Posts Tagged ‘Virgin’

Basu and Stuckler on the Privatisation of the NHS

July 22, 2016

Body Economic Pic

Earlier this week I put up a piece about The Body Economic: Why Austerity Kills, by the medical researchers David Stuckler and Sanjay Basu (New York: Basic Books 2013). The book shows, using examples of recessions from the Great Depression of the 20s and 30s, to contemporary Britain and Greece, and the massive privatisation of the Russian economy after the Fall of Communism, how recessions and the austerity programmes that Conservatives use to try and correct them, also cause health crises. Conversely, welfare states that support people, not only give their peoples good health, but also create prosperity.

The two authors are also very much aware that the British National Health Service is being privatised, and are very critical of this. They write

Today the NHS’s founding principles are being forgotten, as the conservative Tory government seeks to make the NHS more like the American profit-driven, market-based system. When the Tory government came to power, they revisited a pamphlet developed under the previous Tory government of John Major that called the NHS a “bureaucratic monster that cannot be tamed” and in need of “radical reform”. In 2004, Oliver Letwin, the pamphlet’s lead author, said the “NHS will not exist” within five years of a Tory election victory. Indeed, after the Tories came to power they proposed the Health and Social Care Act, which embodied the free-market principles of the radical pamphlet.

It was difficult for us to understand this decision. Overall in 2010, before the Tory government began dismantling the NHS, the UK spent less of its GDP on health (8 percent) than Germany (10.5 percent), France (11.2 percent) or the United States (19 percent). Ultimately, the Tories’ position was not based on evidence but ideology-the idea that markets, competition, and profits would always be better than government intervention.

A highly divisive public debate over the Health and Social Care Act ensued. Over staunch opposition from the Royal College of Nursing and almost all of the medical Royal Colleges (the UK equivalents of the American Medical Association), Parliament approved the Act in 2012. Thus began what many regard as a major move towards privatization of the NHS. Repeatedly, David Cameron promised the British public that the Act was not “privatising the NHS” and that he would “cut the deficit not the NHS.” The Liberal-Democratic leader Nick Clegg said, “There will be no privatisation.”

The Department of Health website even stated that “Health Ministers have said they will never privatise the NHS.” But the data tell a different story: increasingly, the government is transferring large swaths of healthcare provision to private contractors.

Private profiteers are replacing dedicated doctors. In October 2012, the government awarded 400 lucrative contracts for NHS services, worth a quarter billion pounds, in what was called “the biggest act of privatisation ever in the NHS.” Virgin, for example, won lucrative contracts to deliver reproductive care (no pun intended). But the result was not the efficiency of private enterprise, but what had already been seen in the US market model-profits at the expense of patients. One journalist found this to be the case at health clinics in Teesside, northeast England. After Virgin won contracts to take over the services, the clinic repeatedly missed targets for screening people for chlamydia. It was a simple task that the NHS fulfilled easily. The journalist found a memo that revealed “staff were asked to take home testing kits to use on friends and family to help make the numbers up.” In Oxford, patients complained about increasing wait times to see their doctors after Virgin took over a local practice. Virgin responded that the practice had been underperforming when it was taken over, and that “there are still improvements to be made but we’re pleased that progress so far was recognised and applauded by councillors.” And so began what continues to be a highly sophisticate public relations campaign.

The UK’s next step toward US-style market-based medicine is moving forward at the time of this writing. It encourages patients to spend out of their pockets for healthcare rather than use the government-funded NHS. The Tory government is extending pilot projects to offer those with chronic illnesses “personal budgets” so that they themselves can make choices about how to manage their care, with few safeguards against profit-seeking swindlers or predatory insurance companies despite a government evaluation that highlighted many problems with this approach.

Early evidence suggests the Health and Social Care Act may in fact be hazardous to the health of the citizens and residents of the United Kingdom. Just before the Coalition government came into power, the NHS had the highest patient approval ratings in its history, over 70 percent. Within two years, approval fell to 58 percent, the largest decline in three decades. There are already warning signs that the healthcare situation in Britain may come to resemble that in the US before Obama. Patients are being turned away from privately managed clinics, some of which simply close their doors after meeting a daily quota to fulfill their contractual obligations. And in the first year of reform, emergency room visits jumped to the highest in the decade- perhaps because more people are neglecting preventive care, like Diane. As the editor of the Lancet warned, “people will die.”

Whether the British people will fully accept this radical privatisation of their healthcare system remains unclear. But once market incentives take hold of a public system, it becomes difficult, if not impossible, to reverse course. In the UK, the recession-fueled combination of austerity-and-privatisation seems to be creeping into every dimension of the social protection system. But evidence of its harms should give us all pause. (pp. 105-7).

Part of the way the government is selling its privatisation of the NHS to the public is through artificial funding crises, in which hospitals develop massive budget deficits. They are then amalgamated with another hospital under a PFI scheme, or given over to a private healthcare company to manage. Points West, the local BBC news programme for the Bristol region, last night revealed that Southmead hospital was also in the red to the tune of £48 million. And I suspect a similar fate is being lined up for it here.

This privatisation must be stopped, and those who support it – the Conservatives, and the Blairites in New Labour, must be thrown out of office immediately. Only Jeremy Corbyn has said that he will reverse the NHS privatisation. It is up to us to support him, regardless of the smears from the media and the Right.

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Vote Leave’s Lies about the EU and the NHS Funding

June 9, 2016

I just caught a bit of Vote Leave’s referendum broadcast earlier this evening. It was broadcast around about 7 O’clock, just before the One Show. I didn’t see all of it, as I was busy here, putting up article, but just managed to catch a snippet where they claiming that the £350 million they claim we spend every week on Europe could be used to build hospitals in the NHS. They then claimed that the EU therefore was undermining the Health Service.

They then went on to scaremonger about immigration, raising the dire spectre of what might happen when Albania, Macedonia and Turkey all join the EU. There were large, scary arrows from those countries running across Europe to Britain, rather like the diagram of the Nazi advance in the titles of Dad’s Army. Which is actually what I’d much rather be watching, even in the recent film version, than the Brexiteers and their wretched propaganda. But they made, the claim, so let’s filk it.

Who Do You Think You Are Kidding, Mr Farage (and Johnson, Gove and Ms Patel)

First of all, the claim that Britain spends £350 million every week on Europe has been refuted again and again. Yes, we do spend that money, but we get over £100 million or so of it back. So in net terms, no, we certainly don’t spend that amount. See Mike’s articles about this over at Vox Political.

Then there’s that guff about funding the EU diverting money away from the NHS. This is rubbish. What is undermining the NHS is the stealth privatisation carried out by Andrew Lansley’s Health and Social Care bill of 2012. This has opened up the NHS to further privatisation by private health care firms, such as Virgin, which under law must be given contracts. This has frequently gone against the wishes of the patients using the NHS. The reforms included forcing local authorities responsible for some NHS provision to contract out at least 3 medical services from a list of eight sent down by the government. Furthermore, the remaining state-owned and managed sectors of the NHS are being deliberately starved of funds as part of the campaign to privatise the whole shebang. See Jacky Davis’ and Raymond Tallis’ NHS SOS, particularly the chapters ‘1. Breaking the Public Trust’, by John Lister; ‘2. Ready for Market’, by Steward Player, and ‘7. From Cradle to Grave’, by Allyson M. Pollock and David Price.

It’s a lie that the NHS is being starved of funding due to Europe. It’s being starved of funding due to Lansley and the rest of the Conservative party and their purple counterparts in UKIP. If Vote Leave were serious about the funding crisis in the NHS, then Johnson, Gove, Patel and the other xenophobes and Little Englanders would have voted against Lansley’s bill. They didn’t. They supported it.

‘Bloody Foreigners, Comin’ Over ‘Ere!’

Let’s deal with the threat of people from Turkey, Albania and Macedonia all flooding over here in the next few years. This too, is overblown and pretty much a lie. Turkey would like to join the EU, but the chances of it actually qualifying to do so are presently remote. Critics have suggested that it’ll only reach the point where it has developed sufficiently to be admitted in about 30 years’ time. So the Turks are hardly likely to come flooding up from Anatolia in the next few years.

As for Albania and Macedonia, I’m sceptical about the numbers that will come from those nations due to the open borders policies. Mike’s posted up pieces reminding us all how millions of Romanians and Bulgarians were supposed to be ready to inundate Britain, and in the event only a small number arrived. Mark Steel, the left-wing activist and comedian, in one of his newspaper columns, republished in Colin Firth and Anthony Arnove’s The People Speak: Democracy Is Not a Spectator Sport, attacked the inflated claims of the threat of uncontrolled immigration by pointing out that many of the Poles, who were supposed to flood in, had in fact gone back to Poland. So while it’s certainly possible that a vast number of Albanians and Macedonians may want to come to Britain, it’s also possible that few in fact will.

And in any case, why would they all want to come to Britain? The impression given by the Brexit video tonight was that Britain was a tiny island under siege, and that the first country that the Turks, Albanians and Macedonians would all head for was Britain. But why? Britain’s social security system and welfare state – or what remains of them – are much less generous than some parts of the rest of Europe. Britain does have more cache, apparently, than some of the other nations, but Britain is by no means the sole destination for migrants, as we’ve seen.

Vote Leave’s video tonight was little more than right-wing scaremongering. What I saw was mostly speculation, and when it wasn’t speculation, as on the piece on the NHS, it was a distortion compounded with lies. There are problems with Europe and immigration, but leaving the EU isn’t the solution. Indeed, voting for Johnson, Gove, Patel, Farage and their cronies will only make the situation worse. They want to privatise the NHS, just as they want to remove the EU human rights legislation and social charter that protects British workers. The anti-EU campaign is part of this programme to grind down and deprive working people of their hard-won rights at work and for state support in sickness and unemployment. Don’t be taken in.

Privatised Railways and the Failure of Popular Capitalism

March 23, 2015

One of the Ed Miliband’s election promises has been to renationalise parts of the rail network. As recent polls found, most of the population of this country would like to see the utilities returned to public ownership, including the railways. They’ve been marred with poor service and overcharging since they were first privatised by John Major back in the early 1990s. To make matters worse, the railways are receiving far more in government subsidies than they were when they were nationalised. The British public are paying through the nose for a worse service.

Anthony Sampson discusses the massive failure of the privatised railways in his book, Who Runs This Place: The Anatomy of Britain in the 21st Century. The book examines and describes how Britain has become less democratic, with politicians, government officials and industrialists more remote and unaccountable. He devotes nearly two pages to the privatisation of the railways, pp. 289-90, in which he states

The most disastrous of the privatisations was the last, British Rail, which was also the most visible to the public. Margaret Thatcher had shrewdly resisted selling it off, but John Major weakly gave in to pressure from bankers, and went ahead in 1996. The selling off of the vast railway network was devised by the Treasury to maximise the short-term gains, and was masterminded by Sir Steven Robson. The stations and the 23,000 miles of track would be run by a national company, Railtrack, while separate operating companies would buy and run the trains in different regions. The old railway managers were soon demoted: the chairman of Railtrack was Sir Robert Horton, who had just ben fired as chief executive of the oil company BP; and he chose as chief executive a finance director, Gerald Corbett, who had risen through Dixons shops, Redland cement, and Grand Metropolitan drinks. the track maintenance was delegated to private contractors.

By 2001 the whole railway system was in serious danger. Corbett was out of his field and Horton was in ill-health; he was succeeded by Sir Philip Beck, chairman (like his father) of the Mowlem construction company, whose experience came from the controversial Docklands Light Railway. The lack of effective accountability became tragically clear after a succession of train crashes, which revealed scandalous lack of supervision. The crash at Potters Bar was blamed on careless maintenance by the subcontractors Jarvis, whose chief operating officer blamed sabotage, of which no evidence emerged; he was then promoted to chief executive. The trail of accountability ended up in the sidings of a secretive private company.

The government at last intervened, withdrew support from Railtrack, thereby bankrupting it, and created a new non-profit company, Network Rail, chaired by Ian McAllister, the former chairman of Ford in Britain, with an engineer John Armitt as chief executive. The environment secretary Stephen Byers, who had responsibility for transport, resigned, and was succeeded by the Scot Alistair Darling, and Darling extended the government’s role in July 2004 when he abolished the independent Strategic Rail Authority – which had been created only four years earlier – and took over most of its functions.

The operating companies, which had been only granted short franchises, were more interested in quick profits than long-term planning, and most boards had little experience of railways. South West Trains was acquired by the bus company Stagecoach, built up by the combative Scots entrepreneur Brian Souter and his sister Ann Gloag, which the Monopolies Commission had earlier accused of behaviour that was ‘predatory, deplorable and against the public interest’. They made a new fortune by selling rolling-stock, and bought the magnificent Beaufort Castle in Scotland; but they soon made rash investments in America which brought down their shares and limited their investment in British trains. West Coast Trains was bought by Virgin, run by Sir Richard Branson whose background was in airlines and pop music. South Eastern and South Central trains were run by Vivendi, the French conglomerate which soon hopelessly overextended its empire, from water to Hollywood. The Great North-Eastern (GNER) was owned by the Bermuda-based company Sea Containers, controlled by its American founder-president Jim Sherwood.

The privatising of the network had undermined much of the traditional British pride in railways. The separate regional traditions and hierarchies of engine-drivers, signalmen and stationmasters were swept aside by the cuts and constraints imposed by accountants and financial directors at headquarters. Many of the cutbacks were necessary if the companies were to be made viable; but the upheavals in the operating companies and the collapse of Railtrack had left few people who understood how railways really worked.

The privatisation of the railways failed because the franchises were short-term, and the firms that bought them thus only interested in making a quick buck. They had no knowledge or experience of running railways, and refused to accept responsibility for the disasters and horrendous crashes that occurred. Margaret Thatcher herself recognised that privatising them would be a bad idea, but it clearly wasn’t bad enough to dissuade Britain’s bankers.

As a result, Blair’s government had to extend government power over the privatised railways, even though New Labour was enthusiastically pro-privatisation. Ed Miliband’s planned re-nationalisation of parts of the rail network will thus undoubtedly be an improvement.

From 2011: Private Eye on NHS Privatisation

January 22, 2015

In their issue for 16th -29th September 2011, Private Eye published a block of articles on the government’s privatisation of the NHS. These discussed Circle Health’s attempts to take over the management of Hinchingbrooke Hospital Huntingdon; the proposed putting out to private contract of Suffolk’s 27 community health services, the role of Dr Stephen Dunne in the privatisation process, and negotiations between the NHS and the Helios German private health care group. The articles ran:

NHS PLC
East Extract

Three months after Circle Health, the self-proclaimed “John-Lewis-style health partnership”, was supposed to take over the management of Hinchingbrooke Hospital in Huntingdon, the Treasury has still not given its stamp of approval.

Despite NHS East of England’s desperation to privatise the 330-bed hospital, government beancounters seem unimpressed by Circle’s bosses (£35m last year) and debts (a massive £82m, against a notional £95m share value of the company). And mandarins may not be happy to sanction a business plan that in the current climate looks increasingly potty. Unless Circle begins to run the 330-bed Cambridgeshire hospital at a surplus, it will receive no payment under the franchise agreement. Yet Circle’s plan hinges on “growing the business” and treating more patients – at a time when local health commissioners are desperate to reduce the use of hospital beds and cut the amount paid for each part of any treatment.

Also, time is running out. While Circle’s leading figure, Ali Parsa, is keen to promote the fact that doctors, nurse and clinicians have a stake in the company, most of the money and decision-making power rests in the 50.1 percent share owned by Circle Holdings. And with the company admitting to problems from angry creditors and uncertainty about the finances even of its showpiece 28-bed boutique hospital in Bath, the entire project would already have sunk without the injection of private equity capital from some of the most powerful and rapacious hedge funds on the planet. Between them they have invested around £100m in Circle but seen no return. How much longer will they stick around as Circle struggles to generate any return?

Also on NHS East of England’s “for sale” list are four “lots” comprising all 27 of Suffolk’s community health services.

Not surprisingly, five private companies have made the shortlist of nine bidders for one or all of the £43m, three-year contracts to provide services from paediatrics, nursing and therapy to adult community hospitals, nurses, physiotherapists and intervention teams.

Assura Medical, bought up last year by Richard Branson’s Virgin group, is interested in bidding for just one “lot”, while services giant Serco hopes to bag all four. Privatised social care company Essex Cares Limited and two equipment providers, Nottingham Rehab Supplies and Medequip Assistive Technology, are in the running for single lots. None of these companies has any base in Suffolk, and none has provided NHS community services before – although Essex Cares does provide social care for the county council.

Although many health authorities have put their community services out to tender since they were required to have separate “commissioning” and “providing”, hardly any private sector companies have secured contracts. Of the four NHS trusts in the running, only one, the West Suffolk Hospital Trust, is local.

But as it’s the East of England, the smart money suggests bosses will lean on the NHS providers to pull out. After all, at Hinchingbrooke the withdrawal of bids from neighbouring foundation trusts left the field clear for Circle, whose experience in running a huge general hospital was limited to a costly 28-bed showpiece.

Leading the privatisation mission in NHS East of England is director of strategy Dr Stephen Dunn, whose outstanding achievements for the private sector were recognised in this year’s Healthinvestor Awards, in a glitzy presentation at London’s Grosvenor House hotel.

Dunn, whose £125,000-plus salary is paid by the NHS, won the award for “Outstanding Contribution by an individual” for his tireless efforts to push through the privatisation of management at Hinchingbrooke Hospital. And also won the magazine’s “Deal of the Year” award for setting up the ground-breaking franchise, which the judges said “has huge implications for both the public and private sectors”.

Given that the “Deal of the Year” has not yet got Treasury approval, some of his NHS management colleagues were less complimentary. But now that the private sector values his services so highly, no doubt there will always be a place for him in the new NHS plc.

Helios to Pay

Discussions between the NHS and German health group Helios on “how international hospital provider groups may help to tackle the performance improvement of English hospitals” present and alarming prospect.

Helios is part of the Fresenius Group, which was fined £82m in the US in May for having “recklessly disregarded federal law when billing the [US taxpayer-funded] Medicare program for home dialysis supplies and equipment”. Although the over-billing itself occurred just before Fresenius bought the companies involved, Fresenius itself was accused in relation to this case.

Nor was it the German group’s first brush with American law enforcers. Ten years before, Fresenius settled the largest ever healthcare fraud case with civil and criminal penalties approaching $500m after making fraudulent claims from Medicare and paying kickbacks to get work referred its way. Then, in 2005, another arm of Fresenius admitted its role in a pharmaceuticals cartel in South Africa, designed to “manipulate prices for pharmaceutical and hospital products”.

There’s nothing to suggest Fresenius’ record is much worse than those of other private health companies with hungry investors to satisfy, but what hope does it offer for its role in “performance improvement”?

Together, these articles present a dire picture of the privatisation of the NHS. Circle Health only last week walked away from its contract to manage hospitals. Those in its care had appallingly low standards of care, and the company itself complained that it could not make a profit. This article shows that Treasury officials were aware from the start that the company would have problems managing a large, proper hospital, rather than its 28-bed showpiece.

The article about the privatisation of NHS services in Suffolk also shows that private firms simply aren’t as competitive as the NHS. The privatisation is ideologically led, and pushed through by ministers. The privatisation is also being pushed by managers like Stephen Dunn, who no doubt fancy themselves as highly paid companies executives.

As for Helios, they join Unum insurance as a private company convicted of massive fraud in America.

Overall, these articles present a picture that NHS privatisation is being forced through by greedy, incompetent companies, offering extremely poor service and ripping off the taxpayer in the process. Precisely the kind of companies Cameron and Osborne want running the NHS as they privatise it.