Americanisation of the NHS?  

For 4 decades there have been activists who believe that all changes in the NHS are part of a plot to move our tax funded NHS onto the American, private insurance funded, model.  This would then allow services to be provided by private companies, especially American ones. Moving the NHS from being (on evidence) one of the best health systems to one of the worst, moving us from an NHS which has high satisfaction ratings and is generally loved as a public institution to the contested and conflictual world of US medical care.

Actually there are 3 separate issues:-

  • Private insurance or tax funded?

  • Use of private providers to deliver publicly funded services?

  • Benefits of competition?

Private insurance or tax funded?   There is a very good case for a tax-funded system and most European countries with “sickness funds” are running health services on the basis of an earmarked tax which, unlike US health insurance, does not increase premiums when people get ill. And the US health care actually does have a tax-funded public sector (Medicaid, Medicare & Veterans Administration) that together use up about 8% of GDP (like the NHS).

Use of private providers?  The NHS has always had some element of private provision, despite the myth of the “publicly provided” NHS.  90% of footfall in the NHS is in general practice, retail pharmacy, general dental services and optician services; these have contracts with the NHS and are in the public domain but not in the public sector. If contracting out is a sign of ‘privatisation’ then this has been in the system since its creation when the independent contractor services were fostered.

Benefits of competition? There is overwhelming evidence that the more recent enforced and directed increase in the use of private providers has caused far more problems than any benefits claimed.  This simple and powerful fact is often overlooked when the impact is grossly exaggerated; with for example regular claims that having procurement for private providers adds £10bn pa to the cost of NHS administration.  The true figures are not actually hard to find and the most hated “for profit” provision of some acute care has risen modestly over a decade, but growth has slowed recently and the total is still only 8% of NHS budget – on a par with the historical level of cost of the contracted out GPs.

Growth in private provision contracted by the NHS has been modest at best and the private provision of primary and community care is actually a bigger issue than the use of provider provision for some acute care. The exception to this (but now outside the NHS) is the sale of once publically-owned residential and nursing homes, the appearance of owner-manager homes and the entry of commercial chains in developing care homes.  90% of residential and nursing homes are outside the public sector, and have a mixed clientele of self-funders and state-funded (the predominance of the latter making some homes part of the public domain).

The sensible policy discussion is about how to rebuild public capacity so that private provision is less necessary.  This is highly relevant in discussion about social care and its boundaries with healthcare.

Rational policies   A policy to remove all private provision in one go is not credible; it simply could not be done.  It may also be the case that some elements of private provision, as with GP Practices, some voluntary sector and not- for -profit organisations (like hospices), and some highly specialised private companies may be necessary and not harmful.  And private provision of some nonclinical services and goods is inevitable (unless we become North Korea).

Ending any presumption that services should be put out to competitive tender, making exceptional any further outsourcing and progressively reversing (some or most) of what has already taken place over a prolonged period looks rational and doable but, especially in social care, may take many years of incremental change and major investment in infrastructure.  Changes made quickly by edict will destabilise systems already under huge stress.

Competition can exist even in a system that is fully public.  But “market” competition for all services as imposed through Compulsory Competitive Tendering and more recently by what Lansley tried to inflict does not and cannot work.  It is also expensive with significant costs of procurement and contracting.

Local variations  Unless every service has a defined catchment population there will be some element of choice and some variations based on Practice, Hospital, Town or Region.  This may not be harmful. It is possible that one part of the ambulance service deploys its fleet in a different way and gets better outcomes and that allows all services to improve.  Or does every service everywhere have to do everything the same? Should there be recognition and measures of what works and what does not? Basic common sense says some kind of competition may bring benefits.  Large monopoly providers may also be slow to innovate and to explore new delivery models and this could be detrimental. So how can competition become a valuable tool if competition on “price” is removed as a lever?  That is a sensible question to ask.

Just to avoid any doubts, what does appear clear is that if an organisation has to compete to obtain the basic income it needs to continue to exist then that can have many unintended and adverse consequences.  But this “perform or get closed down” approach rarely works in the public sector with all the political pressures that apply.

So – it is not simple and it is not just about American companies taking over.

Labour should not need negative campaigning based on fears of privatisation or Americanisation.  The public already believe the NHS is safer with Labour. Labour will promise far more money and an end to the destructive market system but that is far from enough.

Labour’s priorities    What Labour ought to campaign for is a better care system; built on the established and unchallenged principles – universal, comprehensive, based on needs and funded from general taxation.  Labour should argue that those principles must also be applied to care more widely .

For a 21st century care service promoted by Labour some new principles might emerge:-

  • The NHS can no longer be an island or an Empire.  It has to become just one part of a wider system that is there to ensure that inequality is reduced, that needs are met and that all parts of the government work together to maximise the wellbeing of the whole population – for the many not the few.

  • A system where the services provided are designed and delivered with those that use them not for or to them.  Nothing about us – without us.

  • A system that is joined up and which gives continuity of care.  Arguments about which organisation is responsible or who pays for what do not help.  Records that are not shared are of less use.

  • A system that respects devolution and allows that some services are better designed locally with participation rather than being imposed from the all-knowing centre.

  • A system that sets entitlement unambiguously for everyone across the whole nation; no post code variation in “rights”.  Proper remedies and rights to appeal decisions about entitlement will be needed.

  • A system where important decisions about how resources are allocated and services are designed are made through governance that is democratically accountable.  A system with genuine openness and transparency – where commercial confidentiality is meaningless.

  • A system where quality is at the forefront (safety, experience and outcomes).  Quality emerged as an issue in 2008 and was lost after 2010.

  • A system where services are based around support for whoever is in need and their carer(s) and family for as long as necessary – not the NHS approach of see the patient and fix the problem.  Support should be continuous and entitlement portable and enduring.

  • A system that has a workforce that is adequately resourced, properly motivated, with decent terms and conditions and competent management.

  • A system with a governance structure that respects the need for strong relationships; is able to adapt but is not subjected to periodic imposed top down redisorganisation.

Labour needs to be able to describe in credible and simple terms why a care system under Labour will be better and worth the extra investment.  That’s a better argument than fear of the bogeymen – American or otherwise.

Richard Bourne   4/2/19

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