The marketisation of the NHS

What bastards, eh?

A row has broken out over a debt-ridden NHS hospital being handed over to a private company that will keep a large chunk of the millions of pounds in savings it will seek to make.

Bosses at Circle, which is running the Hinchingbrooke Health Care Trust in Cambridgeshire, have insisted they will improve standards despite claims that they will need to make what have been described as \”eye-watering\” cuts.

The Health Service Journal (HSJ) has published a report saying the hospital will need to make surpluses of at least £70m over the next decade if it is to clear its debts and meet Circle\’s contracted share.

A letter deposited in the House of Commons library by Earl Howe, a junior health minister, and uncovered by the HSJ, details for the first time the terms of the deal to hand running of the hospital to Circle.

A statement from the HSJ said: \”The first £2m of any year\’s surplus goes to Circle; the company then takes a quarter of surpluses between £2m and £6m and a third of surpluses between £6m and £10m.

Cue wailing about cuts.

However, that\’s not actually what is going to happen. The services they must provide are detailed elsewhere. They can\’t, for example, collect a cheque for doing hip replacements and then not do any hip replacements.

What they have to do is increase the efficiency with which the money they get is spent. That is, provide the services they are contracted to provide at a lower cost, thus creating that surplus through greater efficiency. Only if they manage to do that do they then get a slice of those efficiency savings.

Which brings us to the meaning of \”cuts\” in this instance. There will be no fewer services: only less money spent on providing those services. So what we\’ve actually got is people whining about inputs again instead of what we all want to be concerned about, the efficiency with which inputs get turned into outputs.

Very, very, British lefty. Insisting that it is the amount of money spent which is important instead of the outcome of having spent it.

15 thoughts on “The marketisation of the NHS”

  1. the great redacto

    And it is not new news. All of this was known and reported, certainly in The Times, on the day some months ago when Circle took over that wretched, Soviet-era, money-gushing-out-of-every orifice slaughterhouse.

  2. Yes, but. What is known from many fields of endeavour is that if you give people sufficient financial rewards for meeting specified targets, those targets are likely to be met. However, the targets are often proxies for the underlying objectives which are harder to quantify. And those underlying objectives get thrown overboard.

    Furthermore, a desire to help the afflicted is an important part of the motivation of many NHS employees. If they see their efforts resulting not in better healthcare but in more money for Circle, that may discourage them.

    It’s possible that the previous management at Hinchingbrooke was bad enough for this approach to be a useful improvement. But let’s not pretend that it’s an unmixed blessing.

  3. It has been heard on the grapevine that the contractor involved has form that may or may not, as the case may be, justify the criticisms made. Allegedly.

  4. PaulB
    If you take “the afflicted” & “NHS” out of “Furthermore, a desire to help the afflicted is an important part of the motivation of many NHS employees.” aren’t you describing the attitude many people hold to their jobs? People in the private sector as well. I can certainly think of a couple of things I’ve done where the reward was partially the benefit to the recipients. Expect other’s here can as well. The question of whether profit on my endeavours was going to whoever enabled them wasn’t an issue. Hell, a large percentage (& of my wages) were raked off in taxes to bankroll various mad arsed governments I detested but that wasn’t a deterrent.
    Essentially, this is yet another riff on the lost_nurse argument. They’re all wonderful, public spirited heroes. Just throw money at them & don’t ask questions.

  5. Paul B:

    “Furthermore, a desire to help the afflicted is an important part of the motivation of many NHS employees. If they see their efforts resulting not in better healthcare but in more money for Circle, that may discourage them.”

    So if said employees don’t see “better healthcare” they may become discouraged. They must be bloody discouraged already given the so-high standards of NHS healthcare. Or do they only become downhearted if they see santimonious state socialism being thrown aside?

    However it still needs to recognised that this is only a switch from state to corporate socialism and will still hold many dangers. The real customer, someone in need of a new hip, say, and who has spent a life paying taxes is still a supplicant under corporate socialism nearly as much as under state socialism. Hard-working people have their money taken under threat of state violence and some of that money will be used to fund this company. The cheques will still not be signed by the real customer who uses the service but by NHS bureaucrats and said private company only has to cosy up to them not necessarily provide value to the real customer. Many times “privatisations” involve “Jimmy Olsen” (“The Goverment’s pal”)- type companies who smooze pen-pushers, get contracts with very low quotes and then do as little as possible to avoid cutting into their income. It doesn’t matter to those companies if the actual customer for their services is happy as their names are not on the paycheques. So long as the bureaucrats can be kept sweet the contract will stand. Bad publicity is one thing that might damage the cosy relationship but even there the publicity will be aimed at the company and the politicals who decreed the plan rather than the deal-signing bureaucrats.

    We will have to wait and see if improvement happens. It would be much better to let the people who use medical services have back their money to purchase them in a real free market however.

  6. @Paul B

    ‘Furthermore, a desire to help the afflicted is an important part of the motivation of many NHS employees.’

    Tell it to the hundreds of elderly people who die each year in their own faeces while the ‘nurses’ read Heat magazine and file their nails (and, to be fair, their paperwork).

  7. @PaulB

    Actually, should have read the whole of that paragraph before commenting on it.

    ‘Furthermore, a desire to help the afflicted is an important part of the motivation of many NHS employees. If they see their efforts resulting not in better healthcare but in more money for Circle, that may discourage them.’

    So this allegedly important motivation isn’t enough to cause them to continue ‘helping the afflicted’ if someone is also making a profit out of it? Bizarre logic, there.

  8. Ali Parsa is a joker. Given how vocal (see his platitude-filled stuff on CiF) he has been about the ‘broken’ NHS, it’s funny how Circle depends upon NHS infrastructure, workforce training & critical care capacity! And as for their financial structure… Hinchingbrooke is a loss-leading stalking-horse, imo. The likes of Circle are simply positioning themselves for the coming insurance-market Rapture.

    They’re all wonderful, public spirited heroes. Just throw money at them & don’t ask questions.

    I’m not going to get involved in another argument. Suffice to say, nobody at the coalface thinks the NHS is perfect – but on this kind of showing, the ConDem reforms ain’t going to improve matters (Ali’s bank balance aside). It’s easy to talk blithely about ‘hip replacements’: I work in a major city hospital where a large proportion of the trauma caseload consists of elderly patients with extensive comorbidities (put bluntly, think how a fractured neck-of-femur is made much more complex by dementia or cardiac problems) – in other words, exactly the kind of messy stuff that the boutique likes of Circle etc have been so keen to avoid. Given existing cuts/efficiency savings, I fail to see how Parsa can square his model of private profit with statutory requirements for (comprehensive) acute services – except in the sense that he will be taking both DoH and the taxpayer for a ride.

  9. “I’m not going to get involved in another argument.”
    Can’t say I can be bothered either. What’s the point? I live in two countries seem to have no problem in caring for exactly the ailments you describe without an NHS style system. Yet apparently, in the UK, only the NHS can provide. Weird. Is it something to do with ley lines or the colour of the skies over there?

    Above said, my Spanish hosts are cutting back on certain of the medical provisions due to the crisis. That’s the treatment provided to illegal immigrants who’ve no papers. They’re restricting to emergency & childbirth. Heartless of them, isn’t it?

  10. Oh, just to clarify: The last para should have had ‘free’ liberally scattered through it. (It’s so easy to take things for granted & not think one has to explain. 🙂

  11. the colour of the skies over there

    Please don’t talk about the weather – it’s been shite for weeks.

    The fact remains: whatever the good/bad of the NHS, I don’t much care for Circle and their pompous credo.

  12. lost_nurse…and the pomposity of the people who wax lyrical about the wonders of the NHS and the joys of queuing for 3 hours for an X-ray is equally tiresome

  13. Furthermore, a desire to help the afflicted is an important part of the motivation of many NHS employees. If they see their efforts resulting not in better healthcare but in more money for Circle, that may discourage them

    So where was that journal and those staff when the Trust was running up those debts which have led to this predictable result? They could have been sounding alarm bells and then there would have been no need for privatisation.

    Sorry, LN but they have to learn that the well isn’t bottomless, much as we would all like it to be. The bureaucracy continues to make the case for privatisation better than any of us on here ever could.

  14. and the pomposity of the people who wax lyrical about the wonders of the NHS

    Really? I see the best & worst of the damn thing, pretty much everyday – which is precisely why I remain so suspicious of Ali Parsa & his merry band. IMO, they are freeloading off the back of NHS acute capacity.

    could have been sounding alarm bells…they have to learn that the well isn’t bottomless

    Are you joking? Plenty of alarm bells have been ringing…. There is, of course, the nice irony of ‘failing’ hospitals burdened by PFI debts then being targeted by the private sector.

  15. Pingback: Socialized medicine in U.K. turning to privatization for increases in efficiency | motorcitytimes.com

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