Health bill’s competition clauses are tantamount to privatisation

Should full-blown competition be introduced into the NHS we may see consequences that are tantamount to privatisation is all but name, writes Prateek Buch.

Nick Clegg reiterated the ‘no privatisation’ mantra at Deputy Prime Minister’s Questions yesterday. What still needs to be clarified, however, is the extent to which encouraging competition between providers, a central tenet of the Bill as it stands, is at odds with this commitment. Should full-blown competition be introduced into the NHS we may see consequences that are tantamount to privatisation is all but name.

Widening the range of providers competing for patients’ ‘business’ necessarily means increasing the number of private providers – thus continuing the creeping marketisation begun under New Labour – as well as raising the prospect of ‘poorly performing’ providers failing and going bust.

Competition may well raise standards for the fortunate few who get their services from the ‘winners’, but asking those left behind with the losers to accept a lower standard of healthcare, all in the name of market ideology, is simply unacceptable.

The need to prevent a full-blown competitive market in healthcare has focussed on the role of Monitor as an economic regulator, designed to enforce economic strictures on hospital trusts.

The debate on competition needs to be widened, however, to consider whether healthcare can ever be satisfactorily delivered in a system that allows neo-Darwinian competitive provision followed by post-hoc regulation – weaker providers may be eliminated by better competitors, but that would be small comfort for those unfortunate enough to be treated (badly) by them.

Encouraging competition among healthcare providers goes hand-in-hand with its corollary that increasing patient choice will drive up standards and improve health outcomes, and introducing both competition and choice have inherent difficulties. If reducing costs is the aim, standards may fall concurrently – if raising standards the name of the game, costs may spiral – all as a result of competition amongst providers.

Despite being asked twice whether he would block Part III of the bill, that contains the competition clauses, Clegg would not be drawn on the issue. It may be too much to ask for an entire clause of the Health and Social Care Bill to be axed, although it’s surely legitimate to ask that it is substantially improved to eliminate the downsides of introducing competition and marketisation.

In the end it comes down to whether the goal is better health outcomes for all – and if so, I’d suggest the coalition takes a step back from the bill and looks at what really matters.

Professor Sir Michael Marmot, arguably the world’s leading light on the social determinants of health, has studied the underlying causes of ill health in both England and across the world – these can be best tackled by a fair start for all in life, better education and employment for all, sustainable communities and excellent preventative medicine.

It could be argued that the Bill deliberately steers clear of tackling these by focussing on the mechanics of the healthcare system, but in doing so we must guard against increasing competition and choice for its own sake, which would be a continuation of Labour’s policy as shadow health secretary John Healey has admitted and which this bill risks doing.

Should we ignore the risks associated with increased competition, we may stifle our chances of putting Marmot’s policies into practice and of achieving the ultimate goal of health policy – healthier lives for all.

20 Responses to “Health bill’s competition clauses are tantamount to privatisation”

  1. Ma

    Health bill's competition clauses are tantamount to privatisation: //bit.ly/jeVUcO: writes @PrateekBuch

  2. Michael Bater

    RT @leftfootfwd: Health bill's competition clauses are tantamount to privatisation //t.co/JxZydKE

  3. Kim Blake

    Health bill's competition clauses are tantamount to privatisation: //bit.ly/jeVUcO: writes @PrateekBuch

  4. Sam Barnett-Cormack

    Health bill's competition clauses are tantamount to privatisation: //bit.ly/jeVUcO: writes @PrateekBuch

  5. Prateek Buch

    RT @leftfootfwd: Health bill's competition clauses are tantamount to privatisation: //bit.ly/jeVUcO: writes @PrateekBuch

  6. martinb216

    Health bill's competition clauses are tantamount to privatisation: //bit.ly/jeVUcO: writes @PrateekBuch

  7. ad

    Would anyone mind telling me what hideous disaster will befall the country, if our health system becomes slightly more like that of Germany or France?

    Everyone seems to be assuming something without ever thinking about trying to prove it.

  8. Alex Marsh

    Health bill's competition clauses are tantamount to privatisation: //bit.ly/jeVUcO: writes @PrateekBuch

  9. Michael

    Health bill’s competition clauses are tantamount to privatisation – //bit.ly/keCmMr

  10. Richard Blogger

    The original intent of the Tories was to create a healthcare market, in fact Letwin said in a WSJ article (note: not a UK paper) before the election that if they were elected the Tories would create a system “where hospitals compete for patients”. The UK media chose not to report this. Throughout, the Tories used the phrase Any Willing Provider, but never chose to explain what this meant.

    “Competition” is supposed to be about “patient choice” – it never is, but “choice” worked when Blair used it, so the Tories may as well give it a try too. Patients are supposed to have a choice of provider and so providers are meant to “compete” to get patients to choose them. The problem is that pesky patients refuse to choose. So that is where commissioners come in, they can choose private providers on their patients’ behalf. However, although copmmissioners can be more choosy than patients, the government still cannot rely on them to develop a market. In some areas of the country (particularly rural areas) there is no “choice” and commissioners are just glad that they have any service at all.

    Private healthcare initially liked the White Paper and the promised “protected” NHS budget. But Osborne’s spending review did not protect the NHS (and even broke the “ring fence” pledge) and an insistence from Lansley that private providers must do the work at NHS rates have put off private providers. They are not in favour of the Bill because they simply cannot make a profit: the problem is that the NHS is too bloody cost effective and so the “NHS rate” is too low.

    Widening the number of providers means that there has to be investment in private provision. There just isn’t the money. Even the very best of Foundation Trusts during the time of plentiful funding could only make a 4% surplus (which had to be re-invested back into the trust). No private company can borrow money based on a 4% surplus. The surpluses of FTs are about to take a huge hit since payments to hospitals are being cut by 1.5% this year. Private providers will be affected by the same cut, hence making their profit-making possibility much smaller. And the inherent uncertainty of “patient choice” makes it far more difficult for private providers to borrow to provide capacity to enter a healthcare market. Lansley’s and Letwin’s dream of a healthcare market may have been possible 5 years ago, but it is impossible in the current economic climate.

    The White Paper did suggest that there would be mutualisation of hospital trusts (worth £24bn, a nice little earner for Osborne) but the Bill has ruled that out. Even though Ed Miliband seems to think mutualisation is acceptable, the government has decided that the public (quite rightly) will regard it as a form of privatisation.

    Now we hear of a different phrase, well two, actually. Right to Provider (R2P) and Any Qualified Provider (AQP). R2P is mutualism again, and is being sold that any group of existing NHS employees can assert a right to provide an NHS service as a profit-share mutual. This is clearly privatisation even though there is no plc shareholder involved. However services provided by FTs are exempt and since all NHS trusts have to be FT by April 2014 the whole R2P programme seems designed to fail. AQP is touted as “patient choice”. A patient is supposed to choose any provider from a list that have been licenced by both CQC and Monitor. Again, this is designed to fail because few patients will know about the existing providers, and commissioners (held to a tight budget) will prefer volume contracts where they can make savings.

    The whole competition and choice agenda seems to be extremely muddled and badly thought out. If you have taken part in the Listening exercise you will see from the competition and choice questions that they ask that the government really doesn’t have a clue.

  11. Richard Blogger

    #1 “Would anyone mind telling me what hideous disaster will befall the country, if our health system becomes slightly more like that of Germany or France?”

    Bankrupt. Seriously, one of the German health insurers is bankrupt and most of the French insurers are heading that way. I fail to see how people can hold up the French and German systems without looking at their finances.

  12. UNISON Health

    Health bill's competition clauses 'tantamount to privatisation' | Left Foot Forward //fb.me/YoCIGMHB

  13. Watching You

    Health bill’s competition clauses are tantamount to privatisation – //bit.ly/keCmMr

  14. Stephen W

    “Competition may well raise standards for the fortunate few who get their services from the ‘winners’, but asking those left behind with the losers to accept a lower standard of healthcare, all in the name of market ideology, is simply unacceptable.”

    I genuinely don’t understand what you’re talking about. Surely in your preferred option bad providers would be allowed to continue offering bad service totally undisrupted, whereas in the Coalition’s plans they would go out of business and be replaced by good providers?

  15. Herbert Pimlott

    Cdns should watch ConDems attack on NHS RT @leftfootfwd: Health bill's competition clauses are…privatisation //t.co/f3z3eXg #cdnpoli

  16. Joe Mc

    @4 It is fairly simple: A hospital is not like a local shop, it wouldn’t go out of business straight away if it was a ‘bad service’, it would simply lose healthier more mobile patients and have less resource to deal with the remaining sicker ones. It could only vaguely work if you have two hospitals very close together with the ability to close one without incurring any costs. A perfect market can’t operate in healthcare.

  17. Healey: "Cameron is a PR man looking for a PR answer" | Left Foot Forward

    […] Left Foot Forward reported concerns the health bill’s competition clauses were “tantamount to privatisation”, following Nick Clegg’s failure at Deputy Prime Minister’s Questions on Tuesday to […]

  18. Prateek Buch

    @1 – if that remotely resembled what is being proposed, it might be worth discussing – it isn’t.

    @Richard Blogger – you’re right that the competition agenda is riddled with holes, which is why it’s crucial that the final Bill – once amended and possibly recommitted to Parliament – ensures we retain an NHS based on cooperation not competition.

    @Stephen W – I think Joe Mc deals with your comment fairly well – I’d emphasise again that under the current system standards are upheld through rigorous clinical criteria, not economic pressures which are doomed to fail in healthcare (see above comments) and I’d add the following: during the time it takes for a competitive market between say two hospitals to resolve (with the ‘bad’ one going bust as you indicate), hundreds of people’s lives would have been unacceptably tainted or even ended by sub-standard care. This cannot be allowed to happen – at least not in a nation determined not to see health inequalities worsen.

  19. Bonnie Zink

    Health bill's competition clauses 'tantamount to privatisation' | Left Foot Forward: //t.co/8u3Ze88 #sdoh

  20. Daniel Pitt

    Health bill's competition clauses are tantamount to privatisation: //bit.ly/jeVUcO #ConDemNation

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