Editor's blog Monday 5th September 2011: Religion, politics, privatisation and the NHS

The cliche suggests that in polite conversation, one should avoid the subjects of religion and politics - given their potential for polemical positions, supported by great conviction and little evidence.

Maybe talking sanely about the NHS is so hard because it is mired in both.

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Religion in the slightly metaphorical sense, that it attracts most passionate attention from devout believers and passionate non-believers. Religion also in the sense that much of the debate about whether the NHS should be wholly nationalised or privatised is frequently far more strongly based in faith than evidence.

The politics bit you already get if you read Health Policy Insight (doing which has been conclusively proven in private research that I just made up to make you cleverer, funnier, shrewder and sexier).

A few thoughts are worth re-capping about the politics of the NHS: it is the obvious, practical bit of socialism that the British people repeatedly tell opinion pollsters they like.

Academics broadly support the idea of risk-pooling on a population basis to guarantee universal care as a reasonable, rational means of delivering a scarce resource equitably across the UK population.

Oh, and no other country in the world has chosen to organise its system in imitation of the NHS.

Tomorrow, the Health And Social Care Bill returns to the House Of Commons, an event heralded by tonight's BBC Panorama giving us Gerry Robinson's review of the Bill.

I was in the past very critical of 'Can Gerry Robinson Fix The NHS?', the BBC2-Open University collaboration based on the travails of the Rotherham health economy, which left the issue of funding until the last fifteen minutes of the final episode. Some business guru-dom.

Robinson subsequently made an infinitely much better programme about social care. He also made a series of Channel 4 programmes about supporting struggling businesses, with his own money. He put his own skin in the game to such an extent that I can no longer concur with John Cleese's wonderful put-down-by fax of Robinson's take-over of Granada TV and firing its chair and Cleese's friend David Plowright - "fuck off out of it, you ignorant upstart caterer".

And what does Robinson conclude about the Health And Social Care Bill? "I have come away with grave concerns over the very future of our beloved health service ... What worries me, and what I do not think will work in the long run is to use outside providers because they appear cheaper in the short term - but that are not part of a properly managed, strategically planned system of care. I think there is a place for outside providers but it needs to be very carefully managed ... I am left with serious doubts about key elements of the plans as they stand".

Robinson continues, "I think the stakes here are huge. Who is going to be managing that big picture? Unless somebody really does grab this thing at the centre and has the courage to make unpopular but right decisions then I fear this could spell the end of the NHS".

Robinson's article does not support the status quo; it accepts the need for change and careful use of resources. It does, however, raise meaningful points about the NHS's failure to invest in modern diagnostic equipment, and about the risks of fragmentation reducing the NHS system's ability to co-operate in service improvement. (It should be said that if such co-operation were the norm, then the NHS would be a far better-performing system.)

How real is the threat of privatisation?
Much of the rhetoric in the current debate is being fuelled by fears that the NHS reform plans of Secretary Of State Andrew Lansley (saviour, liberator) are a covert means of privatising the NHS.

This isn't a perspective that I share. I do, however, think privatisation is a plausible unintended consequence of failure of these reforms.

As I wrote last week, in some parts of the NHS, GPs who want to do commissioning as something more than a means of settling scores with acute providers will make the reforms work well for patients and for the taxpayer. (Their own small, albeit probably growing, private businesses may also do well - as they already do.)

The problems with these reforms is that they are profoundly philosophically confused on the role of central or national planning. The DH's recent proposals of dealing with provider failure are foggy beyond belief.

In addition, those in charge of the reforms - Mr Lansley and his boss That Nice Mr Cameron - have foolishly spent much of the past year demonising NHS managers as "bureaucrats".

It's an interesting motivational tactic. For people who are keen on competition and market mechanisms, Messrs Lansley and Cameron between them appear to have the sales aptitude of a whelk when it comes to making people want their reforms.

For reforms to work, they need a reasonably broad constituency of people who believe that they represent an improvement, and not merely a change. Mr Lansey and Mr Cameron do not seem to have created this, despite Mr Cameron's comic assertion to This Is Cornwall newspaper that "we had a proper pause and reflect and a massive listening exercise throughout the NHS and a massive message came across – they told us they wanted reform to go ahead, but they wanted the right sort of reform and that is what we're now delivering ... That is what the health professionals told us they wanted out of the reforms, that is what we're now delivering and I feel that the whole health profession is on board for what is now being done".

As I said earlier, it's a religious faith-type thing. Mr Cameron feels it to be so; and it must therefore be so.

The organisation Spinwatch have revealed that the DH has employed management consultancy McKinseys as an intermediary for its talks with various providers about the takeover of NHS hospitals.

Spinwatch's FOI'd documents can be found here (correspondence between McKinseys and others and DH director of provider development Ian Dalton) and here (correspondence between McKinseys and others and DH director Matthew Kershaw).

On page 8 of the Dalton correspondence, there is a touching exchange about where a Christmas card should be sent. This in no way suggests over-familiarity of any kind. (How could you even think that?)

Page 8 also has an interesting email in German, forwarding a message in German. This is presumably from someone in the German private hospital firm Helios, which The Guardian today revealed has been party to these talks. The message talks about 'the NHS project', and expresses doubt that 'anything will come of it'.

The coverage by Spinwatch and The Guardian outlines 15-20 hospitals under consideration (although the emails reveal that McKinseys staff advised DH to start "from a mindset [of] one at a time", and to be aware of the "various political constraints").

It is unclear whether the 15-20 correspond to the list of hospitals assessed as unlikely to be able to achieve FT status due to PFI considerations of finacial viability, published in Health Service Journal in April. The numbers involved looks pretty close.

In another HSJ news story from June, Matthew Kershaw again mentioned the figure of 20 trusts struggling to achieve FT status.

Why does the private sector want to buy unviable hospitals?
If the intended bidders want to run these hospitals (as workers' co-operative-cum-property hedge fund Circle Health do for Hinchingbrooke), the question is this: why?

What's in it for them?

One reason why they might want to do so could be found in the DH's remarkable new proposed failure regime - where providers will be able to lobby Monitor for above-tariff rates without the consent of their commissioner, as our analysis exclusively revealed.

Some of the hospitals in question on the 'PFI risk list' have long been understood within NHS management circles to be unviable. It is striking that 8 of the 22 are in long-over-hospitalled London and its immediate environs; very few are natural geographical monopolies.

If these are to be offered to the private sector to run (as would have to be the first step), then the private sector will want to be guaranteed a profit. In an NHS of patient choice, this cannot be done. It runs up against Health Secretary Lansley's (entirely right) objection to the take or pay contracts issued for First-Wave ISTCs.

This raises a pair of intriguing possibilities: that either Lansley must defy the entire rationale of his reforms, and persuade or command Monitor to prevent failing organisations from so doing (as heavily suggested by the DH proposed failure regime); or that the private sector will be convinced that long-troubled NHS providers with natural local competitors will afford them a return on their investment (even if only of reputational risk).

The former implies that there is no true faith in commissioning. If that is so, GP commissioners will spot it in short order and the system will collapse spectacularly and soon - assuming it reaches the point of sufficient being authorised. Should that come to pass, the Nicholson Health Service wins out big-time, and liberation is forever delayed.

The latter suggests that the private sector is sure it can outperform the NHS and make profits.

Why do we think the private sector wants to buy unviable NHS hospitals?