Part 1 presented evidence that England is now rearranging one of the world’s most effective and most efficient health care systems into a copy of the world’s least financially efficient system. Part 2 documents the role of politicians and private vested interest in facilitating this transformation.
In 2010, Mark Britnell, NHS Director-General for Commissioning, 2007–2009, then Head of Healthcare, Europe & UK for Atos-owned management consultancy, KPMG summarised this change:
“In future, the NHS will be a state insurance provider not a state deliverer”,
Another insider also gave the game away:
“Mr Letwin met a gathering of construction industry representatives in his constituency of Dorset West on 14 May . During the meeting he urged the group of around six local businessmen to work together to win contracts for a new PFI hospital to be built in Dorchester.
Mr Letwin then astonished his audience, however, by saying that within five years of a Conservative election victory “the NHS will not exist anymore”…. the health service would instead be a “funding stream handing out money to pay people where they want to go for their healthcare”, according to a member of the audience.”
Dr Letwin is currently Minister of State for Policy, and has been in charge of overseeing the work of the Secretary of State for Health since the 2010 election and the completion of his NHS privatisation, which has three main elements:
- Privatisation of one-third of NHS hospitals with the rest to be shut down and sold off for redevelopment (see the QIPP plans by McKinsey), through three steps. First, carve out NHS hospitals into the Foundation Trust form invented for Spain’s NHS privatisation then load them with long-contract onerous debt (PFIs). Sudden contraction of hospital funding by manipulation of the commissioning process so that they can no longer break even will take them into insolvency. They can then be privatised under “the Special Administration” provisions created for this purpose by the Health Care Act 2009;
- Privatisation of GP practices by allowing the health insurance industry operating the “integrated care” HMO insurance system developed in the USA to take over their commissioning (payment) administration and part of their funding;
- Monetising every aspect of the NHS, offloading the UK’s blood plasma supplier to the original vampire capitalist, and selling our (re-identifiable) “confidential” medical data to various purchasers interested in access to personal information (insurers, employers, journalists, etc).
The decades-long set-up of the present swift changes to the NHS has involved clever design, impressive long term planning, and the creation of a supporting infrastructure, including think-tanks and controlled opposition organisations to protect the privatisation from public reaction. Public officials were silenced or co-opted by various means. This second part will review how this situation was brought about.
Why has so much effort gone into misrepresenting and vilifying the NHS?
Since 1948 there have been repeated pushes, fronted by “entrepreneurial” doctors and backed by the insurance industry, to remake the NHS and every other country’s health system after the US pattern. Most systems have been privatised already, or are on their way. This arrangement is lucrative for the insurance industry , but expensive, distressing and sometimes lethal for those needing medical care.
The current NHS budget exceeds £100 billion/year, of which £10 billion is spent on market administration alone. This huge prize has attracted predators from home and abroad. As in the US model 31% of budget goes towards administration costs, as compared with administration costs of around 5% in 1987, the completion of the Thatcher plan will see the sum spent on market administration within the NHS rise to a projected £26 billion a year (£100 billion x (31%-5%)).
As Canadian health economist Robert Evans noted in 1998’s “Going for Gold: The Redistributional Agenda Behind Market-Based Health-care Reforms”,
International experience over the last 40 years has demonstrated that greater reliance on the market is associated with inferior system performance – inequity, inefficiency, high cost and public dissatisfaction. The United States is the leading example. So why is this issue back again? Because market mechanisms yield distributional advantages for particular influential groups.
The principal beneficiaries of the NHS changes are the health insurers, the data mining industry, Big Pharma and the private healthcare industry. Also the construction industry, awaiting the NHS site redevelopment bonanza, and privatisation middlemen, who get paid for doing the deals whilst being in a position to influence whether they are done and at what price.
Thatcher’s blueprint for US-style healthcare under the NHS brand
In 1983 the Central Policy Review staff provoked a famously appalled reaction of the Conservative Cabinet to the suggestion of introducing NHS charges and involving private health insurance.
In the mid-1980s a coordinated, complex and radical plan was nevertheless designed and launched to achieve the privatisation of the NHS based on the hand-over of GP services to private insurance, combined with hospital outsourcing and sell-off. The plan was fronted by two International Privatisation Unit directors from NM Rothschild’s, both also serving Conservative MPs, then and now: John Redwood and Oliver Letwin.
This Thatcher privatisation plan was issued in summary in 1988, and elaborated by the Adam Smith Institute (see The Health of Nations and The Health Alternatives). These reports set out the use of clinical commissioning groups (“state-owned Health Maintenance Organisations”) in a transition to US-style “integrated care” run mainly by the private health insurance industry. James Meeks has outlined how Alain Enthoven, a military adviser from the Rand Corporation was consulted by our government on the future of the NHS(!). Enthoven recommended the Kaiser Permanente Health Management Organisation “integrated care” model from which CCGs are copied (synonyms: “accountable care organisation”, “health maintenance organisation”). The Kaiser Permanente model was famously exposed as a con on the populace to Richard Nixon prior to his launching it in 1971.
This is the very system now being introduced in the NHS, facilitated by a procession of complicit ministers, a hungry private sector, a captured and bullied public sector, and complicit media.
Commercial hijack of public policy
The NHS privatisation 1985-2020 necessitated a cross-party convergence not only of political agenda but also of political narrative, characterised by populist promises cloaking pro-business agendas. This helped sustain consistent cover-stories for the privatisation across the decades to completion. Although ostensibly a sequence of separate, opposed, political parties has cooperated on NHS privatisation, all share the neoliberal narrative central to the marketing of privatisation. The unrealistic assumptions and elisions of neoliberal economics conveniently hide the negative impacts of healthcare privatisation, for instance by obscuring the vulnerabilities set up by information asymmetry between buyer/patient and seller/doctor.
The Thatcher administration and its successor started implementing the plans before yielding to privatisation-friendly “New Labour”, whose fundamental purpose was to rally British socialists behind a takeover of the UK by US big business, and to keep the NHS transformation on track under a nanny-state rubric. New Labour’s godparent was the “British-American Project for the Successor Generation” (BAP), launched to advance the transatlantic corporate agenda in the mid-1980s by Nick Butler, a British Petroleum staffer and Fabian Society Treasurer. BAP reportedly groomed aspiring politicians in Blair’s New Labour clique (also several SDP members and UKIP’s founder) to advance US commercial interests, but is publicly presented as a transatlantic dining club for invited yuppies from politics and media.
A main contribution of BAP is the propaganda fountain needed to provide justifications convincing to socialists for introducing the various elements of privatisation. A UK equivalent of US astroturfer Demos, plus a clutch of other think-tanks and other mouthpieces were created for this. This use of multiple apparently unconnected mouthpieces is standard in astroturfing, designed to present the false appearance of general consensus. Demos UK was formed around a team of Thatcher advisers and Big Finance wheelers and dealers to provide the policy content. The original sixteen-person team also incorporated former civil servants willing to use their insider know-how to help cloak moves toward privatisation in faux-socialist jargon.
The privatisation-derived “New Public Management” approach was deployed through Demos and its ilk. NPM is a set of techniques not devoted to public sector management, as it pretends, but designed to coordinate with other privatisation interventions to accomplish the “rolling back of the state” to a minimally active (but always costlier, contrary to promises) state which does little beyond taxing the populace to replenish the gravy train and protect the gravy-noshers from desperate members of the public. In Orwellian fashion, the current iteration is named the “Big Society” plan.
Letwin noted a huge challenge to privatising the NHS in his 1988 book Privatising the World (p88-9):
“Contracting out, deregulation and trade sales are serious and important forms of privatisation, but…. they are defeated by scale: none of these methods can be used to transfer massive nationalised industries in one fell swoop into the private sector. The core activities of such large nationalised industries cannot be contracted out, because there are no contractors with a sufficient asset base to take on the work that they do; they cannot be edged out, by private sector competitors, through deregulation, because they are important employers and wealth creators in their own right, needing to be sustained and improved, not merely replaced; and they cannot be sold to an existing private sector company since there is typically no private sector company big enough to absorb them.”
Thus the NHS transformation has involved much preparation, splitting hospitals off into bite-sized, PFI-burdened Foundation Trusts, and forcing in a market tied to the EU competition enforcement regime that puts up the whole NHS budget for cherry-picking by outsourcers. The traditional ethics of the British civil service were sabotaged by NPM and the peculiar “Common Purpose” network, reportedly another British-American Project product, which has striven since the 1980s to replace defenders of traditional public services by CP members untroubled by privatisation.
Decision-making in Westminster reflects whose interests?
Beyond traditional means of influence such as the City of London’s supervision of UK lawmaking via their £53 million a year “Remembrancer” Office, British electoral democracy is hijacked by big business through the whip system, the “revolving door” between various cadres of government personnel and firms interested in influencing government decisions, and other links. There is also organised foreign influence such as Atlantic Bridge and the “British-American Project”. The balance between elected MPs and the professional Whitehall civil service of the traditional government system has been undermined by the interpolation of “Special Advisers” to MPs, many of them seconded from the private sector.
It has emerged that many MPs and Lords had personal commercial conflicts of interest: at minimum they should have recused themselves from voting: few did so. At worst have been some strikingly odd arrangements. Controls on inappropriate contributions were dodged through use of devious arrangements such as blind trusts in funding the main political parties.
All three main parties support UK entry into the “Transatlantic Trade and Investment Partnership” (TTIP) which will add the USA to the EU trade bloc and require the “harmonisation” (reduction) of European national regulatory protections and the opening of its public services to American operators. Former Labour front bench spokesman John Healey chairs the US/UK Chambers of Commerce-sponsored All-Party Parliamentary Group for the promotion of TTIP. Brussels’ TTIP preparations required “harmonisation” of health service rules across the EU toward the US model: hence the privatising 2012 Health and Social Care Bill.
False narratives to smuggle the privatisation through
The final phase of the NHS privatisation plan by the Conservative/Orange Booker Coalition took most of the public by surprise. We were alerted to the harm to patients that the concealed privatisation generated, for instance at mid-Staffs Hospital, but this was blamed on failings of the “old” NHS, rather than upon the new finance-driven approach.
The thirty-year relay of complicit political parties was deployed to conceal the changes by issuing alternative explanations for each step in the Thatcher plan: thus “the senseless reorganisations”. A swarm of privatisation think-tanks was launched to market them, such as REFORM, associated with Lord Norman Warner, whose former deputy director Nick Seddon is David Cameron’s Health Advisor. Another, 2020 Health, boasts both Coalition leads for Health in the House of Lords among its four patrons. Too many experts were persuaded by the explanations, unaware of their source and bias, naive enough to in treat the McKinsey-captured King’s Fund and Nuffield Trust as “independent” commentators on the NHS.
We were told that PFI was merely a presentational manoeuvre to evade public borrowing rules. Now we see that PFIs created the unpayable, locked-in drain on Foundation Trust funds that triggers hospital privatisation. We were told that the changes to GP contracts were flexibility-enhancing; but they rearranged family practice to ease takeover by the health insurance industry. We were assured that private sector involvement in the NHS would improve its “efficiency”: but public service marketisation blocks exemption from the general requirement to full privatisation under trade laws. Furthermore, it is of course self-enrichment at which companies are efficient, not public service!
Those worldly enough to decode this bogus marketing put NHS marketisation down to crony capitalism. Hardly any saw, beyond the gravy train, the elements of the Thatcher plan taking shape.
Who sets the NHS defence agenda?
Controlled opposition strategies have been copiously deployed to get the privatisation through despite public opposition. Vladimir Lenin explained that
“the best way to control the opposition is to lead it ourselves”
Privatisation guru Letwin applied Lenin’s lesson, noting the advantage to be gained by capture of key constituencies and leadership positions by privatisation trusties so as to defuse effective resistance to the loss of public services. These tactics have been used abundantly in “modernising the NHS, with some obvious privatisation insiders acting as senior “leaders” of the grassroots NHS defence, limiting its effectiveness and blocking attempts to address the corruption documented in respect of the PFI deals, for instance. This has resulted in much wasted effort, with activists too often finding themselves promoting the City’s “Purple Labour” agenda.
After 2015’s easy victory over three mistrusted main opponents, New Labour will be in a position to finish off what they started in 2000-2010 and pass the NHS over to the health insurance industry. They will partner once more with former Blair health adviser Simon Stevens, who presided over the creation of foundation trusts and their loading with PFI debt 2000-2005, and was then appointed by the UnitedHealth insurance corporation as its Executive Vice-President. Stevens now holds the most senior position in the NHS, placed for the final conversion to insurance-based healthcare. This could explained the declared intention of the Labour front bench to repeal the competition rules that block a monopoly takeover of the NHS, while keeping the CCG infrastructure created for that takeover.
While multiple strongholds of complicity with the privatisation are evident, the “Labour Finance and Industry Group” appears to be linked to the capture of leadership positions in activist groups. Such leaders tend to constrain activities; their City-approved agenda specifies left-aligned street marches (which assist the false “austerity narrative” for rolling back the welfare state), lobbying complicit politicians to back their cause, and canvassing for a Labour victory. Commercial boycotts and efforts to publicise and deter the fraudulently achieved deliberate destruction of the NHS we see before us are discouraged by the “official leaders” of the NHS defence: these threaten the privatisation.
This privatisation was capably designed and carefully executed, including the deployment of controlled opposition and controlled narrative mechanisms to try to prevent the public from derailing the NHS privatisation through democratic voting or direct protest.
What should we do?
Our main problem in stopping this destruction in England at present is the lack of public awareness of the privatisation, and understanding of the nature of the incoming trade and competition regimes and their hostility to free-of-charge public services.
On behalf of the corporate bandits, all three main political parties are currently misrepresenting this position in order to stop the NHS escaping destruction. Any true NHS advocate will be taking a position of renationalising the NHS fully. Only the Greens and the National Health Action Party are willing: every mainstream party whip is pro-privatisation.
Furthermore we need urgently to freeze the sales of NHS land and buildings through the property sales company created the Health and Social Care Act 2012. The Lewisham Hospital verdict limited the Secretary of State’s power to dispose of our hospitals, but passage of the Care Bill will restore his ability to sell, with vacant possession, any non-PFI hospital in England.
Beyond that? Iceland offers one of the best models for a 21st Century NHS: still wholly nationalised, thus cheaper than ours while better performing:
Perhaps Iceland can supply other models for us?
See here , and “Iceland’s Loud No” by Silla Sigurgeirsdottir and Robert Wade.