Is the NHS for sale?
Fears that the NHS is being privatised and opened up to US companies have been a running theme of this election. Are they justified?
How much of the NHS is privatised?
Since its inception in 1948, the NHS has always been a patchwork of private and public institutions, in the sense that almost all GPs’ surgeries are private partnerships paid by the NHS to provide services; most dentists and opticians who treat NHS patients are also private businesses. But today, great swathes of
NHS activities are carried out by private companies, from the contractors that clean hospitals to the agencies supplying locum nurses. A series of market reforms since the turn of the century have also opened up many clinical services to the private sector. Private companies run pathology services and immunisation programmes; cataract removals and kidney dialysis are provided to NHS patients at private centres; healthcare groups operate units for mental health inpatients.
Exactly what proportion of it is in private hands?
It’s tricky to calculate. According to the Centre for Health and the Public Interest think tank, if you count GPs, pharmacy, optical and dental services as privatised, then some 25% of NHS spending goes on the private sector. But assuming that isn’t what most people mean by privatisation, then it’s more like 7-8%. In 2018/19, the NHS spent £9.2bn on private sector services: 7.3% of the budget of the Department of Health and Social Care. Recent years have seen the slow but steady growth of this figure.
Why has this happened?
The NHS grows constantly, at around 4% per year, because the population is expanding, and because treatment is becoming more expensive. And even when funding is available, the NHS has struggled to provide extra capacity. To tackle this, Tony Blair’s government took radical action to drive down waiting lists for elective operations: in 2003, NHS England started offering bulk contracts to private providers – which opened independent sector treatment centres (ISTCs) to treat NHS patients, doing routine operations such as hip and knee replacements. In 2009, the scope was expanded: any “qualified provider” was allowed to offer services in 39 areas, from autism to wheelchair provision. Another great change came in 2012, when David Cameron’s health secretary, Andrew Lansley, passed the Health and Social Care Act, which created clinical commissioning groups (CCGs): groups of GPs and clinicians who buy NHS services for patients. The groups have to put nearly all new services out to tender; NHS bodies and private firms can then bid for them.
Who are the biggest players?
There are hundreds of companies active in the NHS, but some of the biggest include: Virgin Care, which has about 400 NHS contracts worth almost £2bn, particularly in community health (such as district nursing); Care UK, which provides GPs’ services and residential care; and outsourcing giant Serco, which has major contracts to provide facilities management and clinical services.
How successful has it been?
It’s hard to generalise on such a complex subject, but in limited areas such as, say, hip and knee replacements at ISTCs, private providers have performed well. On the other hand, private firms have been accused of cherry-picking the simpler, more lucrative cases, leaving the NHS with the difficult ones. There have also been a series of high-profile failures. Circle, which ran Britain’s first privately run NHS hospital, Hinchingbrooke in Cambridgeshire, pulled out after a Care Quality Commission (CQC) report revealed a catalogue of serious failings. At least 11 mental health units run by private companies have been judged inadequate by the CQC. And it is generally accepted that Lansley’s reforms added cost and complexity, without real benefits for patients or taxpayers.
What are the main parties’ policies on privatisation?
In its manifesto, Labour vows to “end and reverse” privatisation of the NHS within the next Parliament. The party says it will make sure both clinical and subsidiary services are “in-sourced” back to the NHS as current contracts run out: a massive organisational undertaking in an already-stretched service. Jeremy Corbyn has repeatedly claimed that the Conservatives are planning “runaway privatisation” of the NHS. The Tories reject this, but their position is hard to discern. There’s no mention of the word “privatisation” in the manifesto, and party campaign literature says “the NHS is not being privatised” – but in a TV interview last month, Boris Johnson twice declined to rule out expanding the use of the private sector in the health service.
Will any US trade deal increase privatisation?
Donald Trump initially claimed that the NHS was very much “on the table” in post-Brexit trade talks between Britain and the US. Though he has since rowed back on this, Corbyn claims that after Brexit, foreign firms will have “a chance to make billions from the illness and sickness of people in this country”. But the fact is that any US company with an EU subsidiary already has the right to bid for NHS contracts: Americanowned groups Cygnet and the Priory Group both provide mental health inpatient beds. The US could certainly push for easier market access in talks, but it’s likely to be less interested in that than in drug pricing (see box).
So how worried should we be?
Polls show that British people overwhelmingly oppose privatisation: a 2017 YouGov survey found that 84% were against it. And suspicion remains that gradual privatisation is a front for an attempt to “dismantle the NHS”. On the other hand, the private sector is now embedded in an NHS which can ill afford to sacrifice any of its capacity. And as The King’s Fund think tank puts it: “Provided patients receive care that is timely and free at the point of use, our view is that the provider of a service is less important than the quality and efficiency of the care they deliver.”