The debate over the Health and Social Care Bill was the most divisive since tuition fees, and the most difficult for me as a Lib Dem since the coalition was formed. Labour’s bluster over some aspects of it was plain ridiculous. They honed their already ample skills in scare stories and plain lies, but here we are with the new law in place and the NHS survives. In fact, the only suggestion of a move away from an NHS being free at the point of use came from a Labour Council (Manchester, which suggested charging drunks for A&E treatment).
A lot of people are worried about “privatising” the NHS. But I wonder if they know what this actually means. There’s a difference between privatisation of the NHS and the imposition of charges for care, which I fear is lost on a lot of people. I suspect that a lot of people don’t know that in many cases their GP is operating as part of a private consortium, or that various aspects of their care is provided by a different part of the NHS to various other parts. The NHS is a fantastically complicated service made up of hundreds of autonomous Trusts. It’s not simple, and debates on NHS reform can’t be boiled down to simple slogans.
But there are some simple principles. One is a health service free at the point of use, which is a vital ideal which should remain. It’s the obvious cornerstone of the NHS. Who provides that care is of secondary importance to me, and so the idea of competition with the private sector (and possible privatisation) isn’t bad on paper either so long as the core “free at the point of use” concept remains. So long as quality standards are ensured, I don’t mind the private sector competing with publicly-funded NHS Trusts to provide care. Competition encourages innovation and efficiency, and drives up standards. If the private sector can deliver better, cheaper care, then fair play to them if they can make a profit at the same time. That should drive the NHS to become even better, and for me that’s the absolute ideal because although I don’t begrudge the private sector I prefer the public.
Private providers have been involved in the NHS for years. It’s nothing new, and it grew steadily under Labour. For Labour to equate privatisation with the death of the ideals of the NHS is disingenuous. The potential for further privatisation is bigger with the new law, and I don’t think this is a bad thing if done fairly.
However, the way that NHS decision making works means that this privatisation isn’t being done fairly, and this puts the public sector NHS providers at a particular disadvantage.
There are hundreds of different types of NHS services delivered in every local area in the country, from toenail cutting to brain surgery, and everything in between. NHS Trusts are paid to deliver them all by NHS Primary Care Trusts, who, in simple terms, “commission” (ie buy) services using money given to them by the government.
The NHS needs to find savings, and so obviously the PCTs are looking to get the best deal for their money. So they are putting various services out to tender, asking a range of providers to say what innovative ways of delivering that service they have, and how much it would cost. They judge what the range of potential providers say, and then appoint their favourite to receive the money to provide that service.
This is fine in theory, except that not all would-be providers start at the same place. NHS organisations have, on average, higher staff costs overheads than non-NHS organisations. They invest far more in training clinical staff than their competitors, and have old buildings to maintain like Victorian hospitals. They tend to have much stricter governance standards and, because they’re public bodies, more robust and costlier reporting and financial regimes to abide by. All of these costs make them automatically less competitive. I work in this field in the NHS. I see this every day.
Crucially, NHS organisations also have to provide all the services that local people need, regardless of whether or not there’s a tender fot them. So whereas a private sector health organisation can look at a service which is out to tender and decide not to bid because it’s not financially viable, the NHS Trust has no such luxury. It must provide the services, or patients die. Often this means cross-subsidising services, making NHS organisations even less competitive.
We’ve seen the unfairness in public v private competition in other sectors. It’s impossible for the Royal Mail to compete with private parcel delivery companies when it is bound by law to deliver mail to every address in the UK six days a week. BT can’t compete with private phone providers because the private providers don’t have to keep open loss-making phone boxes.
Now we’re seeing it in the NHS. The private sector can cherry-pick the best services, reducing the possibility for NHS cross-subsidies, and also reducing the chances of the NHS providers winning tenders. Some of these tenders are for services currently delivered by the NHS. If the tenders are won by a private sector organisation, it means staff leaving the NHS for that organisation. All those nurses, doctors, therapists, trained by the NHS, now working for a private organisation. Not fair.
“So what?” you might say? And, at first glance, whilst it’s a bit unfair to the NHS if it loses out to competition, it doesn’t seem that bad that cheaper, more innovative alternative providers can come in to deliver services. There’d be more choice for patients, and more innovation, right?
Actually, the idea of multiple providers in one area is a looming disaster for patients and a costly mess for commissioners.
Whereas now, regardless of what is wrong with a patient, the chances are that a single organisation or at least a collection of NHS organisations will deliver his or her care, this chance will become much less in future. Imagine an area where the local general hospital is run by an NHS Trust, but diabetes services are run by a private consortium of GPs, podiatry services by a private sector healthcare provider, and drug and alcohol services by a voluntary group. This is a perfectly feasible scenario which is being actively encouraged by the government.
A patient with diabetes and associated foot problems will require care from three separate organisations if he needs to go to hospital. If he has an associated alcohol problem (not uncommon) then that’s a fourth organisation. The governance, risk and cost issues around this are enormous, not to mention confusing for patients who, I wager, would rather have a single good provider than four. Staff won’t know each other, processes will differ, patients will fall through the gaps.
Having many hyper-local providers will lead to differing standards not only between areas but between services in different areas. I’m all for localism, so long as it’s done sensibly. I’m not sure that giving local PCTs (and their successor organisations) the power to put small services out to tender locally is sensible. The government’s “Any Qualified Provider” (AQP) plan, which would extend choice and competition even further, would be an even greater threat to local consistency and to the ability of any organisation to plan to meet local demand.
Competition is fine in theory, and actually commissioners could save longer-term problems by applying different judgement criteria to their tenders, such as the impact of fragmentation on an entire health economy, which would help to redress the imbalance. But in my experience this isn’t happening. Another fairer solution exists whereby entire local health budgets could be put out to tender, from primary care through to specialist hospital care. That would eliminate confusion, minimise duplication and cost, and allow for a choice in provider. But I suspect that the choice in that instance would be restricted to the single type of organisation which is expert at providing that full range of care already –the NHS Trust. Which begs the question as to why we’re bothering with choice at all.
The vagaries of competition policy don’t grab headlines like “Tories Kill NHS” does, but they are a worry whereas that cheap headline isn’t. Labour have done a disservice by not shining a light on the government’s policy in this area, but the Lib Dems have done a disservice in allowing the Tories to push through legislation which puts existing NHS providers at such a clear disadvantage.
We need to get competition in healthcare right if it’s to achieve the ideal of innovation and choice without the cost and confusion of hyper-localism.
Rick