The NHS Consultants' Association

From The Guardian 27th June 2005

Today is the first day of the BMA's Annual Representatives Meeting. The agenda contains dozens of motions critical of the government's health policies, and one of the first topics up for debate will be the expanding role of the private sector in the NHS. The government will be watching the outcome closely. The Association of Surgeons of Great Britain and Ireland has already come out strongly against private sector involvement. If the BMA vote against it too, a majority of medical opinion will have taken a stand against the main health policy of Blair's third term.

The government has sought to present greater private sector involvement in the health service as a means of creating additional capacity, but already it is apparent that this is not the real agenda. The private sector will not support the NHS but compete with it, and NHS units and hospitals that cannot compete will close. Commercial treatment centres (ISTCs) will be introduced whether patients want them or not. Thus, when South Oxfordshire, Southampton and Greater Manchester Primary Care Trusts declined to place any contracts with the private sector, they were ordered to do so, even though they had no waiting lists in the specialties the private sector wanted to service. And when too few patients agreed to be treated at ISTCs in Trent and South Yorkshire, the PCT paid for 'care advisors' to persuade these patients to change their minds. Patient choice comes a poor second to government policy.

There is no attempt to conduct this competition on a level playing field. ISTCs are paid on average 40 per cent more than NHS providers. They are often guaranteed long-term contracts lasting 5 to 10 years, regardless of the number of cases they treat-and often the NHS is paying twice for the same services. They have no requirement to teach and train and they do not provide expensive emergency and high dependency care. And there is evidence that they are mopping up more than their share of 'easy' cases, leaving the difficult and more costly ones to the NHS. This has skewed the case-mix seen by the NHS and is already affecting training in some specialties. The private sector has no budget or time to supervise trainee surgeons. On the other hand, because fewer of the low-risk cases are being seen in NHS hospitals, young surgeons are no longer getting the training they need there either.

ISTCs have little responsibility for follow up, and many simply do not have the capacity or the personnel to cope with complications. In some areas, doubtless for very good reasons, they are refusing to carry out procedures on up to 65 per cent of the cases referred to them because they do not have the technological resources to provide appropriate care. Standards are also an issue. Alliance Medical, with a five-year contract to provide £95m worth of MRI scans, was unable to register with the Healthcare Commission and as a consequence is not subject to NHS standards. Lewisham University Hospital cancelled its referrals to their mobile MRI unit because of concerns about quality and it has since become apparent that some of the scans were being sent abroad to be read, without any apparent clinical governance safeguards in place. Meanwhile, as MPs from North Durham and Bolton have pointed out, NHS hospital scanners remain idle for lack of funding.

Radiology is not the only area to give rise to concerns. Mr Dinesh Verma, FRCS, the medical director of Netcare Ophthalmology Chain UK, resigned over patient safety concerns in mobile surgical treatment centres. It was revealed in the minutes of the clinical governance meeting that Netcare, which has a five-year contract to provide 40,000 operations, was failing to ensure proper continuity of care and on-call cover, or to provide access to outcome data. In one instance 22 surgeons were operating for short periods of time before flying back home to South Africa, leaving the NHS to deal with the problems that arose.

We are asked to believe that this is about additional capacity, but Labour's professed desire for additional capacity sits oddly with its record on NHS beds. Since taking office it has closed 12,000 of them-5 per cent of the 1997 total. And the policy of favouring ISTCs has meant that such closures are continuing at a dramatic pace all over the country as the private sector is given a growing share of NHS elective care. As Nigel Edwards, director of the NHS Confederation, has warned, "the removal of large amounts of elective work from existing hospitals can threaten the viability of the services that remain." John Denham, the former Labour health minister who resigned from the government over Iraq, has echoed his concerns, highlighting the risk of "perverse outcomes… if operations in private hospitals cost more than in NHS hospitals and the latter are closing their wards". In June this year, West Hertfordshire Hospitals NHS Trust with a £13 m deficit annouced it would be closing 90 beds; Leeds Teaching Hospitals Trust , overspent by £19.6 m, announced the closure of 200 beds; Kings Lynn and Wisbech NHS Trust announced ward closures and a freeze on vacant posts; and Southampton General Hospital with a deficit of x million announced plans to close a 26-bed orthopaedic ward; the brand new PFI hospital Queen Elizabeth Woolwich has 10 million deficit and is closing 30 beds: Lewisham Hospital with a 8.5 million deficit is also closing x beds as a result of the transfer of elective work to the private sector. As for the NHS treatment centres, they are to be franchised out to the private sector. In May, the flagship NHS treatment centres at Ravenscourt Oak in West London, and the South London Orthopaedic Centre in Epsom, having run into financial difficulties because of the advantages given to their private sector competitors, began inviting expressions of interest from the private sector.

Of course, the government has an answer to all NHS objectors to the private sector. Government expenditure on the NHS is projected to rise from 7.7 percent of GDP in 2003 to 9.2 percent in 2008, or an extra £20 billion a year by 2008 in real terms compared with 2004.

This largesse has allowed the government to portray itself as a friend of the NHS, to face down its critics, and to earn the support of many opinion formers, party members and MPs. The consequence is that there is less a debate than a stand off between two compelling yet seemingly paradoxical propositions: "the government is rebuilding the NHS through an unprecedented expansion in funding" vs "the government is destroying the NHS through an unprecedented process of marketisation, privatisation and commercialisation".

Against this background, it is significant, that the last time there was a comparable large increase in spending on the NHS, in 1991, the extra money went to pay for the costs of the internal market. Once again much of the new spending today is actually going to meet the costs involved in bringing in the private sector. Major additional transaction costs are involved, as they were in 1991. Money that should be spent on front line care will be diverted instead to making and monitoring hundreds of thousands of contracts, billing for every treatment (to achieve 'payment by results'), and paying for accounting, auditing, legal services and advertising - not to mention shareholders' profits.

The arrival of 'choice' will place a new burden on NHS coffers: the costs of marketing. The NHS Chief Executive Sir Nigel Crisp has said that foundation trusts 'should adopt the same marketing techniques as Tesco in their bids to win customers in the new choice-based NHS market'. A special marketing advice agency, called the Insight Unit, staffed from the advertising industry, has been set up in the Department of Health to give marketing advice, and plenty of companies are moving in to help trusts to 'profile' health 'consumers' and tailor health services accordingly. Hospitals will advertise for patients. The market place will have truly arrived.

In 1997 the Labour Party denounced PFI as creeping privatization. They asked senior doctors to sign a letter in which they described the internal market as a cancer eating away at the NHS. Doctors agreed and voted for them, and now they feel betrayed. They see hospitals closing wards and operating theatres due to lack of funds while billions of pounds are offered as inducements to the private sector. They see huge profits already going to PFI companies. They are not deceived by the rhetoric about patient choice and predict that patients may lose the one choice that is important - a good comprehensive local hospital. They believe that in a system where, as a CEO recently told his managers, every part of the business must generate a surplus, patients will come second to profits. They believe that when the dictates of the market replace the public service ethos patients will suffer, in particular the old, the frail and the chronically sick. They have voiced their concerns and the government has not listened. Doctors need to join with patients organizations to ensure that the relentless march down the road towards privatization is halted. If the government does not heed the warnings the cancer they correctly diagnosed 8 years ago will destroy the NHS.

(Copyright Guardian Newspapers Limited 2005 )