26 October 2010

An article courtesy of red pepper

Dismantling the NHS

Behind the technicalities, what do the government’s plans for the NHS really mean? Stewart Player and Colin Leys expose the reality of the health service white paper

The coalition government’s plans for the NHS represent the final conversion of healthcare into something to be bought, with really good care going to those who can pay for it and only a defined ‘package’ of free treatments, of declining quality, for everyone else.

What has already occurred with dentistry, physiotherapy, podiatry and other services will start happening across the board. ‘Top-ups’ and ‘co-payments’ will become standard. Some treatments will cease to be available freely on the NHS and have to be paid for – if you can afford it.

It’s already happening all over England, as staff and services are cut to meet the government’s demand for £20 billion ‘savings’ over the next five years. GPs are being told to refer many fewer patients to specialists.

NHS North London has decided to cut back on cataracts and hip and knee replacements. The government’s plans mean that this will become the norm, not just one-off cuts justified as a response to a crisis. Under the new plans, by 2014 NHS hospitals will no longer be answerable to the taxpayers who have paid for them over the years, and will no longer have the overriding aim of providing the best possible healthcare for the their local community.

By then they will all be businesses, competing with private hospitals and clinics for NHS patient income. To stay afloat financially they will have to cut costs, reduce staff, lower the ‘skill mix’, reduce levels of pay, focus on profitable treatments and neglect or even abandon high-cost and unrewarding ones in order to match the for-profit sector. There will also be many fewer of them.

The aim is to take chronic care out of hospitals and deal with it in non-hospital settings – ‘super-surgeries’ or clinics, largely owned and run by private companies. It will be a healthcare market, very like that in the US.


All hospitals, public and private, will be answerable only to the central regulator, Monitor, which is concerned only to ensure that they stay solvent and behave competitively.

They will be supervised for safety and quality by the Care Quality Commission, but the CQC is notoriously feeble: it gave mid-Staffordshire top marks when several hundred patients had been dying there from neglect.

The white paper says the CQC will become more demanding. But if in future it tells a hospital to raise its standards, and the finance director replies that the required improvements are unaffordable, what is supposed to happen? There will be no ‘bailouts’. The government’s view is that the hospital should either cut some services, or even close altogether, leaving patients to be treated by ‘better’, privately-owned hospitals – or perhaps in the same hospital, after it has been taken over by a private company.

That is the logic of the healthcare market the white paper envisages.

But closing a medical department or even a whole hospital isn’t like closing a department in a department store, or the store as a whole. There are rarely adequate alternative facilities within reach. Letting hospitals fail means chaos, anxiety and serious risks for patients and their families.

And what if the private company’s services turn out to be no better? The quality record of the privately-owned Independent Sector Treatment Centres (ISTCs), set up and subsidised at huge public expense by Alan Milburn during his time as health minister to treat NHS-funded patients, is notoriously worse than that of NHS hospitals doing similar work.

Whether it is healthcare or home care or schools, good public services for all must come in the end from a service ethic on the part of staff who are not in it for the money, and management who are not in it for shareholders (or forced to compete with companies that are run for shareholders). Outside regulation has a part to play, but without the core commitment that comes from being part of a national service that expresses the solidarity of society – in the case of health, the solidarity of all the well with all the sick – equally good services for everyone will soon be a thing of the past.


The proposed change that has attracted most attention is the shift of commissioning from Primary Care Trusts (PCTs) to ‘local consortia of GP practices’. This is being done on the grounds that ‘primary care professionals’ are best placed to know what is best for patients, and will engage in ‘more effective dialogue and partnership with hospital specialists’. Who could object to that?

You do wonder why PCTs haven’t previously been told to organise such a dialogue between GPs and specialists; but the more important point is that GPs can’t in fact do commissioning.

‘Commissioning’ is Department of Health-speak for purchasing, and what it means in practice is setting the terms of what exactly will be paid for: what services will be covered, how they will be delivered, by clinicians with what sorts of qualifications, following what protocols, with what limits on length of stay in hospital, prescribing what drugs and rehabilitation programmes, and so on. These so-called ‘care pathways’ are at the heart of commissioning, or buying healthcare. The payments are per-patient, at pre-agreed prices for each kind of treatment package.

And to ensure that the deal pays off, any variation from the agreed protocols must be cleared with the commissioner or purchaser. This is the meaning of the ‘managed care’ operated by America’s notorious HMOs (health maintenance organisations), in which doctors have to plead with the HMO to be allowed to go ahead with a needed treatment that the HMO says is unnecessary, in reality because it will cost more than the HMO wants to pay.

Viewers of Michael Moore’s film Sicko will remember a doctor who used to work for an HMO telling a congressional committee how she was paid a bonus according to how often she denied treatments to patients. The new ‘GP consortia’ may not go so far as to reward their staff on this basis. But they will have limited budgets, and the way they are supposed to reduce costs is precisely to involve themselves in the details of all the treatments they are going to pay for. Someone will have the job of denying something.

Two big deceptions

1 Who will really run the new GP consortia?

Some GPs are said to be keen to take on commissioning. But the work involved is essentially commercial, not medical. The new consortia will have to employ large teams of administrators, lawyers and others to negotiate, make contracts, monitor performance, send out bills, do audits, deal with disputes, and so on – as PCTs are already doing.

That is the first big deception involved in this change. It sounds as if GPs will be doing the work, when in fact the essential job of buying hospital and other services involves a vast range of tasks that practising GPs can’t possibly do, and aren’t trained to do – even if they decided to stop treating patients altogether.

In fact, the work calls for skills developed in the managed care industry in the US. The English healthcare market is going to be run on the principles developed there, not by the GPs whose ‘pivotal and trusted role’ is supposed to be central to it.

The change will also mean that GPs will be nominally responsible for the £20 billion of service cuts that are already starting to be made. How trusted will they still be after that? That remains to be seen.

2 The cost of commissioning

The second big deception is that focusing on who does the commissioning prevents a crucial question from being asked: that is, why do commissioning at all?

Running health services as a market is far more costly than running them as a public service. The Department of Health commissioned a study of the NHS’s administrative costs. Based on 2003 data, the authors found that administration absorbed about 14 per cent of the total budget, up from 5 per cent in the 1970s before the marketisation process began.

The department sat on the report for five years. It only came to light in 2010, by which time ‘payment by results’ (payment for every individual completed hospital ‘episode’) and other major additional market elements had also been introduced. The share of administrative costs is now probably more like 18 per cent or more.

The ideologues behind the Tory plan maintain that competition makes healthcare providers more efficient. But the evidence from the US suggests the opposite.

There is a good reason why this is so. Good healthcare is above all a matter of having enough, highly-trained staff; yet employing fewer, cheaper staff is the only way to make money out of it.

In reality, the plan to turn the National Health Service into a healthcare market does not rest on rational arguments but material interests. Any realistic strategy to resist the Tory plans must start out from that fact: the plans are not really new, but are the culmination of a decade-long campaign by the private health industry to get its hands on the NHS budget.

How otherwise could the white paper have been produced so fast – a mere two months after a general election during which none of its far-reaching proposals was even mentioned (let alone made an electoral commitment) by either of the two parties now in office? It’s hard to imagine that even the overall shape, let alone the detail, of the white paper, was put together in two months. So where did it come from?

The HMO/market model: how its foundations were laid

The reality is that successive Labour health secretaries, working closely with the private sector, had already constructed almost the entire edifice of a healthcare market. The Tory plan merely speeds up the final stage and makes it more clearly visible.

The idea that New Labour planned to replace the NHS with a US-style market, complete with HMOs, may come as a shock to some readers. But the fact is that HMOs have been the inspiration behind practically every element of the ‘system reforms’ pursued by New Labour since 2000.

One HMO in particular, California-based Kaiser Permanente, the largest HMO in the US, has been intimately involved in shaping the Department of Health’s strategic thinking. New Labour’s ‘reforms’ have been worked out in constant discussions with and visits to Kaiser. This includes the conversion of NHS trusts into independent businesses (foundation trusts); the introduction of ISTCs; payment by results; giving NHS work to private hospitals and clinics and encouraging NHS patients to choose them; changes in NHS staff contracts; and, not least, the development of HMO-style commissioning.

The US example

These changes have been introduced in a largely piecemeal fashion, concealing their overall intent. But when looked at with reference to the Kaiser model the various elements assume their true significance.

A defining feature of the US healthcare market and its HMOs is its complexity, with myriad forms of organisation and bureaucracy fragmenting provision, and with thousands of different ‘plans’ (i.e. insured packages of care) confusing customers, concealing profits and adding hugely to costs. It was precisely to avoid this expensive dog’s dinner that the NHS was created. But the basic structure is clear enough.

An HMO like Kaiser receives insurance premium income from its ‘enrollees’ (and for over-65s, from the US state’s Medicare programme), and then ‘manages care’ for them through three basic ‘arms’: 1) It owns hospitals and primary care/ambulatory facilities; which are 2) staffed by physicians, who, while nominally independent, are tied into an exclusive relationship with 3) the company’s insurance arm.

How do the New Labour/coalition plans correspond to the US model?

  • At the level of infrastructure, hospitals are being progressively removed from public ownership – all NHS trusts are to become foundation trusts and are then to become ‘social enterprises’ owned by their staff, not the taxpayer. Meanwhile privately-owned facilities are subsidised (sweetheart deals for ISTCs, charitable status given to Nuffield hospitals, etc).
Some struggling NHS hospitals will close, while others, such as Hinchingbrooke in Cambridgeshire, will be handed over to private companies to be run for profit. Mark Britnell, who was the Department of Health’s head of commissioning under New Labour and is now lucratively installed in the private sector, says Hinchingbrooke is ‘only the tip of the iceberg’ and anticipates perhaps 20–30 more such transfers over the next year.

ISTCs, too, provide ready-made privately-owned venues for ambulatory and short-term secondary care, while some 150 private hospitals and clinics in the ‘Extended Choice Network’ that are already available to NHS patients under the ‘choice’ agenda form the nucleus of an expanded network of private suppliers.

  • In terms of staffing, the Kaiser model calls for market relationships with independent teams of consultants, primary care physicians and nurses. In order to develop these, staff must be disengaged from the NHS and redeployed into the above-mentioned teams.
The main initial lever to bring this about will be the significant numbers of hospital doctors who become redundant under the cuts programme. At the same time, GPs already have a semi-independent status and can more readily be included in such teams, which have already been emerging in parts of the country. While such teams may initially have some autonomy, it is unlikely that they will be able to compete with the major providers in the long term; it is more likely that most will end up working for one or other of them, on the Kaiser model.

  • The third arm of the HMO model, the insurance function, will be the work of the new commissioning consortia, advised by – or, more likely, progressively outsourcing the work to – private health insurance companies, and some American HMOs. There are also indications in the white paper that patient choice of GP will in due course extend to choice of commissioning consortium – since all GPs will be required to belong to one, so free choice of GP means free choice of commissioner – and that the consortia and hospitals will become free to compete on price and not just on ‘quality’ as they do now.
It is likely that competing healthcare ‘plans’ will eventually be a feature of the market here too, as consortia begin to compete for patient income.

The insiders

Pushing through these changes is a tight-knit ‘policy community’, comprising a number of leading private sector figures, some doctors and some health policy think-tanks, working closely with a group of strategists within the Department of Health. Among the latter, a highly influential figure has been Professor Chris Ham, who was for some years head of the Department of Health’s strategy unit and is now director of the King’s Fund. Ham has been a long-term champion of Kaiser, organising a series of visits to the company’s California headquarters and being instrumental in setting up a number of ‘Kaiser beacon’ projects within the NHS to introduce and ‘normalise’ Kaiser’s aims and methods among NHS managers.

Even more emblematic is Dr Penny Dash. After working briefly for Kaiser in the 1990s, Dash was appointed head of strategy and planning in the Department of Health, and co-authored the NHS Plan of 2000, which initiated the marketisation process.

Since then she has served on the board of Monitor, led Lord Darzi’s recent review of health services in London, and is currently vice chair of the King’s Fund.

But it is Dash’s function as placewoman for the global consultancy giant, McKinsey, that is probably most significant. McKinsey has been described as the gold standard for the provision of corporate strategy advice to the Fortune 500 companies, and as ‘global thought leaders’ in the areas of strategy and operations management. The company has played a central role in ‘system reform’ in the NHS under New Labour, and Dash is now a partner in their London office.

One of her initiatives, the Cambridge Health Network, is essentially a McKinsey front for exchanges between private health corporations, financial institutions and the Department of Health. Sponsors of the Network include some very big game: Halliburton, General Electric, and Perot Systems, as well as our very own GlaxoSmithKline, BUPA, Assura (now owned by Virgin), Mott McDonald and Carillion. McKinsey has been in many ways a key architect of the reforms that have prepared the way for the coalition. It was also, not coincidentally, McKinsey who came up with the figure of £20 billion that is now starting to be cut from the NHS.

Resisting the destruction of the NHS

As everyone recognises, successful resistance to the Tories’ plans to cut back public services permanently will call for a mass mobilisation with exceptional levels of solidarity, organisation and commitment. But, as Gregor Gall has recently pointed out, the defeat of the poll tax – the last time anything on this scale was successfully attempted – is not a good analogy with the situation we face now.

The poll tax affected everyone; its injustice was massive and obvious; and it required people to co-operate by registering and paying the tax, which they could and did refuse to do in vast numbers. None of these conditions applies to the complex, uneven, protracted process of dismantling the NHS that the Tories intend to push through.

Yet the injustice that will flow from the loss of the NHS will be massive. It will change the face of English society more profoundly than the poll tax. And it will be for all practicable purposes irreversible – unless we stop it now, all of us resisting in whatever way we can.

— -

Summary: what the coalition’s plans means for the NHS

  • Hospitals that ‘fail’ will be left to go bankrupt and close, or be handed over to be run by private companies.
  • GP ‘consortia’ will run the service, in theory. But doctors don’t have the time or skills to do the large amount of administration required – and these are the contracts the private health companies are after.
  • There will be £20 billion of cuts. On top of that, the more complex the market system gets, the more money will be spent on administration instead of medical care.
  • The consortia will end up trying to reduce costs by denying certain treatments. And if they are to make money, they will do it by employing fewer, cheaper staff.
  • In place of a public service we will have a profit-driven healthcare market.
— -

Who’s taking over the NHS?

The main actors in the new GP consortia

The earlier attempt to encourage GPs to take on commissioning roles through ‘practice-based commissioning’ has been widely acknowledged to be a failure, mainly because most doctors prefer to focus on patients. This allows the 14 major US and UK health corporations, consultancy firms and insurers that currently make up the ‘Framework for Procuring External Support for Commissioning’ (FESC) to step in and play an increasingly central role in allocating the bulk of NHS finances. The FESC functions include population risk assessment, procurement and performance management, and data harvesting – but it is in service redesign that their impact will be most felt.

So who are these companies?

Aetna (US); Axa PPP (UK); BUPA (UK); CHKS (UK); Dr Foster (UK); Health DialogServices Corporation (US); Humana (US); KPMG LLP (US); McKesson (US); McKinsey (US); Navigant Consulting (US);Tribal (UK); UnitedHealth Europe (US); and WG Consulting (UK).

How these companies profit from the ‘revolving door’ in senior health personnel

  • At KPMG, the former Department of Health head of commissioning Mark Britnell now leads the company’s European Health Division. Britnell also has close ties with Dr Foster, having previously been one of its non-executive directors.
  • UnitedHealth now employs Blair’s former top health adviser Simon Stevens. It also has the former head of the Department of Health’s commercial directorate, Channing Wheeler, who, alongside Britnell, set up the FESC before being recalled to the US to face the securities and exchange commission on charges of illegally backdating share options at the time of 9/11.
  • BUPA has the services of former health secretary Patricia Hewitt in her role as advisor to the private equity company Cinven, which recently bought out BUPA’s entire hospital portfolio.
  • Tribal’s director of its healthcare division, Matthew Swindells, was chief information officer of the Department of Health and a special adviser to Patricia Hewitt. The company can also call upon Phyllis Shelton, who jumped ship from the Department of Health, where she worked as the lead for measurement on the integrated care organisation programme. Prior to this, she was the founder and managing director of the UK arm of HealthDialogue.
  • McKesson’s UK chairman is Lord Carter. As chairman of the NHS’s competition panel, he is well situated to ensure that decisions on mergers and procurement – including those on commissioning – will follow the privatisation route.
  • McKinsey has the Department of Health’s former head of strategy, Penny Dash. Some idea of Dash’s influence on the commissioning front can be seen in the fact that, in her guise as vice-chair of the King’s Fund, she led a recent briefing for PCTs to cut back on commissioning of what she considered to be ‘low-value’ medical procedures. Sure enough, in June this year, NHS North London proposed cutting back on ‘low priority treatments’.

red pepper has the copyright to this article which they have kindly allowed Dr Grumble to reproduce. Thanks red pepper.

Grumble takes the pulpit

Dr Grumble's father was supposed to go into the church. That was what his mother had planned for him. But Grumble's father wanted to become a doctor and, although he did not go to school until he was 12, that is what he became. He was, without doubt, a much better doctor than he would have been a vicar. Grumble's uncle was a man of the cloth and so was his grandfather but it was Dr Grumble's grandmother who wrote all the sermons. In those days, behind every great man was a great woman. Dr Grumble's mother often told him he was like his granny. It was not intended as a compliment.

Dr Grumble himself never goes to church. He cannot remember the last time he heard a sermon. Probably it was decades ago. But Dr Grumble thinks we do need sermons. There is a need for our minds to be opened to thoughts that we may not get from elsewhere. This is especially true in the modern world where there are malign influences on our thinking generated by people interested only in making money.

It was something Dr Grumble heard on the radio this morning that generated this post. There was a retired army officer on the radio. He was talking about a charity to look after the interests of ex-soldiers. It was something he mentioned that struck Dr Grumble as very important. Essentially he said that problems occurred when soldiers moved from an organisation that values loyalty, dedication and commitment to a society focussed on acquisitive self-interest.

Unfortunately the NHS has moved from an organisation which valued loyalty, dedication and commitment towards one focussed entirely on acquisitive self interest. We used to have secretarial staff who felt that working for the NHS was worthwhile and that the pay was not the only thing that mattered. If Dr Grumble sees that something needs to be done he does it. Some of his younger colleagues, faced with the same problem, are beginning to ask where the money is. An organisation that was happy because it valued staff like Dr G is changing to an organisation that is sad because people only do what they are paid for.

The management consultants would say that all this is right and proper. The only way to get people to do what you want is to motivate them with pay. Every item of work must be paid for. People are expected to work for money and not love.

But it is not money that really motivates people. It is more often love. Dr Grumble has listened to soldiers on leave from Afghanistan. They talk of the horrors of returning to the front line. Doubtless they could get out of it somehow if they really wanted to. They could feign some illness or other. Or they could just refuse. Being locked up would be better than having one's limbs blown off. But they go back again and again. They do it out of a sense of loyalty, dedication, commitment and duty. They are not doing it for money they are doing it for love - the love of their comrades who need them there.

Take now your GP. Is he working for money or for love of you, his patient? Do you want him to treat your cholesterol because he thinks it is right for you? Or do you want him to treat your cholesterol because he gets paid to do it?

Suppose you need to see a surgeon? Do you want him to operate because you really need an operation or do you want him to operate because he gets a fat fee every time his wields his scalpel?

The answers are obvious. Of course your GP and your surgeon work for money. But they should also need a sense of loyalty to you, commitment to you and they have a duty to do what is right. We need a balance and things are going much too far in the wrong direction.

Dr Grumble could have enjoyed himself in the pulpit but he has had to content himself with blogging. Which, of course, is much better because the whole world can hear. But will they listen?

17 October 2010

Competing on tax rates

It's Sunday and on his way to work Dr Grumble listened to that religious programme on Radio 4. The BBC have original names for their programmes: it is called Sunday.

Dr Grumble likes Sunday. Like it or not religion determines quite a lot of what goes on in this world. Whether it is problems close to home in Northern Ireland or the breakdown of law and order in Iraq, often there appears to be some underlying religious dispute. And, most amazingly, in these two examples the conflicts are between people of essentially the same religion.

You might think that religions should favour tolerance but it seems that often they don't. Some might say that the Church of England is amongst the most tolerant of churches yet we find that there is conflict over gay priests and even women bishops. Any outsider aware of the teachings of Christ would be baffled. When it comes to loving ones neighbour as oneself the secular world leads the way. Which is odd.

But one cannot get away from the fact that the basic tenets of many religions are sound. And, although the secular world may be ahead of most religions in trying to achieve equality for women and gays, the malign influence of big business on our society has put the focus on making money, looking after oneself rather than others, and treating oneself to whatever pleasures life has to offer. As Grumble writes this he can almost hear some of his readers wondering whatever could be wrong with that.

But, you know, there is something wrong. We really should not be buying things we do not really need just because, as the advertising mantra goes, "you deserve it". There are more important things than these quick purchases of evanescent happiness. Religion used to teach us that.

Where has the lack of traditional religious teaching led us? It has led to a world where those of us earning a living are told we can no longer afford the taxes to pay for our youngsters to study at university. It has led to a world where those of us in employment can no longer afford pensions for the elderly. It has led to a world where if you want something you must pay for it yourself directly. Yet, when the developed world was a poorer place and the UK was struggling to recover from the Second World War, we could manage all of these things.

Of course they will tell you various reasons why doing things the way we did are no longer possible. There are more students than ever before. The elderly are living far too long. And, thanks to our government encouraging banking in preference to manufacturing, we have run out of money. But it is only partly true. What is the difference between students taking out loans and paying them back and the taxpayer subsidising their studies? One way those earning a good living pay for the next generation. The other way students get saddled with debt at the time when they are likely to be having children and wanting to buy a home. The taxpayer and the grown-up student are the same people separated only by a few decades. Which method of payment would you prefer? Would you like to start life with a debt or would you like to be taxed a bit more when you grow up? And who will benefit most from the new way of doing things? Will it be the student from the comprehensive or the old Etonian? The answer is all too clear.

So why are the ruling Etonians so insistent that we must do it this way? Grumble's suspicion is that it is about competition over tax rates. We are now in a global village. Many of the people society most needs can take jobs anywhere in the world. Even doctors, who have to jump through regulatory hoops to be allowed to practise abroad, move around. Businessmen and entrepreneurs can move even more freely. The ruling class see this as a problem and perhaps they are right.

Where is all this going to lead? Our students will suffer. Our researchers will be paralysed. Pensions will be delayed and slashed. The elderly will suffer and the defence of the realm will be put under threat. And we haven't yet heard what other horrors the ConDems have in store for us.

Could we do things differently? Could we tax more and avoid saddling our students with debt? Could we tax more and ensure the elderly are looked after? Could we tax more and ensure that the realm is adequately defended? Or do we have to compete on tax rates to retain the people we need? Because, if we do have to do things this way, there is the inevitability of progressively fewer public services as public spending is slashed to minimise taxation. Is that what we want? Is anybody offering an alternative way forward?

Is it too much to hope that people might want to come and work here despite high taxes because we have built a fair and just society?

13 October 2010

Andrew Marr should do his job

Instead of criticising bloggers Andrew Marr should be doing his job and criticising the government. Doesn't he realise how he and the rest of the media are being manipulated by the ruling class? That's why we need bloggers. We need bloggers to flag up when we are heading in the wrong direction or at least to point out that there are other ways in which things might be done. It's certainly true of the health service but you wouldn't know from the media. You have to rely on mavericks like the pimpled medical bloggers or the late Clare Rayner whose dying words she wanted to be:

Tell David Cameron that if he screws up my beloved NHS, I’ll come back and bloody haunt him.
Clare Rayner could see what was happening. And she cared. It is a shame people like Andrew Marr do not seem to grasp the enormity of what is happening, don't seem to care and fail to challenge politiicians over their misguided plans for the NHS.

Fortunately there are those who grasp what is happening and can muster cogent arguments. Karen Jennings is an example. You can listen to her interview on the Today programme this morning here.

07 October 2010

A conference on sustainability

Dr Grumble is not by nature an eco-warrior but if you look at the facts we just cannot go on as we are for much longer. If global warming doesn't get us, running out of materials eventually will. It may not affect Grumble but it will affect Grumble's children and his children's children.

Why it is that Grumble should have received an invitation to a conference on sustainability he has no idea. Perhaps he has been muddled with Mrs Grumble who shows more concern about such matters. Here is the letter Grumble has received:

Dear Dr Grumble

On behalf of the International Advisory Board, I would like to invite you to the:


Now that's nice. A conference to sort out the problems of sustainability. But where do you think it is being held? How many people will be flying there? And how far will they have to travel? Let's hope they have located it somewhere near the main centres of population. You can find out where it is being held here.

Will we never learn? If these people do not understand or care about the magnitude of the contribution of air travel to our energy problems there really is no hope for us.