Fast news

ISTC rip-off

Private health firms ripped off the NHS in London by £22 million between 2007 and 2010. This sum equates to the cost of employing 600 nurses.

The scam, centred on Independent Sector Treatment Centres (ISTCs), was perfectly legal and involved ISTCs providing elective surgery - hip replacement, cataract operations, etc - and charging the NHS the full costs of the contracts irrespective of how many patients were actually treated.

This rip-off by private, run for profit, health care companies, is not new. Last year, the Socialist quoted a British Medical Journal report which estimated that in England "up to £927 million of the £1.5 billion [paid to ISTCs, may have been] for patients who did not receive treatment under the wave one ISTC contracts".

Previous Labour governments had spearheaded this private health companies' assault on the NHS, claiming that ISTCs helped bring down NHS waiting lists - while omitting the fact that their treatments have cost much more than ploughing the money directly into the NHS.

ISTCs 'cherry-pick' the easiest patients, leaving NHS Trusts to treat those more likely to suffer complications because they have other illnesses or need more complex surgery.

Unsurprisingly, the current pro-big business Con-Dem government has shown no sign of scrapping these costly contracts.

Profit from failure

Global finance capital has only learned a partial lesson from what should have been the very chastening experience of the world economic crisis. The recent rise in 'tail-risk' funds suggests, at some level, that the crisis-ridden nature of their system is now understood.

A 'tail-risk' is the danger of an investment losing significant value due to a largely unpredictable event (the sort of events that have so far characterised 2011). Staggeringly finance capital scents a profit to be made in this. Just one tail-risk fund - PIMCO - has $30 billion invested in it!

These tail-risk funds, that investors and speculators can pour their money into, act as a 'hedge' (or insurance) against losses arising from market shocks.

These funds buy-up a range of obscure financial instruments that in 'normal' market conditions would perform poorly, but if the market nosedives can give returns anywhere between 50% and 100% on the original investment. The perversity of capitalism and its drive for profit knows no bounds.

Ironically, these 'investments' will probably only fuel global instability. After all, it was the failure of capitalism to invest its capital in new production, instead chasing short-term profits through financial gimmicks that helped bring down the world economy in 2008. How is this any different?