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?

PCT Functions

When the NHS White Paper was first published and announced that PCTs were going to be abolished (incidentally, against what the Coalition Agreement said would happen, but as we all know that piece of paper was a sop to LibDem party members, it was never intended to be actual policy) many people said "huh? who are they and what do they do?".

So the Department of Health and the NHS Confederation produced a document that listed the responsibilities of PCTs. This list came to 211 items and it took 14 pages just to list them. This may sound like bureaucracy, but when you look closer you see that these responsibilities include making sure that money is spent in a cost-effective way, that healthcare is equitable, that strategic planning is done to ensure that facilities are available for expected population changes.

The laws that they have to be compliant with are: NHS Constitution, European Convention on Human Rights, Race Relations Act, Equality Act, Sex Discrimination Act, Disability Discrimination Act, Equality Act (Sexual Orientation) Regulations, Mental Health Act, Coroners and Justice Act.

Now I am sure some right-whingers will complain about all of this, but the country is not a majority of ignorant right-whiners, the rest of us want to make sure that healthcare is equitable, that steps are taken to make sure that everyone gets equal access regardless of their race, sex, sexuality or disability.

Many commentators have pointed out that GPs do not have the skills to provide all of this, and hence they will have to employ former PCT commissioners. Lansley see the PCT commissioners as the problem, not the solution. So how does he make sure that GPs do not have to emply PCT commissioners? Easy, get rid of the PCT responsibilities.

HealthcareRepublic report:

Dr James Kingsland, DoH national clinical director for practice-based commissioning in England, said much of a 283-point list compiled by the DoH and the NHS Confederation PCT Network was unnecessary. ‘This is what PCTs used to do. They are being abolished, and their functions are gone,’ he said. ‘We have to rewrite this list and it has to be radically different.’

Since much of the list is about making healthcare access equitable, and about keeping the NHS cost-effective and improving performance, it seems bizarre that the Department of Health will want to abolish most of the responsibilities.

Quoting PCT Network director David Stout:

‘Work was being done to ‘downsize’ the list of functions but none would be easy to abolish, he said. ‘I suspect it will be quite difficult to do as just because they are less important it doesn’t mean they just don’t need to happen,’ Mr Stout said.

The NHS under Lansley will be very different than we are used to.

NHS Funding

Michael Blastland from the BBC gives some graphs which show how the pledge that the Conservatives are protecting the NHS budget is basically a lie. (The Riddle of the NHS Budget). I have downloaded the data myself from ukpublicspending.co.uk and applied some colouring to make the situation clearer. Here is my version of the graph of NHS funding as a percentage of GDP:

The blue are Tory years, Red are Labour years and the dotted line is the expected spending outlined in the CSR. The reason that the line goes down is because in real terms NHS funding will fall by on average 0.1% every year (a fall of 0.54% between the 2010/11 and 2014/15 figures) yet GDP is expected to rise over this period. remember this poster? Complete and utter lies, and the graph above prove it.

Bloody Blairites

I suppose they don't have to allow me to comment on the articles on their website. but it does smack of cowardice. I mean, all I am is a moderately lefty amateur with a passion for the NHS, and ProgressOnline are a well funded website edited by professional politicians who should be able to put up a cogent argument against my comments. (To be fair to ProgressOnline, I think the main problem was that I was posting a long comment - see below - but once I had chopped it into two, then got past the Captcha - after about 10 tries - I was given a reply that said because there was a URL in my response - there wasn't - it would have to be moderated. This means that my comments are not on the site. That either indicates incompetent, badly thought out website software, or censorship. Which would ProgressOnline prefer?)

Progress have an article called "Labour can seize on this reckless NHS reform" written by Ralph Michell who is described as "head of policy for a charitable organisation but is writing in a personal capacity". I'll let you know which charity at the bottom of this post, when you'll go, "oh, that makes sense". Anyway, since the Blairites won't allow me to comment on what is frankly a disgusting article, I have posted by comments here:

I had to check to make sure this was not a posting on Conservative Home.

"Labour should mount a bold attack on the government's policy of ringfencing NHS spending"

While I agree that the "ring fence" was political expediency, only Tories (and that would appear to include Ralph Michell) actually believe that any "ring fence" exists. Please, before you spout right wing nonsense can you first look up some of the statistics? The Kings Fund (like, umm, independent experts on the NHS) say that the NHS needs to have a 5% to 6% real terms increase every year to take into account the aging population and healthcare inflation (which is typically TWICE CPI). Therefore any responsible government would agree to real terms increases. As we know from the CSR we do not have a real terms increase because £1bn a year is to be taken from the NHS to pay for social care that has NEVER been their responsibility. Since this social care commitment is being done to make up (only partly) for the massive cuts in local authority funding (and hence their social care funding) it means that it is a real cut in the so-called "ring fenced" budget. The NHS "ring fence" does not exist: does that make you feel happy?

"The NHS consumes more than £100 billion a year of public money, and there is patently scope for it to be more efficient and make a significant contribution to reducing the deficit."

Where on earth have you been for the last ten months? In the 2010 NHS Operating Framework, published at the beginning of the year, Andy Burnham, said that the NHS must make £15bn to £20bn "efficiency savings" by 2014. That's about £5bn of efficiency savings every year. Let's see: that would be the entire public health budget, or most of the NHS training budget, or half of prescribing costs. What would you do, cut public health in the first year, then most of training in the second year, then half of prescribing costs in the third year, and then the remaining prescribing costs in the final year?

Oh right, you would actually make the NHS more *efficient*. The evidence is that there is not much fat to be trimmed. Even the Tories admit this, the Guardian reports that a Tory "health insider" says that "a fifth of everything the NHS does today will have to stop". That means cuts. That means that patients will have to go to the private sector to get the treatment or (I guess your "solution") beg a charity for it.

These "efficiency savings" are wreaking havoc in the service right now. In my county the PCT has stopped all "non-urgent" treatments. (The only treatments that are being done are: cancer - everyone's favourite disease, it is a pity if you have a non-cancerous heart condition - A&E and fractures. EVERYTHING else is non-urgent!) Do you know what that means? An elderly woman needing a hip replacement will be told that she will have to be in pain and immobile for another 6 months (at least) because first Andy Burnham, then Andrew Lansley (and presumably now Ralph Michell) think that it will be "more efficient" that way. What utter and obscene nonsense!

"Arguing that the NHS is different ... will not wash", says who? Someone who knows nothing at all? The fact is that the NHS is the bottom line. It is the last line of defence, there is nothing to protect you after the NHS. The NHS has to pick up the pieces and repair the consequences of failures in every other service. You mention social care, yet the first thing that social care providers do when there are any problems is pass the client on to the NHS. It is frankly disgusting that anyone could argue for a cut to the NHS.

"Second, Labour should attack the government's economic incompetence on the NHS."

I don't know if you have noticed, but the NHS is currently running under the policies of the last Labour government. Any attack on the NHS now will be an attack on Labour.

"One hundred and fifty-two primary care trusts and 10 strategic health authorities will be wound up"

Not an expert on the NHS I see. The SHAs were due to be wound up anyway. When an NHS Trust becomes a Foundation Trust it is take out of SHA control, so under Labour SHAs were getting more and more irrelevant and would have been reformed, or maybe abolished when the NHS Trusts in the SHA's area became FTs. As to PCTs well Labour's plans were to hand commissioning over to GPs through Practice Based Commissioning, which is not quite the same as GP commissioning, but not far off. And if you were paying attention you'll see that the Kings Fund says that consortia need to be at least 500k people and most commentators agree: there will be about 80 consortia. The 500 figure was an initial estimate by some newspapers based on PBC. It is clear that such consortia would be far too small and would not have financial stability.

Of course, you may have noticed that 152 PCTs will be replaced with 80 consortia and largely staffed by PCT commissioners. You may also have noticed that the NHS Board cannot do its commissioning work from London, and will need regional officers, and some people (Sir Philip Green, for example) suggest that there should be 10 regional offices. Is this "re-inventing the wheel"? Yes it is. But that has happened frequently in the NHS.

You casually mention Foundation Trusts, but this is the main area where Labour can get a popular campaign against the Tories. The problem is that you spoil it by making exactly the same argument as Lansley does.

"It should look to make greater use of organisations outside the NHS (including community groups, or peer support groups like those run by third sector organisations)"

No! No! No! This is NOT the attitude to take. The reason is quite simple: this is EXACTLY Lansley's plans (have you actually read the White Paper? it does not appear so). Now let's see. An elderly woman has ulcers on her legs and needs the dressings changed frequently. So let's ask a "community group" if they could give it a go, I mean all you have to do is take the old dressing off, throw it away and stick a new one on. What's difficult about that? No need for a trained nurse, eh? Oh right, it does need a trained nurse, but you don't want to pay him/her? The fact is that the vast majority of the work being done by the NHS needs highly skilled, trained staff. You simply cannot shunt that work onto untrained volunteers. What about if something goes wrong? Who is responsible?

"It should argue clearly for shutting inefficient hospitals."

And who will do the hip operations, cataract replacements, cancer treatments? Oh let me guess, either 1) voluntary "poor house" hospitals paid for by charity contributions by rich people with a conscience (doesn't it just make your heart sing that there are such lovely people around?) or b) private hospitals where the exorbitant costs are paid using a co-payment by the patient. Nice. Point me to an "inefficient NHS hospital", then have a look at how much it costs to perform their procedures (say, a diagnostic test, or an operation). I will accept your assertion only if you can find me an alternative that is safe and of equal quality, but costs less. Please do not spout Lansley's propaganda.

I would argue that in some places, for historical reasons, there are too many hospitals and that there is an argument to close the excess hospitals. But equally so, there are some areas with too few hospitals and they need a new one built. Over all, the NHS is very efficient compared to just about any healthcare system you could mention.

"The National Care Service which Labour started to articulate in government, free at the point of need, could form the basis for such a vision."

Now we can finally agree on something. But the NCS is NOT and alternative to the NHS. We need BOTH. And the NHS needs new funding, it MUST NOT be funded from NHS funds (like Lansley is trying to do now).

OK so who do you think this Ralph Michell is? Other than the lame talk about attacking Conservative policies, he does sound like a wet Tory, doesn't he? (Read the original article, if you can stomach it.) He says that the NHS wastes money (heard that somewhere? perhaps in a Tory election leaflet?). He says that NHS services should be done by the voluntary sector (again, where have you read that before?). OK so I went a little over the top about DIY community health services, but it is the natural conclusion of his ludicrous plans.

So Ralph Michell's Twitter profile says he is

Head of policy at the Association of Chief Executives of Voluntary Organisations (ACEVO), interested in third sector, charity, politics 

Let's remember what the "third sector" really is. They are charities (who have staff that need to be paid) and "social enterprises" (ie, not for profit, but still private, companies, that have staff to be paid). These charities and "social enterprises" have boards of directors and chief executives on very generous salaries. They have also got rather fat on the funding from New Labour.None of these charities and "social enterprises" would stand up to the financial scrutiny that the NHS suffers. None of these charities and "social enterprises" could withstand the Conservative government instigated, media bile that has been throw at the NHS. They feel that they are untouchable because they have a cuddly image. But they really are the bad guys.

These charities and "social enterprises" are in competition with the NHS. They are in competition because they do the same stuff as the NHS (or they see a business opportunity in doing what the NHS does) and the only source of funding is the taxpayer. They want NHS money. That is why Michell is against the so-called NHS "ring fence" because he sees that it is a threat to his (and the other chief execs and directors) fat pay packets.

Their website congratulates the last government on neutering the "NHS as preferred provider". They are no friends of the NHS and as such no Labour supporter who supports the NHS should have anything to do with them.Sadly, these horrible people were pulling Blair's strings and are now salivating over Cameron's plans. They really make my heart sink.

By the way, if anyone from Progress is reading this, I allow ANYONE to post comments. I want to debate, it is a pity that you do not.

Basingstoke Rule

Last week I attended a meeting with the finance director of my local hospital. The meeting was called to outline the effects of the NHS white paper. It was frightening. As he went through the slides he pointed out substantial parts of the plans that will not work. Remember, this is a white paper, and essentially the first draft of the legislation, it is not a discussion paper. Lansley has said that the white paper will be implemented and that there is no alternative.

One of the points the Finance Director made concerned the debts of PCTs. He said that the GPs were relying upon the "Basingstoke Rule", and he explain thus: Andrew Lansley was on one of his tours touting his white paper to GPs, and in Basingstoke he was asked if GPs would have to take over the debts of PCTs. This issue is a frightening prospect for GPs because they run businesses, and as such they have to make sure that they at least break even. It is usual for businesses to owe money on an asset that they use (like premises, or equipment), but PCT debts are not for assets the GPs will own. (One could argue that some of PCT debt is created by GPs over prescribing or referring patients when they shouldn't.) Lansley's response to the Basingstoke GPs was that they would not inherit the PCT debts.

This is significant because some PCTs have huge debts. There is a lot of PFI debt, there are liabilities like leases on property and some PCTs have hidden debts where they have borrowed from other PCTs. Lansley's Basingstoke Rule means that GPs will not take on this debt. This does raise a question of where the money will come, but this is just one of a plethora of important questions that Lansley seems not to be able to answer.

Pulse gives some more details about this:

[Lansley] made clear the Government would not write off debts racked up by PCTs in their remaining two and a half years, and urged GPs to work closely with trusts during the transition period to ensure they don’t start off with huge financial millstones around their necks.

So clearly Lansley's Basingstoke Rule is that the debts PCTs generated until the government changed would be written off, but any debts that PCTs generate under his watch would be the liability of the GP consortia. This is quite clever since it means that GPs will have to get involved immediately in the process of taking over commissioning so that they can limit their future liability.

It means that commissioning that happen now is effectively the responsibility of GPs even though the actual commissioning consortia have not been created. After all, if PCTs are cutting patients' treatments now to protect GPs from a debt in two and a half years time, the PCTs are doing this for the benefit of the GPs and hence the GPs should take the responsibility for this.

Cuts, cuts, cuts

The Commons public accounts committee published a report today about the results of the last attempt at "efficiency savings". The New Statesman says:

The report warns that only £15 billion of the £35 billion of savings identified in the 2007 Spending Review have been achieved, and only 38 per cent of those were considered "legitimate value-for-money savings". The Communities department, for instance, which faces cuts of 51 per cent - the largest of any department - has made only £40m of savings against a target of £987m.

£15bn out of £35bn is 43%. Let's use the more optimistic 43% than their measly 38% (a little bit of illegitimacy can be excused).

The NHS is supposed to find £20bn of "efficiency savings" by 2014. We are told that the money saved will be re-invested in the NHS. The NHS needs a 5-6% real terms rise just to stand still and so some of this rise must come from the re-invested "efficiency savings". £20bn over four years is about £5bn a year, or about the 5% needed to stand still. That is why Osborne only gave the NHS 0.085% increase each year, the rest that the NHS needs has to be found in the money from "efficiency savings". The big if here is can the NHS get 5% more efficient each year for four years? The evidence from the public accounts committee suggests not.

43% of £5bn is £2.1bn a shortfall of £2.9bn. So if the 2007 spending review is replicated with the 2010 CSR it would mean that the NHS will have £2.9bn less each year. Hence this indicates that the NHS funding will be cut by about 3% every year. It certainly looks like we are heading towards the usual Tory situation of patients on trolleys in corridors. Bastards.