Category Archives: Competition and markets

The following article was first published in the Camden New Journal on 06 December, 2018

A private company being promoted
by government to recruit patients to its doctor service spells ruin for the whole-person integrated care we need from the NHS, argue
Susanna Mitchell and Roy Trevelion

The sneaking privatisation of our National Health Service now aggressively threatens our GPs. In Camden and across London, we all need to be aware of the long-term harms this development will cause GPs and primary care NHS services.

Last year, a global multinational corporation called Babylon Healthcare – owned by a former Goldman Sachs investment banker and Circle Health CEO – established a “digital- first” business called “GP at Hand”.

Disastrously for the NHS, Babylon Healthcare Services Ltd can be traced back to a holding company in Jersey, the offshore tax haven.

GP at Hand is contactable through a mobile app which uses standard calculations as a symptom checker. Unfortunately NHS England have not provided our existing practices with this software.

Instead any patient registering with this commercial enterprise will be deregistered from their normal GPs. And, although the GPs employed by the company can also be accessed by video or phone, this process delivers no continuity of care or whole-patient assessment.

Continuity of care is a cornerstone of general practices. However, Matt Hancock, the health secretary says, “If we need to change the rules to work with the new technology then change the rules we must.”

In addition GP at Hand’s own promotion material actively discourages older people from registering. Explicitly these are those who are frail or living with dementia, or in need of end-of-life care. Pregnant women and those it describes as having complex social physical and psychological needs are also discouraged from signing up.

In other words it is “cherry-picking” young and healthy patients who will be more profitable to its shareholders. Its use of standard practice via information technology, and the easy access it offers, is particularly attractive to the young.

Of the 31,519 new patients who have signed up with GP at Hand over the past 12 months, 87 per cent are aged between 20 and 39 years, while patients over 65 now make up just 1 per cent of the population registered with the service.

All this poses serious problems both for patients and general practices. In the first place, our present primary care system consists of GP practices committed to whole-person and integrated care for everyone in their local communities. Healthcare services are organised around geographic areas to enable better co-ordination with hospitals and social services.

In contrast to this, GP at Hand fractures this fair and impartial community-based model, registering patients who live or work anywhere within 35 to 40 minutes of one of the clinics. In addition, should any of their patients require more complex care, they will no longer have their own GP to turn to.

Secondly, by picking the most profitable patients, GP at Hand drains money away from ordinary GP surgeries. Normal GPs are funded according to the number of people on their patient list and this funding is combined into a single budget to provide the services they offer. This means that funding from the roughly 80 per cent of patients who remain reasonably well helps to pay for the 20 per cent who are elderly, who are chronically sick, or have multiple illnesses.

But if the “capitation fee” of the young and healthy is scooped up by a for-profit company like GP at Hand, it will critically undermine the funding available to surgeries. This will leave practices to deal with the sick, the frail and the old on a much reduced budget.

Shockingly this commercial entity is funded by NHS England. It can be commissioned through our clinical commissioning groups (CCGs).

It’s expanding fast, and already has over 35,000 patients. Currently the corporation operates out of five clinical locations in London including one in King’s Cross. Plans for rolling it out nationwide are under discussion. It is also advertised widely, with the health secretary Matt Hancock recently announcing that he has registered with the company.

Future developments in information technology and artificial intelligence that can be useful to our public health systems should be funded directly towards our existing GP surgeries.

It should not be used as a vehicle for profit-making by private corporations at the expense of our NHS.
We need to make the dangers of adopting this business model clear to the widest possible public. We must encourage those who care about our publicly-funded NHS to boycott Babylon’s GP at Hand.

We need to bring public pressure to bear and end this attack on a valued and trusted institution that serves us all.

The NHS has always been for the benefit of everybody. It must be kept that way.

• Susanna Mitchell and Roy Trevelion are members of the Holborn & St Pancras Labour Party and of the Socialist Health Association.


Nick Bostock reports at GPonline that:

Under-pressure GPs are delivering ‘remarkable outcomes’ on cancer

You can read the complete article here. Nick reports:

GPs ‘can take a lot of credit’ for marked improvements in early cancer diagnosis and reductions in the proportion of cases detected as an emergency, according to a cancer expert.

In the year to March 2018, the proportion of cancer patients who first presented at hospital as an emergency fell to 18.8% – down from 21% in the year to December 2012.

Over roughly the same period, cancers detected at an early stage increased significantly – rising from 46% in 2013 to 52% by mid-2017, according to figures from the National Cancer Intelligence Network (NCIN).

However: GPonline reported earlier this year on research showing that GPs were as good as consultants at making appropriate use of cancer diagnostic tests – and yet pledges to give GPs direct access to four key diagnostic tests – blood tests, chest X-ray, ultrasound and endoscopy – have not been delivered in many areas.

Isn’t it about time that GPs were also given access to the new technology for GP consultations via mobile and Skype? This is currently being ‘rolled out’ by GP at Hand. Here’s a transcript of the R4 Today programme 13 September at 6 mins to 9:00 am (I made this transcript and I believe it’s a fairly accurate job – but any mistakes are mine):

(Int) Interviewer

AP (Ali Parsa, CEO Babylon – parent company that runs GP at Hand)

RV (Dr Richard Vautrey, Chair GP Committee, British Medical Association)

SoS = Secretary of State


(Int): So Ali Parsa just explain to us how your App works.

(AP): So, we have a very simple service. So, what it does is allow patients to check their symptoms whenever they want. To make an appointment with a doctor within seconds, to be able to see a doctor within minutes. In fact, I was just checking my App and it says that if I want to see a doctor I can see one at 9 o’clock today, in the next few minutes.

(Int): You mean ‘see’ over the phone?

(AP): Over the phone. And if you want to see somebody physically then, you can go see them that very same day. It is open 24hrs a day, 365 days of the year. And it is available for the same price the National Health Service pays any other GP. What we have done is to solve the problem of accessibility and the continuity of healthcare – using technology and what the SoS and the NHS is doing today is celebrating that and promising it for the whole country.

(Int): And Richard Vautrey, this is something which patients complain about again and again, isn’t it, access to their GP, so is this kind of App the solution?

(RV): We have real concerns, as well as patients do, about the inability of many practices to be able to offer enough appointments and that’s simply because we haven’t had the funding over the last decade to support the expansion of the health service to be able to meet the growing needs of our patients. What General Practices are doing right now is seeing thousands and thousands – if not a million – patients today offering, you know, face-to-face consultations and seeing them in their surgeries, so that’s when patients approach them today. So that’s happening right now. What we haven’t got is the resources to be able to offer some of the IT technologies in every single practice. And the SoS’s commitment to IT is welcome, but we need to see that commitment translated into resources provided to enable every practice to offer this type of consultation.

(Int): But could this kind of technological approach actually help some of the pressure on GPs because people would consult a doctor over the phone rather than going to the surgery.

(AP): Well many practices, if not most practices, already offer telephone consultations. What they haven’t got is the IT kit to be able to offer smart phone consultations, or Skype-phone computer consultations, any many would like to be able to do that, if the technology was provided to them. But the other big difference is that every Practice that is open today will see any and every patient who lives within their area, and we have concerns about the model of which GP Hand has been built, which is primarily about looking at some of the relatively mobile healthy patients and not accepting every single patient who lives within their area.

(AP): I’m afraid Richard that is simply factually not true. We will ask when patients started the service, to ask patients to seek advice if they want to change their GP Practice to our Practice, if they have any clinical issues. Most patients seek advice and join us – we look after them, young, old, sick, healthy, our patients are across the border, and we don’t do that just in Britain, remember we look after one third of the population in Rwanda, and we do so in the United States, we do this in Canada. . .

(Int): But specifically, on this idea of whether you cherry pick patients, it’s likely that patients who don’t have very serious health problems, and maybe younger, are more likely to want to use an App on their mobile.

(AP) . . . but, why is that? If the patient is not very mobile, if the patient is very old, if the patient can’t wait a few weeks to see their GP, they’re significantly more likely to use a service that is continuously available. Many of our patients have mental health issues – they can’t wait for a few days or a few weeks to see their GP. That’s why they switch to us. A thousand patients today will choose to apply to GP at Hand, and then switch their GP Practice – one every three minutes.

(Int): Richard Vautrey, some GP Practices are worried about the fact that if their patients sign up to GP at Hand they then lose that funding, don’t they?

(RV): That’s exactly right. And the way that General Practice is funded at the moment is a balanced mechanism, so those patients who use the service less, and there are many patients that use the service more, and that overall, that compensates one for another. What we have concerns about is that this would effectively replace a personal service with an anonymous call centre and patients don’t want that.

(Int): And finally, Ali Parsa, this was something that commissioning groups in Birmingham were worried about and that was clinical safety – isn’t it better to see a doctor the next day.

(AP): No, it wasn’t clinical safety, you do see a doctor, not a call centre, face-to-face on your mobile and then see one in one of our surgeries. We will open up across the country physical surgeries, their issue was not that. It was an IT hitch that doesn’t allow its screening to be done with your local hospital and that IT hitch has been fixed. This is the future, and I encourage more and more patients to join it.

(Int): Okay thank you both, we’ll leave it there, let us know what your think via twitter.

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Following the Judicial Review in London in July, NHS England quietly launched its promised public consultation on the Integrated Care Provider (ICP) Contracts on 4 August. The consultation closes on 26 October.  If the appeal granted at the other Judicial Review called for by 999 Call for the NHS in Leeds is successful, this ICP contract may yet be unlawful, but it is nonetheless essential that we respond to the feedback.

The ICP consultation document is a daunting read for most of the public. However, Health Campaigns Together (HCT) has provided expert answers to all 12 points in the public feedback document. 

HCT’s aim in providing these answers is to prevent flawed plans being adopted. They are seeking to prevent long-term contracts being signed that will undermine our NHS. This is in order to preserve any hopes of achieving a genuine integration of health and social care as public services, publicly provided free at point of use – and publicly accountable.


A reminder on what’s happened so far: There have been two judicial reviews on the Accountable Care Organisations and these Integrated Care Provider (ACO/ICP) contracts. And the courts found in favour of the NHS. But one of the campaign groups, 999 Call for the NHS, has now been granted permission to appeal. 

This is some very good news. But it also means NHS England is consulting on an ACO/ICP contract that may be unlawful. 

NHS England knew full well that an appeal was a possibility. Although fully aware of this, on Friday 3rd August – the day Parliament and the Courts went on holiday – NHS England started a public consultation on the ACO/ICP contract. The consultation says that the Judicial Reviews had ruled in their favour. This consultation runs until 26 Oct.


We all know that this ICP consultation needs to be combatted and stopped. But in the meantime, here’s all the information you need to fill in the consultation feedback.

As stated, the judge in the London NHS Judicial Review said that the ACOs (now ICPs) should not be enacted until a lawfully conducted consultation was held, and any eventual ICP contract would have to be lawfully entered into.

Since then, NHS England have moved swiftly and stealthily into gear, and you will find their monstrous ICP ‘consultation’ document at this link.

And here is Health Campaigns Together on the subject at this link.

As you see, the consultation document includes 12 points for feedback and Health Campaigns together has provided suggested responses to these points – very good responses too, I think. You’ll find them at this link.

When you’re ready here is the direct link for public feedback to the document, just copy and paste from the Health Campaigns Together link above.

As stated, there is a move afoot to get the consultation suspended until after the appeal granted to the 999 for the NHS has been concluded, but it’s very important to counter what will definitely be lots of responses from the allies of NHS England. Otherwise they will be able to hail the result as a democratic mandate.

Health Campaigns Together say that it is OK to copy and paste HCT’s responses into the feedback boxes on the questionnaire, although if possible, it would be good if respondents could add a few tweaks of their own.

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I am not sure it’s feasible just to use “length of stay” and “avoidable admissions” together only as yardsticks.

Imagine if the only metric you had of how effective the provision of weekly groceries was was how much time you spent in a supermarket.

But that’s actually the level of the argument.

Or, in the alternative, imagine for a moment if a lot of effort was put in, by external advisors, into drawing up lists of how to avoid inappropriate trips to the supermarket; or screening for members of the public who might be at high risk for running out of provisions that week.

If you shut down all the local smaller shops, admittedly people would be forced to go to their local supermarket. And the customer would be assumed to be able to make it to the supermarket, even if it were miles away.

A particular type of customer might have a big shopping list, where the only sensible option would be to go to a supermarket rather than a local smaller shop.

And yet we have a situation where that particular type of customer might be tending to have to shop for ever longer lists in their shopping basket – but simply cannot avoid going to the supermarket when needs must, for example one has run of toilet roll.

This week, I attended a ‘quality improvement clinic’ for the Royal College of Physicians’ annual conference here in London, at the ExCeL centre. A newly appointed consultant took her problem to the ‘clinic’; and explained how she was leading a proposal for a newly engineered frailty service.

The ‘clinic’ expert then asked – “But what are you actually trying to achieve?’

The consultant replied, “For frail persons to spend the least time in hospital.”

I offered to the ‘clinic’ expert at the end, just after the meeting had ended, that the issue all depends what question is being framed, for you to judge whether a quality improvement project is worthwhile.

The project appeared to me like saying it is desirable for ‘us’ to force shoppers to spend least time in the supermarket, when it is clearly not the case that it will necessarily be safe and desirable for such patients to negotiate their long shopping lists while running down the aisles at high speed.

Frail older people tend to have complex needs, due to a plethora of issues, like comorbidity and polypharmacy. The danger in making the length of stay so short is that the long list of problems don’t actually get sorted out. The supermarket is basically saying to the shopper ‘here – have one of the items on your shopping list, but please don’t come back unless you run out of it or you really do need the other items‘.

It might also not be possible to expect all customers to have all their needs serviced in a small shop where the time frame is limited.

The customer (and I hate this analogy too) should be in the right shop at the right time. Keeping people away from the supermarket by actively trying to manage their shopping demands at home may not always work.

Making people educated enough to produce complex meals from limited ingredients may work, and may indeed stop the need to buy more complicated stuff from the supermarket. But that assumes people have the resources and skills to ‘self manage’ their shopping, and this is a big demand. Having successful self-managing ‘shoppers’ at supermarket conferences butters no parsnips.

And then again – some shoppers may never go home after going to the supermarket, as what happened in the supermarket really put them back (e.g. a change of surroundings or inappropriate medications may put a frail older person with dementia fully into a state of delirium, so that, once successfully ‘deconditioned’ in bed, he or she might have to go to a care home.)

If your time is overall running out, would you want to spend most of it in a supermarket?

We are in a relatively good place now compared to where we were before – where we can now raise our heads above the parapets and say openly why sometimes what happens in supermarkets really isn’t good enough.

How do you ‘measure’ how good the supermarket is? In addition to the speed with which its customers are “processed”, it could be whether the supermarket meets the needs of customers, or whether the products are safe in the first place, as well as whether the supermarket is running at an overall loss or the time spent by each customer is at a minimum.

The whole construct, furthermore, assumes that shopkeepers never become customers. I indeed am on the GMC medical register, and regularly have to go shopping on behalf of my mother because she is frail and lives with dementia. Sometimes, I find that on-line shopping with the best will in the world is not enough.

But as a ‘secret shopper’ it does give me insight into the big picture. Shopkeepers think very differently to customers.

I think we need to invest in community resources, and to think rather more carefully about that question asked in ‘clinic’: “But what are you actually trying to achieve?’

Can this all be summarised with something so trite as, “Would you recommend my supermarket to your friends and family?”

At no point was I left with a clear idea of what the patients wanted from this new innovative shiny service, and more. All I was left with was an elaborate list of excuses to why the shopper might spend the least time in the supermarket, how the supermarket could see more shoppers, but not at all addressing why the trip to the supermarket was necessary and what could be done by all to get the most out of it. Quality improvement cannot be an elaborated game simply ‘to save money’.






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Privatisation has been the economic policy of successive governments since the 1970s. All the major infrastructure, utilities and manufacturing industries which had been brought into public ownership in the immediate post-war period have been sold off, as single share offers, wholesale private transfers, or partial staged transfers. Privatisation has been developed through the remaining public services, with local authorities increasingly turning into commissioning hubs rather than direct employers, education transferring its assets and management to the private sector through the Academy programme and courts, prisons and more being owned and run by the private sector. 

That privatisation is government policy is not in question. The question is how far that has affected the NHS.  

Privatisation of the NHS began as far back as 1983 when the cleaning services started to be put out to tender. That has had fairly disastrous consequences with the spread of ‘superbugs’ being attributable to the cleaners no longer forming part of integrated core teams on wards.

Other privatisations, including IT services, facilities management, out-of-hours GP services and the 111 service, have had patchy results; some have been a waste of money, some have failed to show any benefit over public provision, some, like the cleaning services, have been cheaper but a lower standard. Interestingly these privatisations are not discussed or presented as ‘privatisation of the NHS’, or part-privatisation, although they clearly are.

The NHS is the sum of all the parts that make it function, not just its clinical services. This intellectual sleight of hand of naming private-sector takeover of asset ownership and management, ancillary and backroom services as normal business practice or ‘just outsourcing’ rather than service privatisation has allowed a significant part of the NHS to be privatised without being acknowledged as such.  

The House of Commons Library briefing on privatisation defines the need for a competition regulator as one of the essential features of the move from public to private provision. Regulators have been brought in over the last 20 years via various bodies up to the current position of the CQC and NHS Improvement, reflecting the need for market regulation. 

The Health & Social Care Act (2012)

The Health and Social Care Act (2012) continued the process of privatisation. It has become commonplace to describe the Act as a mistake. But given that privatisation is the dominant economic policy, the Act is not a mistake, it is merely a continuation of that policy.  

Privatisation is embedded in the Act in several ways. It removes the NHS in England to arm’s length from government. The relationship between the state and the service changes with the responsibility of provision lying outside the government department. The government’s remit alters significantly from being responsible for provision and planning to providing a Mandate and a funding stream to NHS England and authorising the NHS ‘kite-mark’ through NHS Identity.  

NHS Identity’s website gives advice and regulations about using the brand to the NHS family, which includes public, private and voluntary sector partners. 

The Act also created the Clinical Commissioning Groups (CCGs). Section 75 3(a) of the Act imposes requirements relating to competitive tendering for the provision of services. 

The interpretation of this provision is a source of contention with the government arguing that the clause gives CCGs choice about tendering out services and the CCGs feeling that they are open to legal challenge if they do not tender. The CCGs and Section 75 are the engine that powers the privatisation of clinical services. The constituent members of the CCGs – GPs – do not have the collective skills to carry out the complex procurement process of putting services out to tender. They use Commissioning Support Units such as Optum, the UK subsidiary of United Health of America, to perform this function. 

The CCGs are also not bound to supply the same range of services nationally. They have some core clinical responsibilities but can put restrictions on others according to their financial needs. This can lead to situations where hospitals request patients to check with their commissioner to ensure they will cover payment before they start treatment, otherwise they have self-pay and insurance options available. In all but name this makes the CCGs act as local insurance groups to their registered patients, rather than service providers with common service standards set at national level. 

Trusts and Foundation Trusts are also empowered by the Act to increase the amount of private patient income they can earn. The Act specifies that they must earn the majority of their income from NHS funding. But that is interpreted as meaning that up to 49% can be from other sources. This can include rent from retail spaces and car parks as well as private patients.  

The Five Year Forward View

Simon Stevens, CEO of NHS England, produced a Five Year Forward View (5YFV) for the NHS in England in October 2014. This is largely presented by the media, politicians of all stripes and think tanks, such as The King’s Fund, as a way of integrating services to end the fragmentation caused by the 2012 Act and to bring an end to the split between commissioners and provider organisations. In 2013, immediately after the implementation of the Act, The Better Care Fund was rolled out as a series of local programmes under different names; ‘Better Together’, ‘Fit for the Future’, etc… Its stated intention is to shift the focus from acute hospital settings into local authority based social and community care.

The 5YFV started with a series of Vanguard testbeds and will end with Integrated Care Systems and possibly Accountable (or Integrated) Care Organisations.  The stated intention of the 5YFV is to shift the focus from acute hospital settings into local authority based social and community care. In other words, even though they have different names, the two programmes have exactly the same aim.

This illustrates that the HSCA 2012 was not a mistake but is in fact a continuation of policy. That is why the findings of Michael Mansfield’s 2015 independent inquiry into Shaping a Healthier Future in NW London is still relevant. It highlights how this programme is moving services away from those areas most in need of them towards high-density, more profitable areas.

The reality of the 5YFV is that it is a re-shaping of the NHS to fit with a predicted permanent reduction in funding levels. It is based on a reduction of the total number of fully functioning blue-light A&Es from the 144 A&Es in England in 2013 reduced to somewhere between 40-70. These will be large major trauma centres. There will be no more than two for each of the 44 Sustainability and Transformation areas (STPs) which were announced in December 2015 as part of the implementation of the 5YFV. Some STPs will only have one. This is the case in Northumberland, an early adopter of the system. 

Other hospitals are having their A&Es downgraded and services transferred to the trauma centres along with their income. When campaigners are fighting across the country to save their local A&Es they are really fighting against the 5YFV. Acute and emergency care is being separated from elective (planned) care. Planned care is more attractive to the private sector as it is low risk and high income. It is one of the areas of clinical care included in the ‘7.9%’ of privatisation quoted in the Health and Social Care Select Committee’s oral evidence session. 

The 5YFV also envisages using the sale of property as a form of pump-priming of the changes. The Naylor Review (part of the 5YFV process) goes further in working on the transfer of services out of owned properties into rented accommodation, built and managed by the private sector. 

The 2012 Act also created NHS Property Services Ltd, the ‘PropCo’, which took ownership of all the properties previously in the stewardship of the Strategic Health Authorities and Primary Care Trusts. The PropCo is a private company, currently wholly owned by the Department of Health & Social Care. It also charges commercial rents. 

The 5YFV encourages the separation of midwives from the hospitals to form their own companies to provide midwifery in the community. It contains plans for the widespread use of vouchers for maternity and personal health budgets for the disabled and those with other long-term health needs. These vouchers and budgets can be spent in the private or public sector. 

Privatisation: an economic policy

Analysing the overall effect of privatisation in the NHS will take time. Whilst there is little evidence of an increase in health insurance schemes, there is evidence that more people are turning to self-pay options to avoid waiting times. For a cultural change to happen people have to accept the principle that there will be things outside the ‘NHS menu’ that they will have to pay for – that cultural change hasn’t happened yet.

Descriptions of how little impact the private sector has currently had on the NHS avoids the issue of how little unmet need is being created by the reconfigurations. It is in the unmet need that the principles of universal and comprehensive care are being lost.

The report from the Health and Social Care Select Committee on Integrated Care is absolutely explicit about the need to retain ‘choice’ of providers and to avoid the ‘danger of creating airless rooms in which you simply have one provider who is there for a huge amount of time’.

This is the economics of privatisation and it needs to be addressed at parliamentary and legislative level. The Health and Social Care Committee recommends new legislation. On the current trajectory that will mean the introduction of ACOs.

The battle to promote the principles of public service as public good still has to be fought and won if the privatisation agenda within the NHS is to be brought to a halt.

The NHS [Reinstatement] Bill will be presented under the 10 Minute Rule by Eleanor Smith MP on 11 July 2018.


In 2009 the internal market was abolished in the Welsh NHS. Seven unified Health Boards (and three trusts – Ambulance, Public Health and Velindre cancer services) took over the responsibility of the former 22 Local Health Boards and most of functions of the seven Trusts to both plan and deliver health care for the population resident in their geographical areas.

In the initial phase following the internal market abolition the acute hospital sector seemed to have “captured” the planning process. But as things have matured the Welsh Government has sought to re-balance matters with the introduction of Integrated Medium Term Plans (IMTP).

All NHS organisations are now expected to operate to three yearly IMTPs as part of their planning cycle. The latest framework covers the period 2018-2021 with yearly iterations providing firm plans for the initial year, indicative plans for Year 2 and outline plans for Year 3. At the heart of the process is the creation of a collaborative approach which will be sufficiently robust not only to withstand the continuing pressures of austerity but to deliver real improvement for patients, service users, carers and wider public health.

The planning framework ( ) and the IMTPs continue to be informed by the principles of “Prudential Healthcare” ( ) and an emerging distinctive Welsh legislative backdrop including the Mental Health Measure (2010), Social Services and Well-being Act (2014), The Well-being of Future Generations Act (2015),  Nurse Staffing Levels Act (2016) and Public Health Act (2017).

The planning and delivery process needs to achieve the “Triple Aim” of improving outcomes, improving the user experience and achieving best value to money supplemented by the Parliamentary Review’s ( ) recommendation of enriching the well-being, capability and engagement of the health and social care workforce.

There are five priority delivery priorities outlined which represent a real effort to re-balance the Welsh NHS away from its initial over-focus on acute secondary care covering such areas as:-
Tackling health inequalities
Primary & community care
Timely access to care
Mental health.

Each of these priorities are important in their own right. The prevention and tackling inequalities agendas acknowledge the social determinants of health but they also re-emphasise the importance of addressing “the inverse care law” which is about how the health service responds to the unequal health experience of people. Access to care is recognised as being both clinically important and a key quality measure of the patient’s experience. And as well as timely access to services the quality agenda requires that patients receive safe, effective, personal and efficient care in an equitable way.

Health boards and trust IMTPs must be the product of collective working that extends from the clinical experience of patients and NHS staff to engaging with a wider range of bodies outside the NHS family. Particular attention must be paid to the plans being developed by the primary care clusters ( ) as well input from traditional sources such as Public Health Wales. In addition participation in regional and local service boards, as well as bilateral discussions, must be used to co-ordinate planning and delivery with other public bodies such as local government, social care, education and housing.

The governance within the Health Boards and the wider NHS must improve if the planning process is to effectively identify and respond to local need. To date the record is not great. Health boards are not always adept at either identifying service failures or responding effectively to them. The Welsh Government has a clear pathway of escalating intervention when health organisations are struggling but even then improving performance has proven elusive ( ).

The final report of the Parliamentary Review recommended that the Welsh Government itself needed to more pro-active in promoting innovation, evaluation and implementation of best practice across NHS Wales. The planning framework preceded the publication of the final report and its silence on the Welsh Government’s role in being a catalyst for service transformation is therefore missing. This needs to be rectified.

The abolition of the NHS internal market was widely welcomed in Wales. This in itself it does not provide automatic answers to all of the problems the NHS faces. But it allows for new ways of addressing them based on the principles of partnership, collaboration and public service values which are more clearly reflected in the latest planning framework guidance.

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Once upon a time there were public services that treated everyone the same, and people had to take what they were given. Patients, school children, students, welfare recipients were grateful and deferential, and prefaced all their requests with ‘if it’s not too much trouble’. There would be an audible gasp if ever they did an Oliver Twist and dared to ask for more. Then came Margaret Thatcher with her faith in markets and a feeling that government would run a whole lot better if lots of things were privatised, and those public services that remained were run like businesses. Users were encouraged to be customers of public services and to demand what they wanted, and to shop around.

Of course, this is an oversimplification– the welfare state never treated everyone the same, and before Thatcher there were groups of people who combined together to demand different kinds of public services. But beyond this simplistic picture, a cross-party assumption of governments has been that public services will flourish through adopting the entrepreneurialism, efficiency, and customer focus of the market. We have seen the customer language and approach take hold in a range of public services. Customer language is applied when people pay directly for public services (e.g. tuition fees); have choice over services (e.g. state schools and elective surgery); and/or are treated in an attentive and respectful way (good ‘customer service’).

There has been a huge growth in performance data about public services as well, so that we can be smart customers, shopping around between providers to get the best fit for what we want. We can see the death rates of surgeons before we choose a hospital; we can see the punctuality rates of trains and perhaps decide to take the car instead. The pressures of customer competition keep providers on their toes: if they want to keep customers and the money that comes with them then they need to keep those customers happy.

Public Services

There are a number of problems with this, and I’m going to focus on four:

The language of customer is individualising. It focuses on what you want to get out of public services, not on the broader collective goals of those services, which are often public in the first place because they are about shared and equal access to a good life. Prioritising people’s individual demands risks intensifying inequalities in access to services, and in generating collectively undesirable outcomes such as over-prescribing of antibiotics in response to patient demand.

It draws a false equivalence between private customer service and quality improvement. When I’m shopping for car insurance, I like being able to pick a different provider if I’m not happy with the one I’ve got, but it took me a few goes at buying car insurance before I learned how to compare them properly and make a good choice. A lot of public service choices are sticky: people make a choice once and after that it is difficult to change university, school, care home, hospital consultant. You’ve often had to work quite hard to get those services in the first place. And often (despite the plentiful performance data) the quality of the service isn’t really clear to you until you are in them. There’s little scope to make a poor choice and learn from it the next time, and that means the signals we send to providers by our choices are not a reliable guide to service quality.

The language of customer shifts the blame for bad services onto the individual. If we make consumer choice the engine of change in public services, then – if I’m not a very articulate or motivated customer – isn’t it my fault that the service isn’t better? Making choices about certain things is really difficult. We know that it’s hard to compare energy prices and mobile phone tariffs because they are designed to be difficult to compare. Now imagine choosing a care home to live in, because of advancing dementia or a medical crisis which has affected your mobility. It’s a hard time to make a choice, and we need to have more to offer people facing poor quality underfunded services than blaming them for not being good enough at making choices.

It puts staff and service users in conflict. Underpinning the customer language is the view of public services as a battleground between staff and customers, where customers have to keep their wits about them and be ready to complain, switch and be generally awkward in order to get what they want. You can see this in the language around students as customers in higher education in which tuition fees are seen as flexing customer muscle over wayward academics.

But this conflictual model fails to recognise that the interests of users and providers can be closely aligned. Successful delivery of public services often requires high trust relationships between users and providers on the front line. We need to get better at supporting good relationships, at harnessing relational power. In our 21st Century Public Servant research into the future public service workforce, we repeatedly find that people want public services and organisations that feel human and treat them as humans.

And that’s not easy. In the many presentations we have given to public service organisations what’s clear is that taking relationships seriously is a radical challenge for them. Big organisations in the public (and indeed private) sectors are not good at being human. Large organisations work through the efficient processing of people – the customer service algorithm – rather than the building and sustaining of relationships.

Creating good relationships is small-scale work. We need to find ways for even big organisations to feel small. There may be ways to nest the insights of small organisations in bigger ones, so that within large hospitals and large schools we have wards and classes where relationships can be developed and sustained. We need to get better at understanding the places where good relationships exist and celebrating and copying them, rather than allowing adversarial narratives (‘them and us’) to take hold and thrive.

First published on the  British Politics and Policy blog

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George Duoblys thought provoking essay,  One, Two, Three, Eyes on Me! in the current edition of the London Review of Books describes the application of new public management techniques and competitive markets in education.  The teaching he describes appears to be entirely teacher centred.  It may be successful in getting more pupils into universities, but what does it offer to those who fail to do that? We have tried payment by results before in education, but abandoned the idea in 1892, something this government never mentions, presumeably because it was not included in Mr Gove’s history syllabus. What he describes appears similar to reports of the Japanese education system, also seen as successful in getting students into universities.  But the Japanese approach leads to high levels of suicide.  In this country mental health problems in children  appear to be rising as a result of the relentless focus on testing. This approach may be efficient in turning children into well behaved automata, but it’s cheaper and more effective to create electronic versions.  Getting pupils into a university is an easily measured output for a school, but what is the outcome for the pupil?  Can we also publish the number of pupils from each school who end up in prision, or in mental health services?

These market focussed ideas in the English NHS are now being quietly abandoned.  Paying hospitals to perform more operations and more tests is not actually an efficient way of running a health system.  Trying to measure the performance of individual organisations doesn’t get you very far.  The important question is how the system performs as a whole.  The NHS is returning to managed systems, with local government involvement. This government still seems to think that education should be run as a competitive market between autonomous institutions.  The notion that only what can be measured counts leads, as it did in health, to a focus on short term institutional outputs, and ignores the real long term outcomes for people.  Important outcomes in health and education can only be measured over the long term, and some cannot easily be measured at all.

If we move in health to paying for the outcomes which really matter for people – longer happier lives, rather than more medical procedures – we will quickly realise that for most healthcare’s contribution to such an outcome is pretty marginal.

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The UK has had a policy of competitive tendering for public services since the 1980s; this is despite the fact that there has been no research evidence of its success. At the heart of this policy are a set of policy rules, set by central government, which force local government into using a competitive tendering process to ‘purchase’ public services. These rules are often called EU Procurement Rules, although the UK has twisted these rules to make them harsher and more damaging. For instance, most countries exclude services like social care from competitive tendering – but not the UK (nor, so far, Finland). This is another example of how the UK often falsely blames the EU for its own rules. It is likely that competitive tendering has played some part in alienating the British people from the European Union.

A personal perspective

Competitive tendering began in the 1980s, but it became central to all social care (support for people with disabilities, including the elderly) after the 1992 NHS & Community Care Act. From this point onward local government was forced to become a ‘purchaser’ of services, while the private and non-profit sectors became ‘providers’.

These changes happened at the beginning of my career and much of my early thinking and practice was focused on trying to make sense of these changes. More experienced colleagues were more pessimistic than me, they believed that these changes would be wholly negative. However I felt that these changes, whilst dangerous, did present some opportunities for positive change.

In 1996 I wrote my first book Unlocking the Imagination where I argued that the model of commissioning proposed by government was wrong; however I tried to persuade local leaders to adapt that model to design a better system to promote inclusion and empowerment for local people. But it turned out that I was naïve and that my colleagues were right. The UK’s system of competitive tendering has been very harmful and there have been no serious efforts to reshape it into one that promotes better values. The dominant neoliberal ideology, which has reduced everything to financial transactions and contractual control, has won the day.

The only successful challenge to competitive tendering has come from those people who have managed to exit the system, by demanding control over their own funding. First the 1996 Direct Payment Act allowed people to ask for their own budget, instead of a service. In 2003 I led a project called In Control to individualise all social care services using personal budgets. These initiatives have had some success, but they have come into conflict with the established system:

  • We said, give people and families control, because they know best
  • The system said, no we need even more control, because we know best

Today, in England, less than 25% of the funding has been individualised, most funding remains locked inside the competitive tendering regime.

The impact of competitive tendering

The impact of competitive tendering has been wholly negative and it has caused a number of serious problems, each of which has got progressively worse over time:

1. Lowering costs by cutting frontline salaries – When competing for funding the easiest way to win a contract is to reduce the salaries of frontline staff. However, and at the same time, salaries for senior managers have rapidly increased, so the level of income inequality inside organisations is now extreme. For example, the CEO of an NGO (Non-Governmental Organisation, often called a ‘charity’ in UK law) may be earning €210,000 pa whilst frontline staff may be on €16,000 (a ratio of 13:1). Social care has also seen rapid growth in precarious work: zero-hour or short-term contracts. Things have got so bad that many NGOs can no longer afford to meet minimum legal standards for pay and have been lobbying government to be exempted from these standards. It seems shameful that some NGOs are campaigning to keep standards lower rather than fighting for better rights for disabled people.

2. Increased compliance and reduced advocacy – In the past NGOs acted as advocates for people and for important causes; however today their independence has been eroded. They are very reliant on government funding and they can lose funding very quickly. Today NGOs provide little meaningful advocacy and this has contributed to the deep cuts in social care – 700,000 people have lost support since 2009 – a cut of over 40%. This was one of the major reasons why the United Nations recently condemned the UK Government for using its austerity programme to target cuts on disabled people in breach of the UN Convention.

3. Toxic culture of mistrust and regulation – The financial, bureaucratic and transactional focus of tendering damages the quality of relationships within and between organisations. Anything too warm and human now seems suspicious and contrary to the principles of tendering; only bureaucratic processes can be trusted. This has created a culture of mistrust which has infected almost every aspect of social care. It is assumed that government only wants to save money, service providers only want to make profit and that staff are all potential abusers. Every problem is solved by adding more rules, regulations and penalties. John O’Brien has called this new world Cog World, and its spirit is entirely hostile to the purpose and nature of social care and independent living – it is like expecting a robot to dance.

4. The death of creativity – Before the era of competitive tendering most innovative work was carried out in the NGO sector and it was common for NGOs to cooperate with each other and with government. Today’s NGOs now compete with each other for work and fear cooperation. The tendering process has also killed creativity. Government officers who issue contracts for funding will never be a source of creativity; it is only people, families and practitioners who can develop creative solutions to problems. This is the true source of efficiency and positive social change. Competitive tendering creates organisational chaos, yet it is fundamentally conservative. Commissioners are constantly purchasing last year’s solutions. Contracts that are ripped up every three years will never foster real creativity, which demands time, commitment and the capacity to take risks. Competitive tendering is like gardening with hand grenades.

The myth of the social care market

Although there is no evidence to support the use of competitive tendering the idea that this is a reasonable process is sustained by a series of myths and linguistic tricks. We apply important sounding language from another world and then imagine a reality that does not exist. In the process we become blind to the critical damage that is being done. For instance, Government often refers to a social care ‘market’ but this is an illusion. In the current system:

  • Government decides what people and families need
  • Providers do the work on behalf of the government
  • People and families must accept what has been decided for them

Even if you like markets it is clear that the social care system is not really any kind of market. The current system is more like the Christmas myth:

  • Santa Claus decides what all the children deserve
  • The elves make all the presents for him
  • The children wake to find out what he has delivered

Unfortunately Santa Claus does not exist and it is not a good idea to ask someone you don’t know to make important decisions about your life on your behalf. It is also not a good idea to enslave a race of elves to carry out your wishes. People with disabilities need rights, not gifts; and professionals need to work in partnership with people with disabilities and their families, not for the Government.

The new language of social care also makes us forget that creativity is essential to human services – at every level. Notice the language we have been forced to use:

  • Procurement
  • Tendering
  • Purchasing
  • Commissioning
  • Service Provider
  • Service Delivery
  • Consumer
  • Service User
  • Regulation
  • Quality Control

This is the language of industry. Strangely, at the same time as traditional industry has declined, its language has been imported into the world of social care. We had hoped that, as the institutions began to close, people with disabilities could take their place as full citizens. Instead we’ve converted human relationships into manufactured commodities that can be sold and purchased in bulk.

The way out of the madness

After 25 years this system of competitive tendering is now approaching collapse:

  • The social care system is in deep crisis with funding slashed and service providers operating on the fringes of legality.
  • Local government cannot afford to contract with more than a handful of services because of the cuts to their own core staff, and some authorities find they must go back to providing services themselves.
  • Service providers are merging with each in order to cut costs and to reduce the level of competition for contracts.

But the biggest cost of this system is the opportunity cost: for 30 years we have missed the opportunity to do the right thing, to focus on creating inclusive and welcoming communities and on developing ourselves as active citizens. Instead of seeing people with disabilities as leaders in the transformation of our communities we have wasted our time by wrapping some people in over-regulated and under-funded services while leaving others isolated and unsupported.

The alternative is clear enough:

  1. Self-directed support – Treat people as citizens and ensure they have a clear entitlement to support, one which is implicit in the UN Convention on the Rights of Persons with Disabilities
  2. Community sourcing – Encourage inclusive communities by respecting and supporting community groups and citizens to bring about the necessary social change.
  3. Local support – Ensure that local communities have the structures, expertise and information to enables them to develop local solutions.

Finland is showing us the way. It is time to throw competitive tendering in the bin. It is time to reclaim our citizenship and design a social care system that treats us as full human beings, not as lots to be sold off to corporations at the lowest possible cost.

Read the article: Not for Sale and show your support via Citizen Network Finland.

First published by the Centre for Welfare Reform.

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The rationale of the now discredited Health and Social Care Act embedded the idea that the NHS should be regarded as just a collection of services. Regulations required that (with some few exceptions) these services should be tendered out with independent autonomous providers, public and private, competing for the business on a level playing field. The process was overseen by the 200+ Clinical Commissioning Groups who were assumed to have the expertise to understand service requirements, run competitive tendering processes, design appropriate contracts and manage them. This “market” method meant that commissioners could not talk to providers about what might be best for patients and providers could not discuss better models as this would be anti-competitive. Quality of service would be managed through contracts and overseen by the Regulator (Care Quality Commission).

A study by UNISON into the problems some staff faced when their jobs in Patient Transport Services  were transferred from the NHS to private providers turned out to be a valuable insight into wider problems in our NHS caused by this “market” viewpoint.

Patient Transport Services

It has always been part of the NHS that, for some patients transport, would be free with the obvious example of any response to a 999 call. But there were also Patient Transport Services to take patients to and from an outpatient appointment or to take them home after discharge. At the time the ambulance services moved into the NHS in the early 1970s they were regarded as the transport providers1 – quick scoop and drop to A&E and a slow journey to outpatients or to home.

Since 2012 there was an acceleration in the outsourcing of the Patient Transport Services away from the traditional providers and UNISON studied the consequences.

Many staff transferred from the NHS into private providers had very poor experiences. There were also a series of very well documented failures with disruption to services and considerable inconvenience to patients. Some providers that moved into the Patient Transport Services “market” were wholly unsuitable and soon proved unable to cope. Some providers with a questionable record are still winning contracts and reports of poor practices continue. Some more reputable providers entered the market, tried hard but discovered that profits were not to be forthcoming.

Feedback from the staff impacted by privatisation was either neutral or angry. In almost no instances were any staff positive about their experience. Some staff who were moved out then back into the NHS expressed the opinion that they had been rescued from the Titanic. Such evidence as is available, and it is limited, shows that there is no improvement in services because of competition, no innovation coming from new providers but many examples of very bad patient experiences; issues being caused by organisational problems rather than by treatment by staff which is almost universally praised.

Emerging conclusions in the UNISON study are that commissioners had poor understanding of the requirements even for the simpler transport situation and no understanding of the strategic possibilities of how transport fitted into a bigger picture. Many looked for low cost solutions, almost as if this was a taxi service. There were far too many small and different contracts generated by multiple CCGs; there was a huge variety in Key Performance Indicators – no attempt was made to have a simpler national template with a few local variations.

Contracts were awarded to totally unsuitable providers. The Coperforma saga in Sussex is the extreme example where major issues with a Patient Transport Services contract (signed off by 7 CCGs) were apparent within days of the contract start. It was clear no appropriate due diligence could have been done and an independent report highlighted how poor the process of procurement had been. In another well reported case the contract with a provider had to be terminated when it was discovered that reporting had been less than honest.

Elsewhere it became clear that contracts were badly drawn up even in one case failing to include the correct geographical area to be covered! Because of inadequate contracts there were disputes between commissioners, providers and hospitals about who paid for what – with the poor patient stranded. Ambulance services lost contracts but kept some costs and assets. Contract monitoring is not well developed and inspection by CQC is superficial (the CQC are seeking help with improving this). Commissioners looked at a narrow view of costs savings and failed to do any whole system analysis of the costs and benefits.

But even if all that were not true the bigger issue is that most commissioners are still looking at services in isolation. With a couple of notable exceptions they are not looking at the opportunity of reducing fragmentation and taking a wider system view.

If this sounds familiar then that is because the farce around NHS 111 (and to a lesser extent NHS Direct and GP out-of-hours) has many similarities. The NHS does not learn!

So tactically this process of outsourcing of Patient Transport Services has failed on any sensible economic test. The strategic opportunities have also been missed; so we would hope for better solutions in the new STP world of collaboration and cooperation. Sadly no STP addresses properly either PTS or the role of the Ambulance Services as the integrators of urgent and emergency care.

1 There have always been some private providers of some non-urgent patient transport and some hospitals have used their own service. But until the era of markets the service was predominantly provided by ambulance services alongside and possibly loosely attached to the blue light 999 service.

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Staffordshire was the last of the Sustainability and  Transformation Plans to be published perhaps because relationships in this part of the country are rumoured to be poor. Both providers and commissioners in the area are challenged. Despite this the commissioners in Staffordshire are going ahead with a hugely controversial project to outsource some £1.2 bn of NHS services. This is at least in part an outsourcing of commissioning functions.

The Public Accounts Committee considered a similar exercise in Cambridge with some grave concerns. The PAC report into the matter noted:-

We asked the CCG why it had decided to contract out the commissioning of services to a third party, given that the commissioning of services is the role of the CCG itself. The CCG explained it had hoped that by commissioning one organisation for all of the services, that the organisation would find ways of integrating pathways of care to get the best outcomes, which the CCG had failed to do until that point.

The CCG acknowledged that it had tried to outsource the responsibility for transforming care pathways. It accepted now that CCGs should not outsource difficult decisions that they should be taking themselves, and that the commissioner is responsible for the NHS services for their local populations. The CCG confirmed that it believes it is now able to fulfil the commissioning role and is investing in developing the organisation to be fit for purpose to do so.

So why are commissioners in Staffordshire being allowed to do something acknowledged to be unacceptable?

When the Staffordshire fiasco began back in May 2013 a press release announced that – Staffordshire’s Clinical Commissioning Groups (CCGs) are teaming up with Macmillan Cancer Support to transform the way people with cancer or those at the end of their lives are cared for and supported. This sounded like a good idea and this project was awarded Pioneer Status by NHS England.

But the twist came soon after when in March 2014 the Financial Times reported that The NHS is embarking on its biggest and most wide-ranging outsourcing of services so far by inviting companies to bid for £1.2bn in contracts to provide frontline cancer treatment in district hospitals and care for the terminally ill. The deals could see the private sector delivering all cancer and end-of-life treatment for children and adults across Staffordshire and Stoke on Trent.

The CCGs were effectively outsourcing a key part of their role as commissioners. The procurement Notice stated that “In Stage 2 the provider will assume the responsibility for managing the provision of Cancer Care (or End of Life Care)”.

The process rumbled along with Macmillan continuing to play a very active part – leading to some questions about if this was a valid use of donations.

There were some delays with the procurement process and then work was paused after the collapse of a similar huge contracting process in Cambridge. Following the involvement of the National Audit Office and Public Accounts Committee there was an agreement that NHS England would review all major contracting processes. But then in November it was announced in the HSJ that NHS England had carried out a review of the programmes and given the go ahead for them to continue. The review has not been published.

Of great concern must be that the key advisors in Staffordshire were the now discredited Strategic Projects Team (SPT), the same SPT who “advised” in Cambridge. The SPT were actually a part of NHS England so there must be a question over how sensible it was for NHS England to review itself.

The HSJ reacted to the news of the continuation of this project:-

The Staffordshire project predates Simon Stevens’ tenure as NHS England chief executive, and quite a lot has changed since it was launched. “Integration” doesn’t mean quite the same thing in 2016 as it did in 2013. In the past three years we’ve had the Five Year Forward View, new models of care and the vanguards, which all overwhelmingly focus on “population health” rather than single pathway integration.

The Stevens-led NHS does seek to integrate and improve single service pathways too – see the acute care collaboration on orthopaedics, or the cancer taskforce – but does the Staffordshire cancer pathway fit with the work now being done nationally by Cally Palmer? Hopefully someone has checked.

Although national leaders aren’t completely averse to single specialism outcomes based contracts, they are clear that you can’t build a population budget out of a mosaic of single service contracts. They want to avoid a scenario where it becomes impossible to set up a PACS on a capitated budget because there are already lots of individual long term contracts for single pathways. The two Staffordshire contracts would certainly punch two big holes in any future MCP or PACS.

The method being used in Staffordshire feels at odds with the new care models approach. No one involved in the vanguards seriously thinks you can award a massive contract to a new provider and expect services to integrate automatically. Part of the reason new care models are taking so long to be formally established is that people are (sensibly) focusing on the relationships and working practices first, and leaving the contracting until much later in the process.

Another complicating factor: the Staffordshire STP covers six Clinical Commissioning Groups, but only four are involved in this contracting exercise. Assuming this notoriously fractious patch does come up with a viable sustainability and transformation plan (nothing has been published yet), these contracts may make it harder to begin whole system working.

Lots of work has been done in parts of Staffordshire on the cancer and end of life care pathways. National leaders have decided it is better to go ahead than to abandon the tender. Presumably the work done so far is of good quality.

Let’s hope so, because, on the face of it, this exercise is a relic of the pre-forward view era and cuts across the generally sensible approach to new models of care being taken elsewhere.

So the HSJ shares the view that this approach with outsourcing of commissioning is wrong and is also incompatible with the new direction set out in the 5 Year Forward View and the STPs.

The CCGs have decided to go ahead by simply restarting the two paused procurement processes both of which only no include private sector bidders. They will decide in private based on documents nobody has been allowed to see.

If this goes the way of Cambridge who will be held to account?

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There has been a fundamental shift in how care and support for people with learning disabilities is provided over the last 20 years. During this period, quality of care has plummeted. In 1993, the independent sector provided just 5 percent of all care services. By 2013, the figure was 89 percent as local authorities shifted responsibilities to voluntary and, increasingly, private sector organisations. In learning disabilities, 80 percent of services in residential and non-residential settings are provided by the independent sector, a business worth around £8.2 billion in 2013.

This shift represents a huge saving for squeezed local authority budgets with services in the independent sector around half the cost of those provided centrally. Initially, local authorities facilitated the growth of independent provision through direct funding. This has decreased over the years, accelerating through the austerity era with a £1.2 billion per year reduction in central and local government funding since 2011. As 2016 research from the Nuffield Trust into services for older people shows, the last six years of cuts to local authority budgets has meant 26 percent fewer older people receive services. Although no specific data is available for people with learning disabilities outcomes are certain to be very similar.

Social Impact Investment schemes

One of the ways governments since 2000 have attempted to fill this funding gap is through Social Impact Investment schemes. Originally overseen by ‘Father of Venture Capital’ Sir Ronald Cohen, schemes included FutureBuilders, Big Society Capital, the Social Outcomes Fund and numerous others. The schemes offer financial incentives to encourage multinational entrepreneurs to invest in the UK social care market.

This new funding system, broadly based on encouraging independent sector organisations to take on debt to finance care, has replaced the government-local authority-care provision system typical of post-war welfarism. Now, a market (or pseudo-market) system attempts to provide care by aligning the interests and working methods of an array of ‘Demand organisations’ serviced by a plethora of ‘Supply organisations’ linked through numerous ‘intermediary organisations’, using a wide variety of contractual and sub-contractual arrangements and working practices. As yet, little research has been published showing how much money is taken away from front line services and absorbed at each stage of this process through staffing, administration, and other costs. What research there is shows that resources intended to provide care are greatly diminished as a result.

‘Zombie’ care

Debt levels in the UK independent care sector are extremely high. In 2014, it was estimated that over 700 care companies were ‘zombie’ organisations with liabilities worth more than assets. In 2013, shares in market leaders such as Four Seasons, Care UK and NHP were officially rated as junk bonds, or sub-investment grade, and dangerously risky for investors to buy. As recently as April 2016 Four Seasons reported annual losses of £264M.

The National Care Association highlighted the risk that a quarter of independent sector care providers were likely to ‘exit the market’ as a result of debt and lack of government and local government support, causing a ‘loss of 40,000 beds in the independent social care market.’ A consequence of these debt levels is that merger activity in the care sector is at unprecedented levels.

The Financial Times reported in October 2012 on the ‘positive environment for ongoing consolidation and M&A [mergers and acquisitions] across healthcare services’. As Marx long ago showed this ‘centralisation’ of capital ‘involves nothing more than a change in the distribution of capitals that already exist…Capital aggregates into great masses on one hand because, elsewhere, it is taken out of my hands’. Little extra profit is generated (with which to repay debt for example). What profit exists is simply concentrated into fewer people’s pockets.

A financial context for abuse

Sir Stephen Bubb, who led the investigation into the institutionalised abuse at Winterbourne View residential home exposed in 2011 has said: ‘It is outrageous that in the 21st Century we still treat people with learning disabilities and autism in this appalling way – seclusion, restraint, injections. It is unacceptable.’ One reason for the return of the larger, this time privately-run, residential units such as Winterbourne is that staffing costs in the care sector remain central, accounting for 57 percent of costs.

To address this, learning disability care companies are building larger units to give them the economies of scale to generate profit. Larger units potentially facilitate cutting staff numbers to a minimum. One staff to 10 residents is common across the sector. Skill levels are also low with skilled workers relatively more expensive and the costs of training prohibitive within this market-driven bottom-line context. Care staff are working longer and harder equipped with fewer skills.

‘Technical innovation’

Evidence shows that attempts are being made to increase the productivity of care labour through ‘technical innovation’. At a broad systemic level this includes changes to benefits systems that have seen people with learning disabilities ‘disappeared’ from benefits provision through the shift from Disability Living Allowance to Job Seekers Allowance and the regime of sanctions that accompanies it.

According to Mencap, the sanctions regime is ‘grossly unfair’ to people with learning disabilities and helps to ‘trap them in poverty’. At care provider level productivity of labour is increased by the more intensive and extensive use of restraint and of anti-psychotic and anti-depressant drugs. This allows fewer staff to deal with larger numbers of sedated clients. Cutting staffing might reduce a wage bill in the short run but it is not a basis for securing a long-term system of care.

Quite apart from the denuded humanity and grotesque immorality of placing vulnerable people in segregated locations at a distance from friends, family and communities, in more crowded spaces with less support, and sedating and containing them with physical restraints and drug treatments, the current market model with its operational imperatives is economically inviable.

This first appeared on the  British Politics and Policy blog.

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