Should the concordat be grounded?

If trade is necessary but perilous to the soul, commercial medicine is doubly perilous to the public’s health. In a profit-seeking environment medical practice grows exuberantly, re-adjusting clinical judgement to make every headache a hidden tumour, every worry a cause for expensive investigation and treatment. And the administration of health care expands to match, costing and billing and checking claims instead of measuring and meeting needs.

So why would New Labour want a concordat with commercial medicine, just at the time when the government is expanding the NHS budget and modernising its services? There are three likely answers. The concordat may be a short term, expedient solution to a problem of under-capacity. It may be a Trojan horse for step-wise privatisation of the NHS. Or it may open another front against commercial medicine in a long war to restore faith in the public service.

The NHS does not have enough staff, equipment or facilities to do the work that needs doing. Waiting lists for surgery, but also waiting times for specialist consultations, are a reflection of this under-capacity. It is true that commercial medicine encourages long NHS waits, because they feed it with custom, and it is true that the administration of hospital care can itself be a barrier to efficient working, but these are only partial explanations for the queues.

There are not enough MRI scanners, not enough technicians and secretaries, not enough beds and not enough nurses to meet reasonable demands. Drafting in commercial clinics for planned surgery, or even for emergency psychiatric care, is a way of rapidly increasing the capacity of the NHS, and getting back some of the professionals trained at public expense who have migrated into commerce, or who simply moonlight. This arrangement will benefit the commercial sector, by filling its beds and reducing its trading risks, but at a price to both sides.

If the NHS is able to reduce surgical waiting times significantly, referral thresholds may drop, encouraging even more patients to join the queues. The short-term expedient could then become a longer-term obligation, because how could politicians allow waiting lists and times to lengthen again? The commercial sector would then find itself transformed from a grateful recipient of public subsidy to a major supplier of services, able to set a price for its continued co-operation. But the risk to the commercial sector is that its case mix could change, with an influx through the gleaming portals of private hospitals of the kind of patients the affluent currently pay good money to avoid. And waiting lists might shrink enough to make ‘going private’ less attractive, so robbing the commercial hospitals of trade.

Covert privatisation is another possible role for Milburn’s concordat. Once a partnership arrangement develops between public and commercial health care, further deregulation becomes possible. If the London Underground can be modernised through partial privatisation, by New Labour, why not the equally needy NHS? While the government has defended taxation funding for the health service, and rejected insurance-based funding, it has not avoided ‘outsourcing’. On the contrary, its continued preference for the Private Finance Initiative in hospital development suggests that public-private partnerships are perfectly acceptable. And, even if deregulating the NHS is unacceptable to New Labour, the levers will be ready for a future Conservative government.

The third, and perhaps least likely, explanation is that New Labour has secretly declared war on commercial medicine, and is closing in with it, prior to a take-over. This would not fit with the government’s statements, but it might fit with its competitive instincts and there are two signs that support this explanation. NHS walk-in centres have stolen customers from the private Medicentres, so that commercial success is now in serious doubt. Similarly, NHS Direct is a real threat to commercial deputising services in general practice, and their days also may be numbered.

The NHS can compete effectively against some types of commercial opposition. If the commercial hospitals take public money yet fail to deliver the quantity or quality of care required, the business case for taking them over may grow strong enough to make even a centrist, commerce-friendly government act.