Will hospitals be local election issues at the next general election?

Paul Corrigan was Tony Blair's special advisor on the NHS and was the architect of the Foundation Trust programme and the Blairite reforms that brought in more private sector involvement into the NHS. He knows a thing or two about the NHS and politics.

It is safe to say that Corrigan is not a fan of Lansley's plans, but he's also not in favour of maintaining the status quo. However, it is interesting to read his opinions and analysis of Lansley's NHS re-organisation.

Corrigan's blog on the government's response to the consultation over the NHS white paper is significant because he's identified the political traps that the new Health Bill will produce. Readers of this blog will know that I am pretty luke warm about GP commissioning, it was going to happen under Labour anyway, and if it is done right (ie not Lansley's way) it could actually improve care. The part of the white paper that no one talks about, and the part that really gets me going, is what Lansley intends to do with hospitals. This is why Corrigan's blog is significant, he explains how Lansley's plan will fail and the significant effect this will have on the Conservatives.

In my last blog I pointed out that all hospital trusts will have to become Foundation Trusts. The government will abolish the NHS Trust model so there will be no option: a hospital trust will have to be a Foundation Trust or not exist at all. Corrigan points out that there are about twenty NHS Trusts that will not be able to become Foundation Trusts: they are too weak in their financial governance, or quality of care, or they simply have debts that are too large.

In early 2011the Government will publish how the pipeline of organisations to become FTs will look. It will provide a map of all hospitals that are not FTs and expectations of when they will make it to FT status. It will outline a menu of local and national support for this pipeline. This will not just involve turnaround teams, but will also have plans for regional health economy reconfigurations, as well as options and mergers.

The last part is significant, as Corrigan points out:

The final date for applications to become a stand-alone FT will be 31/03/2013. ... The legislation will remove the status of non NHS FT trusts from the statute book for any trust beyond April 2014. Within these plans the Provider Development Agency will have one year to work with those organisations that have not applied to become an FT to ensure that they have plans for merger or acquisition before the non FT trust status is abolished.

If the coalition survives, the election will be between spring 2014 and 2015. This means that according to these plans about 20 hospitals will be closing or merging or being taken over in the year before the earliest date of the election. I will be interested to see how those in the Government who are interested in electoral politics take to this timetable. Does David Cameron know this?

Hospitals are the most obvious embodiment of the NHS, people get passionate about their local hospital. The re-organisation of the NHS will mean that the ownership of part (or all) of each NHS hospital will be doubtful. But more significantly, there will be twenty places around the country where NHS hospitals will become election issues. We will see the list of these hospitals next year, but the interesting point is that it will not be the Labour strongholds of the North East because that is an all FT region nor North West because that is 80% there. Most likely these failing NHS trusts will be in one of the Strategic Health Authorities of London, South Central or South East Coast. In other words London and the Home Counties.

The graphic above shows the Strategic Health Authorities and the percentage of the trusts that are Foundation Trusts (shades of grey). England is almost completely blue politically (Conservative) so the graphic just shows the Labour (red) and Liberal Democrat (yellow) areas. What is immediately clear is that other than London it is the predominately Conservative areas that have a low number of Foundation Trusts.

What about hospitals?

In the next blog I will comment on a recent blog by Paul Corrigan about the political hole that the government is digging itself, but before I do that, I must first wind back and explain the context of the issue.

The white paper says very little about hospitals, but the significant section is 4.21:

"Our ambition is to create the largest and most vibrant social enterprise sector in the world."

The first point to make is that half of US hospitals (2,918) are social enterprises, so how Lansley expects the 436 NHS hospitals in England to be bigger than 2,918 is anyone's guess.

The white paper goes on to say:

"As all NHS trusts become foundation trusts, staff will have an opportunity to transform their organisations into employee-led social enterprises"

This is saying that the plan is for management buy-outs. The rather interesting thing about the government's response to the consultation on the white paper (Next Steps) is that they back track from this position. Not only have they back tracked (which is good), but that they have back tracked without there being much opposition to this policy (well, some people like me - and notably the public service unions - have opposed the policy, but few others have, and few people who the Conservatives actually listen to). It would be interesting to know why they have back tracked. Perhaps we will never know.

Next Steps points out the lack of response in section 6.17:

Regulating healthcare providers discussed the prospect of enabling FTs to have employee-only memberships. Not many respondents commented on this proposal but, with some exceptions, those that did were generally not supportive.

In other words, Lansley has said that he wants management buy-outs and the response has been Meh. Few people (other than us usual suspects) have said that this is the end of the NHS as we know it, but equally so, few people have said "this is wonderful". Lansley (or is it Letwin?) responds to this by saying (effectively): "we have given you an ideal opportunity to get rid of the NHS and you ungrateful bastards are unwilling to congratulate us".

On the one hand I am happy, but on the other hand I am scared. The problem is that the fact that there were so few people running around saying that the demise of the NHS was a good thing means that the demise of the NHS is not being publicised. Those of us trying to rally the public against the worst policy a Conservative government has ever produced, have been denied our best weapon: the enthusiasm of the privatisers.

Section 6.18 points out that the government is disappointed that the public have not warmed to their big idea:

However, we remain convinced that employees should be given new opportunities to provide innovative services, and an alternative way to achieve this is for staff to set up their own independent organisations to run services. Staff providing community health services in PCTs already have the “right to request” to set up an employee-led social enterprise; the Government is exploring a similar “right to provide” for staff working in NHS trusts, and will actively encourage FTs to consider similar requests from their staff.

They say that even though the public don't want it, we will get it anyway. Their new idea is that we will get the "employee-led social enterprises" piecemeal, a department here, a department there, but the hospital will remain in public ownership.

The white paper (section 4.23) says:

Within three years, we will support all NHS trusts to become foundation trusts. It will not be an option for organisations to decide to remain as an NHS trust rather than become or be part of a foundation trust and in due course, we will repeal the NHS trust legislative model.

About half of hospital trusts are Foundation Trusts meaning that about half are NHS Trusts. This section says that all hospitals will have to be FTs because the concept of a NHS Trust will be abolished in three years time.  The question (as I have asked before) is will all trusts be able to convert? The answer is undoubtedly "no", which raises the question of what will happen to those trusts that cannot become Foundation Trusts. That is the subject of my next post.

Not-for-profit good?

The Conservatives are obsessed with legislating away our jobs. But one thing that few people realise is that they are also obsessed with legislating away their own jobs. Frankly, the reason is that they cannot be bothered to run public services, although it beggers belief why they were so desperate to get elected to do the job, if they really do not want to do it.

Look at Lansley's "Big Society" plan. Lansley is incompetent, he knows that he is incapable of running a healthcare service and the fiasco of the lack of publicity over the flu jab this winter shows this: for some reason he thought it was not necessary and now we are finding hospital resources are strained by the large number of people needing specialist respiratory care when it could have been avoided if they had been vaccinated. Lansley says that it is the fault of GPs for not telling their patients about the flu jab. This should be a heavy hint to GPs about what is in store for them in the future: they will be blamed for all of Lansley's legion of mistakes.

Lansley's "Big Society" big idea is to turn every hospital into a "social enterprise". What this means in practice is that the government (ie Lansley) will have no responsibility for hospitals. Your hospital is failing? Don't contact Lansley because he'll tell you that it is not his responsibility. He treats hospitals like supermarkets - if you do not like one supermarket you simply go to another one, it is called "choice" and you have no right of complaint or recourse to the government if your local supermarket fails. Your hospital will be a supermarket.

Hospitals will be "social enterprises". Social enterprises are private businesses.They are not owned by the public. Lansley tells us that he wants to create "the largest and most vibrant social enterprise sector in the world". Not only is he incompetent, but he does not do his homework. If he could be bothered to look over the Atlantic he would see that out of 5,795 hospitals in the US, half (2,918) are not-for-profit, non-government, social enterprises. There are about 450 hospitals in England, how Lansley thinks that 450 is larger than 2,918 is anyone's guess.

Let's look at just one aspect of US social enterprise hospitals: executive pay. The following is from the Nonprofit News website:

A survey of nonprofit hospitals in the Puget Sound [Washington state] area found that 19 top executives and doctors earned more than $1 million in 2008. Public radio station KUOW in Seattle reported Monday that an additional 59 employees at the hospitals earned at least $500,000 that year.

A salary of $1 million is a lot more than the Prime Minister earns. Remember that metric? Who earns more than the millionaire who draws a salary that he does not need? Well, nineteen of the not-for-profit hospital execs in Washington State earn more than him.

The report also says:

A hospital’s board of directors ultimately is responsible for executive compensation. MultiCare Health System, which runs three hospitals in Tacoma and Good Samaritan Hospital in Puyallup, paid CEO Diane Cecchettini $2 million in 2009 and more than $5 million in 2008.

Wow, that's a good salary, yet these are not-for-profit? Isn't that like a charity? No. While some social enterprises have charity arms, all of them are private businesses that simply do not make a profit. They are supposed to plough the "surplus" back into the business to improve the service, but they could equally plough the "surplus" back into the business as executive remuneration. Clearly in Washington state, this is what they are doing.

So who is there to restrain executive pay? It is the executive board. Since US social enterprise hospitals have no shareholders and have no public accountability the only restraining influence on executive pay is the executives themselves. They decide on the level of their salary. Remember when we had a similar situation in the UK with MPs' pay?

This situation is effectively what we will get if Lansley gets his way. A social enterprise hospital will be a private business, so presumably the executives will want to be paid private sector rates. According to the NHS Confederation:

NHS chief executives' counterparts in the private sector are paid, on average, £424,000 - around three times the average salary within the NHS

So when a hospital is newly "liberated" as a social enterprise, how long do you think it will be before the pay of the executive directors starts to creep upwards?

Complain? By all means try, but it will be pointless because a social enterprise is not a public body and so your elected representatives will have no responsibility over the hospital. Look at how spineless the government has been over bankers' bonuses, it'll be no different with hospitals. Welcome to to the world that Lansley is creating because he is too lazy to run the NHS!

Lansley fails

The main philosophy behind Lansley's policy is that he should have no responsibility at all. Nowt. The idea is that the NHS should run itself and Lansley spends his time in Richmond House with his feet upon his mahogany desk throwing paper airplanes made from prescription scripts across the room.

The problem is that the NHS is a very large, complex organisation and this means that someone must run it. And, sadly, that means Lansley must do something. Sometimes he has to make some decisions.

Before the election, when he was whoring as many votes as he could get, Cameron said that no A&E or maternity unit will close without the local community agreeing. Politicians often make such rash pledges but the Press usually challenge them. The Tory-compliant Press before the election chose not to ask Cameron to justify individual pledges and so now we are seeing the result: they were hollow promises.

After the election Lansley gave "four criteria" that must be applied to any NHS service re-configuration:

"First, there must be clarity about the clinical evidence base underpinning the proposals. Second, they must have the support of the GP commissioners involved. Third, they must genuinely promote choice for their patients. Fourth, the process must have genuinely engaged the public, patients and local authorities".

The second and fourth clearly indicate that there must be widespread consultation.

Lansley inherited such a service re-configuration in Kent, where there was a plan to down grade the  maternity unit at Maidstone Hospital and centralise consultant-led maternity services in a new hospital, Pembury. The policy has proven to be contentious. Local GPs are apparetly against the move (the local campaign group claims the figure is 97%) and more than 20,000 people have signed a petition against the move. While in opposition, the then shadow minister (now Minister of State for Health) Anne Milton expressed her opposition to the changes and the Conservative prospective parliamentary candidate (now the MP) Helen Grant actively campaigned against the move. 

Yet with all of this opposition it appears that Andrew Lansley has decided that the re-configuration will go ahead.

KentOnline revealed Health Secretary Andrew Lansley has given the go-ahead for Maidstone Hospital's unit to close. It means maternity services are set to be centralised 15 miles away at Pembury Hospital.

KentOnline quote a letter from Lansley announcing the decision, in it he says:

My conclusion does not prejudice any future decisions made by local commissioners. If in future GPs as commissioners assess that a need for services at Maidstone is unmet, then it will be their prerogative to seek to redesign and commission services on that basis.

This is the typical "have your cake and eat it" attitude that Lansley takes. He says that he is making a decision that clearly goes against his election pledges, and his four criteria (well, at least two of them) and yet he says "if you don't like what I have decided then at some unspecified time in the future, someone may decide to change it".

He really is a poor minister.

Train Crash

Earlier this week, before the operating framework or the responses to the white paper "consultation" were published Nicholas Timmins, Public Policy Editor of the Financial Times published a damning piece about what lies ahead for the NHS. It is worth repeating here.

A senior management consultant has been privately warning anyone in government who will listen of the risk of a train wreck.“They all hear the words, nod wisely, but give no outward sign that they are going to challenge what is going on,” he says. “It is going to be very messy.”

This is frightening, it appears that no one is willing to Lansley aside and tell him to stop. Timmins quotes the chief executive of one of Britain’s biggest private hospital groups:

“If I went to my board and said that I’d told my senior management that I was merging all their posts before making them redundant in two years’ time; that I’d told all my finance people they too will be going; and that I was going to get some other people to run the business; and that while I can’t yet define it precisely, it will involve the nurses – well, I think it would be me who was out of a job.”

Surely this should tell Letwin something?

Next Steps

Today has seen a flurry of publications from the Department of Health. First there is the response to the consultation on the NHS White Paper, which can be summed up as "we read the objections, but we are going ahead anyway". You have to admire the chutzpah of a document that says in one paragraph (1.14) that there was "widespread enthusiasm for the vision and principles" while in the next paragraph (1.15) it says that "a considerable number of respondents opposed the Government’s reforms altogether". This document suggests that there will be a Health bill in January, although the notable health service journalist Andy Cowper thinks that is optimistic.

The other two major publications are the Operating Framework for the NHS in England 2011/2012 and the PCT Allocations 2011-2012. The former gives the rules that GPs, hospital trusts and PCTs must follow from next April, and the later is the hard figures. The best analysis of this comes from Prof John Appleby on the Health Policy Insight website.

Prof Appleby says that the money for PCTs next year will be £89.1 billion, a 3% cash rise. He applies the "real terms increase" test using the OBR's forecast for inflation and concludes that this does  represent a real term increase of 0.3%. However, these are just raw figures. From the £89.1 billion the government will take £648 million and hand it to local authorities to pay for social care. Then, before the PCTs get their hands on the remaining cash the government will take more money (2% of the total) to pay for the re-organisation that "a considerable number of respondents opposed". Prof Appleby estimates this to be £1.8bn of money that should be spent on our healthcare.

So clearly when you have a barely "real terms increase" and then take £2.448bn out of it, that does not mean "real terms" at all. To echo Ed Miliband in the Commons this afternoon, this is yet another broken government promise.

Designed to Fail

Currently all Foundation Trust hospitals are rated according to their financial and clinical governance. An FT must balance its books and the reason why a trust is made an FT is because the regulator, Monitor, regards the trust to be capable of doing this. (In fact, Monitor has more stringent rules than this, a hospital trust has to make a surplus of at least 1% of income to make them happy.)

This is good for the taxpayer because it means that hospitals will improve efficiency and are less likely to ask the Treasury to bail them out. While an FT is less likely to go into debt than a non-FT NHS Trust, it does not mean that they won't. The following is from Monitor's web site for the quarterly report for the three months up to June 2010 (the latest available). This mentions is the Financial Risk Rating for the current FTs (rating of 5 reflects the lowest risk and a rating of 1 the highest):

• 58 NHS foundation trusts (45%) have an FRR of 4 or 5 (63% at quarter four 2009-10);
• 63 NHS foundation trusts (48%) have an FRR of 3 (32% at quarter four 2009-10);
• six NHS foundation trusts (all acute trusts) have an FRR of 2: Blackpool Fylde and Wyre Hospitals; Medway; Northern Lincolnshire and Goole Hospitals; Poole Hospital; Royal National Hospital for Rheumatic Diseases; Royal Brompton & Harefield (five at quarter four 2009-10); and
• three NHS foundation trusts (all acute trusts) have an FRR of 1: Mid Staffordshire; Heatherwood & Wexham Park Hospitals; and Dorset County Hospitals (two at quarter four 2009-10).

Basically this says that three FTs have financial problems.

Mid Staffordshire in 2008/09 had a surplus of £0.759m, which is 0.5% of income; Heatherwood & Wexham Park Hospitals in 2009/10 had a deficit of £9.9m, which is -4% of income, and Dorset County Hospitals in 2009/10 had a deficit of £5m, which is -3.5% of income.

Heatherwood and Wexham Park Hospitals have recently been loaned £18m by the Department of Health to help them continue to provide healthcare while they sort out their finances. The announcement of this loan was met with some derision since Andrew Lansley announced that there would be "no more bail outs" for hospitals that go into debt.

The NHS white paper is explicit about the "no bail-outs" threat. This policy means that there is a possibility that if a hospital goes into debt it will have to cut staff, or services, or (ultimately) close. It is vital, therefore, that trusts are monitored carefully so that they do not go into debt. Currently Monitor receives quarterly reports and has the power to intervene in an FT if they think that the trust is in a serious risk of going into debt. The intervention can be as extreme as replacing the management team.

However, we now find that Monitor may only perform financial checks for just the first two years of Foundation Trust status. Health Service Journal reports:

The government is understood to have decided the current compliance regime run by Monitor and its tough intervention powers will, from April 2012, only apply to foundation trusts still within the first two years of their authorisation.

Before April this year there were 129 authorised foundation trusts. Under the new approach to regulation  nearly all would be freed from many checks in April 2012. The only exceptions would be those with very poor risk ratings at that point. They would remain subject to the foundation trust regulator’s intervention powers so it could take steps to stabilise them before they were also put outside the regulation regime.

Assuming the April 2014 “drop dead” date for all trusts to become foundations is met, the change means the Monitor compliance regime would cease altogether in April 2016, with finance and governance oversight ending for all state providers.

The excuse given is that Monitor will soon have the responsibility for ensuring competition between healthcare providers (including private healthcare) and so their financial oversight of FT hospitals (publicly owned - for the time being) would be a conflict of interest.

However, it does seem as if the Department of Health is designing a system where hospitals will fail.

Lansley is Bullish

In a FT interview with the FT today Andrew Lansley is bullish about the scale and speed of the changes he proposes:

People, he argued, “woefully overestimate the scale of the change”. Practice-based commissioning, choice of provider, an NHS price list and foundation trusts already exist, he said.

Well, yes, but Lansley has already argued vociferously that GP Commissioning is not Practice Based Commissioning (since PBC had indicative budgets and GP Commissioning has real budgets); choice of provider at the moment is choice of NHS provider, not any private provider; NHS "price list" is set at average actual cost, not the minimum cost conjured up by Monitor as suggested by Lansley; and trusts become Foundation Trusts only when they are deemed to be capable, and not forced into the status by an artificial timetable suggested by Lansley. So yes, he's right, but he is also very wrong.

Mr Lansley acknowledged there would be some minor changes to the timetable. It is thought, for example, that the date by which all hospitals will be expected to have reached foundation trust status might be slightly extended.

The Foundation Trust programme under Labour was that an NHS Trust could become a Foundation Trust if it met certain criteria on financial, quality and governance. As with any such programme, those best able to meet the criteria will be the first to achieve the status. The following graph shows how many FTs were created in each year from 2004 to present (132 in total).

What is immediately obvious is that the rate of gaining status as an FT has slowed. This reflects the fact that those hospitals that had the best financial governance have already gained FT status - the low hanging fruit - and the remaining acute trusts (currently 74 of them) are the more difficult cases. Most of these remaining hospitals have financial issues (with some, the extent of the debt is hidden) and so achieving FT status will be a long, difficult process in the best of years.

The problem is that the NHS is being cut rather savagely. The "£20bn efficiency saving" is a 4% cut every year. Further, most hospital income comes from the National Tariff, which Lansley intends to cut from the average to the minimum value. Finally, in response to GP's objection to inheriting PCT debt Lansley is likely to cut the tariff further. All of these will make life extremely difficult for the best hospital trust, but they will mean that the weaker trusts have almost no chance of reaching balanced budgets and achieve the level of financial governance to become a Foundation Trust.

So when Lansley suggests "some minor changes to the timetable" it is likely to mean in the region of years rather than weeks.

Disposable sections of the White Paper

It is interesting that today the FT is reporting that Oliver Letwin has been asked to troubleshoot the government's health policy. There appears to be a lot of worry in the government that Lansley is pushing too hard on his re-organisation of the NHS and letting the day to day running of the service slip. This concerns everyone in the country since the government's cuts could push the NHS into crisis just at the time when the most vulnerable will need it most. That worries the government because they will be seen as being incompetent with the NHS, that the NHS is not safe in their hands. This will undo the careful detoxification of the Conservative party which was instrumental in gaining them the share of the vote that they did.

Further, there are concerns that no one quite knows what Lansley is doing, neither the government, nor the public:

One Number 10 insider said: "There is no change in the policy. But Oliver is starting to ask all the important questions that need answers." Another added: "Andrew [Lansley] has all the answers when he is asked the questions about how the implementation of all this will work. We are just not sure they are the right ones."

Interestingly, the strength of the opposition to these plans appear to have shaken Lansley, who the FT quotes:

"It does not mean that we will do everything in the way that we first suggested in the white paper. This is a major reform. There are aspects of implementation of the reform that people have made comments on, and we will take them on board."

The question is: what parts of the white paper is Lansley intending to drop?

Any Willing Provider?

Andy Cowper over at HPI has his ear to the ground and has a good sense of what is happening in the NHS. I've just managed to read a post he made last week. As ever, he makes some good points.

The first is that few people seems to know what Lansley is doing and that he is losing the confidence of Number 10 and Number 11. Clearly Lansley chose badly to launch into his re-organisation with so much gusto, setting an impossible to meet timetable. The Department of Health, which had said the Health Bill would appear in October, then "before Christmas", now say that the Bill will be published in January. The DoH say that they are having problems addressing the 6,000 replies to the White Paper consultation (including one from yours truly). Well, to be honest, with the largest re-organisation in the NHS's 60 year history, what did Lansley expect? A competent minister would have realised that his timetable was unattainable. But it is not the incompetence that is the most worrying, it is the arrogant authoritarianism that exudes from Lansley: he always behaves as if he can never be wrong.

Andy Cowper says that an insider suggested to him that there could be ministerial changes in the Department of Health. Perhaps this will mean that the DoH will concentrate more on the £20bn "efficiency savings" and less on Lansley's uncalled-for re-organisation. Stephen Dorrell, chair of the Health Select Committee, and Sir David Nicholson, NHS Chief executive, are both in favour of making the "efficiency savings" the priority. Lansley, however, would not like to see his big idea playing second fiddle, so presumably the only way to switch the priorities would be for Lansley to be given another job in government.

Another interesting point from Andy Cowper comes from his reporting of an answer by Health Minister Earl Howe in response to a question about Any Willing Provider. Howe says:

"The drive to competition and ‘any willing provider’ is a shorthand away of saying that Monitor is there to police unfairness in competition; not to drum up artificial competition where there is none. Where services work well, delivering good outcomes, I don’t think services have much to fear. Where they’re falling short, getting too expensive or could be more cost-effective, there ought to be scope for other to do better."

This should make the free-marketeers cringe. Those obsessed with the free market say that quality and cost-effectiveness only emanate from competition. Howe is saying that if a monopoly provider is cost-effective and high quality then there is no need to apply competition. Interesting volte face.

In fact, this seems pragmatic. Outside of the metropolitan areas, hospital trusts are often monopoly NHS suppliers with no local private providers. Such trusts are clearly NHS and have high public support. Competition for competition's sake would upset a lot of local people, and in a shire county, those people will mostly be Tory voters. So basically, competition will only be forced on a county district hospital if it is performing badly. Actually, this sounds rather Blairite, a bit like the New Labour policy of forcing failing schools to become academies.

John Lewis

John Lewis are supposed to be the model for our public services. Interesting that, the model for public services and not the private sector. If it is good enough for the public services, why isn't it good enough for the private sector?

But I digress. The subject of this post is actually about the dimness and vacuity of their managers and customers.

My local Waitrose gives £1000 to local charities every month. This is fine, however the way that they do it is tawdry. When you buy something you get a token, a green plastic disc. You are encouraged to put this token into one of the slots in the top of three plexiglass containers. Each container has the name of a charity and at the end of the month the money is divided between the charities in proportion to the number of tokens. Your token is worth nothing. Every month exactly £1000 is distributed between three charities, if you throw away your token the money given to charity is still £1000. Your only involvement is to decide the proportion of this money goes to which charity.

Initially the manager chose three different charities, so you may get a nursery, a cat charity and a disgusting sounding disease charity. This always resulted in the majority of the tokens going into the nursery box. The manager changed his policy and now we get three similar charities: three nurseries, three animal charities or three disgusting sounding disease charities. This has now got nasty. My token now says not that I support one nursery, but that I the other two are undeserving.

If I shop at Waitrose I do not take part in this scheme. I do not contribute to determining who doesn't get the money. If everyone did this then the money would be divided exactly between the three charities. I think that is the fairest way to do things. However, most customers think that they are contributing, they actually think that their token is worth something and that they are contributing to that charity, they seem oblivious to the fact that they are actually taking money away from the other charities. Indeed, the people putting their tokens into the boxes actually think they are doing a little bit of good, and not that they are actually counterbalancing this with two little bits of bad. This is the vacuity of those who participate in this scheme.

This neatly sums up the Big Society. With the public services that we have been used to, everyone gets the service, everyone contributes to the payment for the service: it is equitable. But under the Big (Nasty) Society public services won't be funded by all of us. That concept is disappearing. So this will mean that areas where there aren't the people with the time or money to provide the service that area will not be served. In the area where people have the time and money to contribute, they think that they are being charitable, without thinking that by paying less tax they are depriving someone else.

Just to complete this story, the local Sainsburys also collect for charity. They have a car park and like many supermarket car parks you pay £1 for the ticket half of which you put in your car and the other half you hand to the checkout to get a refund. However, if you choose you may put the refund ticket into a collection bucket and the money is given to the charity. This is a very different way to collect money. There is no limit on the amount donated every month. Sure, Sainsburys only select one charity but this collection mechanism will still work if there were three. The difference between this scheme and that operated by Waitrose is that by putting your refund ticket in one box you positively increase the money they will get - with no effect at all on what the other two get (they get nothing in this transaction). With the Waitrose scheme when you put your token in one box, one charity gets more money, and the other two get less.

Orphan Drugs

It's a bit of an odd name, but basically an "orphan drug" is one that is used to treat a rare disease. by definition a rare disease is suffered by few people and this means that there is not the scope for pharmaceutical companies to make large profits through volume sales. Because of this, various countries have changed their law to allow companies to make more money out of the restrictive market.

The problems of the Orphan Drugs laws is highlighted by this letter in BMJ:

The original purpose of this legislation, passed in 1999, was to encourage drug companies to conduct research into rare diseases and develop novel treatments. However, as the rules are currently enacted, many drug companies merely address their efforts to licensing drugs that are already available rather than developing new treatments. Once a company has obtained a licence, the legislation then gives the company sole rights to supply the drug. This in turn allows the company to set an exorbitant price for this supply and effectively to bar previous suppliers of the unlicensed preparation from further production and distribution. 

The signatories give an example:

One example of the effect of these rules is the drug 3,4-diaminopyridine (3,4-DAP). We have been using 3,4-DAP for more than 20 years to treat two rare diseases, Lambert-Eaton myasthenic syndrome and congenital myasthenic syndrome; both cause disabling muscle weakness of the limbs, body, eyes, and face, together with swallowing and breathing problems, which can be fatal. The drug improves muscle strength and is used either because other treatments haven’t worked well enough or to avoid using drugs that can have serious side effects. Expert clinicians take the responsibility for informing patients about the drug and prescribing it. It has an excellent safety record. Until now 3,4-DAP has been produced by a small drug company on an unlicensed basis and costs between £800 (€945; $1285) and £1000 per patient per year.

The company BioMarin has now been issued with a licence to supply the drug (marketed as Firdapse) throughout Europe and has priced its product at £40 000 to £70 000 per patient per year—a 50-fold to 70-fold increase. BioMarin merely had to demonstrate that its drug works, using data generated from the unlicensed version. It has simply produced a slightly modified version (amifampridine) that meets regulatory standards and has been allowed to set the price at an exorbitant level with no clinically relevant advantage. 

The details sound very similar to those that I have given before on this blog about Avastin/Lucentis use for Wet Age Related Macular Degeneration, which Andrew Lansley uses as a model for his new Value Based Pricing scheme.

Understandably the clinicians are worried that this rampant profiteering by drug companies will have a detrimental effect on their patients. They point out that some PCTs refuse to pay the inflated prices, and presumably this will get worse when the budgets are handed over to GP consortia (who will have smaller risk pools than PCTs). Lists of Orphan Drugs can be found on the FDA website.

The signatories conclude:

Legislation on orphan drugs, far from encouraging the development of new treatments for orphan diseases, is severely limiting the availability of existing treatments. We believe that the Medicines and Healthcare Products Regulatory Agency and Department of Health should not just state the rules but should act now to progress the issue of unfairness upwards, so as to instigate change.

These figures are shocking and it seems that things are likely to get worse if Lansley has his way.

Hinchingbrooke

There is a flurry of tweets at the moment about Hinchingbrooke. To put this into context, Hinchingbrooke has been in debt for several years and the East of England SHA decided to change the management by outsourcing it. NHS Foundation Trusts were allowed to bid, but because the contract had a £40m debt attached to it, no NHS trusts were willing to take over the hospital. That left the usual suspects of the private providers: Serco, Ramsay, etc. It has to be stressed that this process started a year ago, Andy Burnham could have stepped in and stopped it. He decided not to.

One of the bidders is Circle. These are the poster boys of the government. On the surface they look like a mutual,. but when you look at the details it is clear they are not. The following is from their website:

• 49.9% of Circle is owned by Circle Partnership Ltd, which is owned by everyone who works in clinical services, directly or indirectly and at every level.
• 50.1% is owned by Circle International plc. This is the investment vehicle that blue chip City institutional investors have subscribed to for shares by providing the capital for Circle. They ensure that any refinancing is achieved without diluting partners' 49.9% ownership.
• The investment needed to buy land and build hospitals, clinics and invest in infrastructure is raised by Health Properties Ltd, a separate business.

So the first thing that you can deduce is that the majority of Circle is owned by City investors. This means that the majority of Circle is a for-profit company, and since a "social enterprise" must be not-for-profit that means that Circle is not a social enterprise. It also scores weakly as a "John Lewis" style of company because the profit share is only through 49.9% of profits.

So Julia Manning the Tory parliamentary candidate (from 2005, she failed to get selected in 2010 even though she tried several times) who runs the right-wing 2020Health is wrong to call Circle either a "social enterprise" or a mutual. When I tweeted her to say that she was wrong she replied:

@richardblogger I understand this bid is a Soc Ent model - I know they aren't as a company

Ms Manning will know a lot about the Big Society model because she has advised David Cameron.

The second thing that you can deduce is that Circle does not even own their own hospitals, these are all owned by a for-profit company.

Also we are given the impression that Circle is some kind of mutual using profit-share. It is not. In fact, most of their employees are consultants - highly paid doctors. So their model is not so much profit-share as dividend payments.

Some people have tweeted that Hinchingbrooke is being privatised. This is not the case. Circle will just provide the management, it is certainly outsourcing. This is a tweet from the East of England SHA:

Hinchingbrooke: Not privatisation. Staff & assets protected; no need for taxpayer bail out. Model for hospitals facing similar challenges

On the one hand this is reassuring (Staff & assets protected) but on the other hand it is worrying that they say it is a model for the future.

Julia Manning's quote worries me. Those people who read this blog will know that I do not like the prospect of so-called "social enterprises" (Community Interest Companies) taking over our hospitals, but at least their values are defined: "social purpose" and not-for-profit (ie profit re-invested as further services).

Since Circle is a for-profit company with half of its profits handed back to City investors and the other half shared as effective dividends to the wealthy consultants who work for the company; and since Ms Manning (who is one of the people driving the Big Society for Cameron) this means that Big Society is simply the take over of our public services by private companies.

Nasty Targets

Labour's stewardship of the NHS was characterised by targets. For example,

• 98% of referral to treatment time kept down to 18 weeks
• 98% of treatment carried out within 4 hours of admission to A&E

etc etc, you've heard them before. Andrew Lansley calls them "process-driven targets" as if they are something worse than he's ever trodden in.

However, Labour's targets have been beneficial to patients. Targets have ensured that waiting lists for hospital treatment were the shortest ever. Targets ensured that waiting lists for cancer treatment were the shortest ever. Targets ensured that the waiting time for a cancer diagnosis were the shortest ever. Heck, targets ensured that you could phone your GP and get an appointment within a day! Targets were good for patients!

Andrew Lansley said at the 2010 election that he would get rid of targets. David Cameron, in nodding dog fashion agreed with Lansley. At the Tory party conference Cameron got a cheer from his clueless audience when he said:

The old targets and performance indicators that drove doctors, nurses and police officers mad – they're gone.

Sigh. The very mechanisms that guaranteed that patients got a world class service have gone. They've gone because they drove doctors [and] nurses mad, the patients clearly do not matter to him nor Lansley.

However, now it appears that Lansley has decided that he is keen on targets, just different ones. These are the targets that Pulse reports.

• drive down unscheduled admissions by 20%, 
• drive down A&E attendances by 10% 
• to work with hospitals to bring down length of stay by a whopping 25%

So while Labour's targets benefited the patient, Lansley's targets are designed to save him money (ie they are the manifestation of cuts to the NHS).

Theresa May hates the NHS Too

She must, considering her ill thought out immigration cap. Here's what Karen Charman, the head of NHS employment services says (from the Guardian's Andrew Sparrow):

NHS Employers is concerned that the manner in which the new immigration cap has been constructed will have a disproportionately adverse affect on the ability of the NHS to recruit.

The intra-company transfer route is not available to the NHS and as such a 25 per cent reduction has effectively been applied to the supply of visas available. This is the maximum reduction as recommended by the Migration Advisory Committee which led us to express concerns last week. We remain concerned that this substantial reduction in staff supply may adversely affect the ability to deliver patient care in many NHS trusts.

More Squeezing of Hospital Income

Currently all hospitals are paid at a rate called the National Tariff. This is calculated as the average price for performing a treatment across all hospitals in England (there is also a regional variation). Since this is an average it means that some hospitals generate a surplus and some generate a deficit on the treatment. Since no hospital wants to go into debt the effect of this payment system is that all hospitals will try to be more efficient and perform the treatment at the average price or less. The long term effect of this is to drive down the cost of the procedure.

In some cases a hospital cannot become more efficient (for example, they do not perform the treatment on enough patients to get the economies of scale). Such hospitals accept that the treatment will always generate a deficit but they provide the treatment as a service to the community, and subsidise it with the surplus generating services.

Andrew Lansley intends to change this system so that the Tariff is "best practice" and hence the cheapest rate. This rate will be determined by the economic super-regulator, Monitor. GP Commissioning will mean that GP consortia will determine which hospital will provide your treatment, and each GP consortium will agree a contract with the hospital for the number of patients who will have the treatment and the level of payment. Lansley intends the Tariff to be the maximum rate that a hospital will be paid and that consortia can negotiate a low rate. This means that under Lansley, the maximum rate that a hospital will be paid will be the minimum rate currently being paid. This is a system intended to slash hospital budgets.

Hospitals are not awash with cash. At the moment the most efficient hospitals generate surpluses in the region of 5% of income, but few hospitals are that efficient. Lansley's plans will drastically cut the income of hospitals and this will inevitably move us back to the situation we were during the 90s where hospital waiting lists were lengthy and hospitals became dilapidated through lack of investment. The only way out of the problem of falling NHS income is for a hospital to seek other sources of income and that means taking on private patients, and as I mentioned yesterday, this will lead to a two-tier system.

The problem with the NHS is not that it is inefficient, but that there is simply not enough money. Lansley assumes that there is too much money and he is doing everything he can to make it have less money.

Currently treatments are paid by PCTs, they have contracts with the hospitals, and the PCTs pay the Tariff to the hospitals. Some PCTs have deficits. There are many reasons for this, but the bottom line is that there simply isn't enough money. Lansley has said that when GP consortia take over the responsibility for commissioning they will also take over the debts of the PCT. It is argued, quite correctly, that some of the expenditure of PCTs occurs from GPs referring patients yo hospitals, and that these PCT debts can be reduced by not treating patients. The logic is impeccable. The possibility of this transfer of debt has angered GPs and is one of the sticking points. Lansley will not budge. He will not write off the debts of PCTs and allow the GPs to start with a clean slate.

Now Healthcare Republic report that

Ministers have also announced plans to allow GP consortia to drive down the cost of NHS services by adjusting the tariffs for these services.

In other words, the Tariff is going to be adjusted down so that in the few remaining years of their existence PCTs will be paying less for hospital treatment to enable them to generate surpluses to pay off their historical debt. This means that hospitals will have less money, thereby move us back to the situation we were in during the 90s where waiting lists were lengthy and hospitals became dilapidated through lack of investment. Oh and expect several hospitals (particularly in London and the Home Gounties) to close.

This is the reality in an NHS run by Andrew Lansley.

Imagine this...

Imagine this, you have cancer, you are frightened, sick and weak. The NHS picks you up and treats you, you get the best care that money can buy. Everyone is kind, understanding and caring.

Now imagine that the NHS picks you up but puts you aside for a little bit of time - not much, but just enough for someone else to use the facilities first. Prioritisation? Yes, the other person is sicker, weaker, more frightened than you. You wish that both of you could get the treatment at the same time, but you recognise that equipment, drugs and manpower are all limited. This is clinical prioritisation and we accept that it happens, not least because one day we might be so sick that we are prioritised before someone else.

Now imagine that the patient getting the priority is not more sick than you, not weaker and not more frightened than you: they get the priority because they have paid to get it. Can't happen? It used to, and it will again.

In the late 80s a close friend of mine was diagnosed with cancer: he was just 23. Paul discovered a lump in his neck and went to see his GP, she said he should see the oncologist, but said there was a waiting list of several months. Paul was training to be an accountant and since he had worked 6 months with a large accountancy company he was entitled to use their private healthcare policy. On hearing this, the GP phoned the oncologist and an appointment was made for the next day. At that appointment the consultant told Paul that he needed surgery immediately and the next day he was in theatre and had the tumour removed. The magic health insurance document had made a waiting list for an NHS doctor disappear.

Paul then had several weeks of chemo: he would usually ask his girlfriend to drive him to my house the night before the treatment and we would go to the pub for a few beers: our own version of chemo. The next day I would drive him to the hospital, a posh private hospital out in the countryside, rather than to the dowdy inner city NHS hospital used by everyone else. The same oncologist who worked in the dowdy NHS hospital would treat Paul in the private hospital.

One story Paul told me sticks in my mind. At this time MRI machines were experimental (heck, I actually worked in the university department where they were invented!) and very expensive. So five large hospitals had clubbed together and bought one machine to be shared between them. The MRI machine was installed in the back of a HGV lorry which was driven between the hospitals spending a few days at each. Paul's doctor said that he needed a scan so he was put in a private ambulance and taken to the NHS hospital who had the MRI scanner that week. Paul described to me how he was put in a wheelchair and then wheeled past a queue of NHS patients: some in wheelchairs, some on trolleys; some walking wounded and some extremely ill. My friend Paul was pushed to the front of the queue and was scanned straight away. The insurance company were paying a tidy amount of money, so he was prioritised. The magic health insurance document had made a queue of NHS patients disappear. What it could not disappear was the guilt my friend Paul felt as he was prioritise solely because of the payment.

Paid-for prioritisation. It happened in the late 80s under Thatcher.

Paul was horrified by the difference between the care he got as a private patient and how his prioritisation was not clinical. As an accountant he was also horrified by the sheer cost: the insurance company was sucked dry by the private hospital and by the consultants working privately.

He went into remission and enjoyed his life for a couple of years: we had plenty of our form of chemo during those years he was cancer-free. Then the cancer returned. The insurance would not touch him, they had already been sucked dry and he had his treatment by the same oncologist, but now in the dowdy NHS hospital. By now we are talking mid-90s and at one of the low points in the NHS when funding had been slashed and hospitals were suffering badly from poor maintenance and demoralised, underpaid staff. His cancer returned with a vengeance and (to be fair to the NHS) there was very little that could have saved him. He died in September 1994, he was 30.

We are going to see scenes like this again. Lansley has raised the private income cap. This cap was applied to Foundation Trust hospitals by the Labour government and the value is fairly arbitrary: it is the proportion of income of the FT hospital that came from private sources in 2005. However, raising this cap was a clear sign to FT hospitals that Lansley wanted NHS hospitals to aggressively pursue private patients. Sucking the private markets dry? Maybe. But some hospitals (particularly small district general hospitals) do not have the capacity or the specialism to attract large numbers of private patients. private patients are more likely to go to the large tertiary teaching hospitals. If you have the cash to pay for healthcare, you may as well spend it on world-class treatment. If NHS hospitals are supposed to benefit from private patient income, this will lead to two-tiers of hospitals: those with a private income, and those without.

An example of a hospital which can attract private income is The Christie FT hospital in Manchester. This trust has recently partnered with HCA International Limited. HCA will provide £14m and the private patients and The Chrisie will provide the facilities and specialists. The Christie has a high reputation as a cancer centre, describing itself as "Europe's largest cancer centre". Since The Christie cancer centre has an income of £173m the HCA contribution is a small proportion, but the question is whether these private patients will be treated like the NHS patients?

Imagine that you are a private patient and you have spent a substantial amount of money on health insurance premiums. You have cancer so you fully know that this is the last time that you can get the benefits of the insurance since after you have been treated for cancer health insurance will not touch you. Would you be happy if someone else gets the same treatment as you - or even gets pushed in front of you - and has not paid that substantial amount of money you've paid? Of course not, and the clinic will not put you in the position of thinking that you could ever have to wait while an NHS patient is treated before you.

Welcome to the two tier NHS.

Incidentally, who are HCA International Limited? They describe themselves as "the UK's largest provider of cancer care services outside the NHS".  However, there is more about this company that you need to know. HCA stands for the Hospital Corporation of America and Wikipedia describe it as "he largest private operator of health care facilities in the world". HCA is also known for pleading guilty to 14 felonies for overcharging Medicare (government funded healthcare for the elderly) and state Medicaid (healthcare for the poor). According to Wikipendia "In all, civil law suits cost HCA more than $2 billion to settle, by far the largest fraud settlement in US history at the time." I do hope that The Christie has a very long handled spoon to sup with this devil.

The Christie is a fore runner of what almost all NHS hospitals will be like in the next few years. This is what you voted for when you voted for this Coalition government. Oh, you did not know that this would happen? Then tell your MP that you do not want it to happen. Or better still, demand a new election so that we can be rid of this government.

Student Fees

My opinion is, and always has been that the "graduate tax" that we should pay is the higher rate of income tax. If you go to university you go there to get an education, not to get paid more. The fact that this government (and the last Labour government) does not realise this shows that they do not understand what education is for.

The "a binman should not pay for the education of a middle class child" argument of the Blairites irritated me immensely for two reasons. First, when you start that stupid argument, where does it end? Do we say that this "binman" should not pay for the healthcare of the middle class child? Secondly, and the main reason why it irritated me was because it was always a middle class Blairite that pushed this nonsense argument, so I did the evidence-based thing and asked my uncle. He spent all his life as a refuse collector and I found that he was delighted that his taxes paid for his nephews and nieces to go to university and have the opportunity that he never had. He was also delighted that the NHS paid for the healthcare he needed, treating him exactly the same as a Blairite businessman on ten times his income.

So I have always argued against tuition fees, and I will also argue against Ed Miliband's graduate tax. The Lib Dems are rarely right, but they are right on one thing: we should get rid of tuition fees and make education a universal right. Personally I think the pledge to get 50% of young people into university was a silly one, for two reasons: first, half of young people do not want to go to university, and second, what about the other half? I would have supported a pledge of state funding for continuing education and training, at a level appropriate to the student. Further education and apprenticeships in this country have been woefully ignored, and now with the Conservative government's local authority cuts, further education colleges are going to take huge, possibly fatal, hits. We should have invested more in further education, instead of trying to fatten up the universities ready to sell them off.

So given that we have a stupid funding system and no cash to do the right thing, how do we make the best of a bad job? The last Government commissioned the Browne review which has been controversial in that it means raising tuition fees. It is delicious politics that those LibDems who publicly signed pledges to vote against rises in tuition fees will be voting for the rises. They will regret doing that (signing the pledge and/or voting for, or abstaining - which is the same as a vote for - rises in tuition fees). The LibDems claim that they have made a difference, they have altered the tuition fees policy to make sure that students do not start re-paying their loans until they are earning a reasonable income; they will argue that the policy has been structured so that the most well-off pay more. In fact, they are right about this, when you look at the policy as it was first published (but I would not say this to their face), they have had some effect.

However, as is typical with Lib Dems, they just cannot stick to a policy. No, they change the policy when you are not looking, and this is the case with tuition fees. They have just changed the details which will mean that students will pay considerably more. These details are outlined on the Exquisite Life website, which I quote here:

First, the threshold for graduate beginning to pay back their debts is £21,000 in 2016 prices, not 2012 prices. The difference is about £2,500 and means that students will both face higher monthly bills and have to start paying earlier.


Second, the threshold will only be raised once every five years, not every year. "This makes a very big difference," said Dearden and increases the cost to all graduates.


Third, graduates will start paying the full rate of interest (3 per cent plus inflation) while still at university, not after.


The fourth issue is that Dearden suspected that the repayment period may have been lengthened from 30 to 35 years (it is currently 25). If true, this would push up the cost for any graduates that would have been let off their debts after 30 years.

These are really serious changes and the Lib Dems who claim to have had an effect on this policy will now have a lot of explaining to do.

Mutualising Public Services

Mutualising Public Services

Of course, if you want to run the public service that you work for, you will not be handed it for free. Don't be silly.

No, it will be a business and like any business you will be expected to buy it. Yes, I know that you personally do not have the money to buy it, so instead you are expected to go to the City.

No, not the big town near you, I mean the City of London, where (in the words of Vince Cable) the "spivs and gamblers" hang out.

Those spivs have money, lots of it. The odd thing is they do not like spending it. I mean, if you or I had a billion or two we would just say "sod it" and buy a Caribbean island and live the rest of our lives in the sun ignoring that there was a world out there. (Admit it, you would, wouldn't you.)

No, these spivs believe that if they have some money, the only thing to do with it is make more money with it. The Bible calls it Onanism. No it doesn't, it calls it usury and calls it a sin, but the spivs are Onanists too. (Oh look it up, if you don't know what the word means, but pleases don't do it at work. The looking up, or the Onanism.)

So now you are amongst the spivs asking for some money for your mutual, your "social enterprise". Now the spivs have just one thing in mind (please, think only about usury), they want to get the largest return on the money they have. Thus, the money they lend you will be at a cost.

Remember, it is YOU who has the social purpose, not the spivs. But your mutual must make a profit, because otherwise it will not be able to pay the interest on the money the spivs lend you. That means that you will have to provide proportionally less of that social purpose. Think of it being a little bit of that goodness that you want to provide has to go into the pockets of the spiv in the City.

Does that sound good to you? I did say that they are Onanists, didn't I?

Anyway, this supposes that the spivs will actually lend the cash to you, which is very unlikely. Why? well, since (understandably) you will want to pay the spivs as little as possible, and they know fully well that they will get far more lending their money to the government, they really don't want to lend the money to you. So that means that your mutual, your social enterprise just cannot start, so why are you bothering?

I wished the Labour party had my logic, but at the moment they are confused as to why the Tories have stolen their big idea, the Third Sector.

Is Lansley in a majority of one?

There are emerging three key figures in health policy: Andrew Lansley, the Secretary of State for Health; Stephen Dorrell, the chair of the Health Select Committee and Sir David Nicholson, the Chief Executive of the NHS. That is the top three men in the government, in the Commons and the civil service.

Dorrell is a former Tory Health Secretary, but he is no Lansley-stooge, indeed it looks like he is quite a powerful thorn in the side of Lansley. Dorrell gave a rather interesting interview with Health Service Journal (subscription, but there is a non-subscription comment article available that summaries what he said).

The Conservatives said that they would not cut the NHS and would deliver year-on-year "real terms" increases in funding. We all know this to be utter lies, and Lansley's enthusiasm for continuing the "efficiency savings" in the NHS that were announced by Andy Burnham earlier this year, shows that he relishes cutting the NHS. Tories do not change their spots. What Dorrell is saying is that the financial situation is the most important and Lansley's aren't:

And the message was this: delivering the £15bn-£20bn efficiency savings first identified by NHS chief executive Sir David Nicholson last year must be the priority. The reforms set out in Liberating the NHS, the government’s white paper, have a part to play in achieving this goal - especially in making them sustainable - but they are secondary.

Andy Cowper at Health Policy Insight quotes Dorrellin more detail:

“This reform of commissioning is important up to and only in so far as it reinforces the capacity to deliver the Nicholson challenge (the £15-20 billion un-spend by 2014). If you get that wrong, healthcare delivery is at risk"

Further, Dorrell is worried about accountability. This is something that I think Lansley is ignoring at his peril. A couple of weeks ago I spoke with my MP (a shire Tory) and he made it clear that his constituents regard the government as being responsible for the NHS and if the NHS fails then the government has failed. Dorrell says something similar:

"I’m in favour of liberalising the system, but I’m not in favour of imagining the secretary of state isn’t ultimately accountable for what’s delivered tomorrow morning in surgery in every part of the NHS, because he is ... Nobody should believe [he] makes all the decisions; but he is accountable for the structures under which those decisions are made. And if the structure delivers [negative] outcomes, you get into that world where you find yourself on the Today programme, quite rightly”

The Conservative manifesto and the NHS White Paper states that the aim is to absolve the Secretary of State of any responsibility for the NHS. It seems that Dorrell disagrees, and I think most of the public do too. Basically, if my neighbour is denied care it may well be the local GP consortia telling her that the money simply isn't there, but we all know that the money isn't there because Lansley did not ensure that it would be. At the next election, he will not be able to shirk that accusation.


Sir David recently wrote a letter to Lansley saying that he too thought that the efficiency savings were the most important and urging Lansley to slow down with his re-organisation.

It certainly seems that only Lansley believes that his re-organisation is the priority. HSJ report:

A government adviser attending the HSJ summit left the event concluding in sad surprise that many NHS leaders “really don’t like the [white paper] reforms”. No, they do not.

Meanwhile Andy Cowper also reports:

a consultant working in DH, who says "they have the strange confidence of the 300 at Thermopylae. No-one else thinks they are going to win". 

This is worrying since it implies that they know they are fighting everyone else, but they are insistent that they are right even though everyone else thinks they are wrong.

If there are problems with the NHS this winter then perhaps Lansley being in a majority of one may make him realise that 1) he is the Secretary of State, which means that he is responsible and 2) ambitious, expensive and disruptive re-organisations can only be done at a time when money is plentiful and so the sensible thing is to scale back the plans. The problem, as the HSJ article says, is that much of these policies (including the plan to take all NHS hospitals out of public ownership) is the brain-child of Oliver Letwin, and Lansley may find that he does not have the authority to scale back the plans.

The NHS Sell Off

It has always been clear that the Tories have wanted to sell off the NHS. Lansley's (well, more likely Oliver Letwin, he's the one with the brains) plans has always been to take all hospitals out of public ownership. The NHS White Paper talks about "social enterprises" but it goes further than that. By definition a "social enterprise" is a not-for-profit company but they are still private businesses able to buy other businesses and to sell off parts of their business. This means that part of an NHS hospital could easily be sold off to a private company. Social Enterprises are a way for the government to rid itself of any responsibility for healthcare provision, but to the uninitiated there is something, well, "social" about them. The White Paper only says "social enterprises" to take the sting out of their real intent, which is to sell everything off.

Today Francis Maude launches a new programme to allow "employees" to "mutualise" public services. The idea is that "employees" will buy the asset off the government (school, hospital, community centre) and then run the service themselves. A social enterprise means that all profits are re-invested in the service, but the government, which has an extreme free market ethos, believes that the only effective incentive is pure hard cash, so the "mutualisation" route means profit share, which by definition means a for-profit organisation.

But who are these "employees"? Since the Internal Market was introduced all hospital trust balance sheets have to give the value of the hospital. My local hospital employees 2000 NHS staff and a further 1000 contract staff (mostly cleaning and catering); it has 450 beds and about 50 thousand admissions every year. The hospital is valued at £75m, its income is £105m and it makes a 4% surplus. So if the hospital is "mutualised" what will happen, will each and every one of those NHS employees be asked for £37,500 as their share of the £75m? Of course not. The idea of the employees owning their hospital is ludicrous.

The way it will work is that the hospital board will go to the City and ask them for a loan - just like any business would. The "mutualise" bit will be that a proportion of the surplus will divided out to the employees in proportion to their salary (note: and not invested as healthcare). A consultant on £150k will get a lot larger "profit share" than a porter. That may well be an incentive for the consultant, but the porter will be none the better. Since the "profit share" implies a profit, it means that if there is no profit then there is no "share", and we are heading for a financial crisis in the NHS.

I once worked as a software developer for a plc that introduced a profit share. Every time I was asked to work extra hours I was reminded "think of your profit share". Naively, rather than asking for overtime, I accepted the "profit share" argument. At the end of the year there was a company meeting. It turned out that the parent company had had a dodgy salesman who had lost a lot of money. All the companies in the group had to contribute to make up the loss and although our division had made a whacking great profit, all of it had to go to pay off the money lost by the salesman. There was no profit to share and the scheme was closed down. I decided at that point that I wanted "an honest day's pay for an honest day's work" and that the directors and shareholders could worry about profits.

A "social enterprise" is be outside of NHS terms and conditions (initially they will keep NHS T&C but after a few years they will no longer apply) so most staff will find that their salaries will fall because there is no national bargaining and schemes like the Agenda For Change increments will be abolished. Any "profit share" will not be enough to make up for the loss of those benefits. "Mutualisation" will not be in the interests of most employees.

Of course, you are now thinking that I am a doomsayer and that this cannot happen. Further, you may also say that the Labour party will be against this great sell-off of the NHS. Unfortunately, the entire policy is a New Labour policy.

For much of the last administration, Labour insisted on an ideology of purchaser-provider split, that is is, within the NHS some organisations provide healthcare, and others commission them. PCTs were supposed to be purchasers commissioning hospitals, community health services and GPs. (And dentists, opticians, pharmacies etc etc.) However, historically PCTs have provided services. In some cases it is accidental - for example in my area the PCT owns some GP practices because the original GP either had financial issues, or the GP died and the PCT wanted to continue the care in the same premises with a new GP. In other cases the services are part of what PCTs have always provided, and Community Health Services comes in this category.

The last government decided that PCTs should be purchasers only and so told PCTs to divest themselves of any providers, and this mostly means Community Health Services: community hospitals and clinics, physiotherapists, chiropodists and district nurses. PCTs were given two options. If there was a local Foundation Trust then they could bid to take over the Community Services (or the service could apply to be a Community Foundation Trust in their own right). Or the employees were allowed the "Right to Request" to create a "social enterprise" (as explained above). That is, under Labour the planned NHS sell-off began.

Few Community Health Services took up this option. Unite and Unison were against the concept of "social enterprises" fearing, rightly, what would happen to the employees, so every time a PCT arrange to divest itself of Community Health Services the unions campaigned against the "social enterprise" option. This did mean persuading employees to vote to join a Foundation Trust, and yet we now know that the FTs will become "social enterprises" themselves.

The one shining example that is held up is Surrey Central Health. Maude will tell you what a wonderful organisation this is. But the fact is, there are very few others like this. Remember that the idea is a "market" in healthcare. Surrey Central Health currently has the contract for Community Health Services in the area, but will it continue to do so in the future? The genie is out of the bottle, when the contract expires it can easily be handed to another non-NHS organisation, like one of the big US operators. at that point people will rightly ask "how did this happen?"

Yesterday saw the announcement of two rather rich people deciding to get married next year and expecting us to pay for their wedding. It was a "good day to bury bad news" since the media had gone gaga over what should be a personal announcement.  One very important piece of news was released and has not been followed up by the media. It is an announcement from the Department of Health about the latest NHS sell-off.

Thirty-two projects will form the third wave of NHS organisations that want to set up social enterprises, through the NHS ‘Right to Request’ scheme that gives public sector workers the opportunity to become their own bosses. ... Today’s announcement of the third wave of proposals means that, since it was set up in 2008, 'Right to Request' has generated a total of 61 innovative proposals from staff to take over the services they provide. These proposals will transfer an estimated £900m of services and almost 25,000 NHS staff into the social enterprise sector.

The bad news announcement yesterday was that the almost a billion pounds of NHS services (out of a budget of £105bn, so this is about 0.8%) will be  taken out of public ownership. The latest "wave" will double the existing number of "social enterprises" to 61. (Interestingly, the health service commentator, Andy Cowper, commented "Why so few takers for liberation? Genuinely quite surprised by that".)

This was bad news because it shows that the NHS sell-off is gathering pace. But have any news media reported this? No. The reason is that the government and the Labour party do not want to frighten the public. Neither of them want this to be seen as the great sell-off that it is. Look at the statement "third wave of proposals means that, since it was set up in 2008, 'Right to Request' has generated a total of 61 innovative proposals" You'll notice that this great sell off started under the last Labour government.

This is why I was cynical when Labour MPs and officials were spouting about yesterday being a "good day to bury bad news" and then desperately trying to find some "bad news" to report (for example, here on Labour Uncut). They all missed the really bad news because they were complicit in creating it.

Militarisation

Every time I read the government's policies I think: not only is that disgraceful, it just cannot work. And then I find that the policy will work because I have not been able to imagine that the Conservative government could move so far to the right. Take for example law and order.

The vicious cuts in public spending will inevitably lead to civil unrest. This is understandable because there will be some people losing their livelihood, others losing their homes and others who frankly cannot stand by when plainly unfair policies are being imposed on blameless people. The conventional thinking would be: cut everything except the police, we need the police to protect us while we are cutting. But this is not what Cameron is doing. Rather bizarrely he is cutting the police. For example, West Midlands Police intend to cut the number of officers by 12%. Wow. Doesn't this sound bonkers? When there are riots on the streets of Birmingham and Coventry how will the authorities maintain law an order? Clearly cutting the police is unworkable, right?

Wrong! Yes, Theresa May will cut the budget, but she will also redirect the remaining budget towards the shadowy private security firms. This is from the Observer referring to the NUS march:

As police face continued criticism for failing to control the march, the Observer has learned that defence firms are working closely with UK armed forces and contemplating a "militarisation" strategy to counter the threat of civil disorder. The trade group representing the military and security industry says firms are in negotiation with senior officers over possible orders for armoured vehicles, body scanners and better surveillance equipment.

This starts to get sinister. armoured vehicles on the streets of Britain? militarisation? It really looks like we are moving toward a right wing dictatorship.

Parliamentary Reboot

I am just reading Johann Hari's piece from today in the Indy. Talking about Clegg's numerous U-turns (notably about tuition fees and cutting the deficit this year, but actually about most of the LibDem manifesto) Hari makes this point:

Clegg may well be committing political suicide. He represents Sheffield Hallam, the only seat in South Yorkshire not held by Labour. It has a huge population of students and workers at Sheffield Forgemasters – which his government has effectively bankrupted. It is now probable he will lose his seat. Nationally, more than half of his party’s supporters say he has “sold out”. They are skidding down the slaughterhouse tube of the Australian Democrats, a long-standing centre-left party who installed a right-wing government in power and were promptly euthanized by the electorate.

All of this is true, but there is something else to consider. Clegg's constitution bill will cut the number of MPs by 50. This will not be an even cut since many of the Lib Dem seats in Scotland will be left at the current size (for good reason, they are sparsely populated areas and increasing the numbers of constituents will make it far more difficult for the MP to represent them all). This will mean that there will be huge changes to constituencies and in some cases the new seats will have no resemblance to any of the old seats.

I imagine that when this bill is passed there will be a scramble for seats, but since no one really knows the effect of this change, we can regard it as a kind of parliamentary reboot. Don't expect the new constituencies to have the candidates that stood in one of the old constituencies that it is made from. It is quite conceivable for a politician currently on the national stage to be selected in another, more safe seat. (Of course, the more senior you are, the higher priority you are for a safe seat.)

I think this is what Clegg will do. He is the leader of the party and will make sure that he gets into the next parliament. Clegg will pick a Lib Dem stronghold (West Country?) and then the natural candidate, the sitting MP of one of the old constituencies, will fall on his/her sword to be kicked upstairs to the House of Lords after 2015. The redrawn boundaries will be spun to us as a huge constitutional change (mainly by Clegg, who will try to bask in his self-generated glory) and so it will be treated as an honourable reason to move to a safer area of the country.

Clegg won't be the only senior politician to do it, politicians from all parties will.

Responsibility

The Spending Review is a depressing document, but the sections 1.86 to 1.90 are the most depressing. This is a section titled "Sharing Responsibility". On first sight you would thing that this means you, that you should share responsibility for your health, your environment, your community. To a certain extent I agree, you do have some responsibility for all of those things; but that is not what the section is about. The responsibility here is that of the government. Cameron thinks that it has no responsibility to provide public services.The Spending Review 2010 document says:

The Government believes that while it should continue to fund important services, it does not have to be the default provider. (1.87)

That is pretty clear, isn't it? What it is saying is that the government should not be regarded as the provider of last resort of any service: education, health, police, fire fighting, welfare, ambulances. Think I am going over the top here? No. Frances Maude has said as much, as reported in the Guardian.

Ambulance drivers, paramedics and firefighters could be given the right to breakaway from the national rescue service to form for-profit groups and run their services themselves, the Cabinet Office minister Francis Maude has said. The government is to unveil a white paper that will give nearly all public sector workers a right to "mutualise" services, along the lines of a John Lewis model whereby employees own the service they work for, and can profit if it makes money. Maude said that almost all public services – bar the police and the armed forces – could be mutualised. One ambulance service had already expressed an interest and he would also look at options for the fire service, he said.

Notice that Maude says "bar the police and armed services". That has been inserted to keep the retired colonels happy, but we already know it to be untrue. There are many so-called Private Military Companies (mercenaries) and these were used extensively in Iraq and Afghanistan. Governments like PMCs because their casualties do not contribute to the Allies body count (and so it appears that our military action has been far more successful than it has because fewer of our soldiers have been killed) and that the PMCs are not subject to the same rules of engagement as our military. Have a look at the companies listed here: there are a lot of them, aren't there? PMCs are big business.

As to police, well every nightclub has bouncers, every shopping centre has security guards, every warehouse and factory has night watchmen, we have never had a comprehensive system of state provided policing. There certainly is a plan to move more policing into the private sector. After the Spending Review indicated that there would be vicious cuts in local authority funding (which includes the police) my town was inundated with PR from a private security company that was offering a "service" of checking that your house had not been broken into for a fee of £10 per month. (That PR guy was very good: there were articles about the company in all the local newspapers and a piece on the local TV news, and the company paid not one penny for that publicity.)

The Spending Review continues:

the Government will look at setting proportions of appropriate services across the public sector that should be delivered by independent providers, such as the voluntary and community sectors and social and private enterprises. This approach will be explored in adult social care, early years, community health services, pathology services, youth services, court and tribunal services, and early interventions for the neediest families. (1.87)

A proportion of services will be provided by anything other than a public provider. This will be the law. The last time the Tories did this was with the 1990 Broadcasting Act that mandates that 25% of TV and radio production broadcast by the BBC had to be from non-BBC suppliers. When this was introduced undoubtedly it shook up the system. A lot of new production companies appeared apparently from nowhere and there was a distinct improvement in the BBC output that still had a 70s feel to it. However, this was at a time when there was money to innovate and all the Act did was to push the BBC into spending it on innovation. And, of course, this is a creative industry, they don't need much of a push to be creative. But significantly, the BBC is a service that we can do without (though many of us would not want to): if the experiment had failed then we would still be alive and well, just slightly culturally deprived. However, the long term result is not so rosy. The plethora of small, brash, edgy and innovative companies coalesced and merged and were taken over by the big beasts. So now we see that the "independent production" is from the new establishment of Talkback-Thames, Endemol, Granada etc. It can be argued that the BBC spawned baby-BBCs producing much the same stuff as the matriarch. We are back to 1990.

We are in a different situation now. First, there just isn't the money to allow people to make mistakes, so we cannot afford a Plan B. Secondly, the services being played with are vital, we cannot afford for them to fail. Health, ambulances, fire fighting: these services were provided by the state precisely because they were too important to let them be subject to the vagaries of the market. The state took the responsibility of providing these services so that we could be assured that we would have access to them. When Conservatives talk about Sharing Responsibility they mean offloading the responsibilities that they have taken on. Basically we have elected a bunch of shirkers who are telling us: we do not want the responsibility, we just want the power. The next few years are going to be very unpleasant.

Administration

Coalition Agreement:

We will cut the cost of NHS administration by a third and transfer resources to support doctors and nurses on the front line.

Where does all of that administration come from? Well David Cameron will insist that it is targets. Lansley has now abolished the 18 week target (well, abolished performance monitoring hospitals against it, the NHS constitution gives you a right to treatment within 18 weeks) so surely the NHS administration problem has been fixed? No, of course not. The Tories are not that logical.

Undoubtedly targets do add to administration, but they are not the source of excessive administration. Anyway, targets deliver benefits, notably that patients actually get the treatment within an acceptable amount of time. Since targets deliver a benefit, then surely we should be willing to pay something for it?

I am currently reading a rather depressing book: NHS plc by Allyson M Pollock. Great book, but you get a sinking feeling as you read it (buy it, I do not know Prof Pollock nor do I have any financial gain from you buying the book). Anyway, in the context of this blogpost Prof Pollock says:

The number of general or senior managers in the NHS rose from 1,000 in 1986 to 26,000 in 1995, and the proportion of total NHS spending consumed by administration more than doubled, from 5% to 12%.

The Internal Market was introduced in 1991. Get the message? The rise in administration is due to the marketisation of the NHS and fuckall to do with targets.

I cannot find a table of the cost of administration since the 80s (which would prove the point conclusively) but the nearest I can get is this from Hansard:

	96–97	97–98	98–99	99–00	00–01
Admin costs	2,020	1,963	1,935	2,158	2,166
NHS Budget	32,997	34,664	36,608	40,201	43,932
Adimin %	6.1	5.7	5.3	5.4	4.9
	01–02	02–03	03–04	04–05
Admin costs	2,565	n/a	3,345	3,412
NHS Budget	49,021	54,042	63,001	69,706
Adimin %	5.2	n/a	5.3	4.9

It certainly looks like Labour had got administration under control.

It is interesting to see that Prof Pollock also cites some evidence about the US system (remember, a system that is based on competition). She said that in 1994 administration was 22.9% for public sector hospitals, 24.5% for independent not for profit hospitals and 34% for for-profit hospitals.

Marketisation clearly puts up admin, so will the pledge to cut admin by a third be yet another Coaltion Agreement pledge to be boken?