Posts Tagged ‘‘Health Reform: Public Success – Private Failure’’

Privatisation Has Increased NHS Expenditure, Not Reduced It

January 1, 2020

I found this little statistic about the increase in NHS expenditure due to Thatcher’s NHS reforms, including privatisation, in Daniel Drache’s and Terry Sullivan’s Health Reform: Public Success, Private Failure:

Offsetting the quantitative picture of change presented thus far are data on expenditures. Privatisation has accompanied not a decrease but an increase in NHS spending to well over 6 per cent of GDP, and yet efficiencies and improvements have occurred in the public sector. (p. 130).

It’s not hard to see why. Private healthcare is much more inefficient compared to state provision. About ten per cent of the expenditure in private health companies is on management costs. This is usually ten per cent, but can rise in some firms to 40. And some of this is because, apart from paying the medical professionals, who actually do the work, these firms must also provide a profit for their shareholders.

The continuing privatisation of the NHS set in motion by Thatcher isn’t making the NHS more efficient. It’s making it less so, for the profit of the private healthcare companies like BUPA, Circle, Virgin Health all trying to cash in on it.

If we want to create a genuinely efficient NHS that provides universal healthcare free at the point of use, it has to be renationalised. And that means a left-wing Labour government.

So for everyone’s health, kick out Boris and the Tories!

 

Private Medicine and the Demand for the Privatisation of State Medical Care

December 17, 2019

The book Health Reform: Public Success – Private Failure also makes it clear where the demands for NHS and the privatisation of other systems of state healthcare come from: the private medical sector, including the insurance industry. The book states

Arguments for private markets in health care are not only persistent, and resistant to both analysis and evidence, but they also come forward from the same groups of people. Again over the decades, and across countries, one finds the same arguments for private organization and funding coming from spokesmen for private practitioners’ associations – physicians, dentists, pharmacists – as well as from private insurance companies and drug manufacturers. In addition they tend to come, as noted above, from representatives of ‘business’ and, more recently, from ‘ideological entrepreneurs’ that support themselves and their organisations by championing the interests of the wealthy, cheerleading for the private marketplace. Indeed, they are simply taking advantage of the general ideological climate, currently more favourable to re-open old issues. (p. 28).

‘Ideological entrepreneurs’ seems to be another term for right-wing thinktanks and astroturf pressure groups.

The book states that in contrast with hospital workers, who want to see cheap or free medical treatment provided to the poorest, the private sector is interested in maximising its income.

Hospital workers, whose patients/clients tend to be very ill and/or have very limited resources – the unhealthy and unwealthy – are generally very supportive of public payment systems. Their opportunities in a private marketplace would be quite limited. But they do not support hospital ‘downsizing’ or containment more generally; the ideal policy would be more money from public sources, to hire more highly trained and better paid staff….

The loud voices for privatisation, by contrast, come from those who believe that they could do better, in the form of increased sales of or higher prices for their products and services, in a more entrepreneurial environment. It is not clear how many, if any, of these would support a truly private system, with no direct or indirect contribution of public funds. The economic mayhem among providers would be truly awesome. Instead what seems to be contemplated is a continuation of public support on a large scale, but without limits on private fee setting or delivery, or private insurance – rather like the United States, in fact, before more widespread ‘managed care’. 

This sounds very much like the thinking behind the privatisation of NHS services – private healthcare providers supported by the state – and Trump’s intention to open up the NHS to American private healthcare firms and remove the NHS’ price fixing mechanism keeping drug prices as low as possible.

NHS privatisation is all about private profit, not public care or the provision of health services at minimal cost. Don’t fall for the rhetoric of the Tories or Blairites in Labour. Get rid of it, and them.

Private Clinics Are Not Better Than Those Run by the State

December 17, 2019

Here’s another vital little snippet on the failure of private healthcare to give adequate provision to society generally from the book Health Reform: Public Success – Private Failure, by Daniel Drache and Terry Sullivan, eds. This discusses the Canadian experiment in expanding healthcare provision by including private clinics. It states

Advocates for private clinics argue that they enhance access and supplement an over-strained public system. The evidence for such claims is mixed to dubious; they tend to reduce to ‘more is always better’. If government cannot or will not pay for more, then private individuals must. Our concern here, however, is to emphasize that whatever the effects of ‘more’ on the health of Canadians, all the privatization initiatives and supporting arguments involve a transfer of income, through higher prices as well as higher volumes of care, from payers to providers. But even if there were no restrictions on extra billing or private facilities, there are likely to be limits on ‘what the market will bear’ in private charges, particularly in the presence of a free public system. Denigrating or inhibiting access to that system can assist in recruiting private patients, but could also trigger a political backlash if people begin to see ‘their system’ as being sabotaged. (p. 38).

Blair wanted to expand the NHS through the construction of health centres or polyclinics, which would be privately run. And the Tories are running down the NHS in order to privatise services at one level and encourage more people to go private at another. Hence Boris Johnson’s 2002 speech lamenting that 200,000 people had given up their private health insurance because Gordon Brown had ended tax exemption for it, in which he angrily denounced the ‘monolithic’ NHS and called for its abolition.

But the next sentence in that paragraph states very clearly that for private clinics to function properly, it has to be accompanied by private health insurance.

For really significant increases in total system costs and incomes, it is probably necessary to introduce private health insurance…. out of pocket charges provide something for private insurers to cover, and that coverage permits increase in the level of such charges. Private medicine and private insurance are symbiotic. (My emphasis).

Don’t be misled by the Tories or Blairites. The inclusion of the private sector in NHS provision will lead to its total privatisation and an insurance-based system like the US.

Don’t allow it.

NAFTA, and Boris Johnson’s Trade Agreement with Trump Are Threats to State Healthcare

December 16, 2019

One of the chapters in the book Health Reform: Public Success – Private Failure, edited by Daniel Drache and Terry Sullivan, is by Barry Appleton, ‘International agreements and National health Plans: NAFTA’. NAFTA  is the North American Free Trade Agreement, a free trade zone that was set up in the 1990s which included America, Mexico and Canada. Appleton states that it is too early to fully appreciate the impact of the agreement, but states that ‘The NAFTA affects health care in two ways. first, acts as a general limitation on the ways that governments can deal with public policy. Second, the agreement acts to lock in market liberalisation in the health sector’. (p. 87). 

The treaty includes clauses like the following that prevent governments from nationalising the property of other nations:

No Party may directly or indirectly nationalize or expropriate an investment of an investor of another Party in its territory or take a measure tantamount to nationalization or expropriation of such an investment (‘expropriation’), except:

(a) for a public purpose;

(b) on a non-discriminatory basis;

(c) in accordance with due process of law and Article 1105 (1); and

(d) on payment of compensation in accordance with paragraphs 2 through 6. 

Now the renationalisation of hospitals and doctors’ surgeries taken over by the Americans would, I believe, come under ‘public purpose’, and so be permitted, but there would be objections to this. I remember at the time when the Americans were setting the system up there was real concern amongst the left that if the Americans were allowed to buy up British industries, including parts of the NHS under a NAFTA-trade deal, we would find it impossible to renationalise them.

This should still be a major concern with Boris Johnson’s negotiations with Trump, in which, despite Boris’ denials, the NHS is very much on the table. In fact Johnson, Liam Fox and Daniel Hannam set up the Institute for Free Trade in 2017 in order to push for a deal with the Americans, in which private American companies would be allowed to run British hospitals.

If this goes through, we may find it impossible under international law to get them, and other important businesses, back.

Don’t let Boris privatise the NHS.

 

NHS Privatisation Means More Expensive Bureaucracy

December 16, 2019

The Tory election victory on Thursday prompted me to buy a book, Health Reform: Public Success – Private Failure, edited by Daniel Drache and Terry Sullivan, which I had seen in one of the secondhand bookshops in Cheltenham. The book was published in 1999, and examines the inclusion of the private sector in the healthcare systems of America, the UK, Canada, Australia and elsewhere. It isn’t necessarily against this inclusion, but does treat it critically. And one of the points it makes is that private healthcare companies are as wastefully bureaucratic as the state planning system of the former Soviet Union. And because they’re run for a profit, they’re keen to inflate prices, not keep them down. the book states

But private insurance, as the American experience shows, brings in a whole new group of very powerful income claimants – a major expansion in the Z term. Large-scale private coverage is a horrendously expensive way to pay for healthcare. A huge private bureaucracy must be established to assess risks, set premiums, design complex benefit schedules, and review and pay (or refuse) claims. A corresponding financial apparatus is then required in hospitals, nursing homes, and private practices to deal with this system, in a form of ‘administrative arms race’.

Far from trying to minimize the cost of administrative overload, and match premiums as closely as possible to benefit payments, private insurers refer to the rate of benefit payment as the ‘loss ratio’ and try to maximize the difference between premium revenue and payout. That difference is the income of the insurance sector.

Yet, as we know from the experience of the single-payer system in Canada, all this financial paper-pushing turns out to be as unnecessary and wasteful as the old Soviet planning apparatus. These are not functions that anyone needs to perform once a decision has been made to cover the whole population. In the United States, bureaucratic waste by and in response to the private insurance industry now adds more than a hundred billion dollars per year, over 10 per cent, to total health care costs.

(pp.38-9).

Yet the Tories push privatisation, including that of the NHS, as a way of reducing costs and increasing efficiency, while the opposite is true. And I know true-blue Tories, who are shocked to hear that it does. They simply accept the neoliberal doctrine that private industry is someone how more efficient and cost-effect than state provision, even when it manifestly isn’t.

This point is made by Jacky Davis and Raymond Tallis in their polemic against NHS privatisation, NHS – SOS, but despite the newspaper headlines about the crisis in the NHS, I don’t think it’s properly appreciated. And the Tories are determined to privatise the NHS, which is why I bought the book, so I could put up more information about the effects of the piecemeal privatisation of the NHS on this blog.

NHS privatisation and the inclusion of private healthcare means greater costs and worse healthcare for those who can’t afford it. Which means the poor, the disabled, and the old. This is what Tory health policy means.