Select Committee on Health Appendices to the Minutes of Evidence


Memorandum by the Medical Practitioners' Union (PS 15)


  This discussion document has been prepared by the Medical Practitioners' Union as a contribution to the current debate that is taking place within the Trade Union and Labour movement on the role of the private sector in the NHS. The MPU has a proud history in support of the NHS. We were the only trade union of medical doctors which was instrumental in campaigning for the creation of the NHS. We also campaigned against the Tory internal market and fundholding and have been strong defenders of patient rights in the NHS. We remain deeply committed to the ideals of the NHS.

  This document argues the case against wholesale private sector involvement in the health service. We accept that there may be a limited role for the private sector in the NHS as a short-term measure. Our objection to privatisation is based on our deeply held conviction that privatisation offends against the basic principle of social justice on which the NHS was founded—that treatment should be determined by patient clinical need, not their ability to pay—we should not be supporting private medical practice in any way. It drains the NHS by using NHS trained staff; concentrates on routine care; and is there primarily to make a profit.

  Our central argument is that the NHS has a proud record of achievement in spite of decades of under-funding and low investment. Its staff should be congratulated in having provided a service thus far rather than blaming the staff, including NHS managers. There is an overwhelming case for placing any new investment in the NHS rather than the private sector, enhancing the ethos of public service and retaining the benefits of collaborative effort and team working.

  The NHS has a proud record over the past five decades. It has innovated; it has improved quality; it has managed on very meagre funds. So less blaming of staff, less dreaming "private good—public bad". Adequate funding of a proven cost-effective NHS will resolve most of the issues that have to date held the NHS back from achieving its full potential.

  We recognise that the decades of under investment in the NHS has led to outcome markers which show that the NHS provides an inadequate service and has a huge backlog of problems. Many hospital buildings are in a terrible state; there are unacceptable levels of waiting for operations and visits to doctors. There are huge variations in outcomes between different parts of the NHS. Because of the urgent need for change, we can accept a limited role for the private sector in the NHS for the short-term. However, we need to be explicit about the principles under which the private sector can be involved.

  MPU believes the government needs to show clearly why the analysis that we present in this document is incorrect and why the solutions we suggest are invalid before embarking on any further private sector involvement in the NHS. We believe there is little or nothing that a well funded NHS cannot do and will share our thoughts within MSF, with the other health trade unions and with the wider trade union and labour movement, many parts of which already share our view.

Why is the NHS so clearly failing to keep up with demand and why are health indicators so bad in the UK?

  Under funding is the simple answer. Tony Blair accepted this when he pledged to raise the NHS spend to the EU average. Unfortunately even the 6 per cent increase in NHS spend till 2004 will not reach the EU average which itself will have moved on by 2004. The NHS is funded to about 70 per cent of the EU average and not surprisingly provides a below par service. Low wages and cuts in training have resulted in shortages of nurses, doctors and other health professionals. Unacceptable workload pressures have led to demoralisation and recruitment and retention crises. Our rates for heart operations and survival from cancer are low. We do have fewer doctors, nurses and other health professionals. For example, there are 1.8 GPs/1000 population in the UK compared with European average of 3.4/1000.

  The Government is committed to spending more money on the NHS. 30 per cent more money will be spent on the NHS by 2004 and the Government should be congratulated for this. However, no account has been taken of the building maintenance backlog, the need to modernise a large number of NHS facilities, and the knock-on effect of running services on a shoestring for decades. There is therefore a growing "reality gap" between the improvements in the NHS the Government expects the new money to supply and what can actually be achieved. A way has to be found to fund the NHS properly beyond 2004.

Why not use the private sector to bail out the NHS?

  It is perverse to identify under-funding of the NHS as the cause of the problems and then spend money in the private sector. Funding our health service on the cheap is clearly failing so more money has to be found. Most people want to see the NHS maintained, improved and remain a full public service rather than new money being diverted into profits for the few.

  There is absolutely no evidence that pouring money into the private sector would help the NHS. There is evidence that the privatisation of cleaning has led to filthy hospitals; the PFI schemes are poor value for money, lead to less beds and staff and to cramped, poorer premises.

  Railtrack, BT, M&S, the Dot Coms and Marconi are poor adverts for the abilities of the private sector. In the era of evidence based medicine there is a total lack of evidence based public policy in this area.

Why not use the spare capacity of the private sector hospitals to get waiting lists down?

  We do not object to using spare capacity sector in Private hospitals where it makes sense to do so. But this should be a temporary expedient until NHS capacity is increased. Any short-term measures should fit the long-term strategy of properly funding the NHS as the provider of health care in the UK. We do not think that standards of safety in private hospitals are as high as in the NHS, that it is sensible to encourage NHS staff to moonlight, or that it makes sense to entice away NHS staff trained at public expense so they can "help the NHS" and coincidentally help profit plundering for the private companies.

Why not use the flair and imagination of the private sector?

  The NHS does not get everything right and can learn from the private sector. That does not mean the NHS could not also carry out these new tasks. The Hospice Movement is an example where the NHS did learn from the voluntary sector. In some areas, the NHS even pays significant amounts of money to Hospices so that they can provide a service to NHS patients. The NHS saw what was being offered in the not-for-profit sector and changed its attitudes to and services for the terminally ill. There is plenty of flair and innovation in the NHS—the government Beacon practice scheme and Nye Bevan Awards for example. What hinders the NHS is lack of cash and investment and spending hours trying to decide which cuts to make so the budget stretches for one more year.

Why not use the expertise of private sector management to beef up the NHS?

  Poor management in the private or public sector needs improving. The NHS does not have a monopoly on poor management. Disasters in the private sector such as Railtrack and the computerisation of the Passport Office and Benefit Agency should be remembered along with the spectacular management failures in BT, M&S and Marconi. Private sector managers often look good because the resources they are given match the task they are asked to address. This has rarely been the case for the NHS. As an alternative the Government has already suggested a University for the NHS which we support. Both the private and public sectors have a lot to learn from each other.

The Government says that this is not privatisation since the bills will be paid for out of public funds and the service will remain free at the point of use. Does it matter who provides the service and who owns the plant and services?

  Yes. If the NHS is reduced to a bill-paying organisation it will lose the power and control that an integrated service provides. Look at the state of the railways and what is happening in our schools. Involving the private sector fragments essential co-operation, introduces competition instead of team working and leaves less money for services as profit and share dividends are removed from the NHS budget.

  PFI hospitals have done just that. In Norwich the new PFI hospital has yet to open but already the private sector has re-financed the PFI investment and made £70 million profit, money which could have been used to reduce the long waits for heart and hip surgery. Local trusts have been instructed to make further savings by cutting beds and staff to pay for the rent on the new hospital. Money spent in the private sector is money leaking out of the NHS economy.

  If the private sector owns the plant it will distort clinical priorities to maximise profit. In America MRI scans are often carried out in inappropriate conditions—so-called over investigation. The NHS is efficient in its use of resources because their use is based on clinical need and not for a hidden profit motive.

  Drugs companies are wholly privately owned and spend millions visiting GPs to urge them, for example, to prescribe the new (expensive) drugs to lower cholesterol in people with heart disease. Making sure all heart patients are on aspirin is a higher priority but aspirin is cheap and provides no profit.

  It is difficult enough to get public service bodies to co-operate with each other. Trying to get private firms fundamentally in competition with each other to share commercial secrets and work collaboratively is a nightmare.

The Government suggests four ways to involve the private sector—expanding the Concordat with the Private sector, health factories, involving the private sector in management and using its expertise in IT, and PFI/LIFT. What's wrong with that?

Concordat with the private sector

  As a short term measure limited to using spare capacity at an affordable price and without taking staff away from their NHS duties we can accept the Concordat between the NHS and the private sector. However it would be absurd if the Concordat resulted in fewer NHS operations and more waiting list cancellations because staff were at the local private hospital "helping the NHS to cope". (Remember the Government's contradictory commitment to prevent new consultants doing private work, which we support).

Health Factors

  MPU has long argued for more efficient use of consultant's and hospital theatre time but getting the private sector to build, staff and run stand alone factories is wrong headed. Small, stand-alone units are not safe. Present private hospitals are usually built away from NHS hospitals and regularly have to transfer patients to the NHS when something goes wrong. Private hospitals rarely have ITU facilities or a full complement of on-call staff. The NHS picks up the pieces and the private sector keeps its fee.

  We have no objection to new ways of working. But the NHS could run these new units for hips, hernias and cataract services more safely and more efficiently as integrated units within NHS hospitals. There are excellent examples of efficiently run day surgery units in many parts of the NHS. Given the right amount of funding, they could carry out more operations. The NHS can be flexible if given the financial capacity and leeway instead of the daily struggle just to cope. Current NHS inefficiency is partly the inefficiency of under-funding.

  In addition if these units were not integrated into the NHS they could not be made available at times of emergency—a flu epidemic or major disaster for instance. The whole rationale of a hospital is to concentrate medical resources in one place so that they can be deployed to best advantage. Integrated NHS units allow adequate backup for junior staff and Royal College approval for their training.

  Many private sector units are inadequately monitored because monitoring costs money that the NHS does not have. More private units means more monitoring and more NHS money diverted from patient care.

  Many patients needing cold surgery are elderly and have other problems, which can be addressed while they are in hospital. Wouldn't it be more sensible therefore to build these units on existing hospital sites?

Better Management

  There are ways to improve management in the NHS other than inviting the private sector to take the NHS over with the associated loss of power and control. In Frenchay hospital there is litigation pending but the patient is having difficulty finding out whether the private sector contract or the Trust Management is responsible for errors. It is possible the NHS will have to pay up leaving the private sector company with its contract fee intact. Evidently no one had foreseen such a situation of confusion could arise. The same thing happened with Railtrack and its contractors—a stream of disconnection and failure of accountability.

  Rather than bringing private sector management to take over NHS facilities, we suggest:

    —  Use the NHS University and develop management fellowships with secondment from private sector firms with a proven record and something specific to offer the NHS.

    —  Resource and use Beacon Management Practices to teach colleagues about best practice.

    —  Properly resource and upgrade estate management within the NHS and clean up our wards so neglected by the private sector.

Better IT

  The private IT sector has not served the NHS well. There are many GP and hospital clinical systems that are unable to "talk" to each other. IT suppliers have had to accept specific "all NHS" standards because the market solution brought fragmentation, poor quality and systems that wouldn't "travel". The private sector has a poor record on large-scale computerisation as seen in the Benefit Agency and Passport Office for example. There are excellent examples of NHS IT systems that are innovative and which can be extended throughout the NHS if properly resourced.

Better Investment

  PFI and the community variant NHS LIFT are poor investment ideas. They are like buying a house with a huge mortgage you can't afford. Sooner or later you have to pay up and so will the NHS. Because rent on these schemes comes from NHS revenue (as opposed to capital) budgets PCTs will have to find the rent first and use what is left over to buy clinical services. Whilst PFI schemes have maintenance charges built in it will be up to the owners to decide when and if work is needed.

  PFI to date has been poor value for money (see IPPR Report). We can see no argument for not using money borrowed at a low rate by the government. Investing in the private sector is counter productive—it denudes NHS of staff and money. The NHS is then perceived to be getting worse and so the cycle tightens.

  If LIFT money is to be used, let the local community control the facilities that come into these new premises. Instead of retail outlets boosting investors' profit use the space for GP surgeries, benefits advice and healthy living centres and so on. Include in the tender documents a requirement to use local labour and boost the local economy in deprived areas.

In response to the Governments desire to involve the private sector, MPU suggests:

    —  building up NHS capacity and only using the private sector short term where there is a genuine unresolvable, short-term capacity issue;

    —  increasing staffing by better wages and terms and conditions rather than take staff away from the NHS to work in the private sector;

    —  training "intermediate health professionals" to work exclusively on hips, hernias and cataracts adequately supervised by formally trained doctors and nurses, which would also help to reduce intolerable workloads;

    —  operating at weekends with flexible staff policies building on success of NHS day units using new consultants working full time for the NHS;

    —  paying enhanced rates of pay in difficult to recruit areas;

    —  resourcing NHS Beacon Teams to help other establishments to change ineffective or inefficient practice.

  If the private sector is to be involved then there are some basic questions that the Government needs to answer.

    1.  What evidence is there that the private sector will improve the NHS and its delivery of services?

    2.  Given a cash-strapped health service where will the profits come from?

    3.  If there is a way of making genuine profits from public services, why doesn't the government invest so that these profits can be ploughed back into the public purse?

    4.  How will a two-tier system be avoided when further private involvement grows the private sector as a whole?

  In summary, we applaud the Government's new investment in the NHS and want their support for the NHS to continue but as a publicly funded provider of integrated, high quality care. An adequately funded health service can learn from the non-NHS health and commercial sectors and apply the lessons to its own functions without losing its power to control and direct resources. The public supports the distancing of private profit making companies from the ideals and ethos of the NHS. So do we.

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