Blair Predicts "Difficult Year" for NHS

Workers' Daily Internet Edition: Article Index :

Blair Predicts "Difficult Year" for NHS

The NHS Needs a Budget Sufficient To Meet the Health Needs of the People

A Clean Bill for Health

Patients to Suffer in NHS Jobs Massacre

Monopoly Dictate of the Drug Companies

“Rationing” Health Care

Risk-Free Windfalls of PFI

Channelling Funds to the IT Monopolies

A hysteria is being created that he NHS is in deficit despite “record investment”. But who decides the overall health service budget, who decides the level of the hospital trusts’ income, where is the destination of this “record investment”? The government and Trust bosses are attempting to justify the unjustifiable, which is, in a word, to cut back on patient care in the name of creating “efficiencies”.

            Prime Minister Tony Blair, along with Health Secretary Patricia Hewitt, met yesterday with the chief executives of several Primary Care Trusts and health authorities at Downing Street to discuss the “financial crisis”. He said that the NHS faces a difficult and challenging year, as it is expected to report a £632 million “overspend”. This figure is meant to signal that the government will cut back on its responsibility for the health of its citizens even further. It follows on the heels of the so-called “pensions crisis” where the government is absolving itself of the responsibility for the well-being of its citizens in retirement.

            Commentators have observed that is puzzling as to why so many hospitals are cutting jobs and delaying non-emergency treatment because of cash shortages given that the government has been pumping record sums into the service. A shoal of red herrings has been unleashed about “inefficient” hospitals, “poorly spent” money, “financial risk” and the like. The culture of blame in the NHS is being stepped up even further. Health workers are under attack from the government not only as being “inefficient” but as “costing more than anticipated”. A report by the Reform think tank even predicted that government changes to the NHS could lead to a 10 percent cut in staff, amounting to 100,000 health workers being sacked, but would result in a “more efficient system”. But who is pointing the finger at the privatisation of the NHS, the channelling of funds into the pockets of the PFI entrepreneurs, the vast sums paid to the pharmaceutical companies? Allyson Pollock in her article below also points out that an estimated £12 billion a year is spent attempting to get the NHS to operate as a market.

            The author of the Reform report, Nick Bosanquet, Professor of Health Policy at Imperial College London, is arguing that a 10% reduction in the NHS workforce will be good for us, that foundation hospitals, “payment by results” (!) and patient “choice” would lead to a greater emphasis on “productivity” (!) and produce a service based on quality and more efficient workers. This is little more than a desperate effort to justify government policy. Patricia Hewitt said in response that she “accepted” that a reduced service could be more “productive”.

            It cannot be accepted by anyone that these “slash and burn” tactics are meant to be a solution to some “financial crisis”. Health care is a right, and the application of the national social product to health care must begin from this principle.

           

The deepening crisis that the government’s "investment with reform” programme is driving the NHS into is becoming ever more apparent with each passing day. Over the past few weeks alone, well over 4,000 job cuts have been announced in the NHS including 1,000 at North Staffordshire NHS Trust, 700 at County Durham and Darlington NHS Trust and 480 at the Royal Free Hospital in London. The Conservative Party is predicting that the number of these job cuts could rise to as many as 20,000. This reckless "job cull” which public sector union Unison has already called on the government to put an end to is allegedly intended to "deal with” the estimated £700 million "deficit" in the overall NHS budget of £87.2 billion for 2005-06. This deficit amounts to less than 1% of the budget deficit and is dwarfed by the £12 billion of costs that Professor Allyson Pollock [see below] argues have resulted from the introduction of the government’s "internal market” in the NHS.  

            The government’s policy of wrecking the NHS under the guise of "combating overspending” cannot be accepted. It is time that the working class and people demand an end to the secrecy over precisely how the Treasury arrives at the amount of money to be set aside for the NHS budget each year.  The workers must demand to take part in the budget setting process for the NHS, which must take as its starting point the country’s total social product and not just the revenue that the government has collected from taxes. The people as a whole must demand that sufficient resources be made available to the NHS for it to respond to the health needs of everyone, and that all private profiteering from health care be outlawed, and an investigation under the control of people’s representatives be launched into this scandal with a view to reclaiming the vast sums channelled through the health service into private hands.

by Allyson Pollock*, Guardian, March 24, 2006

March 21, 2006, was the 60th anniversary of the post-war Labour government's white paper, the National Health Service bill. What would a new white paper for the NHS today look like? We do not need to reinvent the wheel. The weaknesses of the original NHS were serious and they have been skilfully exploited in the drive to privatise it, but the basic design was good; it deserved to be improved, not surrendered to the ideologues of private enterprise.

            The most radical features of the 1946 model were the transfer of funding to general taxation; the freedom from fees or charges to patients; the proposed nationalisation of all hospitals and the proposal to locate all family practitioners and community health services in health centres.

            For the next 50 years the citizens of the UK enjoyed entitlements to health care as a right, and the NHS has endured despite the last 30 years of continuous sniping and assaults. It is true that not all that was proposed in the legislation that established it materialised – for example the plans for salaried GPs and for integrating GP and community services were never properly implemented – but the mechanisms for integration and fairness in resource allocation were crucial in protecting the NHS's founding principles. But critical weaknesses in the original structure remained – above all lack of capital investment, the retention of private practice, the independent practitioner status of GPs and dentists, the separation of responsibility for health and social care between central and local government, and weak public accountability. In the end these weaknesses would provide fertile soil for market predators, assisted over the last two decades by both Conservative and Labour government policy.

            Since 2000, with the launch of the NHS plan and the "concordat" with the private sector, government legislation has been intent upon tearing down the very structures and mechanisms that protected the NHS from market predators and on opening up clinical services to large for-profit corporations. Following the management reforms and outsourcing of non-clinical services to the private sector by the Thatcher and Major governments, came the "internal market", breaking up the NHS into hundreds of competing operating companies (culminating in the creation of the almost fully autonomous foundation trusts) and the transfer of political accountability from the secretary of state to a regulator, known as Monitor. The PFI, loading individual NHS hospitals with the costs of private sector borrowing, was followed by the uncoupling of resource allocation from a basis in the needs of local communities and a switch to "payment by results", involving the costing and payment for every individual patient treatment. The idea was that a market is more efficient and a market in clinical services needs price signals.

            Then there began the privatisation of the easy bits of clinical services: elective surgery, diagnostics and pathology, and the giving of new powers to foundation trusts to enter into joint ventures with companies like the US-based UnitedHealth, the Swedish-based Capio, the South African-based Netcare and our own BUPA, for the provision of clinical services.

            And so, across the country, the results are unfolding. Moving services out of the NHS into private hospitals and "treatment centres" destabilises the NHS hospitals' budgets, creating financial difficulties. Those with PFI schemes are stuck with unaffordable leases that are even more unaffordable now that the revenues they counted on having are being diverted to private providers. Indeed, still more revenue may go elsewhere as a result of "patient choice" – a kind of choice ("any hospital in the country") that surveys consistently show patients do not really want. So far from "price signals" becoming a mechanism for allocating resources, central government fiats are channelling funds to what are in effect private semi-monopolies, with ringfenced tax revenues and three to five year guaranteed patient numbers at well above-NHS rates. Many of the contracts are not being fulfilled, leaving the NHS paying twice for care.

            Instead of "price signals" we have bureaucratic decisions leading directly to the closure of NHS services, and in many cases to the closure of whole hospitals on which local communities have been able to rely for three generations. Across the country we are seeing the closure of services for the mentally ill, the chronically sick, those in need of palliative care services and rehabilitation; patients are now going without care and suffering on a scale that has not been seen since before the inception and creation of the NHS in 1948 – all for the sake of the alleged gains to be had from "market efficiency". Across the country the public is protesting, but the voices go unheard and unanswered in Westminster.

            As in 1946, a new white paper would set out the key principles: service on the basis of need and not ability to pay, for everyone wherever they live, that is, a comprehensive and universal service. It would pay close attention to funding and delivery. As the banker and then adviser to the Treasury, Derek Wanless found, after exhaustive examination – and as other European countries are also finding now – central taxation is the most efficient and cheapest, as well as the fairest, way to pay for health care. The idea of "top-up" fees for "superior" levels of service are transparent attempts to reintroduce unequal health care and should be anathema to us all. That pregnant women going into labour at the NHS Queen Charlotte's and Chelsea hospital in London should pay a top-up fee of £4,000 for NHS care to guarantee the presence of a named midwife and a superior birthing package will simply accelerate the cycle of deprivation that babies born to poor mothers will experience.

            As for the design of the delivery system, what is critical is the flow of resources through the system to ensure equity. Resource allocation must be on the basis of need and disbursed to geographic planning tiers with budgets for hospitals and community services, which require integrated service planning; the lines that Scotland and Wales are working towards would be good start. Integrated budgets and service integration are key. Without it, providers can cherry-pick profitable patients, treatments and services, to the neglect of others. Equity also needs good data and monitoring systems, on the basis of geographic populations and integrated service planning.

            Finally there needs to be strong public accountability, both at the population level and at the level of the individual patients. Valuable mechanisms that were in place have been eroded or even abolished (for example the community health councils). There is room for important creative action here.

            Market mechanisms must be abolished. These include purchaser-provider split, payment by results and practice-based commissioning. US studies show that transaction costs of operating a market in health care provision are in the order of 20-30% of annual income. These costs are the costs of operating a market. In England, the savings that would accrue would include the appallingly large portion of the NHS budget – estimated at not less than 15%, or some £12bn a year – that is currently spent simply on trying to operate the NHS as a market – on invoicing, accounting for and auditing the accounts of millions of individual patient treatments, on making and monitoring thousands of contracts, on management consultants and financial "rescue" teams from the private sector at £2,000+ per consultant per day, on marketing and advertising and on lawyers and communications, and so on and so on, as hundreds of competing NHS trusts each try to survive in the new marketplace.

            If this does not happen, the NHS in England is destined to become no more than a logo attached to a group of corporate chains, while all the old health inequalities and fears return.

* Allyson Pollock is the Head of the Centre for International Public Health Policy, newly established in the School of Health in Social Science at the University of Edinburgh. Prof Allyson Pollock and her colleagues focus on equity and distributive justice in health and health care.

by Caroline Colebrook, New Worker, 31/3/2006

The current financial crisis in the NHS has led to 4,000 job cuts in the last two weeks and far more to come in the near future. Some are putting expected job losses as high as 25,000 to resolve a total deficit that is approaching £1 billion.

             Healthcare workers at every level are furious with claims from Health Secretary Patricia Hewitt that these cuts will not affect patient care. They are also angry that Chancellor Gordon Brown did nothing in last week’s budget to rescue hospitals facing huge deficits.

             The Government is claiming that the crisis is the fault of the hospitals for mismanaging their budgets but up to 40 per cent of NHS trusts are in debt. The new foundation status means they must sink or swim on their allocated budget.

             But their budget plans have been sabotaged by huge PFI debts and by many routine operations – from which the hospitals expected to earn a steady income – being channelled into the more expensive private sector by the pro-privatisation dogmatism of the Blair government.

             Hewitt has told the NHS trusts that “they have taken on too much work” and over-performed in their efforts to meet Government targets on waiting lists.

             The Royal College of Nursing said that a preliminary analysis indicates that nurses on the basic grades are bearing the brunt of the cuts, with work being transferred to lower-paid healthcare assistants. Trusts are recruiting senior nurses to take on the work previously done by doctors.

             Job losses over the last fortnight include 1,000 at North Staffordshire, 300 at the Royal Cornwall, 300 are New Cross Hospital, Wolverhampton, 300 at Telford and Shrewsbury, 200 in Plymouth, 400 at NHS Direct, 480 at the Royal Free in north London and 190 at St Mary’s in Sidcup.

             Medical training is also under threat – with dire long-term consequences for the NHS. Postgraduate deaneries, which are responsible for the training of doctors, are facing large budget cuts. This will lead to fewer junior doctors and GPs being trained.

             Dr Jo Hilborne of the British Medical Association’s junior doctors’ committee said: “faced with cuts in previous years, deaneries have come close to denying doctors the opportunity to take courses to learn essential skills like advanced life-saving. The same thing now would ultimately hit patients, because poorly trained doctors will provide a lower quality of service.”

             When surgeon Greg Hopkinson of North Staffordshire Hospital heard that Hewitt had said the hospital was in trouble because it had taken on too much work – and that the cuts would not affect patient care, he said the entire hospital was consumed with anger.

             “We just sat there and asked ourselves if she’d ever been in a hospital,” he said, “if she had any idea of all the extra things we do, week in, week out, to keep the place running.

             “What kind of fantasy land if she living in is she imagines you can lose one seventh of your staff and for a hospital to remain on its feet.”

             He also said: “We have one of the highest rates of emergency admissions in the country, and yet somehow we are supposed to ‘absorb’ this kind of loss.

             “It’s not as if we’re luxuriating in beds and staff. In the morning I come in and look at a list of patients I’m operating on, and I have to hunt them down as they’re scattered around different wards because there are not enough beds to go round as it is.

             “If we cut staff that can only mean more bed closures, longer delays for care and, in the end, that does mean people dying on the waiting lists.

             “There’s not point in beating about the bush, people are going to suffer.”

Nine pharmaceutical executives are to be charged with “conspiracy to defraud” over an alleged pricing cartel that defrauded the NHS of millions of pounds. The Serious Fraud Office also named five companies in connection with the alleged scam, which involved inflating the price of commonly-prescribed antibiotics and the blood-thinning drug warfarin, which is used to treat stroke victims.

            The charges follow an investigation – Operation Hobein – into pricing and market sharing by suppliers of the drugs between 1996 and 2000.

            Summonses issued by Bow Street magistrates were served on five companies – Kent Pharmaceuticals Limited, Norton Healthcare Limited, Generics (UK) Limited; Ranbaxy (UK) Limited and Goldshield Group plc (formerly Goldshield Pharmaceuticals (Europe) Limited).

            The SFO has been investigating allegations of a drugs cartel set up to swindle the NHS for a number of years, according to reports. In April 2002, police raided six drug companies as part of a probe into an alleged multimillion-pound scam. The case was referred to the fraud office after initial inquiries carried out by the counter-fraud directorate of the Department of Health. The department has been suing over alleged agreements between companies to restrict the supply of warfarin and fix its price. Three companies have since offered multi-million pound, no-liability compensation deals, totalling around £30m, to the NHS over the issue. Civil claims were made in connection with the alleged price-fxing of drugs delivered to Britain's 28 strategic health authorities between 1996 and 2000.

            A wider, parallel investigation by the NHS has so far led to three lawsuits, claiming £150m from alleged cartel firms.

            According to a background report in the Guardian, sharp rise in the prices of dozens of drugs in the late 1990s caused panic among many NHS trusts. Generic drugs typically sell at a fifth of the price of equivalents made under patent. A committee of MPs investigated in 1998, but was told by industry leaders there had been no collusion on pricing. The committee criticised the NHS's pricing mechanism, which has since been changed, but found no cartel activity. Subsequent NHS and Serious Fraud Office investigations were helped by a whistleblower, said to have attended cartel meetings. Charges this week are the first attempts to use the offence of conspiracy to defraud to prosecute for price-fixing. Meanwhile, three of seven firms facing an NHS civil claim for £150m have settled, without admitting liability.

According to The Times, patients are being denied appointments with consultants in a systematic bid to ration care and “balance the books”. It cited leaked documents showing that, despite the government's “Patient Choice” agenda, barriers are being erected, limiting GPs' rights to refer people to consultants.

            The documents reveal plans by health trusts across London to establish panels to "monitor" how many patients are referred to hospital by doctors, it reports. Local trusts have been told they must cut their referral rates to those of the lowest 10% nationally – saving £25 million a year in the capital, it added. Consultant-to-consultant referrals are also being limited, denying many patients a second opinion. Further targeted are patients who use accident and emergency services for care that could be provided by GPs.

            The Times reports that emergency care staff in A and E departments will "redirect" up to 70% of patients back to GPs or walk-in centres. And payment will be withheld from hospitals who treat patients who should have been sent to GPs.

            The leaked paper, Pan London Demand Management Arrangements, is still in draft and was produced by the London Transition Team, led by senior NHS manager John Bacon.

Laing, a construction company heavily involved in PFI in the health care sector, has reported a 45 per cent increase in profits in 2005.

            The book value of the company’s PFI contracts rose from £65 million in 2000 to £330 million in 2006.

            Profits from the health sector are so good that Laing – and other companies in the same business – have started packaging projects and selling stakes in them to pension funds and insurers as “low-risk” income investments.

According to a Guardian report, the government's £6.2bn revamp of the NHS's computer systems hit another snag as US consulting firm Accenture, which is upgrading systems in the east and north east of England, blamed delays in the delivery of software by its British contractor, iSoft, for part of a $450m (£260m) loss on the project.

            In January, iSoft admitted that what it called "rescheduling" of the contract would mean NHS revenues this year would be £30m or about £55m less than expected. The company stressed that over the life of the contract it would still make several hundred million pounds, but the cash would just take a little longer than hoped to turn up.