Blimey

Ed Miliband has said that he will impose “profit capping” on private NHS providers, in a move that will prompt renewed claims that Labour is anti-business.

Launching his election campaign in London, the Labour leader said he will create a 5 per cent cap when private companies provide NHS services so fewer private contracts are awarded and “patients are always put before profit”.


Doesn’t get it, does he
?

The way to lower supplier profit margins is to have more suppliers, not fewer.

41 thoughts on “Blimey”

  1. “patients are always put before profit”

    Sure thing, Ed. Get back to me when you’ve promised to end the Liverpool Care Pathway then…

  2. So, 2 suppliers bidding.
    The NHS can deliver a given service by an old method. Costs £1 million. Business risk zero. Cost £1,000,000.
    One new more efficient privately developed process but with the sunk development costs and risks to pay off, thus a significant margin required (largely to pay for their next innovative project).
    Costs £800,000. Margin 7.5%. Charges the NHS = £860,000.
    And Ed would choose the first one. What a muppet.
    This is one of the main problems with our political class; they don’t understand the concept of business risk. You may need to make a larger profit on one project to pay for the losses on the ones that don’t come off. If you don’t allow that you don’t get innovation, because innovation, almost by definition, means risk.

  3. More utter stupidity from Ed. Surely this would cripple every GP practice, unless payments to the doctors themselves were allowable. So, any contractor can just increase their expenses, (by paying an owner-director more, say) to keep with the cap.

    And, frankly, 5% of what? If I were, say, a private surgeon, how can we decide what the 5% limit is?

    And does it extend to, say, bandage manufacturers, drug companies etc etc. If not, because it would be nuts to do so, shouldn’t that tell him something?

    Ed is one of two things: either his is ignorant, which makes him highly dangerous, or he fully understands, which may be even worse.

  4. Surely some NHS providers already make in excess of 5% profit? The drug companies, the medical machinery vendors (what are the margins on a CAT scanner?), the IT providers, and so on. Not to mention the staffing agencies (or perhaps they make no profit, since it all goes on commission to the recruiters).

    Besides, how does this work when a foreign provider wants to come in? It’s trivial to shift profits abroad and thus avoid the 5% limit. So congratulations Ed, you’ve managed to discriminate against domestic businesses and in favour of foreign ones.

  5. At least he’s admitting that 5% profits are possible without putting them before patients. Assuming the NHS itself will want at least a 5% saving if it outsources, that’s 10% savings possible across great swathes of the NHS without risking patients. Good word Ed.. I look forward to the budget cuts.

  6. Bumbling idiot.

    There is also the small matter of how this would all be certified as being no more than 5%. A Ltd supplies the NHS, and where its supply is just one part of A’s business. Should make for some “interesting” accounting entries at the very least!

  7. bloke (not) in spain

    OT but NHS related & sometimes you need to share or explode.

    Yesterday, the NHS delivered its final kick in the teeth in my father’s long illness. At 4:45 I noticed he’d stopped breathing. No point checking for pulse or heart. The visiting nurse couldn’t find them two days back & she was talking with him.
    So I called his GP. because i do actually need someone to tell me he’s dead before I phone the undertakers. i get an extended menu & ten minutes in a queue listening to how I could be using their website. Somehow I don’t think e-mail is going to quite cut it here. So I called the nurse’s OneCall service. The nurse said she’d call the surgery on a direct line. Six o’clock I tried the GP again but the recorded message tells me they’re closed. Six-forty-five – with Dad still officially alive – OneCall again. They found a couple nurses showed at 7:10. No, he wasn’t faking it. Looks like I’ll have to go to the GP’s on Monday for a death certificate. If they can fit in an appointment?

    Look. I’ve got skin thick as a rhino. If there’s anything I can’t breeze, through I haven’t found it after a lifetime’s searching. But fuck it. Say I’d been some wife had sixty years of marriage expire on her? How fucked up can something be?

  8. The stupid thing about the policy is that rarely do they make more than 5% any how. Most contacts are about managing staff using preexisting assets (cleaning, cooking etc.) Or there very long term capital programs (pfi’s etc) where they have a 25-30 year pay off.

    They other part of commissioners being able to end underperforming contracts is also still the case.

    The answer I want to know is, is this going to apply when one part of the NHS contracts from another?

  9. Really sorry to hear that BIS. I don’t think there generally is much chance of dignity in death – it isn’t the point of the whole thing – but it would at least help if the people who are supposed to be at your service would kindly refrain from making matters worse.

    He might have been an ordinary chap but I do feel a debt of gratitude to your dad for what he did – or even simply what he had to endure – in the War. I can respect that without him having to be a hero. This isn’t what he deserved.

    Hope warmer climes, better times, and an escape from the irritations of modern Britain await you soon.

  10. What I constantly fail to understand is that his socialist plans are taken seriously. Every single experiment in socialism has ended in economic ruin and degradation of its citizens.

    How much more misery needs to be inflicted on the human race before the commentariat start to realise that the likes of Brown, Balls and Miliband are intellectual pygmies living in a dream world?

  11. People should remember that Milliboy is the same lying cunt who promises to punish the energy companies (and I am no friend of those corporate socialist pukes) for having put up prices due to the greenwankery that he forced on them. And BluLabour let stand.

  12. Can’t disagree with NN. Either he’s so stupid as to think his dog-whistle plans will have no unintended consequences, or he realises that they will and doesn’t care, or welcomes them.

  13. Oh… ferfeksake

    anybody with any experience of these sorts of gubmint schemes will tell you it’s all a crony-fest driven by the most part by eejits totally intoxicated on their own status. They first go out and consult with invited “stake holders” at nice designer hotels and then hold a “public” bidding competition.

    NHS administrators adhere religiously to one of the primary tenets of First Aid – “make sure you’re safe before you assist someone else” – “patients before profit” my arse…. ask any executive car leasing agent who their best customers are.

    As for Wallace – it’s past time he got a Grommit.

  14. I work for the Americas separate legal entity of a global division of a global division of a global plc. Certain services, such as IT and accounting are provided internally, but by separate entities, and a number of other costs and facilities are shared by other entities within the global group.

    Within my Americas entity, there are between 6 and 24 business units, depending on how you look at these things.

    The final profit can be anything you want it to be.

  15. @BNIS

    Sympathies on the death of your dad. Comes to us all I suppose but I’m sure that doesn’t make it any easier.

    But I must confess I’m missing the point. He died at 4.45 (presumably at home?) and was certified 2.5 hours later? It doesn’t sound unreasonable. I can accept that having to make various phone calls and press buttons might be upsetting but that’s the modern world, surely, not just the NHS (which I loathe)?

  16. bloke (not) in spain

    @Interested
    The surgery’s 10 minutes walk away. I can almost see it from the house. And I find the concept of a large GP practice keeping 9-5 Mon-Fri office hours inconceivable. The idea of a grieving widow having to go through this is horrifying.
    This area, here, seems to be unusually replete with the advanced of years. Judging by the amount of care companies & care homes operating, anyway. It must be an everyday occurrence. But apparently, mysteriously comes as a novelty to those entrusted with patient care.
    But, as I said, it was the final kick in the teeth. After 6 weeks of NHS abysmalness. I’m not feeling particularly understanding.

    However, your, MBE’s & of course the learned Mr Lud’s condolences are much appreciated.

  17. And yet – on current showing – these “multiple suppliers” appear to be avoiding the complex stuff like the plague. The Circle, VirginCare, Care_UK etc model is predicated upon leaving the risk to the NHS acute care. Don’t dress it up as anything else.

    B[n]IS: deepest sympathy. His was a life full-lived, I’m sure.

  18. what is it with this obsession with private suppliers avoiding “complex stuff”? we don’t insist that kwik fit have an AAIB function as a condition of being able to provide MOTs ffs

  19. When everyone is using the same argument then no-one is doing any thinking. The claim that private companies are avoiding difficult work is parroted on CIF, Facebook and Twitter without touching the sides.

  20. no-one is doing any thinking.

    This isn’t about how healthcare markets work in theory/practice, or how getting a MOT at Kwik-Fit is (or isn’t) analogous to having a work-up in A&E… it’s about how the likes of Care_UK are operating, right now, within the NHS. They sure ain’t taking on the risk – and everybody on the ground knows it. I certainly don’t hold a candle for Labour, but the current multiple-providers-with-an-NHS-kitemark re-org has been wasteful and ineffectual. Much as was predicted.

  21. It is more efficient to have specialists for whom heart transplants is easy and treating a disclocated shoulder is difficult than asking one doctor/team to know everything.
    It may be, as lost_nurse claims, that private companies are cherry-picking in order to make higher profits, or it may be that some of them are efficient specialists saving the NHS £millions.
    The companies that I analysed that were ripping off the NHS/patients (and in a few cases outside investors through the predecessor of EIS schemes) were all owned by Labour supporters: competition would have cut their profits. The Rothschilds are Laboursupporters and one would expect a minority of any group of entrepreneurs to vote Labour but not *all* of them.

  22. Corporate socialism works little (and sometimes no ) better than state socialism. If private companies are ducking certain aspects of what they are supposed to do (and I don’t know if that is true but I can believe it might be ) it will be because of a couple of reasons.

    1-They can because the utterly useless simple shopping NHS morons who placed the contracts have left the way open for companies to do so. No enforcement procedure or penalty clauses for example.
    2- The companies will have submitted low bids to get the contract–bids so low that it is in their interest to do as little as possible to avoid eating into their margin. If they dealt directly with the customers who receive poorer service they would get the boot. Since they deal with useless NHS bureaucrats (who will look bad if the consequences of their poor negotiation/contract drawing come to light) they won’t get fired unless their failings come to widespread public notice. And perhaps not even then.

  23. “And yet – on current showing – these “multiple suppliers” appear to be avoiding the complex stuff like the plague. The Circle, VirginCare, Care_UK etc model is predicated upon leaving the risk to the NHS acute care. Don’t dress it up as anything else.”

    Yes because if you need acute care on the Continent those neo-liberal bastards over there just allow you to die in the street unless you have a credit card handy.

    FFS, has it not sunk in to your thick skull yet? There are other ways of organising healthcare that do not involve monolithic State bodies deciding what is good for us (or rather deciding what is good for NHS employees first and foremost, then giving the patient what suits the employees best), or at the other extreme a pure market free-for-all with beggars dying on the street. The rest of Europe is our example, and they manage to avoid both the US problems AND the UK ones. A system of individual insurance with multiple healthcare providers (both State and private) seems to be the model that provides the optimum healthcare outcomes for the service user.

    All you are doing is fighting your own little corner out of pure self interest, with zero regard for the best interests of the public at large who have to use your ‘services’.

  24. I wonder whether newer GPs assume (if they think about it at all) that most elderly people will not die at home but in care homes where the nurses and admin there will deal with it, and therefore have no plans in place. Similarly, although they work in offices called “surgeries”, they don’t actually do any of that any longer, but refer to A&E.

  25. @ Jim

    This is probably for another day, but “a system of individual insurance” (on the demand side)?

    Unless that’s optional / to top up, etc (rather than being universal), I’m not convinced as to what that brings (adds) to the table, other than a fat margin for those that administer insurance.

    A universal individual insurance system on the demand side also means that the sick and poor will lose – insurance is generally good at identifying risk, hence, those most in need will pay most. Is that what we want to move to as a society?

    Surely better to tackle other issues on the demand side, eg health tourism (let’s stop it), a sensible debate about what services are actually covered as part of the “free at point of entry”, GPs being used as social / counselling (rather than medical), etc?

  26. FFS, has it not sunk in to your thick skull yet?

    Yawn. Once again, for the hard of reading: continental-style mixed-provision has little bearing on how the likes of VirginCare are operating, right now, in the NHS – this is the issue. Moronic commissioning has been written firmly into the system (facilitated by the ’12 HaSC act) – and all overseen by the Mckinsey trojan horse which is Monitor. It’s a revolving-door triumph.

  27. @PF: I don’t care how its done, or exactly which insurance model we emulate,but we need to move from the system we have now where the patient is the supplicant, pathetically grateful for whatever drops of care lost_nurse deigns to drop on his or her head, to one where lost_nurse sees the patient as someone who needs to be looked after or the money that patient represents will go elsewhere, as will lost_nurse’s job.

    We do not give the poor and needy free food and clothes from State monopoly stores, we give them money and they are free to work out how and where they spend that money in the private sector. The same principle should apply for healthcare. We shouldn’t just give ‘free’ healthcare to everyone who asks for it, we should everyone the legal and financial means to purchase their healthcare from whoever they so choose.

    It might indeed cost more than the system does today. But the improvement in patient care by instituting a true business relationship between patient and healthcare provider would be far greater than just giving the NHS the same amount of extra money, because one thing we have proved is giving extra cash to the NHS does not improve patient care one jot. The mechanism for improvement is just not there.

    All other ideas such as you mention are just tinkering at the edges. The basic premise of the NHS is wrong, and we need to start again with a clean sheet.

  28. “Once again, for the hard of reading: continental-style mixed-provision has little bearing on how the likes of VirginCare are operating, right now, in the NHS – this is the issue. Moronic commissioning has been written firmly into the system (facilitated by the ’12 HaSC act) – and all overseen by the Mckinsey trojan horse which is Monitor. It’s a revolving-door triumph.”

    Of course the ‘private sector’ involvement in the NHS is a complete f*ck-up, because there’s nothing private sector about it. Can the patients of the private sector contractors go elsewhere and take their money with them? Of course not. We all know private sector companies are monopoly seeking little (or big) sh*ts if they can be, anyone who has to deal with banks, telecoms or utilities knows this. And thats in sectors where there is actually a plurality of suppliers. Give a private sector company a monopoly and it’ll behave just like the State sector does – it’ll act in its own self interest and bugger the customer.

    Give the patient the power and see the positive effects that flow from that. Of course you don’t want the patient to have power, because you lose yours. And that, ultimately, is what this argument is about – who has the power in the healthcare, the patient or the service provider?

  29. Jim

    Actually, we’re on the same side. I had misunderstood your insurance comment.

    I agree with the “voucher”, or whatever it is (available to all and which comprises the demand side so that the poor and sick don’t get screwed), and from which the supply side then has to shape up.

    I’d do exactly the same for education; then we would increasingly start to lose the distinction between state schools and the independent sector.

  30. Of course you don’t want the patient to have power, because you lose yours.

    Yes, that’s exactly it – I’m power-crazy, me.

    And thanks for explaining how a proper market works. I just don’t understand these things.

    FFS.

  31. “Yes, that’s exactly it – I’m power-crazy, me. ”

    Answer my question – who should have the power in the healthcare transaction – you, or the patient?

  32. you, or the patient?

    The patient. But it doesn’t automatically follow that the “healthcare transaction” (at least in the environment in which I work) is automatically like buying white goods on the high street – unless you’d care to explain how severe abdominal pain of unknown cause is just like choosing a kettle, or why repeated switching by consumers is always an applicable mechanism. Acute care is an utterly imperfect market – hence the consolidation of services/specialties under one roof (I mean in terms of physical configuration, not ideological centralisation): in blunt terms, it gives you a much better chance. Many of the same issues pile-up in social-insurance systems.

    You clearly think my stance is simple producer-interest… jealously guarding the sacred monolith against the levelling power of proper, consumer-driven competition – it ain’t. By your logic, the utilities sector in this country ought to be gleaming – by your own admission, it isn’t. So don’t patronise those of us who work in healthcare – who are also patients in that same system – about our concerns.

  33. “But it doesn’t automatically follow that the “healthcare transaction” (at least in the environment in which I work) is automatically like buying white goods on the high street ”

    No of course not. But the presumption should always be in favour of the patient, not the healthcare provider, which is the way the NHS operates. You seem to think that because someone who turns up at A&E after a car crash isn’t in a position to argue about the type of care he gets at that precise point that everyone else, with whatever ailments they may have, and at every other point of their care program, should have to genuflect at the NHS gods in order to try and get decent care. Indeed there is no reason why our A&E basket case, once patched up, might want to take his healthcare business elsewhere, if your hospital’s tender mercies were not to his liking.

    As I’ve repeatedly pointed out, the other European nations manage to operate acute care within insurance based systems, and with private and public sector providers too. If they can do it, so can we.

    “So don’t patronise those of us who work in healthcare – who are also patients in that same system – about our concerns.”

    Odd that so many ‘healthcare professionals’ advise their friends and family to avoid certain NHS hospitals at all costs then isn’t it? Or game the system to make sure they get better treatment than Joe Public off the street?

    http://www.theguardian.com/healthcare-network/views-from-the-nhs-frontline/2015/mar/09/nhs-fails-patients-doctor-apologise

  34. Or game the system

    This article was the subject of a previous (and extensive) thread… medic in a severely-stressed system which is being royally screwed by idiotic reforms expresses relief at her own professional knowledge? Colour me surprised! Docs are like that the world over.

    You seem to think…

    Nope – the market in elective procedures in the generally fit n’ healthy is reasonably healthy – but that’s only a small proportion of the acute/chronic caseload in any (comprehensive coverage) public healthcare system. My problem is with the inane market platitudes that get wheeled out on this blog – and how (very) easy it is to dispense ’em.

  35. “the market in elective procedures in the generally fit n’ healthy is reasonably healthy”

    Not for the patient it isn’t. We don’t get to choose who does our elective op and have the money follow us, like it does in any other commercial transaction. The NHS may commission private firms to do work for them, that is NOT the same as the patient deciding exactly where and when and who is going to do his or her op. And deciding if they wish to add more money to the basic NHS payment to get better care or service if they so choose. Its all still a centrally controlled system where the patient has no rights to treatment, just has to take what the NHS deigns to give them.

    Which is of course the way you, and all the other vested NHS interests want it. Your jobs and pensions would be at risk if they were reliant on patients actually volunteering to be treated by you rather than having no alternative.

  36. I meant market as in the existing PRIVATE market for routine elective surgery (e.g. orthopaedic procedures) in ‘easy’ patients (e.g. no multiple comorbidities) – the point being that it’s not a reflection of the complexities faced in the acute/chronic casemic which , etc.

    Which is of course the way you, and all the other vested NHS interests want it.

    Fucking hilarious.

  37. correction: it’s not a reflection of the complexities faced in the acute/chronic casemix (which IS the day-to-day issue in any developed healthcare system).

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