prosthese (PIP) was discovered to have saved millions of euros by using industrial grade silicone (meant for mattresses) instead of medical grade silicone in their breast implants. Their prostheses were more
prone to rupture and when the story appeared 47,000 British women were found to have received the implants, mostly for cosmetic reasons. Women who had had the operation on the NHS, mainly for reconstructive surgery after cancer, were offered free operations to remove and replace them.
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The government announced that it expected private clinics involved to offer the same deal, but they dragged their feet. Some had closed down, others refused to remove the implants for free until forced to do so. The Harley Medical Centre, facing legal claims from 1,700 women, went into administration to avoid being sued, transferring its doctors and clinics to a new company where it could continue its cosmetic surgery business without the threat of legal action. The multi-millionaire CEO, Mel Braham (who initially denied having a secret offshore company linked to the clinic) claimed that the Centre could not afford to offer free replacements to their patients, and demanded the NHS pay for the bulk of the costs.
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A spokesperson for the clinic said: ‘The Harley Medical Group has always put patient care at the heart of everything we do. In response to [the implant scandal] we have acted in the best interests of our patients.’
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One of their patients was less impressed: ‘I got a letter this week saying Harley was going into administration and that was the end of my claim. Harley was great when I was paying but now that the firm isn’t getting money it’s not interested.’
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Fearful women naturally looked to the NHS. The total NHS bill for dealing with affected patients, including those the private sector had turned its back on, was estimated at £3m.
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Despite the incentives given to private companies it has proved difficult for many of them to make a profit from the
NHS, which is not surprising, given the very cost-effective nature of the public service they are seeking to replace. Since their business is to make a profit, companies may decide to terminate an unprofitable contract with the NHS, an option clearly not open to the NHS itself however ‘unprofitable’ delivering health care may be (just because something isn’t profitable doesn’t mean it isn’t essential).

There is already a history of the private sector terminating NHS contracts, well-illustrated by the sorry story of primary care in north London. United Health Europe
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first appeared on the NHS scene in 2003. In 2008 they bid for three GP practices in Camden and won the contract against a bid from local GPs on the ‘value for money’ score, despite the fact that the local doctors were judged to be offering ‘superior core services’.
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But in 2010, after recording an overall loss of £13.9m in the UK health market, United Health (UH) decided to pull out of primary care, anticipating that there would be more money to be made in providing commissioning support services to the newly forming CCGs. They sold the contract on, along with five other practices, to The Practice plc, ‘the UK’s largest operator of privatised NHS GP practices’.
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Camden Primary Care Trust (PCT), responsible for awarding the original contract to UH, thought it had contractual safeguards in place to stop the subcontracting of GP services but legal advice found otherwise. National rules allowed for contracts to be passed on without even the need to consult the PCT.

Worse was to come. In 2012 patients at one of the practices (142 Camden Road) discovered via their local paper that their GP practice was about to close. The Practice PLC explained that this was because its loss-making activities were
‘unsustainable’. At this stage it was being run by locums, had 4,700 patients depending on it, who were thus thrown on the mercies of adjacent NHS practices. Local GPs complained that the process had been chaotic, and that pat-ients’ records had not been transferred. They also had worrying concerns that patients arriving from the Camden Road practice had received ‘appalling care’ and ‘were often on the wrong medication’. Sorting out the mess was time consuming, time that had to be taken away from their own patients.
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