NHS for Sale: Myths, Lies & Deception (25 page)

The high number of contracts going to the private sector
is hardly surprising. Tendering for a large NHS contract requires legal expertise, time and deep pockets, advantages possessed by the health industry multinationals but hardly by small voluntary sector organisations and NHS staff. One GP practice reported spending £40,000 on tendering for a service they were already running only to see it go to a private company who could undercut their bid.
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The exercise not only wasted a large amount of money but took ‘a senior partner and manager away from the practice for a lot of time’. It is understandable that while a few entrepreneurial GPs are learning how to get involved in tendering, most aren’t prepared to risk further loss of money and staff time which would be better spent on patients. This of course leaves the field open to the private sector.

Another doctor responsible for a sexual health clinic wrote a heart-rending blog describing how he and his staff had had to take three months away from clinical work to draw up a tender for their own services. He notes with regret that ‘quality’ accounts for only 40 per cent of the total value of the bid
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and points out the crass stupidity of taking clinical staff away from patients to write a bid to tender against experienced businesses who could throw money and legal (but notably not clinical) expertise at the process. (As we have seen, the private sector is better at winning contracts than delivering them). The blog
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is well worth reading in its entirely as a microcosm of the terrible waste of time and money involved in the compulsory tendering out of all services, and the gross unevenness of the so-called playing field. If patients, faced with lengthening waiting lists, knew that doctors’ and nurses’ time was being wasted in this way there would be a riot. At the time of writing, the staff of the
threatened clinic still don’t know if they have been successful in winning the contract, but they surely know that they lost several months of frontline clinical care while they were forced to write the bid.

Once the coalition had successfully pushed the necessary privatising legislation through they quickly got down to business. One of the first victims was the state-owned company Plasma Resources UK. Reliable and trustworthy plasma supplies are vital to a wide range of patients, including people with haemophilia, and the company had been set up in 2002 to safeguard UK plasma supplies after the emergence of Variant Creutzfeldt-Jakob disease (‘mad cow disease’) meant that UK plasma was considered unsafe. But in July 2013 the government decided to sell an 80 per cent share of the company to Bain Capital, a US private equity firm founded by failed Republican presidential hopeful Mitt Romney, and better known for being ‘job destroyers’ than purveyors of high quality blood products.
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Dr Eric Watts, an eminent UK haematologist and former vice-president of the Association of Clinical Pathologists, feared that the privatisation of the service would mean ‘losing control of the supply of important treatments to market pressures’.
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An early day motion tabled by Labour MPs Jeremy Corbyn and Frank Dobson claimed that without the state company: ‘the UK will be left buying its own plasma on the open market where there are supply chain issues of the sort that saw horses being labelled as beef.’
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And, they might have added, that gave rise to the problems with UK plasma in the first place. (The problems had resulted from ‘reduced UK
regulation of cattle feed processing’ which had allowed the transmission of a brain disease of sheep to cows whence it proved transmissible to humans).

Dobson and Corbyn, along with medical experts, warned that ‘penny pinching neglect of safety procedures in the collection of plasma may well lead to an increased risk of infection’,
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and Vince Cable himself, alerted by the concerns of experts, had to be reassured by a DoH spokeswoman that the ‘sale (was) good news for patient safety, taxpayers and jobs’.
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Dr Watts did not think the taxpayer had benefited, however, describing the sale as ‘another gift from the UK taxpayer to the market’ as ‘£540 million has been spent to establish a company being offered for sale at a suggested £200 million’.
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The government preferred the advice of management consultants (Lazard and Ernst and Young) to that of medical consultants and the sale went ahead. As Will Hutton remarked in
The Guardian,
‘Who would consign the provision of blood plasma to such custodians? Only a fool, a knave or a Tory politician’.
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Along with the privatisation of UK plasma services successive governments have had NHS pathology services in their sights. The scene was set with the two reports on English pathology services by Lord Carter of Coles
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(who deserves and will get a paragraph to himself later on). The reports called for major reconfiguration through consolidation of services, with Carter arguing that the £2.5bn spent by the NHS on pathology could be reduced if services were delivered by ‘stand-alone pathology service providers’, independent of the hospitals in which they were based. The warning signs were all there, with recommendations about ‘creating greater choice … with more contestability and greater plurality of provision’. Accepting these proposals not coincidentally
opened the door to private sector involvement, which has advanced most rapidly in London with so called public-private pathology joint ventures.

Some of this began under the previous government, when Guy’s and St Thomas’ NHS Trust entered into a 50:50 joint venture with Serco, forming GSTS pathology, which took over the hospitals’ pathology services in deals ‘worth £800 million over the next decade’.
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Then in 2010 King’s College Hospital joined the enterprise producing a tripartite venture called Viapath.

Concerns about the new public-private arrangements emerged as early as 2012, when
The Guardian
reported that clinical and financial failures had been uncovered by the independent research group Corporate Watch. They described an organisation ‘in turmoil’, documenting 400 clinical incidents in 2011, including ‘losing and mislabelling samples’ at GSTS’s St Thomas’ labs. The service exceeded the agreed monthly turnaround times for tests 46 times in 2011, with critical risk levels breached 14 times. They reported that staff morale was at an all-time low and that the new managers ‘appear more concerned with marketing than laboratory work’.
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The full report is well worth studying and makes alarming reading, describing among other things problems arising from malfunctioning IT systems, undertrained staff and consequent damage to patients (see also
Chapter 8
). What’s more the NHS hospitals had made no profits from the venture but had to continue to give it financial support. Corporate Watch concluded:

Running a pathology service without involving pathologists does not sound like a blueprint for success. Contrary to the
current government’s frequent promises that its reforms will put medical practitioners at the centre of decision-making in the NHS, involving private companies like Serco seems to do exactly the opposite, giving more power to non-medical managers. GSTS has been going for less than three years and yet it has already, as promised, shown what involving the private sector will do to the NHS.

In 2014 Corporate Watch reported further concerns, this time that the company had been overcharging the NHS to the ‘tune of £283,000 in a sample three month period’.
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Once again there was evidence that staff cuts and lack of investment had left ‘laboratories close to disaster’. Internal e-mails from senior doctors accurately summed up the core problem of outsourcing public services when they claimed the company had an ‘inherent inability … to understand that you cannot cut corners and put cost saving above quality’. The whole undertaking increasingly looks like the worse possible combination of a public-private venture, with the NHS taking the risk and the private sector apparently living up to its reputation of putting profits before patients.

For a long time traditional primary care presented a solid face against the private sector but a number of factors have combined to change that. The ability of GPs to opt out of out-of-hours care (which happened on Labour’s watch) created a point of entry for private companies and some quickly took advantage. At the same time smaller companies like Concordia and larger ones like United Health and Virgin started to bid for and win GP practices, and in 2011 Dr Clare Gerada, then chair of the RCGP, predicted that private firms
would be running 10 per cent
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of practices by 2014.
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Some of the problems that have already been encountered are outlined in
Chapter 8
.

But the HSC Act crucially brought other forces into play. It was clear from the outset that GP commissioning was going to be a big challenge for GPs. Many were already struggling with their clinical load and few had the knowledge, time or expertise to take on commissioning on this scale. Lansley’s white paper anticipated that they would need support and mentioned possible input from local authorities, the third sector and ex-primary care trust staff, but this is not quite how it has turned out. The subsequent creation of Commissioning Support Units (CSUs) has given rise to the possibility that decisions about outsourcing could themselves be outsourced.

CSUs, regional bodies currently subsidised by the NHS, were created to support CCGs. There are nineteen of them, and together they employ nearly 9,000 staff with a turnover varying between £21m and £62m. They are supposed to be off the NHS books by 2016 and according to Bob Ricketts, director of Commissioning Support Strategy at NHS England, there is ‘a lot of interest from commercial providers’. One person involved in negotiations was quoted as saying: ‘It’s a great opportunity for the private sector … They’re not big businesses but they are likely to be increasingly influential and control billions of pounds. William Laing, of Laing & Buisson, the healthcare analyst, said: ‘I can imagine private equity groups are keen on running [CSUs]; and I can see that the NHS is probably keen on them being taken over. The government couldn’t have made it clearer that the CSUs are going to become independent entities by 2016.’
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If the private sector takes over the running of CSUs,
making decisions on behalf of CCGs about purchasing care, then much of the NHS budget will be in the hands of private companies who will be free to purchase that care from other private companies. Given the secretive world of offshore arrangements and rapid changes of ownership and name it will be impossible to avoid a situation where the private sector is buying care from itself. The privatisation of the NHS will have come full circle, and Dracula will be in charge of the blood bank.

Meanwhile the government has put out a tender for GP administrative support services. At stake is a ten year £1bn contract, one of the largest NHS contracts ever offered. Big multinational companies like Serco, G4S, KPMG, Capita – and even arms manufacturer Lockheed Martin – have shown interest. The NHS is excluded from bidding. Christina McAnea of Unison said: ‘For there to be no NHS body or in house option just reveals the truth about the agenda of this government, which is running hell for leather in privatising as much of the NHS as they can before the general election in May [2015].’
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At the same time community health services were being put out to tender and in 2012 Virgin Care (previously Assura Medical) won a £650m contract, the biggest of its kind at the time, to run community health services in parts of Surrey (see below). When the contract was delayed it is rumoured that the local MP, one Jeremy Hunt, stepped in to push it through.
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Private companies taking over GP practices, compulsory competitive tendering, the outsourcing of community care and GP administrative support services
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and influential CSUs run by the private sector mean that the privatisation of primary care, once viewed as unimaginable, is well under way.

While some of the concern about the tide of privatisation has been focused on primary care, there are significant inroads being made into the secondary care sector as well, where privatisation is advancing on several fronts. Hospitals, under severe financial pressures, are increasingly filling their beds with private patients and at least one hospital – Hinchingbrooke hospital in Cambridgeshire – has been franchised out lock stock and barrel to a private company, Circle. Other threats include the creation of ‘mutuals’ and the appearance of ‘self-funding’ patients.

The story of the private takeover of Hinchingbrooke hospital by Circle
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has already been outlined in
Chapter 1
. Suffice it to say here that the extensive mythology surrounding the carefully-crafted PR image of Circle and its proclaimed ‘success’ is almost entirely bogus. The company was not and is not a genuine ‘partnership’. It has appalling relations with many of the frontline staff at Hinchingbrooke, refusing to meet with unions or, in recent instances, refusing staff time to attend ‘partnership’ meetings. In the last NHS staff survey covering all trusts in England, Hinchingbrooke came in the bottom half on two thirds of the 28 key issues and in the lowest 20 per cent of trusts on almost half of them. Staff numbers have been slimmed down beyond the sustainable level, resulting in a high and rising bill for temporary staff to keep services running.
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Circle as a whole has never yet made a profit as a company, and its bijou, tiny private hospitals in Bath and Reading stay afloat only thanks to treating higher than planned numbers of NHS patients. Its ten-year contract at Hinchingbrooke
has not yet generated any profit, but has run up increasing deficits.
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At the last count the company was just £185,000 short of the £5m level of investment in the Trust’s balance sheet that could force a renegotiation of the deal, or allow Circle to walk away for a further payment of £2m. At one stage Circle were caught selling off hospital land to ‘make the site more efficient’.
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