APPENDIX 10
Memorandum by the Socialist Health Association
(PS 24)
INTRODUCTION
The Socialist Health Association (SHA) is affiliated
to the Labour Party and plans an important role in the development
of health policy locally and nationally. Since 1930 we have campaigned
for a National Health Service and to defend the principle of a
comprehensive health care funded from taxation free at the point
of use. As socialists we believe in the common ownership of social
capital for the relief of poverty and for equity. We do not believe
that money or influence should buy better treatment for human
suffering.
SUMMARY
The SHA wishes to express its grave concern
that current government policies and proposals will increase the
very inequalities that we are all committed to reducing. The statement
in our election manifesto that "specially built surgical
units, managed by the NHS or the private sector, will guarantee
shorter waiting times" is the latest in a series of policy
changes effectively preparing the NHS for wide-ranging privatisation
of the management—and in some cases provision—of clinical
health care.
The Concordat with the private sector which
Alan Milburn signed last October puts the private sector and NHS
onto an equal footing by requiring the NHS managers to involve
private hospitals and nursing homes in workforce and long term
capacity planning. The high cost Private Finance Initiative has
resulted in money intended for patients being channelled away
from patient care and into the coffers of business. In every area
with a first wave PFI hospital scheme, some 30 per cent of NHS
beds are being closed with reductions in clinical staff budgets
averaging 25 per cent.
The Health and Social Care Act 2001 accelerates
these trends by enabling commercial companies, underwritten by
the government, to build, run and finance GP and primary care
centres. They can also provide services by employing clinical
staff. Although the Health and Social Care Act allows more care
to be provided for profit, the government pledges that patients
will not have to pay for operations. However, a clause in the
Act distinguishes (free) health care from personal care and hotel
costs, which can attract a charge. Under the Act, Primary Care
Trusts with pooled budgets and Care Trusts—a new type of
NHS body—will be allowed to charge for care. The government
has already published new Intermediate Care Guidance limiting
NHS health care to six weeks except in exceptional circumstances.
The SHA strongly opposes New Labour policies
and proposals that support the introduction of private sector
management and user charges into NHS clinical services (the latter
by creating mechanisms that will allow NHS bodies to charge for
the non-nursing elements of care). Such changes will disproportionately
affect the poorest and most vulnerable people in our society,
and as such represent a direct challenge to the fundamental principles
of the NHS that we have all fought so hard to retain.
EVIDENCE
CONCORDAT
NHS Concordat with the Private and Voluntary
Sectors requires NHS managers to involve private hospitals and
nursing homes in long term workforce and capacity planning—for
elective care, critical care and intermediate care—where
this offers demonstrable value for money and high standards for
patients.
1. Value for Money
1.1 The Concordat, rather than delivering
value for money, encourages commissioners to provide intermediate
care services in the private sector where user charges can be
levied. It is an inequitable policy that effectively shrinks the
NHS for some of the most vulnerable patients. Over 270,000 people
could be affected (NHS Plan). Patients receiving intermediate
care in community based settings or in their own home will be
fully funded on a time limited basis, typically lasting no longer
than six weeks. Many episodes will be much shorter than this eg
one to two weeks following acute treatment for pneumonia or two
to three weeks following treatment for hip fracture. (HSC2000/01:
LAC (2000)1. If patients are not recovered or ready to return
home after the time allotted in their care plan, they will undergo
a second assessment including an assessment for social care for
which they will be means tested. The 2001 Health and Social Care
Bill carries a clause extending the provision of free nursing
care to all patients in private nursing homes. However, patients
will still have to pay for the cost of accommodation and personal
care, on average 80 per cent of the total fee of £350-400
per week (HSJ 9 August 2001). A recent consultation document(
London: Department of Health: January 2001) suggests that doctors
charge up to 55 per cent of a patient's income for the costs of
personal care in private residential settings.
1.2 The Health and Social Care Bill 2001
allows PCTs to form new NHS bodies called Care Trusts holding
pooled budgets for health, social services and other health related
LA functions. Care Trusts retain the requirement of the local
authority to charge for services such as provision of residential
care and the discretion to charge for others such as transport.
Certain equipment and non-residential social care.
The Concordat encourages Care Trusts to maximise
the use of the private sector and to define personal care as broadly
as possible in order to increase charges. It also provides cash
strapped PCTs and Care Trusts with an opportunity to use private
intermediate care beds as a substitute for expensive acute care
(see 2.2). People requiring prolonged hospital and community health
care eg following complex surgery, trauma or acute conditions
such as stroke or cancer may find their eligibility for free NHS
care seriously curtailed (Pollock A. BMJ 2001; 322: 964-967).
1.3 The government expects the private sector
to deliver value for money. This seems disingenuous. The private
sector has higher costs than the NHS. Doctors and nurses salaries
are higher and there is a duty to maximise profits. Typically,
the NHS fee for a consultant surgeon on the maximum scale is £115
for three and half hours work whereas private sector rates could
be up to £180 per hour. Surgeons clearing NHS backlogs in
private sector hospitals are paid at the higher rate (Guardian
31 August 2001). Birmingham Health Authority, between October
2000 and March 2001, paid four times more to buy intermediate
care beds in private nursing homes than it did for intermediate
care beds in two NHS community hospitals with the full range of
rehabilitation facilities (£1,200 per week compared with
£320).
1.4 The Concordat encourages the private
sector to recruit and complete for staff trained at great public
expense, at a time when serious recruitment and staffing problems
are threatening the ability of managers to deliver the NHS plan.
Shortages of skilled staff have been identified by health authorities
across the country as the biggest threat to meeting NHS plan targets
(HSJ 9 August 2001). Two thirds of NHS nurses in a recent RCN
survey say staffing at the hospitals and clinics where they work
is insufficient to meet patient needs (Guardian 18 September 2001).
There are many examples of NHS beds and theatres closing because
of staff shortages.
1.5 Even if numbers of trained nurses and
doctors increase in line with the NHS plan, the NHS will still
be at a disadvantage. Private sector salaries for doctors and
trained nurses are highly competitive and terms and conditions
of employment often more attractive than those in the NHS. NHS
trusts with cash limited budgets will find it increasingly difficult
to attract staff as the private sector expands. Private hospitals
have already treated 50,000 more NHS patients since the Concordat
and the Independent Health Care Association expects numbers to
grow (HSJ 23 August 2001).
1.6 Contracts that appear to be better value
initially could end up the only option and costing more. East
Surrey Health Authority has used private hospitals to remove almost
1,000 patients from its waiting lists. It found prices were comparable
to and sometimes cheaper than the NHS, patient satisfaction seemed
high and consultant productivity was higher. Both the health authority
and the private sector are now strongly in favour of developing
long term arrangements (HSJ 6 September 2001).
Such arrangements are likely to weaken local
NHS provision by reducing the pool of staff available. As a result,
the private sector could become indispensable and in a position
to charge more. The NHS and local authority in Birmingham were
held to ransom when Birmingham Care Consortium which represents
owners of 178 independent homes in the city refused in the midst
of a major "bed blocking crisis" to accept new residents
from the council unless the local authority was prepared to increase
payments. The home owners accused the city council of deliberately
under-paying the independent sector in order to recoup a social
service deficit of £14 million (Birmingham Post 19 June 2001).
2. Standards of Care
2.1 Treating NHS patients in private sector
beds for elective care and intermediate care may be justified
on a short term basis to reduce waiting times and to avoid some
patients being "trapped" in a hospital bed. By encouraging
long term arrangements, the concordat appears to mimic health
care in the United States—a system notorious for generating
fraud, malpractice and inequalities. The medical director of BUPA
admits "private practice offers fewer of the safeguards and
support that help to minimise the adverse events and reduce patient
risks in the public sector" (Vallance, Clinical Risk Journal
2, 27-30 1996).
2.2 The Concordat gives local commissioners
the responsibility for ensuring high standards are adhered to.
But it also gives commissioners faced with financial difficulties
the freedom to use the private sector in order to avoid the cost
of acute hospital care. There is a real risk that some patients,
particularly those who are elderly, may not get the most appropriate
treatment. An intermediate care bed in a private home is expensive
but still costs less than an acute bed in a hospital and can be
means tested. Managers on limited budgets may be compelled to
purchase intermediate care in private care homes even though such
places may not have the resources for the expensive specialist
geriatric rehabilitation provided by the NHS and required by many
patients.
2.3 The Concordat seems to encourage the
perception that intermediate care is a cheap option stating:
"In some cases the level of care required
does not need to be the full acute nursing care delivered in a
hospital setting. It is for this reason partners should consider
the supporting role private and voluntary nursing homes, residential
homes and home care could play in providing these services."
Research shows that intermediate care is not
a cheap option—one study be a senior lecturer in gerontology
and health policy at Southampton University showed that intermediate
care was more expensive than acute care and produced no added
benefits for patients (HSJ 19 April 2001). The British Geriatric
Society notes the lack of evidence for the effectiveness or cost
efficiency of intermediate care and urges cautions against dismantling
established effective specialist services. It warns that ageism
is a real danger. (BGS Compendium Document D4).
Geriatricians writing in the BMJ share this
view "Specialist geriatric units are crucial elements of
comprehensive acute hospital services but are expensive. In medical
care, as in anything else, you get what you pay for. It is convenient
for managers to confuse convalescence (spontaneous recovery) with
the more expensive rehabilitation that is necessary to make non-spontaneous
recovery happen. Geriatricians who have contrived to defend specialist
rehabilitation units against the cutbacks of the past 20 years
may now have to fight to prevent them being degraded to intermediate
care. Indeed managers may seek to close rehabilitation units to
free money for purchasing intermediate care in private sector
nursing homes. Those "extra" beds will have to come
from somewhere else." (BMJ 2001; 322: 807-8.)
2.4 There is a wealth of evidence from compulsory
competitive tendering to show that the bulk of private sector
"efficiencies" are at the expense of non-clinical staffing
costs and the quality of patient care. According to King's Fund
research, the "best value" tool introduced into local
government 18 months ago is not preventing councils from "driving
down costs at the price of quality" (King's Fund Report:
Future Imperfect?). It found that the hourly rate for care workers
in private sector homes was below £4.
2.5 The Annual Report 1999-2000 of Birmingham
City Council's Inspection Unit found that local authority and
independently run care homes both had problems relating to staffing
shortages. But whereas the local authority homes had staffing
shortages largely relating to sickness and lack of funding for
maintenance, the private sector homes had difficulties with recruitment
and retention.
The report states: "financial constraints
on fee levels coupled with rising costs may have resulted in corner-cutting
in some homes to an extent that is unacceptable for the interests
of residents. The great competition for staff in the area has
a marked effect and most homes have had difficulty in replacing
staff that leave. Despite this, some employers have been found
to pay less than the minimum wage, by employing people without
training and in difficult circumstances. Such employment is unlikely
to last and the staff turnover has a detrimental effect of the
welfare of residents."
PRIVATE FINANCE
INITIATIVE
3. Contradictory statements
3.1 On 15 February 2001, Health Secretary
Alan Milburn announced that another 29 new hospitals, totalling
£3.1 billion, were to be built under the private finance
initiative, "if that represents best value for the taxpayer
and the NHS." He declared "There will also be more beds
in the new hospitals. For four decades, the number of hospital
beds has been falling—157,000 were cut between 1980 and
1997 alone. More than 60,000 of those were general and acute beds.
In the year to December 2000, the number of general and acute
beds started to rise again. I am determined that that trend should
now continue".
The two statements contradict one another. The
first, that the new hospitals are to be privately financed, will
lead to service reductions and bed closures as research by Professor
Allyson Pollock and others has shown. The second, that the new
hospitals will have more general and acute beds, indicates the
NHS has reached a capacity ceiling due to previous bed losses
and growing demand and needs to increase the number of beds.
4. Value for Money
4.1 The DoH asserts that bed numbers in
new hospitals are determined by commissioners well before a decision
is made on whether to fund the hospital through public or private
funding (HSJ 15 June 2000). In practice, Trusts are forced down
the PFI route.
During public consultation on the new hospital
recently approved for south Birmingham, the Chair of the trust
wrote "There is only one source of funding for hospitals—the
Private Finance Initiative. We have investigated all the other
suggestions but have been told by the NHS Executive that any scheme
costing more than £25 million must be PFI (Birmingham
Post 14 July 1999)".
When drawing up the Outline Business Case in
August 2001, the Trust told members of South Birmingham Community
Health Council that it would not get the funding for a new hospital
if the Public Sector Comparator proved to be better value for
money. (information from South Birmingham CHC).
4.2 In June 1998, the DoH issued guidance
on preparing the Strategic Outline Case covering capital investments
over £25 million. The guidance requires trusts and health
authorities to show that they can afford both the capital and
revenue consequences of building hospitals under the private finance
initiative. So at the earliest planning stage. Trusts are compelled
to draw up plans constrained by the costs of private rather than
public financing. Health authorities and trusts planning new hospitals
must reduce expensive in-patient care in order to accommodate
the extra costs of the private financing.
5. Bed capacity
5.1 The DoH has promised an extra 2,100
acute general and acute beds and 5,000 more intermediate care
beds for England and Wales (the first increase in 30 years) by
2004. It has also instructed health authorities not to plan for
a reduction in bed numbers, including general and acute beds,
except in exceptional circumstances (HSC(2001)3LAC(2001)4.
5.2 The recently approved new hospital for
the University Hospital Birmingham NHS Trust (UHBT)—a new
single site acute hospital to replace the Selly Oak and Queen
Elizabeth Hospitals in Birmingham—seems to show the same
trend in acute bed reductions as that found in the first wave
of PFI hospitals.
Existing and proposed bed numbers for UHBT's new
hospital scheme
BED NUMBERS BASED ON CURRENT ACTIVITY
| |
OBC | SOC
| Exist | OBC minus Existing
|
| Intermediate | 160
| 150 |
| |
| C |
| |
| |
| Day Case | 67.2
| 68 | 50
| +17.2 |
| Patient Hotel* | 25.2
| | | |
| Acute | 786.2
| 810 | 1,017
| -230.8 |
| Total | 1,038.6
| 1,028 | 1,067
| -29.4 |
* Patient Hotel—overnight accommodation for patients
and relatives who are self-caring.
SOC—Strategic Outline Case, published May 2001.
OBC—Outline Business Case, in preparation. Projected
numbers from UHBT.
The loss of 230 acute beds represents a 23 per cent reduction,
more than twice as big as the 9 per cent reduction proposed in
the "care close to home" scenario of the National Bed
Inquiry.
5.3 The true extent of the above acute bed reduction
could be obscured by 106 additional beds planned for regional
specialities which have been agreed with other Health Authorities
in the West Midlands and will be funded separately (information
from the trust). An increased caseload is anticipated here due
to the transfer of beds from other hospitals and new government
targets. There will also be more community intermediate care beds
in line with the NHS plan.
Replying to a letter from Roger Godsiff MP expressing the
concern of Birmingham Trades Council, under Secretary of State
Yvette Cooper wrote:
"It is important to note that the proposed on-site intermediate
care beds still fall into the category of general and acute and
not the definition of intermediate care stated in HSC (2001)1."
One of the planning assumptions of Birmingham Health Authority
is that on-site intermediate care beds will be nurse led and at
least 40 per cent cheaper to run than traditional acute hospital
beds (BHA, Framework for Investment 1998). Attempts by the DoH
to re-define established bed categories provides another opportunity
to hide the real extent of acute bed reductions.
5.4 The fudging of bed definitions parallels a decline
in evidence based planning. Birmingham planners assume that when
the new hospital opens in 2008, levels of activity and funding
will be the same as they were in 1999. The rationale for this
assumption is that the Trust can address the rate of increase
in emergency admissions—averaging 3 per cent per year—by
deploying intermediate care beds and other "new models of
care". (Consultation on proposals for the Development of
Acute Services in south Birmingham 1999). The consultation document
provides no trend or activity analysis or any other form of evidence
to prove that the "new models of care" will reduce the
need for acute hospital care or improve clinical outcomes. The
chief economist at the DoH and author of the Bed Inquiry document,
Clive Smee, admits that "evidence of the effectiveness and
cost effectiveness of introducing services into new settings is
not as good as we would like". (HSJ 25 April 2000).
6. Filling the Gap
6.1 "New PFI hospital schemes involve reductions
in the number of acute beds, many involve closures of other hospitals
and services. The first 14 PFI hospitals involve bed reductions
averaging 33 per cent", writes Prof Allyson Pollock and colleagues
in their response to the IPPR Commission on Public Private Partnerships.
Health authorities, particularly those building new PFI hospitals,
are beginning to use the private sector Concordat to fill the
gap. In the new Hereford PFI hospital, bed numbers are due to
fall from 377 to 250, a reduction of almost one third. The Trust
has been told that it will only be able to meet the targets of
the NHS Plan if it makes a substantial investment in intermediate
care. As the local GPs are short of money, these are likely to
be purchased in private care homes, where patients will contribute
to the costs of their care (HSJ, 23 August 2001). Surgeons from
North Durham have been compelled to treat NHS patients in private
hospitals at extra costs because the new PFI hospital there has
insufficient beds to meet local needs (Guardian, 31 August 2001).
The Department of Health does not keep figures on how many
patients are being treated at extra cost in the private sector.
But the short fall in acute beds seen in PFI hospitals makes the
Concordat a necessity, irrespective of cost and standards of care.
Without it "the biggest new hospital building programme in
the history of the NHS" would not succeed.
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