Link to this page: https://www.socialistparty.org.uk/issue/750/16047
Privatisation: Bleeding the NHS dry
Private health company Harmoni regularly ran out-of-hours clinics in London without doctors or nurses last year. Their clinics at the Whittington Hospital were sometimes closed completely for hours at a time.
Families were told to drive miles across the city in the night to get their child seen. A GP who worked shifts for the company wrote to a director in 2010, saying he feared the service had become unsafe because of an aggressive cost-cutting agenda. The tragic death of a seven week-old child has been linked to one such incident, after a four-hour wait to see a doctor.
As well as out-of-hours clinics, Harmoni runs a quarter of the new 111 telephone lines, prisoner healthcare and IT services, supposedly providing services to over eight million people in the UK.
Harmoni was originally set up as a GP co-operative in North West London in 1996. This was the sort of organisation the Tories, Lib Dems and Labour all claim to support.
Former Tory Health Secretary, Andrew Lansley said in 2011: "...we're giving staff greater control of their organisations. By handing responsibility and power to the front line, a variety of services will develop, which in turn will give patients a real choice about the kind of care they want to receive."
Nick Clegg said in 2010 that Lib Dems would: "give frontline staff control over their ward or unit budgets, and would allow them to: "establish not-for-profit social enterprises or John Lewis-style employee trusts to run services of all kinds within the NHS".
In 2009 Labour had also proposed health workers form 'mutual' companies to take over the running of the services they provided.
Harmoni shows how these co-ops and social enterprises get swallowed up by much bigger fish. It merged with a consultancy company, WCI Ltd in 2005. WCI was itself owned by ECI - a private equity company. (Private equity companies, or venture capitalists, buy companies with the aim of boosting their profits and then selling them on, at a handsome profit to themselves.) They say they have: "made a number of very successful healthcare investments during the past decade."
In 2007 another of ECI's businesses - a care home operation for sexually abused and autistic children - went bust. It had returned £20 million to investors, leaving vulnerable children needing rehousing.
ECI sold Harmoni for £48 million in November 2012. The buyer was Care UK, one of the largest private health companies in Britain. It is paid £190 million a year to treat NHS patients and will soon get a lot more - from 35 new NHS contracts to provide diagnostic services, elective surgery and diagnosis and treatment of musculoskeletal conditions.
Care UK's profits rose 7% in 2010 to £38 million. In the same year average staff pay fell 1% to under £16,000. Whether the average included the Chief Executive is unclear, but he got a 60% rise to £800,000!
Care UK's owner is Bridgepoint, another private equity company. Like other profiteers, they have seen the opportunity to make money from healthcare. "European countries spend on average 9% of their GDP on healthcare provision," they say. "We believe that there will be excellent growth prospects and consolidation opportunities for private sector players." It certainly seems less risky to these 'venture' capitalists than investing in manufacturing industry or construction.
£41 million is now taken out of Care UK every year - as profits, tax avoidance and interest charges (at 10% a year!) on the debt Bridgepoint deliberately loaded onto the company. Some of Care UK's tax liabilities are registered in the Channel Islands.
If its care homes and NHS services were publicly owned, this £41 million would be re-invested into improving the service. Instead it goes straight to Bridgepoint's investors and financiers.
On 20 January Care UK fixed a deal to take over another healthcare company, UK Specialist Hospitals, for £55-£70 million. UKSH operates five Independent Sector Treatment Centres (ISTCs). These privately run hospitals are paid to treat NHS patients.
They were first set up in 2002 by the Labour government. The health secretary at the time was ex-MP Alan Milburn.
After leaving government, Alan Milburn joined Bridgepoint as part-time adviser on £35,000 a year. So Milburn brought in ISTCs and is now paid by a company that owns them! He is now chairman of Bridgepoint's European Advisory Board (which also includes Lord Patten, chair of the BBC Trust) and a director of another of its companies, Diaverum, the second largest private kidney machine clinic operator in Europe.
He is not the only person to travel in this direction. Care UK recently appointed Jim Easton, former 'director of improvement and efficiency' at the Department of Health, as managing director. His contacts at the Department of Health will be more recent than Milburn's.
All the money that taxpayers put in to the NHS should be spent on patient care provided by properly paid staff - not handed to greedy profiteers. After all, it's the NHS that trains most of the nurses, physiotherapists, radiographers, laboratory scientists, doctors and other health professionals these private companies employ.
Some shocking facts
The total value of European healthcare buyouts rose to $6.5billion between the first quarter and the third quarter of 2012, 170% up on the same period last year.
The Practice plc, a company with contracts for over 50 GP surgeries and health centres, has been accused of walking away from contracts in deprived areas. It seems it can't make enough money there.
Serco replaced skilled clinical staff with call-handlers without medical training, and then apparently instructed them to manipulate records to make sure performance targets were not missed. There was a fourfold increase in ambulance call-outs. (Guardian 24.1.13)
Specsavers (who sell hearing aids too) has won 33 adult hearing contracts with the NHS.
Private companies treated 345,200 non-emergency NHS patients in 2011-12, an increase of more than 10% on the previous 12 months.
The Socialist Party says:
If the NHS is to survive, all the money-grabbing private corporations swarming around its sickly body must be taken into public ownership, with no compensation unless there is proven need
Unless Labour disowns and expels the likes of Alan Milburn, there's no chance of a future Labour government doing this. A new workers' party is needed that will fight to rebuild a publicly owned service run for the benefit of all - except the profiteers
- No cuts, closures or job losses in the NHS
- End privatisation. Scrap PFI and refuse to pay back the 'debt'
- Nationalise the pharmaceutical companies under democratic control and integrate them into the NHS
- For mass action to defend the NHS, including a 24-hour general strike
The Whipps Cross hospital strikes 1997-2006
A Whipps Cross hospital worker recalls how workers fought privatisation.
In April 1997, following 'market testing' of portering services at Whipps Cross hospital, east London, the service, along with the switchboard, was to be privatised. Unison Waltham Forest Health Branch launched a campaign publicising the threat that this takeover by contractor Tarmac Servicemaster posed to both service users and workers. The porters voted to take strike action. And the magnificent two-day strike was overwhelmingly supported and saw major involvement in a lively picket. There was solidarity from health workers, patients and local trade unionists.
A 400-strong local demo was led by the porters. Their strike later concluded with them marching proudly from the picket line back to work, having put down a marker that they would not meekly roll over if Tarmac Servicemaster attacked their jobs, pay and conditions.
Over the period that followed the union saw new-start porters being employed on inferior pay and conditions compared to their ex-NHS employed counterparts.
The company's name changed six months later following the departure of Servicemaster (the partnership fell apart) until finally Tarmac plc was dismissed from the hospital by the Trust for failing to meet required service standards.
The union's arguments against privatisation had been fully vindicated. However, the Trust then awarded the contract to Danish multinational ISS Mediclean in February 1999.
In 2002 a joined-up campaign with Unison branches at Newham, Homerton and Mile End hospitals and supported by the Telco (London Citizens) organisation, embarked on plans to secure harmonisation of pay, terms and conditions with NHS contract workers doing the same jobs.
Mass recruitment to the union was the key task. At Whipps Cross this experience was characterised in the words of Unison branch secretary and porter Len Hockey as: "Having a million conversations" with the overwhelmingly female domestic workforce from countries including Ghana and Nigeria.
With little understanding of what trade union organisation was or why they should part with their meagre earnings to be in one, these workers remained to be convinced that the campaign could really make a difference.
The core of the campaign to win these workers to the union was built around the industrial action experience of the longer established porters. These workers, employed on superior pay and conditions and tempered by their experience in struggle, helped show the domestic workers the way.
An important breakthrough for the organising campaign came when Kola Shokunbi was recruited as a shop steward for domestic workers. From one-to-one discussions in changing rooms, at bus stops, in corridors and the union office, the fight was on. Soon two female domestics joined Kola as activist shop stewards in the campaign.
A common pay and conditions claim had been submitted to the companies and Trusts. The union made representations to the Whipps Cross Trust bosses about the appalling and discriminatory conditions that the contractor operated. They argued that the Trust indirectly bore responsibility, but this fell on deaf ears.
But in 2002 union membership at Whipps among these workers reached 250 and mass meetings were taking place. In a ballot for strike action, with confidence riding high, a vote of over 97% in favour was returned.
In the summer of 2003 the strike took place. In brilliant sunshine and in intermittent action over a period of several weeks, porters and domestics participated in what was an inspirational movement. 111 workers joined the picket line on the first day.
The most striking feature above all was the porters' participation. These members, largely already on the superior pay and conditions, in response to the lead from their union and without a penny to gain from a successful outcome, stood shoulder-to-shoulder in struggle with their sisters and brothers.
Management resorted to intimidation. It was suggested workers might find their documents 'not in order'. The implication was that the workers could lose their jobs if they continued to support the union's campaign.
The Trust moved from a position of watchful neutrality at the beginning of the dispute, to being silent attendees at the negotiations and then very vocal and active participants (on the side of ISS Mediclean) in the often acrimonious talks between company and union.
This was exemplified in one incident. Following the end of one round of talks and as the union reps were returning to the hospital, the local police rang to say the union was required to attend the police station. This was because of a complaint from the Trust that the next day's strike action was an unauthorised demo and illegal.
During the successful discussions with the police that afternoon and while we were off site, the Trust and ISS Mediclean distributed letters of misinformation suggesting that the union leadership was misrepresenting members' interests.
But on returning to the hospital from the police station we were greeted by the sight of female domestic members dancing and jumping up and down on these now torn up letters. The strike went ahead the next day and was overwhelmingly supported.
The victorious outcome of the strike coincided with the ending of the contract with ISS Mediclean. Initial Facilities, part of the Rentokil group, secured the new contract.
Very soon a confrontational management style emerged. This resulted in a provocation between a supervisor with one of the strike leaders, Kola. Kola was sacked and a union campaign for his reinstatement followed.
After a successful Employment Tribunal, Kola was reinstated and returned to work. There was a jubilant reception from union members as he was carried aloft by them into the staff restaurant.
The company's attempt to intimidate the workforce and break the union early on in the new contract had failed.
However, they continued to prevaricate and drag their feet over the implementation of the agreement, leading to a ballot and further successful strike action in 2006. The contractor conceded that they had to honour the agreement.
The effect of the action completely transformed the Whipps Cross strikers. They made their own history and had it reflected in the messages of solidarity and money that came in from all around the country. Strikers attended Unison conference where over 2,000 delegates and visitors rose to their feet to applaud their struggle. The union branch won first prize nationally for recruitment and organisation.
The experience of the unity of black and white workers in action was a living and concrete example of how to defeat the bosses' divide and rule tactics. The attempts of the employers to intimidate these workers was faced down. This was because of the resolute and principled stand from the local strike leadership, in particular porter and branch secretary Len Hockey.
As a Socialist Party member Len had the support of many other workers and trade unionists and was able to draw upon that collective strength and experience to help to guide the dispute.
But probably the most outstanding feature of this historic east London struggle was the example given by the longer established porters. These workers struck for the status and future of their own jobs and of the service.
Today the effects of the Con-Dem coalition's policies are felt throughout the Whipps Cross workforce with domestic and portering staff facing reduced earnings opportunities with flat-time earnings for overtime working. But the experience of struggle cannot be expunged.
In The Socialist 30 January 2013:
Socialist Party NHS news & campaigning
Socialist Party news and analysis
Fighting the cuts
Workplace news and events
Socialist Party review
Socialist Party reports and campaigns