McKinsey and The National Health Service - Part Two

Before looking at how parts of the McKinsey report have been directly incorporated into Andrew Lansley’s new Health Reform Bill 2011, despite claim to the contrary by the coalition government’s leadership, it is perhaps worth noting a few pertinent details regarding those individuals and companies that are responsible for building the new health and social care bill.

The main architect of the new reforms, the Health Secretary, Andrew Lansley, was a civil servant before entering politics and apart from his father having been employed in a pathology laboratory, Lansley has no more direct experience of healthcare services, other than that which is gained from reading reports, being briefed by lobbyists and civil servants, or through meeting doctors, nurses and patients during one of his many obligatory public visits. Bearing in mind that Lansley only entered Parliament in 1997 and had gained only limited experience through his membership of the Common’s Health Select Committee, before being appointed as Shadow Health Secretary by Conservative Leader, Michael Howard, it seems quite astonishing that anyone would consider him capable of reorganising the entire English NHS system, given his obvious lack of first-hand experience on the subject. However, for the most part his knowledge of the health service seems to be based almost entirely on his own personal political ideology, information gleaned from ministerial briefings, proposals put forward by management consultants such as McKinsey, suggestions put forward by health provider lobby groups and the ideas contained within the book “The Future of the NHS”, a publication edited by Dr Michelle Tempest, which contains the thoughts and opinions of 44 of the leading experts in healthcare, politics and policy making, including Andrew Lansley (although whether or not you would regard him as an “expert” on any of these subjects is highly questionable).

It is also interesting to note that the editor of this particular tome, Dr Michelle Tempest, is not only a former prospective Conservative parliamentary candidate for North West Durham, but is also a dually qualified physician and lawyer, having studied both subjects at Cambridge. She subsequently taught in both of these specialist fields and has even practiced medicine at Addenbrooke’s Hospital, where she is reported to have worked in various departments, including general medicine, the A & E department, infectious diseases and vascular surgery, although nowadays she is said to be specialising in psychiatry at the same hospital. Born in 1976, the Wikipedia blurb on Dr Tempest states that she has not only contributed papers and specialist advice to several public think tanks, but also more importantly to Andrew Lansley, the Health Secretary. Tempest edited the book “The Future of the NHS” following on from her own extensive first hand experience within the organisation; and in particular to show her admiration for the staff and to improve the service for her patients.

Despite the fact that Dr Tempest is clearly an astonishing young woman, to have achieved such a vast amount of experience in her first 36 years of life, one cannot help but be slightly concerned that having spent so many years studying and teaching both medicine and law and then practicing clinical psychiatry, as well as being involved with politics, just how much frontline health experience did she gain during her time at Addenbrooke’s and how exactly does that qualify her to be regarded as any sort of expert in the field, or indeed someone whose opinion is worth more than anyone else’s? From what little you can glean from the advertising blurb relating to the book “The Future of the NHS”, many of its 44 contributors, including the likes of Patricia Hewitt (Labour Health Secretary), Andrew Lansley (Conservative Health Secretary), Professor Steve Webb (Lib Dem Health Spokesman), Derek Draper (Former Political Adviser), Andrew Haldenby (Director of Reform), Daniel Hannan (Euro MEP), Daniel Barnett (Employment Lawyer) and Clare Rayner ( President of the Patients Association) cover a multitude of health related subjects now and in the future. Significantly though, the overriding subject of the book seems to be the problems caused by the politicisation of the NHS by the 3 main political parties and the perceived lack of local accountability caused in no small part by the actions and attitudes of the various Strategic Health Authorities and Primary Care Trusts.

It is perhaps somewhat ironic that there is now an overarching level of criticism regarding these often huge semi-autonomous health bodies being levelled by the very same sorts of politicians, GP’s, Nurses, Doctors, etc. who played their own parts in creating the various SHA’s and PCT’s to begin with, but now find them unsuitable for purpose. It is little surprise either that with so many political and medical luminaries pointing the finger of blame at the 150 plus Strategic Health Authorities and Primary Care Trust’s that the argument has swung towards the idea of more local accountability, by putting healthcare into the hands of locally run health boards and clinical commissioning groups, after all, you can’t get more accountable than that can you? In that particular respect, Lansley and his coalition colleagues might be thought to be following the argument made by the supposedly informed medical directors, GP’s, surgeons and nurses, who almost to a man believe that the current healthcare system is too remote, burdensome and too slow to work effectively. The argument then follows that these bureaucratic monoliths should be replaced by much greater numbers of smaller, more accountable, much more reactive and therefore far more efficient healthcare boards and groups, driven by the people who know the healthcare system inside and out, the doctors, nurses, GP’s and even local councillors. After all, the argument continues, these people, the care-givers and community leaders, are far better placed to know what local communities want and need in terms of health provision; and as members of the local community will be much easier to contact, to bring to account and in the case of councillors, to vote out of office if they ignore the wishes of local people.

Unfortunately, the coalition government’s strategy is not so much driven by the idea of localism, as it is about central government’s withdrawal from the wider public sector, where smaller government naturally equates to less public spending; and the supposed benefits of local control, is simply a political bonus, not a specific objective. By tapping into what was already a significant level of dissatisfaction felt towards the various Strategic Health Authorities and Primary Care Trust’s, the coalition has tried to bundle those misgivings, with a demand for more local accountability, along with the necessary spending cuts that the country’s economic situation demands, creating a package of health and social care reforms that purport to be all things to all men. Added into this mix, is the Conservative Party’s increasingly failed argument that the country gets more bang for its buck, when the buck in question happens to come from private investors, an unconvincing argument given the country’s previous experience with manufacturing industries generally, our railway network, communications industry and our utility providers.

The old adage of being careful what you ask for might be especially appropriate for all of those different healthcare professionals who were quick to condemn the inefficiencies and inadequacies of the various SHA’s and PCT’s, but now find themselves facing the prospect of having to do the same job better themselves. Even the much talked about McKinsey report avoided suggesting that these large scale administrative bodies should be abolished, possibly because they saw any alternative as being an even more bureaucratic and wasteful system that the one it might hope to replace. That is not to say however, that management consultants such as McKinsey and KPMG, etc. are unwelcoming of the newly proposed Clinical Commissioning Groups, as clearly such clinical led creations will by their very nature require the sorts of administrative, accountancy and managerial services that McKinsey, its clients and its competitors will be more than willing to provide at a price.

It is perhaps unfair to paint McKinsey as the main villain of the piece, with regard to the coalition’s proposed reform of the English National Health Service; even though there is no doubt that they are more than happy to exploit whatever commercial opportunities might arise from the wholesale reorganisation of the system. What is clear, is that rather than the reforms being the result of some radical thinking exercise by Andrew Lansley and his political advisers, to create a better, more efficient national health service, it is purely an amalgam of other people’s ideas that have been roughly stitched together to create an administrative monster that undoubtedly contains a high degree of risk, both to the public purse, but more importantly to people’s lives. As a result, for these reforms to actually work, it will not only require a great deal of good luck, but a certain amount of faith that those being tasked with identifying and implementing the changes; the GP’s, Nurses, Commissioning Groups, Politicians and even consultants like McKinsey are behaving as honest brokers in the process, which given past experiences does not exactly bode well for the future.

When GP’s renegotiated their working contracts with the Labour government in 2006, the outcome very much worked in the medic’s favour, with more money and less working hours being the result, which tends to make a lie of the myth that GP’s put their patient’s health and wellbeing before everything else. Remembering that these are the same people that agreed to work around 44 hours per week for an average salary of around £100,000 per year, one has to wonder why they’re likely to take on even more work, for no additional financial reward? The likelihood is that they’re not and given that we already have large numbers of GP’s significantly reducing their clinical hours in order to concentrate on establishing the proposed Clinical Commissioning Groups (a management job); and employing salaried locums to fill in at their surgeries, the taxpayer is essentially being forced to pay two people to do one job. In the McKinsey report it was proposed that GP’s should be undertaking more clinical work, not less, so how exactly are the current arrangements going to help reduce spending in the NHS?

Even though McKinsey prides itself on its ethical standards and is one of the world’s foremost management consultancies, boasting numerous multi-nationals and even national governments amongst its clientele that is not to say that they are infallible, or their proposals right on every occasion. Critics of the company have accused them of producing sometimes highly questionable surveys, reports and outcomes, almost as if they have deliberately managed the results in order to confirm an already pre-determined answer. Because of their international reputation for client confidentiality and the company’s often rigid reluctance to address, or even acknowledge such public criticisms, it is sometimes only when their recommended strategies fail to deliver that their corporate failures finally come to light, as in high profile cases such as Enron and Swissair. The company has also been accused of blatant partisanship in some of its dealings and reporting, with a lack of objectivity being cited in the company’s working relationships with and for certain clients. This is a common complaint made with regard to McKinsey’s continuing involvement in the coalition’s proposed reforms of the English NHS, with critics accusing the company of having an obvious conflict of interest, by not only strategising changes to the health service, but also standing to benefit directly from such changes should they be adopted by the Conservative led government, which they have been.

Whether or not any actual commercial impropriety has taken place between McKinsey executives and members of the coalition government or their supporters is often not as important as the actual perception or public belief that some sort of secret deals have taken place. The fact that members of the government, including William Hague, is a former employee of McKinsey’s and that a number of the management consultant’s other clients are involved with the provision of private healthcare; and therefore might benefit from McKinsey’s working relationship with the coalition, simply helps to strengthen the belief that the company is not acting as an honest broker in this matter, whether they are or not. However, McKinsey’s position and its reputation has not been helped by reports that confidential emails between company executives, members of the coalition government and a number of private healthcare providers, who might benefit directly from the proposed reforms, appear to indicate that all three parties are in fact colluding with one another over the running of between 10-20 NHS hospitals, making McKinsey’s stated position as an independent arbiter highly debatable.

Any concerns about partisanship or allegations of inappropriate corporate behaviour might perhaps be understandable when one considers some of the close working relationships that active members of the British political establishment have previously enjoyed with companies like McKinsey. William Hague aside, a former McKinsey employee, David Barnett is reported to be actively involved with the new English health regulatory body, Monitor, which is tasked with authorising and monitoring NHS Foundation Trusts and identifying any potential problems with these new bodies. According to a number of sources, while he was employed by McKinsey, Mr Barnett was said to have been personally involved in persuading the British government to purchase one of McKinsey’s clients IT systems for use within the NHS. This now infamous system was said to have cost billions to develop, but ultimately proved to be little more than a hugely expensive “white elephant”, which many doubted would ever have been suitable to purpose in the first place, let alone at the price that it would have cost the British taxpayer, had the contract not been eventually cancelled. Extraordinarily, this same McKinsey client, despite its failure to deliver on this first unworkable system, is now thought to be in line to receive further valuable IT contracts from the coalition government, at an estimated cost of around £1 billion, as part of the government’s purported money saving health reforms.

It is precisely because of McKinsey’s existing business links to some of the world’s leading and most acquisitive private service providers that the company generates a great deal of suspicion within the UK, a country where public sector services are commonly provided by the state. However, with England now governed once again by a traditional Conservative party, albeit one supported by the increasingly irrelevant Liberal Democrats, large parts of the public sector are now being put at risk of being sold off to private enterprise. Given that some within the Conservative Party have described the NHS as a “millstone” around the country’s neck, it should come as little surprise that there are some within the party who would quite happily see that particular millstone smashed into a million pieces, or at least sold off to private companies that can use it to grind out a profit from the English electorate. None of us should be under any illusions that the current coalition’s small governance policy will undoubtedly result in all parts of the public sector being sold off, with health, education and social care just being the first of many. For the Conservative coalition the result of a successful “fire-sale” would be obvious, in that direct taxes could be cut for high-end earners (their traditional supporters), whilst indirect taxes, such as private health, education, road tax, fuel duty, etc could be levied on those less able to afford them, in order that the wealthy could keep more of their incomes.

Despite any assurances offered by the likes of Cameron, Clegg and Lansley, it is clear that elements of the McKinsey report are already being implemented, even before the coalition’s Health and Social Care Reform Bill 2011 has reached the statute books. Although some sources suggest that McKinsey proposed cuts of between 6-7% across the board in order to achieve its recommended savings within the NHS, reductions of around 10-15% are far more likely. If anyone was in any doubt about the level of cuts being demanded by central government, it is worth noting that an estimated 31,000 NHS posts were cut in a single year, which does not include the tens of thousands of other public sector workers who were made redundant as part of the coalition’s wider spending cuts. Those lost NHS jobs included hospital consultants, registrars, nurses and healthcare assistants who were in the frontline of patient care, but who were surplus to requirements as hospital, after hospital is forced to live within their much reduced budgets, despite what the likes of David Cameron, Nick Clegg or Andrew Lansley might say in public. Even those who have been charged with safeguarding public health have not been spared, with an estimated 1500 medical specialists, including dentists, dieticians, psychologists, psychiatrists and nutritionists all being made redundant at the Department of Health’s offices in London. Other large-scale redundancies are reported to have taken place at the Heart of England NHS Trust (1600), Manchester (1400), Staffordshire (1300), Devon and Exeter (1100), East Lancashire (1000), Salford (750), Morecambe Bay (700), County Durham (700), Wirral (680), Cornwall (650), London (635) and so the list goes on, implying that a possible figure of around 140,000 job losses, as suggested by McKinsey’s own report (if 10% is taken as the likely target) is not so fanciful after all and is a great deal higher than the 50,000 job losses estimated by some commentators.

Elsewhere in the capital there is some evidence of individual hospital trust’s having to make significant cutbacks in services in order to achieve the reduced levels of spending ordered by the Department of Health. According to the Guardian newspaper, in Islington, vital speech therapy services are being cut, whilst child and adolescent mental health services are being shut down completely. Mental charities in Kent are having to close due to lack of funding, while elsewhere in the country hundreds of routine operations and procedures are being postponed or cancelled indefinitely, with hernia, cataract, back, hip and knee operations being cut back; and certain non-emergency dental procedures being refused by local health providers. In some places financial resources are thought to be so limited that even procedures that the McKinsey report recommended retaining are being cut back, with anti-smoking, anti-obesity and pro-breastfeeding programmes being withdrawn or severely reduced by local health authorities, despite the fact that they’re proven to have a highly beneficial effect in helping to reduce the occurrence of later health problems, such as cancer, emphysema, diabetes and immune system deficiencies.

It has also been reported that a large number of PCT’s are either stopping or significantly reducing the numbers of IVF treatments being offered to childless couples; and in some areas of the country local health authorities are withdrawing funding from specialist dementia care centres, despite the fact that they have a proven record of successfully maintaining those suffering from a variety of degenerative diseases, who may now have to rely on conventional healthcare services to help manage their conditions, which will undoubtedly reflect an additional and unexpected cost to the local health authorities anyway. Perhaps less radically, but just as importantly, a number of these same health authorities are beginning to ration, if not stop providing entirely, psychotherapy and psychiatric services, even for those patients suffering from a range of debilitating diseases, including MS, arthritis and cystic fibrosis, as well as alcohol and drug addiction, all of which in their turn have a highly negative effect on the social life of the country; and often prevents sufferers from taking up or holding onto full-time employment, thereby denying the government of much needed tax receipts.

It has been estimated that to date the reforms being enacted by the coalition, even before the measures have been brought into law, has cost the British taxpayer something in the order of £3-4 billion, which is between 15-25% of the total amount of the money that the new round of health spending cuts was designed to save in the first place. Bearing in mind that we’re only two years into the process and there’s likely to be at least another 2 or 3 years of similar expenditure, before the reforms are finally completed, then it is entirely possible that the final bill for implementing the “money saving” programme will actually amount to £6-8 billion, which obviously begs the question, what is, was, the point of the exercise in the first place? That said however, it has been alleged that even before the bill has received royal assent, or been put on the statute books, members of the coalition have already been rushing through several different healthcare contracts that have been agreed with a number of private providers, not on the basis of best value-for-money, but purely on the basis of cost. What is more worrying though, is that it has been suggested that many of these same contracts have been awarded to privately owned, entirely profit driven companies whose owners have very close personal or political relationships with the Department of Health and/or the Conservative Party itself.

Whatever happens in the coming months and years within the English NHS, it is clear that rather than being a positive and well thought out reorganisation of the country’s healthcare services, the coalition’s planned reforms are, at best, an ideological experiment that just might address many of the problems that have affected the NHS over the past few decades, but could just as easily destroy the system completely, leaving it more fractured and inefficient than it ever was before, only time will tell. However, the undue haste of the coalition, not only to push through these largely undisclosed reforms, but also to allocate and appoint outside personnel and providers, often at the cheapest price possible and in the most questionable circumstances, must at least be investigated by an independent body, to ensure that no impropriety has taken place, on the part of individual ministers, the coalition, outside management consultants, or indeed the numerous private providers who have suddenly found themselves on the cusp of gaining access to what should always be a fully accountable, publicly funded English National Health Service.

McKinsey and The National Health Service - Part One

Much has been written about the American management consultants, McKinsey’s, who were asked to undertake a review of the English NHS by the last Labour government in 2008-9 and to prepare a report identifying possible efficiencies (savings) that might be found to help reduce the service’s ever growing financial cost to the English Exchequer. The report produced in March 2009, despite being commissioned by the Labour Party, was largely rejected, not least because of the substantial efficiencies that the report’s authors believed could be found, simply by making cuts of between 15-22% across the board and basically by getting the NHS to work more effectively, “more bang for each buck” if you will. Unfortunately, such were the level of efficiencies suggested by the report, with some £13-20 billion of cuts being proposed and the possibility of around 140,000 jobs being lost, it was never likely to be the sort of reforming agenda that a sitting government would even begin to try and sell to the English electorate, not if they expected to be re-elected for another term of office anyway.

No doubt the McKinsey executives tasked with preparing the report, spent many expensive hours poring over the hundreds of thousands of documents and millions of dry statistics provided by the Department of Health, in an effort to identify where exactly any potential savings could be made. Like the old-fashioned “time and motion” studies that were so fashionable in the 1950’s, 60’s and 70’s, McKinsey employees were thought to have looked into virtually every detail of running a modern day health service, comparing like-for-like against similar, but supposedly more efficient providers outside of Britain, before delivering their much anticipated and highly expensive expert recommendations, i.e. make cuts of between 15 and 22% across the board. Although the publicly available copy of the McKinsey report is no doubt much reduced to the one presented to government, one cannot help but be struck by the often flawed logic and over-simplification of relevant facts that have inevitably led to a series of highly questionable conclusions and associated recommendations. The fact that McKinsey’s final report was thought to have cost the British taxpayer millions of pounds to produce, simply makes matters worse, as many of the observations, calculations, presentations, conclusions and recommendations contained in the report, are for the most part fairly obvious; and are exactly the same sorts of problems, weaknesses and failures that are and have been endemic to the National Health Service for the past 40 years or so. For any national government, let alone one that is supposedly dedicated to cutting public expenditure, to spend millions of pounds in order to commission a study that simply repeats previous studies and reports is just complete and utter nonsense, although the fact that the current coalition government believe that the McKinsey report offers some new insight into, or indeed solutions to the pre-existing problems within the NHS is just sheer madness.

Sadly, given that we now have a political administration that is almost totally percentile driven and have little understanding of how a 10% cut in one area can have a highly deleterious effect on other parts of the wider market, it should come as no surprise at all that some, if not all of the McKinsey report has been eagerly adopted and then ideologically amended by the likes of David Cameron, Nick Clegg and Andrew Lansley. With McKinsey suggesting that cost cutting measures in the region of 15-22% can deliver anything between £13-20 billion over a 4-5 year period, what’s not to like for two political parties who are not only devoted to small government and limited public spending, but also to the ability of the free market to deliver, especially when there’s a commercial profit to be had. It would perhaps be wrong to conclude that McKinsey’s executives were driven by the same imperatives as the Cameron government, although it is likely that both share a belief in the supposed infallibility of the private sector and its ability to provide goods and services more efficiently and more cheaply than the public sector, a faulty premise that has ruthlessly been exposed over the part 40 years by the inefficiencies, uncompetitive pricing structures and corporate greed that have become increasingly evident in Britain’s transport, communications and utility industries, all of which were formerly in public ownership.

According to McKinsey, the largest savings or efficiencies in the NHS could be found in markedly reducing frontline provider costs (i.e. hospitals, treatments, drugs and staff), which it was estimated could reduce public spending by anything between £6.0 and £9.2 billion, while a further £4.7 to £6.6 billion could be saved by the various NHS trust’s no longer commissioning what are termed as “low value healthcare” (i.e. those treatments where no provable clinical benefit is evident or observed – as in alternative or holistic therapies perhaps?) McKinsey’s reporters also suggested that additional saving of between £2.7 and £4.1 billion might be found by switching certain types of healthcare away from main hospitals to alternative settings, including GP surgeries, clinics, care homes and the patients own home. Although such a suggestion will undoubtedly result in significant savings for the hospital unit’s themselves, unfortunately the authors of the report fail to mention that all of these same former hospital patients would still require either personal care and/or medical treatment, so this would simply shift the financial burden from one health provider to another, thereby undermining the argument that significant savings could or would be made by the local health authorities.

Additional money saving strategies proposed by McKinsey included the proposal to enforce statutory charges on healthcare providers, essentially eliminating incidents of overcharging or price fixing that might occur within a highly disparate and often unregulated industry. The report also suggested the adoption of new oversight structures and processes that would bring some degree of standardisation to the whole of the English NHS, something that most people recognise has been missing from the service over the past number of years, largely because of constant government tinkering and alterations to the way in which the system is governed. The problem with this particular solution, as proposed by McKinsey, is that successive British governments have singularly failed to regulate the existing 150-odd Strategic Health Authorities and Primary Care Trusts, so what chance is there that they will be able to impose a single national standard on the multiplicity of Clinical Commissioning Groups, Hospitals, Treatment Centres, Poly-Clinics, Walk-In Health Centres, etc. etc. etc that are currently being proposed by the coalition’s own health reform bill?

Associated with these changes, McKinsey’s consultants also suggested that a number of national barriers should be removed, allowing both staff and patients to move freely around the country, something that could well prove to be an administrative nightmare, in the event that NHS money is allowed to follow individual patient’s around the country. The final two proposals offered by McKinsey was for incentive schemes to be established, presumably to encourage staff, administrators and hospital trusts to run their organisations more efficiently. Quite how such schemes might work on a day-to-day basis is unclear, but given that hospital managers or owner/operators might well be encouraged to process their patients faster, or cut the basic costs of medical treatments in order to qualify for these unspecified incentives, it is hard to see that particular strategy having any sort of positive patient outcome. Finally, the report suggests that skill levels should be increased through better training (presumably costing more money) thereby creating a more highly skilled and effective workforce, which should then allow numbers to be reduced and staff costs driven down.

Unfortunately, this particular proposal touches upon one of the most glaringly obvious flaws in McKinsey’s entirely commercial thinking, in that patient care could in any way be equated to more generalised industrial production and that the standard economies of scale could be applied in a hospital environment as easily as they could to an industrial workshop. By comparing the duties of a midwife, to those of an acute care nurse, or an orthopaedic healthcare worker is massively misleading, not least because of the level of care that individual patient’s might require. Where a midwife might well be observing and overseeing the delivery of a baby, an acute care nurse would be observing the vital signs and perhaps medicating a seriously ill patient, whilst an orthopaedic healthcare worker might be having to hoist an immobilised patient, in order to wash them, transfer them or simply to change dirty bed linen. Nursing care is not only highly diverse, but is also a 24-hour a day job that is labour intensive, dirty and emotional, unlike that of a factory worker who might pull a lever, turns a screw or fix an attachment, so to even try and make a comparison between the two, or indeed between different groups of nursing staff, is not only foolish, but is patently absurd.

As part of their proposed efficiency savings McKinsey also believed that something in the order of £1.9 to £3.0 billion could be saved by reducing the variation between clinical and non-clinical staff productivity, mainly through smarter working and cutting out the “dead wood”, most notably those staff that perform worst against a pre-set performance average. Suggestions range from changing working patterns to employing in-car GPS systems in order to minimise travelling times between patients, to making use of other new technologies that allow healthcare workers to spend more time in face-to-face meetings with their patients, all of which will inevitably have a direct and increased financial cost to the individual hospitals, clinics and GP surgeries, without any mention being made of where these extra funds are likely to come from? A further £1.3 to £1.9 billion might be saved by increasing non-acute provider activity, with district nurses, midwives, practice nurses, health workers and GP’s taking on more responsibility for patients who could be treated at home, rather than in hospital. It is perhaps little wonder that GP’s and their associated community healthcare workers might be alarmed by such proposals, given that in all likelihood that they would be asked to take on more work and longer working hours, for no additional money. Not surprisingly, the McKinsey report also identified potential savings of between £2.3 and £3.7 billion simply by reducing NHS expenditure on drugs and optimising the service’s supply chains, both of which could have been achieved many years ago, had the political will and management expertise been there to oversee such blindingly obvious strategies. McKinsey’s executives also identified further savings of around £0.5 billion in better management of existing NHS estates (including renegotiation of the scandalous PFI contracts), savings of between £1.1 and £1.7 billion by stricter enforcement of PCT contracts and standards, while another £1.9 to £2.5 billion might be saved by encouraging and enhancing self care strategies and improving disease management programmes. Such proposals would see diabetics, epileptics, the obese, smokers, alcoholics and breastfeeding mothers given far more responsibility for their own conditions and ongoing care, thereby reducing the cost to the NHS overall, although quite how these self-care programmes would be monitored on a regular basis is not specified by the report’s authors, so one can only assume that oversight would be passed to community based clinicians, such as GP’s, Midwives, District Nurses and Health Visitors.

Some of the most obvious and contentious proposals suggested by the McKinsey report revolve around the subject of staffing levels in the NHS, plans that essentially try once again to mistakenly equate healthcare to any other industrial production, with a ballpark figure of around a 22% reduction in the workforce being mentioned, although 10-12% reduction seems far more likely. That 22% figure is said to be made up of cuts to non-clinical staff (5%), other non-clinical (3.2%), Nurses (8.1%) and Doctors (5.7%), with the overriding logic being that existing staff would and should spend more time in their primary task of treating patients face-to-face, rather than being diverted to other non-clinical activities such as administration, ward meetings and patient handovers. According to McKinsey, many of these changes could be achieved by increasing diagnosis throughput, standardising pathways and speeding up patient treatments, thereby leading to fewer bed-days in individual hospital wards. Of course the downside to these largely generic proposals is that with fewer consultants, doctors, nurses and healthcare assistants per ward, or per hospital unit, McKinsey’s conclusions are almost entirely based on other unfunded non-clinical staff having to undertake the administrative tasks currently done by nurses; and all of the remaining 78-90% of medical staff (depending on the level of cuts) working longer, harder and smarter to achieve the same result. Once again there is a perception that McKinsey executives have been misled by the idea that every hospital unit throughout the country is identical in terms of the services it offers and the staff levels required to run them efficiently, which clearly is not the case. Logic would dictate that acute services, such as Intensive Care Units, Orthopaedic Wards and those other medical units where patient disability is a major contributory factor will require higher staffing levels than those where most patients are entirely mobile and able to carry out basic functions for themselves. Simply to calculate an across-the-board reduction in staff, without giving any thought to the specifics of individual hospitals, wards or specialisation and the level of care being provided by them and their staff, simply proves the point that expertise in one particular field, does not necessarily make management consultants like McKinsey’s experts in all areas of work, which seems to be fairly evident in this case.

However, it would be wrong to suggest that all of the McKinsey report is simply about rationalising the cost of the NHS entirely through the use of cuts, because that isn’t the case. The report’s authors also propose much more efficient use of existing NHS facilities and equipment, many and much of which is grossly underutilised by most health trusts that continue to operate on a traditional daytime system, rather than the 24-hour-a-day service that NHS hospitals continue to offer. Because of staffing contracts and management failures there are absurd occurrences where millions of pounds are being spent on clinical equipment, which nobody has been trained to use, medical facilities lying unused because there’s no-one there to staff them, managers being given access to luxury cars as a perk of the job, the list of waste within the NHS goes on and on. Unfortunately, rather than tackling these rather more mundane issues of waste and mismanagement, McKinsey’s report chooses to focus on criticising and trying to reform the front-line medical staff (the soldiers if you will), rather than rationalising and examining the savings that could be made at management level (the General Staff), where much of the financial waste is thought to originate. Sadly though, because the report is largely seen as a charter for government spending cuts the fact that McKinsey’s report proposes significant increases in the fields of breast surgery, vascular surgery and orthopaedic surgery by increased and better use of the scanners, operating theatres and treatment rooms that currently stand idle for most of the time, many of these commonsense suggestions are going to be generally overlooked. That particular issue does of course also raise the question of how the increased use of such facilities would be managed and funded, given that anything up to 10-22% of NHS frontline are likely to be released by their employers over the course of the next few years, although this fairly obvious discrepancy is not actually dealt with by the report’s authors, unless of course it is implied that this extra funding will be found through private money, in the form of personal health insurance, etc. It is also worth noting however, that in another part of the same report, the authors suggest that substantial savings could be made by health authorities actively decommissioning certain types of non-effective operations and procedures, including tonsillectomies and cosmetic surgery (even those that are to redress naturally occurring problems), whilst at the same time hospitals and GP’s should seek to limit or refuse procedures, such as back pain operations, knee wash-outs, minor skin surgery, certain types of hernia operations, varicose veins, some dental procedures and hysterectomies. In what is yet another glaring error by its authors, it seems that the report seeks to have its conclusions and recommendations both ways, firstly by suggesting that such non-effective operations should be carried out to gain maximum use of NHS facilities and equipment; and then by recommending that the same sorts of procedures should be cut or refused in order to reduce financial costs. Taken in one context or another, each in their turn is logical, but for the report’s authors to suggest that they can have it both ways, simply serves to undermine the entire basis of their own supposedly well thought out argument.

Allied to the greater levels of staff efficiencies (i.e. reductions) that McKinsey might expect to see by cutting out the worst performing staff and reducing hospital patient numbers by shifting some of the work to the various GP surgeries, Walk-in Centres and clinics, etc. cutting the numbers of “sick days” taken by NHS staff is also thought to be a priority for the authors. Notably, the incidents of sickness amongst healthcare staff generally are reportedly running at around 4.5%, with the largest amount of sickness occurring amongst frontline medical staff. However, when one considers that such staff, ambulance, nursing and healthcare personnel are the ones directly responsible for carrying, moving, treating and interacting with often highly immobile and seriously ill patients, it should come as little surprise to anyone that these are the very same people who suffer the highest level of workplace injury or illness. In a perfect world, on every occasion, in every instance and with every patient, the appropriate equipment would be available and statutory procedures followed. Unhappily though, we don’t live in a perfect world and NHS staff do not work in a perfect environment, which will inevitably lead to physical injuries being caused, illnesses and diseases being transmitted and nursing staff being rendered too sick to work. Like it or not, nursing is an incredibly messy business for obvious reasons and so, for McKinsey to try and draw a parallel between hospitals and any other workplace, especially in terms of sick days, or instances of staff illnesses, is a pretty futile exercise, when few, if any other non-clinical jobs can actually compare to nursing in the first place.

A possible solution to the vast workloads undertaken by England’s NHS hospitals is for many of the more non-acute and routine procedures to be completed elsewhere, such as GP surgeries, local clinics, Walk-in Centres, Care Homes, or even in the patient’s own home, thereby reducing the cost to local hospital units. Even though some of this extra community based work might be done by existing medical staff working harder, longer and smarter, it is hard to imagine that existing GP’s, Surgery Nurses, Midwives and District Nurses are going to be able to absorb such increased levels of patient care, implying that more community-based staff will need to be recruited, otherwise patients will simply flood back to the hospitals as they did before. Astonishingly though, rather than anticipating a significant increase in the numbers of community based clinical staff to meet their increased workload, McKinsey’s authors actually suggest that all of these new services could be delivered by 10-15% less staff, which is yet another absurd suggestion, based on an uninformed and ill-thought out judgement. A similar solution is suggested for fields such as mental health, where existing mental health visitors would be expected to take on more responsibility for patients, as existing full-time mental healthcare facilities either reduce their services or close altogether. McKinsey does seem to propose that new Crisis Resolution Teams could be established to help co-ordinate such care in the community for vulnerable patients, although whether or not these teams would be comprised of existing mental health staff, or new staff members is unclear, but the assumption is that no new staff would be recruited to help fill the void.

When the McKinsey report was released in 2009 its conclusions and recommendations were said to be so unpalatable from a political point of view that it was immediately and publicly disowned by its original commissioners, the Labour Party, while for their part, the Conservative Party of David Cameron were said to have simply used it as a stick to beat their Labour adversaries. In reality though, all three mainstream political parties in England have irrevocably tied themselves and their parties to the idea of expanding the public sector’s so-called “internal market”, allowing privately owned, run-for-profit companies to participate in the NHS, although only to a fairly limited extent thus far. However, when the coalition government was elected to office in May 2010, it soon became apparent that significant parts of the up-until-then much maligned McKinsey report had indeed found its way into Conservative Party thinking and was likely to form the basis of Andrew Lansley’s much vaunted Health and Social Care Reform Bill 2011, which is due to become law in the next few months. Even though Cameron, Clegg and Lansley have publicly dismissed suggestions that their bill is fundamentally based on the earlier McKinsey report, similarities between the two documents tend to indicate that the coalition government has indeed adopted many of the McKinsey’s reports conclusions and recommendations pertaining to the restructuring and refinancing of the English NHS. Even now, some two years into the coalition’s first and hopefully last term of government there is ample evidence to support the charge that Cameron, Clegg and Lansley have indeed implemented many of the proposals put forward by the McKinsey executives, despite the fact that there is more than enough evidence to suggest that the report itself is and was based on inherently flawed reasoning and a complete lack of understanding of the English healthcare service by the authors of the report. Some of the developments and resulting outcomes from the blatant implementation of the McKinsey report will be dealt with in the second part of this blog article – McKinsey and the NHS – Part Two, which I hope to publish in the next day or so.

The Risks Of Adopting A Charlatan's Charter

I’m really not so sure you need to be any sort of clinical health expert to figure out that the coalition’s proposed health reforms, which were undoubtedly drawn up by one of those unelected “blue sky” (or should that be “head up the arse”) thinkers within the Conservative Party, will be a complete and unmitigated disaster. After all, that’s the sort of outcome we’ve generally come to expect from most of our modern day politicians, who to a man tend to be very big on ideas, but ludicrously short on the detail.

Accepting that most of the elected representatives who inhabit the Westminster Village are by their very nature duplicitous, self serving and smug, it shouldn’t come as a surprise to any of us that our delegates treat the British people like mushrooms, by keeping us in the dark and feeding us all sorts of shit on a regular basis, as this particular strategy certainly suits their own party agendas of enriching the few and impoverishing the many. Not content with having destroyed large parts of our country’s traditional industrial base, sold off most of the nation’s vital infrastructure to private interests, organised mass inward migration to achieve electoral advantage, it should come as no surprise that now they are attempting to remove the last remaining safeguard that the English population possesses, its universal, free at the point of delivery, National Health Service.

Despite their almost obligatory protestations to the contrary, all three major political parties have been equally complicit in helping to bring us where we are today, on the brink of destroying a national health system that even its fiercest critics are forced to admit, is probably one of the most cost effective systems in the entire world. Although the coalition government of Cameron and Clegg are the ones guilty of trying to deliver the coup de grace, through their appointed political assassin, Andrew Lansley, the Labour party and their union sponsors are just as culpable for these criminal acts against the people of England, as they not only failed to rally support to fight the steady encroachment of private healthcare companies into the NHS, but have actively encouraged it since 1997. What a bunch of total hypocrites, Miliband, Burnham and their union paymasters are, protesting coalition plans to commercialise the public health services, when they themselves were so effusive about private healthcare involvement in the NHS between 1997 and 2010. It is perhaps little wonder that our nation is such a total shambles and we are in such a dire financial mess, when we put our trust in such cringing and partisan individuals, who wouldn’t know real political conviction if it sat up and bit them.

It is particularly ironic therefore that it is these same free-market Labour politicians who have been so critical of late over Andrew Lansley’s refusal to release the Health Risk Register into the public domain, so that informed commentators and the general public can make their own appraisal of the potential dangers arising from the coalition’s much criticised, much amended and now publicly derided healthcare reforms. Not surprisingly the coalition have thus far refused to release the risk register, fearing that it will simply confirm what many people already believe, that the NHS will be catastrophically damaged by the top-down reorganisation that ministers promised would not happen, but which the bill proposes should happen, in order to allow commercial investors to gain a major foothold within our publicly owned health sector. According to a number of sources and despite proclamations that the NHS would be safe with a Tory government in charge, it is generally accepted that a number of American private healthcare companies have been preparing for their entry into the English health market for the past 10 years, proving once and for all the lies of both Conservative and Labour leaderships that our publicly owned health services were safe in their hands. Interestingly, even though Labour are in opposition and with some three years to go until the next general election, the current proposals to reform and privatise the NHS could so easily be fatally undermined by Ed Miliband issuing a statement to the effect that as and when Labour are re-elected to office, they would take all health provision back into public ownership. Strangely enough though, there has been no such statement coming from the Labour leader to date, suggesting that even though Miliband publicly opposes the planned reforms, in reality he would do little differently; and in private is wholeheartedly in favour of the reorganisation, just so long as he and his party don’t have to take the political blame for it.

In spite of being ordered to release the Department of Health’s Risk Register by the Information Commissioner’s office, the coalition government are currently appealing that particular decision, claiming that the contents might unduly alarm the electorate and stifle future risk assessments by departmental civil servants, who are traditionally asked to consider the worst possible outcomes regarding specific government plans and policies. However, even though the coalition has refused to publish its own formal risk assessment, a number of independent health specialists and informed commentators have already calculated that the proposed health reforms are likely to run the risk of doing incalculable damage to health service systems, procedures, as well as its physical fabric, along with having a highly negative impact on patient care and choice. It has also been anticipated that rather than reducing costs and the numbers of administrative personnel, there is a real risk that a reformed health service, as proposed by the coalition, would have an even greater financial cost to the taxpayer and will require even larger numbers of people to help run it, both of which would be the exact opposite of the coalition’s stated aims. Even though the coalition has publicly stated that the aim of the reforms is to create a better, more efficient health provision in England, given that the bill clearly states that treatments and providers will be assessed and allocated on the basis of the most economically advantageous tender, it is clear that cost, not quality, or even value-for-money, will be the major determining factor in providing the English population with their ongoing healthcare.

Already a number of national health agencies have claimed that as a result of the proposed changes, some patients, most notably those suffering from long-term illnesses, such as cancer, will be immediately disadvantaged by the proposed new healthcare system, largely as a result of patient treatment being driven by budgets, rather than by clinical need. This assumption generally ties in with the risks associated with the entirely profit driven healthcare companies essentially cherry picking the more routine types of operation or procedure that allows them to maximise income and minimise costs. As a result of this envisaged healthcare outcome, existing NHS hospitals will almost certainly be left to undertake the most expensive operations and procedures, thereby placing an unreasonable strain on their already diminishing financial resources and creating a danger of making them unprofitable, which might well lead to individual hospital unit’s having to close due to lack of money. However, in what can only be described as a sheer act of hypocrisy, sources have accused Lansley of deliberately skewing the supposedly free market by insisting that commissioning groups should pay failing private healthcare providers, rather than their more cost effective NHS competitors, in an attempt to artificially maintain the private sectors profitability. Given that many of the UK’s private healthcare providers are in fact largely unprofitable, having made such significant financial investments as part of their attempts to develop a private model in Britain in the first place, some commentators believe that without the coalition government deliberately manipulating the health market to help sustain them, then many of these privately owned companies could not survive indefinitely.

It has also been suggested that under the terms of the proposed health reforms, the various newly created GP commissioning groups will be able to pick and choose their patients, not just from their own geographical area, but from anywhere in the country. Consequently, it is feared that certain intensive patients will be systematically removed from practice lists, as GP’s and their commissioning committees seek to maximise their income and minimise their expenditure, leaving some gravely ill patients with little option but to hunt around for a clinical practice that is actually prepared to take them on. Such a situation raises the real possibility that some people, through no fault of their own, could well find themselves without any sort of medical cover, simply because they are suffering from expensive and long term illnesses. At the same time, it has also been argued that some GP practices, having reduced their numbers of highly dependent and expensive patients, will seek to maintain their levels of funding by deliberately over-treating some of their remaining healthier patient list. Because patient’s themselves are not experts in clinical diagnoses, they could quite easily be misled by GP’s, who have their own financial agenda, into accepting a range of treatments and procedures that they don’t want, or indeed don’t actually need, which could quite easily lead to what are finite financial resources, being squandered on a much smaller and healthier pool of patients. It is also worth noting perhaps that under the terms of the bill and particularly in using the term “any qualified provider” the coalition is said to be opening the door for public money to be used in the provision of alternative medicine, regardless of whether or not that treatment is found to be have any discernible benefits to patients or to their condition.

It is also feared that the drive for profitability by certain healthcare providers, will not only lead to a lessening of statutory health and safety requirements, but might in the worst case scenario result in a “race to the bottom”, where safety, wages, hours and clinical decision making is based on cost, not on need or on genuine value-for-money. As a result of lower wages, increased working hours and falling morale, there is thought to be a real danger that the actual numbers of clinical mistakes will increase, leading to greater numbers of medical negligence cases being brought before the courts, more public money being paid in legal fees and compensation, which will almost inevitably lead to less money being spent on healthcare, putting even more pressure on increasingly limited clinical resources again. Significantly, it is a matter of record that American healthcare companies are particularly adept at avoiding responsibility for medical mistakes and rely extensively on insurance based schemes to cover the potential costs of any ensuing medical malpractice, a financial cost that is usually borne by the patients themselves.

Such will be the imperative to drive patients along the “for-profit” healthcare conveyor belt, it has been claimed that the safety and well-being of certain vulnerable groups, including children, women, or other at-risk adults might be deliberately undermined or ignored by those providers operating within the newly commercialised health service. Although the current health service is not perfect one, the widespread fragmentation that would result from the wholesale privatisation of the service would almost inevitably destabilize the conjoined reporting that currently exists within the NHS. As a consequence, the welfare of vulnerable patients could well be harmed and they might be left largely unprotected as the various reporting mechanisms and agencies that currently operate within the existing healthcare system are systematically removed in a newly reformed and entirely profit-driven environment.

In the event that participating private operators were unable to make an acceptable profit for their shareholders, there is also thought to be a real danger that the owners might simply choose to close their businesses and walk away, leaving patient care to be picked up by other local NHS units, who would already be operating on highly stringent budgets. An added concern is also that some of these same private operators might try and recoup some of their monetary losses by refinancing their businesses and passing on their accrued bad debts to another supplier, as was thought to be the case with Southern Cross care homes. By creating a wholly commercial healthcare environment through their reform bill, virtually all of those involved in the sector will have to pay for services that presently don’t figure on their balance sheets, including items such as advertising, marketing and promotion, which would not ordinarily be a cost associated with general healthcare, but which under the coalition’s competition plans would be a necessary part of each provider’s business model. That being the case, it would unsurprising if such services and their associated costs inevitably led to a number of smaller, less successful providers struggling to compete against their larger, privately financed competitors. No doubt a significant failure rate amongst the competing healthcare providers will already have been anticipated by the coalition as part of their planning, although any expectation that the remaining healthcare companies will simply step in to rescue patients abandoned through these business closures, will almost certainly add to overall health costs, leading to extra taxpayers money having to be used to try and limit the damage caused.

It is already evident that a number of American based private healthcare companies are poised to take advantage of the proposed reforms to the NHS, with one business in particular reportedly trying to sign up a number of English GP commissioning groups, with the promise of a 5% return on any profit derived from patient’s referred to their private medical facilities. By essentially offering a 5% “bounty” on each of their patient’s heads, there is a real danger that some GP’s will be tempted to put their own financial interests before the actual health and wellbeing of their patients, which could seriously damage, if not completely destroy, the relationship of trust that currently exists between the two parties. By turning the sick, the infirm or the dying into little more than commercial commodities, any pretence of “care” would finally and irrevocably be removed from the English healthcare system, thereby turning our medics into nothing better than stereotypical used car salesmen; with a reputation to match. Even though such commercial arrangements may be deemed to be morally repugnant, most experts who have studied the current healthcare bill agree that there is nothing illegal in such practices, despite claims to the contrary by members of the coalition government. Given that Andrew Lansley is reported to have spent several years constructing this health reform bill, the fact that no restrictions have been placed on such questionable transactions between GP’s and clinical providers, can only lead one to the conclusion that such immoral behaviour, is entirely acceptable to and has been foreseen by its architects, despite what they say in public. That said, the fact that in its initial form the new health bill essentially removed Andrew Lansley’s duty to provide and protect our existing health service, it should come as no surprise that he and his parliamentary colleagues did not concern themselves over the long term effect of the legislation, or indeed any infringements or illegality that might arise from their deliberate removal of such statutory obligations.

Of course, one of the most acclaimed benefits of the coalition’s undeclared reform of the NHS is purported to be the savings that such a reorganisation will produce, not least by removing much of the so-called wasteful bureaucracy and administration that is believed to make the current health service so inefficient. However, in reality there is thought to be a real danger that rather than saving money, the proposed reforms will in fact, cost far more to administer than it does at present. When one considers that the present day PCT’s and SHA’s, which number around 150 separate organisations, will be replaced by several thousand individual GP commissioning groups, it seems fairly evident that irrespective of the model, both systems require large numbers of bureaucrats and administrators to run them. Presently, the health service’s existing PCT’s and SHA’s tend to employ management and clerical staff from within the industry, whereas there is already some evidence that a number of the larger private auditing companies and accounting firms are contacting the various prospective GP commissioning groups to offer them their administrative, financial and back office services at far higher rates than would be usual within the NHS itself. If that indeed proves to be the case, what with new billing and payment systems being put in place, then it seems highly unlikely that there will be any substantive savings in terms of overall administrative costs, suggesting that more public money, rather than less, will be spent on the supposedly wasteful bureaucrats and administrators, thus leaving much less money to be spent on frontline patient care.

As things stand, the NHS is almost wholly dedicated to providing a comprehensive healthcare service, free at the point of delivery to everyone who is resident within the UK, with an option for individuals to take out and receive private healthcare provision, should they wish to do so. As a rule of thumb however, free public healthcare is provided by NHS hospitals, whilst private healthcare is carried out in private hospitals, as is the case with a number of providers such as BUPA and Circle Healthcare, etc. Under the terms of the proposed health reforms though, it has been specifically stipulated that existing NHS hospitals and trusts can, should they choose to do so, use up to 49% of their total capacity and resources to treat privately funded patients. The obvious risk that such arrangements might pose to the overall health and welfare of the publicly funded patients has not been lost on those health professionals who are bitterly opposed to the new bill. Because NHS hospitals will be forced to become self financing, in order to survive in the new economic climate, they will inevitably seek to increase their incomes from the private sector, but at a direct cost to those who are funded from the public purse. Because of these new financial imperatives there is thought to be a grave risk that private patients will receive priority over their publicly funded counterparts, not only in terms of personal care, clinicians time and catering, but more importantly in terms of surgical schedules, with NHS patients being pushed further and further down the waiting lists, as privately funded patients are given priority in virtually all aspects of clinical care. As a result, not only will NHS patients have to suffer for longer, but in all likelihood their medical outcomes are bound to worsen, leading to greater levels of impairment, contamination and perhaps even overall mortality. Previous privatisations by government have already proved that rather than improving efficiency or performance, commercial competition in a marketplace not only leads to a lack of choice, but a greater lack of accountability, corner-cutting, higher risks, worse outcomes and far less value-for-money than had been the case to begin with. The wholesale privatisation of Britain’s transport systems, utilities and industrial infrastructure has proved that point without doubt; resulting as it has in the British public paying far higher charges for what are generally much reduced and far more inferior services.

As a direct result of the coalition’s poor planning and complete lack of consultation with the various public health care bodies and their employees, it is now generally accepted that the Health Reform Bill has become so complicated that only the best legal minds would be able to understand it. As a result, there are fears that each and every one of the thousands of individual GP commissioning groups will have to take expert legal advice to understand how the bill works for them, which will not only result in extended patient waiting times, but also require each group to pay out tens of thousands of pounds simply to interpret the bill, monies that might otherwise be spent on healthcare. That is always assuming of course that implementation of the legislation does not actually end up in the courts, as commissioning groups spend even more public money trying to determine what they can and can’t do, under the terms of the new bill. In addition to these possible expenses, it is also reported that even more healthcare money will be paid to the individual members of each commissioning group, most of which it is claimed will be headed by an unaccountable and unrepresentative commercial director, whose main priority will be to maintain the financial integrity of the particular GP group, rather than anything as mundane as patient’s welfare.

Perhaps the greatest risk to patients however, is the abrogation of the Health Secretary’s powers to oversee and regulate the English health market, a duty that the coalition have handed to the purportedly independent body known as “Monitor”. However, the fact that the chair of that particular body has long-standing private commercial interests with a number of the incoming private healthcare providers and who the Department of Health still regards as an unbiased arbiter, does not inspire confidence in the ability, or indeed likelihood that this so-called independent regular is anything of the sort and might be likened to the gamekeeper turning poacher, which will be a complete disaster for the system as a whole.

It doesn’t take a genius to work out that the reason for the coalition’s reluctance to release their own Health Risk Register, has little to do with their civil servant’s feelings, but is first and foremost about the real and potential risks that the Health Reform Bill poses to the English health system generally. If any further proof were needed regarding the dire risk that the health bill poses to the nation’s welfare, one has only to look at dentistry and ophthalmology, where tens of thousands of English people are now living with rotten teeth and failing eyesight because they can’t find such services free at the point of delivery; and don’t have the financial resources to meet the exorbitant rates demanded by the multiplicity of private dentists and opticians who are exploiting the failure of successive governments to control pricing and availability. It is clear that the current Health Reform Bill is simply the final step along the road to completely privatising the entire healthcare market in England, thereby bringing us into line with perhaps one of the worst and most corrupt healthcare systems in the world, that of the United States. As things stand, this Charlatan’s Charter that Cameron, Clegg and Lansley laughingly call their Health Reform Bill isn’t really about managing any sort of potential risks at all, but is really about one overarching cataclysmic certainty, that will cost more, deliver less and leave a great deal more dead and injured along the way.

Award Winning Hospitals & Cordon Bleu Food

Catching part of the “Newsnight” debate the other night (29th February 2012) on the BBC, it was interesting to hear Ali Parsa, the Chief Executive of Circle Healthcare, regale Jeremy Paxman, the rest of the contributors and the watching audience about the obvious benefits of his own private healthcare company and particularly their new hospital in Bath. Not only was it said to have been designed by one of the world’s top architects, but had also won international awards because it was so beautifully constructed, with its cafeteria and restaurant offering clients the very best of products, including food produced to a Cordon Bleu standard. On hearing this, Mr Paxman rather jokingly remarked how he would like to visit the hospital and was told by Mr Parsa that he was more than welcome to sample the delights of Circle’s new facility, just as soon as he was sick enough to require hospitalisation.

What a pity then that nobody thought to question the fact that the brand new Circle hospital in Bath can only accommodate 28 patients, virtually all of whom will be attending for privately funded operations, which will be paid for through personal health insurance policies, rather than through the public purse. It tends to make a bit of a difference that, implying that such facilities are commonly available to the rest of us mere mortals, when in fact, they are nothing of the sort, but instead, Circle Bath is a rich mans medical paradise, where a limited number of medical procedures is carried out and that only privately funded patients can enjoy. However, at least this startling revelation will have come as an enormous relief, to those of us who were beginning to wonder just how our poor old NHS hospitals were ever going to compete against such lavish surroundings, because after all, if Circle Healthcare can do it, then why can’t the National Health Service, especially if they’re all working with similar budgets, staff costs and overheads? What a pity then that Jeremy Paxman or one of the other contributor’s to the debate didn’t make that fact clear to the generally uninformed masses who were watching, many of whom will be gutted when they realise that they’re not likely to get such 5 star treatment from the NHS, nor indeed from one of Circle Healthcare’s publicly funded hospitals.

Apparently Circle Healthcare is currently being held up as a model by the government, as the sort of mutual or co-operative healthcare company that we should all aspire to have working alongside our traditional NHS providers. After all we’re told, the company not only represents the largest body of clinicians working together in Europe, but all the medical staff employed by Circle Healthcare are shareholders in the business, ensuring that they too have a stake in helping to make the company one of the best private healthcare providers in England. Sadly, once again though, they fail to mention a rather important piece of information, whilst making their bold claims about the benefits of such shared company ownership. First of all, Circle Healthcare is reportedly a subsidiary of Circle Holdings which in turn is 95% owned by 6 major private shareholders, who despite having no real experience in healthcare per se, are better known within the investment industry generally. The suggested 30 million shareholding owned by clinicians and other staff are not actually in Circle Healthcare itself, but in a second company that only actually accounts for around 49% of the healthcare group, while the remaining 51% of shares (that would be the voting majority) are reported to remain in the hands of other private investors, whose principle interest lies in making a profit from their investments, rather than delivering the best possible healthcare to patients. Consequently, rather than the stake-holding clinical staff members having any sort of control over how the actual business is operated, in terms of profits, investments, running costs, etc, as has been suggested by advocates of this particular private healthcare model, they have no real control over such decision making, which are taken by those people who hold the controlling 51% shareholding, the money men, investors and speculators, including a number of notable Tory party donors and advisers. Most commentators agree that to actually describe Circle Healthcare as a mutual or co-operative is a clear and deliberate misrepresentation of the facts, designed specifically to mislead the general public into believing that the company is something other than a “for profit” money making venture, bought and paid for by outside corporate interests, who are only in it for the money.

Although Circle Healthcare are thought to be at the forefront of the emerging privatisation of the National Health Service, if only because they’re the first commercial company to be allowed to run an entire NHS hospital for profit, early indications are that it could be a long time before they ever see a penny in profit from their takeover of the facility. Not only are they having to cope with much larger numbers of patients, but under the rules, they’re also obliged to maintain other vital services like an A & E department, provisions that they don’t have to worry about in their other fully privatised hospitals in Bath, etc. Despite having signed a 10 year contract, worth around £1 billion of public money for running the former NHS hospital unit at Hinchingbrooke, it has been suggested that Circle Healthcare will be very lucky to turn any sort of profit on their first major in-house project. The trouble is that Circle now faces the same sort of problems that their NHS predecessors faced at Hinchingbrooke, providing an almost unknown number of services, procedures and operations to an incalculable number of patients, within a clearly defined budget, a feat that largely escaped the abilities of the NHS managers who used to run the hospital. Early indications suggest that any hopes that Circle Healthcare might have had of finding a “pot of gold” at the end of that particular NHS rainbow will be dashed, sooner or later, as the realities and differences between public or private healthcare begin to bite into their fixed budgets. As some commentators have already remarked, with a relatively fixed amount of money to spend, operators can only make a commercial profit if they can find ways of cutting their overheads. With few savings to be had at the production end of the process (which would be the medical operations, procedures, etc) the only other place to find substantive savings (leading to commercial profits) would be through the costs of productions, including staff, medicines, food, equipment, etc. It is little wonder therefore that most of the major private healthcare companies, currently operating in partnership with the publicly funded NHS have already tended to stick to or “cherry pick” the sorts of medical procedures that are commonplace, easier and ostensibly more profitable, as in the case of cataract operations, as well as with hip and knee replacements, which is said to have seen some £6 billion of public money drain out of the NHS marketplace

Conventional wisdom would tend to suggest that for companies like Circle Healthcare to succeed in England’s health markets they need to do one of two things, either stick to the private healthcare sector or to aggressively expand into the NHS, by taking over more and more supposedly failing publicly owned hospitals. However, given that the privately funded healthcare market is still relatively unpopular with most British people the potential for building even more hospitals, like the one operating in Bath must be limited, thereby leaving expansion into the existing NHS market as the most likely future solution for commercial operators like Circle Healthcare. Unfortunately, as the Hinchingbrooke model seems to suggest, just simply taking over and running a costly and burdensome hospital would not be sufficient to generate a favourable return on the company’s investment. The only way for such operator’s to succeed commercially would be for them to create a dominant or monopolistic position in the marketplace, thus allowing them to fully dictate the terms and costs of health treatment in England, as opposed to such prices being set by nationally independent bodies, which is the case at present. Worryingly perhaps, it has already been suggested that Circle Healthcare and other commercial operators are already vying with one another to take control of up to 20 so-called “failing” NHS hospital trust’s, which offers an indication of the direction such private providers are moving in. Adopting what has been termed a “trojan horse privatisation” of the NHS, the fact that private companies are already beginning to lure vital medical personnel away from the NHS, to work in privately owned businesses is thought to be just one of the most worrying aspects of the creeping inundation by corporate interests into the mainstream health service.

Of course the entire premise that an entirely private healthcare model is much more efficient and therefore more profitable is a fallacy, given that some independent sources believe that the US model (which is almost entirely privately owned and operated) has anything up to 30% of waste in the system (which would represent lost potential profits). Other studies also imply that pound for pound, a publicly funded system is always more cost effective simply because it is based on a highly restricted resource, with no profit motive whereas in a private model, as costs rise exponentially, so insurers (or whoever else is paying the healthcare bills) simply hikes the levels of contribution, perhaps one of the reasons that so many Americans are now without any sort of healthcare insurance or are now having to file for personal bankruptcy, after having been ill for a period of time. It is interesting to note that according to a report in the Observer newspaper, in a document released by Circle Healthcare, the company has freely admitted that there is a small but potential risk that patient care could suffer as a result of its long-term plans to expand its business operations within the English healthcare market, although the company’s owners later played down any such risks as being highly negligible, stating that the admission was merely an outside possibility, rather than any sort of probability.

Logic would dictate that no profit driven healthcare service can be sustained, without the need for increasing amounts of money being pumped into it, a fact that is underpinned by the certainties of increased human longevity and rising public expectations. Even where highly questionable economies of scales are achieved through the actions of the much proclaimed private entrepreneurs who are only now beginning to infest our health service, ultimately if governments are bound and determined to limit spending on healthcare come what may, then something is going to give, be that the number of procedures carried out, types of operations, the standards of care, or some other vitally important piece of the existing medical jigsaw. As things stand in Britain, France and Holland, etc, where central governments control the healthcare markets, then that offers some degree of oversight. But what happens if and when the private contractors eventually take a majority stake in healthcare provision and simply refuse to abide by the rules, regulations and more importantly, the price structures that governments insist that they should charge? Somehow it is hard to imagine that we’ll all be treated in award winning architectural structures, whilst being fed Cordon Bleu food, unless of course that’s because we’ve all been forced to take out private medical insurance, because our national politicians have essentially handed control of our public health service to the private sector on a golden plate.