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From The Socialist newspaper, 30 October 2004

Review: NHS plc

How The NHS Is Being Taken Apart

Allyson Pollock quotes Aneurin Bevan in her new book NHS plc.
Everybody understood what he meant when Bevan spoke of: "Freedom from fear" when arguing for the setting up of the national health service.
But now:
"What is occurring is an accelerating erosion, and increasingly a reversal, of what the NHS was created to achieve: making health care a right, and no longer something that could be bought or sold".
Alison Hill reviews NHS plc and argues for a socialist alternative to the dismantling and privatisation of the NHS.


BEFORE THE establishment of the National Health Service (NHS) in 1948, an accident or illness could be a catastrophe for working class people.

If someone needed medical treatment poor families had to club together, just to get enough money to see a doctor. If people couldn't afford to pay they were forced to go without care.

So the establishment of the NHS really did mean a freedom from the fear of illness. It is one of the most important benefits the working class fought for and won in the post war years.

Professor Allyson Pollock and a team of researchers from the Public Health Policy Unit at University College London have written a damning expose of the current assaults on the NHS - started by the Tories but continued with gusto by New Labour.

The book draws on 20 years of research and activity in the NHS. It is meticulously researched but written in a clear style, with passion rather than pages of graphs and tables. It is an essential read for everyone involved in campaigning for the defence of public services.

The privatisation of all public services

What is happening to the NHS - the drive to privatisation and the turning of healthcare into a commodity - is reflected in all public services to one extent or another. It often involves the same companies and the same individuals.

Healthcare, public health, education, transport, the environment or whatever are increasingly measured by bean counters rather than by accountable bodies measuring whether the service is effective or not.

It is no wonder that the NHS is such a target for private companies, with a £74 billion annual turnover and a huge range of activities. As Pollock says: "It offers marvellous opportunities for companies seeking security of income and healthy profits."

The pharmaceutical industry already takes an estimated 14% of NHS expenditure - more than £10 billion a year. Construction companies like Balfour Beatty, Tarmac, Jarvis and Siemens are queuing up to get in on the money to be made from Private Finance Initiative (PFI) hospital contracts.

Now multinational healthcare companies like BUPA, PPP, United HealthCare and Kaiser Permanente are joining in the queue for public money.

An insight into how relentless the political drive is towards privatisation is shown by an account of a meeting Allyson Pollock had with chancellor Gordon Brown in 2002. She asked him why private finance is being used for public investment, when private borrowing is more expensive and the investment risks are not in practice borne by the private sector.

"His response was simply to declare repeatedly that the public sector is bad at management, and that only the private sector is efficient and can manage services well."

NHS plc is largely a careful dismantling of that baseless assertion.

Healthcare As A Commodity

ONE OF the most alarming consequences of the drive to privatisation in the NHS is the financial system. NHS plc explains how, because this treats healthcare as a business, the main priority of hospital chief executives and trust boards is to enhance their cash flow - including by mergers and acquisitions.

Already local hospitals are being closed and absorbed into PFI schemes whilst the new national tariff means hospitals have an incentive to concentrate on lucrative treatments and specialities.

Functions with higher risk and lower returns, like emergency and intensive care, and the treatment of chronic illness, are bound to suffer.

There may be a national tariff for health treatment but hospitals' costs vary widely according to factors like the age of the equipment and buildings the staff have to use and the nature of the community they work in. So chief executives of would-be foundation trusts are negotiating with the government to get their land and assets valued as low as possible so their costs look low.

As the book points out, foundation hospitals cannot be seen to fail, for political reasons. So the government is also allowing them to borrow money at favourable rates and making more capital available to them. But this is at the expense of health care for all.

Major problems

As with the rest of the public services, the achievement of targets is becoming central to the health service now. Already the target of a maximum four-hour wait in casualty is causing major problems. Doctors are complaining that the whole focus has become the 'four hour rule'.

One national newspaper report recently quoted a junior doctor saying: "Staff become obsessed and bed managers breathe down your neck because they don't want to be fined for failing to meet it... I've spent six years at medical school being taught to treat the patient, not the result, and suddenly the opposite is happening."

Performance measures and targets also affect GPs. NHS plc shows how the new GP contract focuses on measures like the percentage of patients whose blood pressure is kept within strict limits.

GPs are concerned that as a result, there will a temptation to treat mild blood pressure problems with drugs, rather than looking at the patient's stress levels, diet and lifestyle.

"The new performance measures are largely linked to pharmaceutical interventions of one sort or another, and the pharmaceutical companies have been swift to respond, using strategies developed in the US," Pollock observes.

The book exposes how we are told how much is being spent on the NHS but not how taxpayers are: "propping up and cosseting companies whose profitability and stockmarket positions frequently depend entirely on their intimate relationships with the NHS."

Pollock quotes the example of employment agency Nestor Healthcare which miscalculated the size of the new market for 'out of hours' GP services.

When this was revealed, its share value dropped 36.5% and its chief executive had to resign.

The USA Model

IN THE richest country in the world, the USA, there is the highest spend per head in the world on healthcare. But one in five people have no access to healthcare because they are uninsured - mainly people on low wages and unemployed.

If you go for medical attention you not only have to take proof of your insurance cover but your credit card as well - your insurance might not cover all the treatment you need.

Nearly half of all personal bankruptcy filings in the USA are because of the costs of healthcare.

But it's worse than that. When reading NHS plc I discussed it with my brother who lives in the USA. He told me about taking my sister-in-law to hospital when she had an injury to her lip.

She was bleeding profusely but as they are both fully insured they expected to be seen by a doctor or nurse straight away.

No bill, no treatment

But the clerk couldn't allow them to see any medical staff - the computer wasn't working properly so they couldn't start the billing process. My brother had to jump over the desk and fix the computer before they could get into the hospital.

When you see office blocks in the USA which are headquarters for healthcare companies, they're not full of people providing healthcare. They're full of people issuing bills and chasing up payments - functions completely useless to the provision or monitoring of healthcare but vital to the making of profits.

But that's not enough for some companies, the scale of fraud in the US healthcare system is breathtaking. Allyson Pollock gives many examples but Columbia/HCA is the biggest case of health fraud in the USA.

Columbia/HCA is the USA's largest for-profit healthcare corporation. In 2000 they pleaded guilty to substantial criminal conduct and paid $840 million in fines and penalties.

By June 2003 when the case was settled, they had paid $1.7 billion for defrauding the US government and paying kickbacks to physicians.

The US government also got $9 million in fines and penalties from accounting firm KPMG for allegedly helping Columbia/HCA.

Columbia/HCA now calls itself HCA and is involved in bidding for UK healthcare contracts.

The sort of thing that goes on is summed up by Pollock's account of an overheard remark by the head of a heart hospital in Phoenix, Arizona.

He told his junior staff: "Every patient in this hospital needs an operation, it's your job to find out which one." This surgeon also owned the hospital and had a weekly radio programme where he advertised his services.

Big business whines

John Devine, the vice-chairman and chief financial officer of General Motors recently blurted out some of the consequences of the US system. GM is the largest private purchaser of health care in the USA.

They spent $4.8 billion on healthcare for their employees and their dependants in 2003, more than they spent on steel.

"Every vehicle GM manufactures in the United States starts with a $1,400 bill for healthcare", he complained.

But the crucial problem for GM is: "Foreign competitors don't face this problem in their home countries." So he demands: "The rising cost of health care is a serious social issue that requires more than our own best efforts.

"Co-operation between the private and public sectors is critical to finding solutions that will meet the nation's healthcare needs and help restore competitive balance for US businesses."

So sometimes big businesses fall out amongst themselves and plaintively call on the state to intervene.

What's The Alternative?

"THE NHS was not an experiment, nor was it a mythical utopia," says Allyson Pollock. She points out that for over fifty years it has provided high-quality care "to most patients most of the time." It has been the envy of and copied by many other countries. But: "Now it has been made into a laboratory for market-based policy prescriptions."

So what does NHS plc say should be done to prevent the dismantling of the NHS as a service giving the "right to health as equal as the right to vote"?

Allyson Pollock calls for services to be made accountable to local people directly and for the mechanisms by which healthcare planning can be done effectively to be restored, strengthened and made accountable.

Waste of the market

She calls for an end to the waste of the market in the NHS. For the accounts to be opened up to public scrutiny so that people can see how big business eats up public money and how much of the new money promised for the NHS "disappears in private sector duplication, transaction costs and fraud."

She passionately argues that future governments will say that the NHS has failed and that only the introduction of the market has made any improvements.

She points out that any recent improvements have only been because of the increased investment which has not been "soaked up by hospital trusts' accumulated deficits, or siphoned off into private sector profits."


She ends the book by calling, not for reform but for a revolution: "A quiet, collective and reflective revolution of the sort that brought the NHS into being in the first place."

We in the Socialist Party would obviously agree with all those points, we're certainly in favour of revolution, rather than reform. We'd argue that such a revolution would have to include the nationalisation of the pharmaceutical industry and all the other firms involved in the NHS - which these days would include the construction and IT industries, suppliers and many others.

If those industries were run under democratic workers' control and management, as part of a democratically planned and managed economy, their resources could be released to provide, not just the NHS with the principles of 1948 but an NHS for the 21st century.

This would provide free high-quality healthcare for everyone and an effective, accountable comprehensive system for promoting public health.

If you want to fight for these ideas, read this book, it gives you a lot of the ammunition you need and join the Socialist Party and get organised.

The Drug Companies

MPS HAVE recently been told what lengths drug companies go to promote their products.

Clare Wilkins

Professor David Healy of the University of Wales has told the Commons health select committee that that many articles in medical journals about new drugs are not independent but are ghost written by drug company advisers.

Doctors are bombarded with gifts, in contravention of the pharmaceutical industry's code of practice. One doctor was offered two year's salary if he did not publish his research on the side effects of a new heart drug.

Drug companies pay huge fees to medical consultants. They also pay experts to promote new drugs to other doctors and GP practices can make £50,000 recruiting patients for clinical trials.

Dr Des Spence, who runs a campaign against the industry's influence on doctors commented that doctors don't complain about these methods: "Because it would be like complaining that Father Christmas gave too many presents this year."

Side effects are played down. 'Suicidal tendencies' have been described as 'nausea'. Outright violence in children is described as 'hostility'.

The drug companies also threaten legal action for breach of commercial confidentiality to keep the agency that is supposed to regulate them in check.

Members of the committee said that they were horrified by some of the evidence they heard.

But select committee reports and voluntary codes of practice will not regulate the drug companies. Patients will only be safe when drugs are developed for the good of society and not for profit. The drug companies must be under democratic workers' control and management. In a socialist world medicine would be safe and accessible to everyone who needs it.

In 2001, Allyson Pollock was asked to give evidence to a Commons select committee enquiry into the role of the private sector in the NHS, after being dropped as an adviser to the committee when Labour was re-elected.

She was subjected to: "aggressive, hostile and highly ideological questions and comments."

When the report was published it contained an attack on Allyson Pollock's research unit .

As the book explains, the unit has become an important resource for trade unionists, academics and others fighting health service privatisation all over the world.

"From the government's point of view we had to be denigrated and preferably silenced."

Why not click here to join the Socialist Party, or click here to donate to the Socialist Party.

In The Socialist 30 October 2004:

Unite And Fight

Why We're Going On Strike

International socialist news and analysis

Troops Out Of Iraq

Israel: Sharon's 'Entanglement Plan'

The White House For Sale

Ukraine: Galol Plant Workers Left High And Dry

Opel Workers - Down But Not Out

Life As A Refugee

Socialist Party campaigns

Socialist Party Stands To Stop Privatisers

How The NHS Is Being Taken Apart

Wythenshawe: Young People Need Decent Facilities

Four Weeks To Get All Pledges In

Workplace news and events

Nominate Roger Bannister

Manchester Evening News Strike

Support Jaguar Workers

Coventry Workers Fight Back


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