Q. What’s happening to the NHS?
A: One of the most important changes, brought in by the Health and Social Care Act (2012) is that legal responsibility for the NHS has shifted. The Secretary of State for Health used to have a legal duty to ‘provide’ a comprehensive national health service, publicly funded and provided, and free for everyone at the point of use. Now he or she only has a duty to ‘promote’ such a service.
The number of Strategic Health Authorities (the bodies responsible for ensuring that local health systems work effectively) has shrunk dramatically – most have been abolished. Overall control for the NHS has passed to non-goverment bodies – ‘NHS England’ and ‘Monitor’ – that regulate Clinical Commissioning Groups (CCGs). Recently it emerged that some members of these bodies have strong links with private health firms (see for example http://www.dailymail.co.uk/news/article-2109907/NHS-fairness-tsar-urged-quit-doctors-conflict-following-799-000-payment-U-S-private-health-giant.html#ixzz1o8EIqvl8).
Primary Care Trusts (which used to be responsible for buying health care as well as providing some of it through community health services) have also been abolished. Instead 211 Clinical Commissioning Groups (CCGs) have been set up across England. They have responsibility for £65 billion of the £95 billion NHS commissioning budget (the money to procure health services).
Each CCG, composed primarily of GPs, will have been authorised by Monitor and has a fixed budget to buy services for all the patients in their area. NHS-run services now have to compete with private companies for NHS funding to provide these services. Because most GPs don’t have the time or skills to plan or buy healthcare services, much of this work will be taken over by little publicised Commissioning Support Units. These will not only manage things like human resources, pay roll issues, and patient involvement, but will also play an important role in service design and commissioning. Significantly, CSUs are due to be privatised by 2016, when they will compete amongst themselves to provide services to CCGs. (see http://drdavidwrigley.blogspot.co.uk/2013/02/roll-up-roll-up-nhs-sale-continues.html?m=0).
In addition, in a scheme worth £5 billion, NHS England has commissioned private companies to advise CCGs on aspects of their work including handling patient data, negotiating hospital contracts, and outsourcing services to the private sector. These companies will either compete or work in partnership with CSUs. A number of companies like Serco, Optum (part of UnitedHealth) and Assura, are expected to bid for the work, which would make them part of a network of preferred suppliers to be used by hospitals and GPs for buying services more quickly. Voluntary sector providers, local authorities and NHS organisations companies are also expected to compete for this work, many in partnership with private companies, such as Capita. This means that a market has now been created for the commissioning of health care services, with the risk of further fragmentation of health care, conflicts of interest and threats to patient confidentiality. And it will also give rise to new transaction costs estimated at 30p in every pound of every £1 spent. (see Gill Plimmer “Private groups invited to help NHS buy services.” Financial Times, Feb 25th 2014)
Q: Was the Health and Social Care Act 2012 necessary because the NHS was failing?
A: No. The NHS is certainly facing new challenges, such as how to fund care for an ageing population (although the burden of costs for caring for this age group have been exaggerated – see www.euro.who.int/data/assets/pdf_file/0004/64966/E92560.pdf). But the way the NHS has been restructured as a result of the HSC Act, and the way the NHS is being turned into a market will do nothing to address these challenges.
The NHS Support Federation highlights how accusations that the NHS overspends or under performs have been used to justify massive restructuring of the NHS. However evidence suggests that, although there is a need for improvement in some areas, compared with other healthcare systems in the world the NHS does very well in terms of safety, effectiveness, and health outcomes and manages to outperform other, more expensive systems, such as that of the USA. See http://www.nhscampaign.org/NHS-reforms/the-truth-about-our-nhs/the-unreported-nhs-1.html and www.commonwealthfund.org/Publications/Fund-Reports/2010/Jun/Mirror-Mirror-Update.aspx).
Public satisfaction with the NHS was, at least until recent cuts, at an all-time high. (www.bmj.com/content/342/bmj.d1836). This is not to say that the NHS is without problems. But there is no convincing explanation from those who have introduced recent ‘reforms’ and restructuring to show how these will bring real improvements. Instead, there is evidence to suggest that this type of massive organisational change will undo recent progress in patient care. www.guardian.co.uk/politics/2011/nov/23/health-bill-nhs-oecd-report
Q: Is the NHS being privatised?
A: Yes. The NHS is still publicly funded and treatment is still free at the point of use, but this does not contradict the fact that the NHS is being privatised. Increasingly, and particularly since the Health and Social Care Act (2012), providers of services will be private companies. Many GP practices are now run by companies like Virgin or Care UK. The diagnostic tests (e.g. blood tests) and imaging services (such as X-Rays, CT scans, ultrasound or mammography) that you might be offered as an NHS patient are increasingly provided by private companies. If you need surgery, it is likely that you will be referred to a private hospital, or if you need care at home this might come from one of the many private companies becoming involved in community care. And a high proportion of the ambulances undertaking transport or emergency care are now run by private companies – albeit carrying the NHS logo.
For maps showing the extent and growth of NHS privatisation in England, see http://www.nhsforsale.info/mapping-privatisation.html .
In addition, there are a growing number of NHS organisations that are behaving like private businesses (if not creating private companies) and treating private patients within the NHS. The ‘reforms’ mean that NHS Foundation Trusts are now allowed to earn up to 50% (minus £1) of their income from non-NHS sources. While non-NHS income will probably come from a variety of sources (such as car parking fees or work for charities or local authorities) and not just private patients, raising the cap on private income is likely to bring about a two-tier system of hospital care, with private patients having better access to NHS facilities, and NHS patients waiting longer for a hospital bed or treatment. (see http://nhsprivate.wordpress.com)
Q: Will the NHS still provide care for everyone free at the point of delivery??
A: Yes and no. It’s a matter of definitions. To begin within the NHS is not ‘free’ but is paid for from our taxes. Instead it is, free at the point of use (with the exception of some services such as dental treatment, prescriptions and eye tests for most people).
In 2011, Andrew Lansley, in charge of the getting the Health and Social Care Act through Parliament, assured us that “NHS care will continue to be free at the point of use” (see http://www.theguardian.com/society/2011/aug/29/nhs-bill-lansley-wash-hands) . However, at the same time, the Act ensured that, in future, the Secretary of State for Health will no longer be politically accountable to ‘secure and provide’ a comprehensive health service: by abolishing this duty and instead giving autonomy to CCGs, the Act removes the only control the voting public has over the way that the NHS is delivered.
Because each CCG has the autonomy to use their budget as they think best and to chose which services they won’t provide on the NHS, the care or treatment that patients can get on the NHS will vary from one area to another (the ‘post code lottery’). For the time being, much of the care that is NHS-funded will continue to be free. However, there is concern that GPs will be under pressure from their CCGs to keep to strict budgets and may therefore make decisions based on staying ‘in the black’ financially rather than on what a particular patient needs. For example, where a GP’s CCG budget is not enough to cover all of its patients’ needs, an increasing number of ‘non-urgent’ services, such as hip replacement, may well become rationed or no longer available on the NHS (see http://www.telegraph.co.uk/health/nhs/10499703/NHS-is-rationing-knee-hip-and-eye-operations-report-suggests.html ).
Already private companies and some NHS Foundation Trusts are offering ‘self funding’ or ‘self pay’ options for patients who are not eligible for treatment under the NHS (see, for example, http://nhsprivate.wordpress.com/executive-summary/private-patient-services/self-funded-nhs-patients/). There is also fear that personal health budgets, currently being offered to some groups of patients, may prove insufficient to cover an individual’s health care and lead to the public acceptance of a US-style insurance based health care system to cover unmet needs.
In addition, because of financial pressures, there are already suggestions that in the near future, in addition to what we are contributing through taxes, patients may be expected to pay:
- the ‘hotel costs’ of their hospital stay, as much as £75 per night (http://www.independent.co.uk/news/uk/politics/nhs-funding-crisis-hospitals-may-have-to-charge-patients-for-stays-9778502.html);
- a charge of between £10 and £25 for routine GP appointments (http://www.independent.co.uk/life-style/health-and-families/health-news/25-to-see-your-gp-majority-of-doctors-want-to-charge-patients-for-routine-appointments-8732498.html);
- a £10 per month ‘membership charge’ to fund local initiatives aimed at preventing ill-health (http://www.theguardian.com/society/2014/mar/31/nhs-users-pay-membership-charge).
Q: Don’t we need to have these ‘reforms’ of the NHS because money is short?
A: No. First, the Department of Health itself has said that the NHS is in robust financial health. According to some reports, the NHS made a surplus of £3bn in the year 2011/12, and returned £1bn of this to the Treasury. (The Department of Health disputes this but admits it underspent £1bn of funds earmarked for hospitals.) (http://www.guardian.co.uk/society/2012/oct/31/treasury-billion-pound-raid-nhs. )
Second, one of the biggest costs to the NHS is repaying the Private Finance Initiative (PFI) debt taken out by individual NHS Trusts. The Department of Health has agreed 118 PFIs in which private investors finance the building and maintenance of NHS infrastructure, such as new hospitals. The initial cost of these projects currently stands at £11.6. billion. Ultimately, because of the length of contracts, the inflated service charges and the scandalous rate of interest on the debt, the total repayments will be £79.1 billion. As a result, some NHS Trusts are facing bankruptcy. PFI debt is one of the main reasons why NHS Trusts are having to cut services, make staff redundant and sell off assets. However, the ‘reforms’ ushered in by the HSC Act do nothing to address the problem of PFI.
Third, the Government has said that its ‘reforms’ will save money. But besides the expense of setting up the new system (currently estimated as up to £1.6 billion), costs will increase because of the extra layers of management, the extra costs created by a healthcare system based on competition and legal challenges under competition law, and the huge sums – over £1bn – spent on redundancy packages. (see for example, http://www.telegraph.co.uk/news/9685171/NHS-manager-in-line-for-1-million-pay-out.html)
Some parts of the NHS are struggling financially. Yet other parts are in surplus. With a national, integrated service, there is scope to redistribute finances. But with the NHS broken into fragments, with each fragment in competition with the others, such redistribution is not possible.
Q: Is the government right when it says that, despite ‘efficiency savings’, frontline jobs and services will be protected?
A: No. The Department of Health has admitted that 7,060 clinical staff have been made redundant since the coalition government came to power pledging to protect the frontline of the NHS from cuts. NHS Information Centre figures show that the NHS workforce overall has fallen by almost 21,000 since the government was elected. There is also a complete freeze on staff recruitment in some areas. According to the British Medical Association’s chairman Mark Porter, staff redundancies are largely the the result of ‘the Nicholson Challenge’ – a £20bn savings drive that since 2011 has been putting ‘arbitrary Treasury spending limits’ above the needs of people’s health needs and population growth. (see http://www.theguardian.com/society/2013/dec/31/nhs-staff-laid-off-amid-savings-drive)
Q: What does it mean to have private businesses providing NHS services?
A: According to the government, opening up the NHS to ‘Any Qualified Provider’ (not just NHS providers) will give patients more choice over the health care they can get. But NHS health care provided by private businesses will be shaped by those companies’ legal requirement to make a profit. Compared to the old NHS (in which funding for services did not have to include a profit margin), when private businesses provide health care, shareholders’ dividends have to come out of the funding that service commissioners have allowed for patient care.
There are also fears that private healthcare providers will seek contracts for treating only those patients who create the most profit and the least risk for them (‘cherry picking’), leaving the NHS to cope with those patients deemed less profitable – such as those requiring more complex treatments. (For more information, see http://www.nhscampaign.org/NHS-reforms/cherry-picking.html)
In addition, the profit motive creates an incentive for over-treatment. It will be difficult for patients to know if the treatments they are being given are really necessary or are being offered because they create profit for the service provider. For example, in the US system, which is similar to the system that we seem to be moving towards, it has been estimated that over 10% of all health care expenditure in 2009 went on unnecessary treatment. www.economist.com/blogs/dailychart/2011/06/us-health-care-spending.
Q: Are these ‘reforms’ all about putting GPs and other clinicians in charge and, if so, would this be a good thing?
A: No. We were told that the restructured NHS would put those who knew most about the needs of patients (namely GPs, according to the government) in the driving seat. However, the claim that GPs will be in charge can be seen for what it is as it becomes clear that GP’s decisions about treatments for their patients (e.g that a patient needs to see a hospital consultant) may be examined and possibly overturned by Referral Management Centres. http://www.guardian.co.uk/society/2012/aug/31/nhs-rationing-risking-lives-doctors-leader GPs won’t have more clinical freedom but they and other members of Clinical Commissioning Groups (CCGs) will have new responsibilities for balancing budgets and deciding whose care can be paid for and whose cannot. This is less about putting clinicians in charge of shaping our health services than making them appear to be responsible for the rationing of healthcare that there are already signs of.
There is also a crisis in general practice. Many practices are failing to recruit new salaried GPs or locums. 97% of GPs responding to a survey in 2014 said that their practice was dealing with an ever-increasing and unsustainable workload, while 80% thought their practice would not exist in 10 years. (See https://pracmanhealth.files.wordpress.com/2014/08/are-you-in-despair-for-your-future-in-general-practice-final-report1.pdf). Unsurprisingly, with GPs struggling to manage their day-to-day clinical role, they have little capacity for taking on the work involved in the buying and monitoring of services. In fact, GPs hold only 25% of accountable roles in CCGs, while one in 10 of those who took on such a role when CCGs were first set up have now left (see Judith Welikala, ‘GPs hold only a quarter of accountable CCG roles’ Health Services Journal, 16.10.2014).
In addition, by September 2013, research found that one in five GPs sitting on a CCG board had a financial interest in the very providers supplying services to their own CCG. While there was little to suggest wrongdoing, it raised concerns that GPs’ influence on CCG boards was weakened, not least because they had to leave meetings when key decisions were being made, to avoid conflict of interest. (See http://www.pulsetoday.co.uk/commissioning/commissioning-topics/ccgs/revealed-one-in-five-gps-on-ccg-boards-has-financial-interest-in-a-current-provider/20004369.article#.VIq7-MJXnGQ).
At the same time, most GPs do not have the management experience or specialist knowledge to undertake the complex processes of commissioning. Increasingly this work is being taken over by non-clinicians, usually by Commissioning Support Units (CSUs), currently subsidised by the NHS but expected to become self-sufficient, profit-making (and largely unaccountable) businesses by 2016. Meanwhile, NHS England has additionally invited private companies to compete for work worth £5 billion advising CCGS on issues such as negotiating hospital contracts, handling patient data and – significantly – outsourcing work to the private sector, raising serious questions about conflicts of interest. [see G. Plimmer “Private groups invited to help NHS buy services.” Financial Times, February 25th, 2014.] Significantly, organisations within the NHS that have expertise in these areas are excluded from the invitation to tender.
Q. What are personal health budgets and are they a good thing?
A. Personal budgets (PBs) – in some ways a forerunner of personal health budgets – have been available for some time for those who need social care and support in order to live as independently as possible. PBs were introduced on the understanding that giving people more choice and control over the social care services they use would improve the quality of their life. Following an assessment, a service user is given a pot of money to buy the support that they think will help them most. This might be ‘meals on wheels’ or transport costs, for example, but, until now, it has excluded healthcare.
Now, the government is introducing the idea of a Personal Health Budget (PHB) or a set amount of money that is allocated to an individual to spend on healthcare. How much money a person is allocated will be based on an assessment and care plan drawn up with their ‘local NHS team’. A PHB can then be spent on anything that meets an individual’s health needs (other than GP or emergency services), as long as the health team approves it. For example, a PHB might be used for paying for personal care, for training personal assistants, or for equipment. At the moment, it’s planned that everyone with a long-term condition (such as severe arthritis or multiple sclerosis) who wants a PHB should have one by 2014. The Department of Health (DoH) also plans that, at some point in the future, anyone who feels they can get better healthcare by using a PHB will be able to ask for one.
The government says that PHBs will help people to become more involved in discussions and decisions about their healthcare. They suggest that the greater control and choice that PHBs allow will make patients feel more positive about the care and support they get. However, PHBs raise concerns about the responsibilities that individuals may have to take on (for example, if they have a carer, they will, as their employer, need to deal with tax, and insurance, manage poor staff, and organise sickness cover?). It is also unclear what effect PHBs will have for the long-term future of the NHS. For more information, see Personal Health Budgets in ‘The Big Ideas’ section of “Articles, Blogs etc”).
Q: Is the private sector be more efficient at providing NHS services?
A: No. There is no evidence that the private sector is more efficient than the NHS, and in any case it is hard to compare the two sectors because their aims differ. Publicly provided health services exist only to provide health care. In contrast, under company law, private companies have an overriding aim to generate profit, and this is the case whether they are in the healthcare industry or any other enterprise. While the individuals that work for private healthcare providers may be personally committed to the care of their patients, they are legally required to prioritise shareholder earnings over benefits to patients.
Q: Will more affluent people be able to rely on private health insurance to pay for any medical treatment they need?
A: No. Medical insurers only insure risk. This means that they require potential customers to tell them about pre-existing medical conditions before they offer cover, and if it is certain that a condition will require treatment, then that treatment won’t be covered by an insurance plan. In addition, conditions that are especially resource-intensive may not be covered (see http://www.euro.who.int/__data/assets/pdf_file/0007/98422/Private_Medical_Insurance_UK.pdf).
Q: Isn’t competition good for encouraging innovation and enterprise? Or for raising quality?
A: Competition may be good for markets in consumer goods, but competition does not raise quality or encourage innovation in health care. Caring for patients, particularly those with complex conditions, requires co-ordination and information sharing between providers. However, where providers are in competition with each other, legal restrictions on information-sharing and collaborative problem solving work against innovation and enterprise.
Q: The ‘reforms’ are already being implemented and some politicians have said it is too late to reverse what has been done. Isn’t the best thing just to keep going now?
A: The situation is not clear. Politicians behind the ‘reforms’ insist that it is too late to turn back. They are often the ones who have a personal, financial or career interest in the NHS being privatised. (see also http://www.mhpc.com/health/beyond-bill-will-health-and-social-care-act-ever-be-repealed/) There are also suggestions that, now that the NHS has been opened up to competition and is no longer entirely publicly provided, privatisation may be difficult to reverse: the interests of companies involved may be protected by European competition law. On the other hand, optimists believe it should be relatively easy to get rid of the requirement for CCGs to buy services from outside the NHS, and stop Monitor from enforcing competition.
What is clearer is that if the free trade agreement currently being negotiated between the EU and US is agreed without health services being excluded, or includes an Investor State Dispute Settlement mechanism (ISDS), it will be more or less impossible to reverse the privatisation of the NHS. (see the Transatlantic Trade and Investment Partnership for more details.)
While many NHS staff will find it difficult to face further changes to the way the NHS is run, a campaign for an NHS Reinstatement Bill (2015) has been launched to restore the NHS to an accountable public service without major organisational change.
updated February 2015
Acknowledgements: Many thanks to Ian Greener (http://t1ber1us.wordpress.com/2012/02/14/a-brief-faq-on-the-nhs-bill/) and Lucy Reynolds, Martin McKee, Clare Gerada, and David McCoy (http://abetternhs.wordpress.com/faq/#_ftn38) whose FAQs on the Health and Social Care Bill provided the basis for this section of the website.