I still hope and believe the NHS can benefit from the private sector but it must be properly regulated, says Michael White
Did you spot the item about pharmaceutical companies debranding their drugs in order to ramp up the prices the NHS pays by as much as 8,000%?
Or the rising cost of care home nurses that may wipe out private equity baron Guy Hands? Or about (of course you did) the mutual accusations of dishonesty between negotiators of the junior hospital docs new contract?
Much of this kind of headline can be categorised as a response to familiar budget pressures or to the challenge of demographic change, not just among the over 65s either.
The National Audit Office now predicts that the UK’s population will rise by a further 10 million to 75 million by 2039, chiefly thanks to net migration and migrant related births.
Since they won’t all be bricklayers or nurses, I find it hard to be too sanguine about that, as more liberal friends insist. It’s too many too fast, even for a relatively flexible society like ours.
But the wider context is what economists sometimes call the “financialisation” of major western economies over the past 30 or so years, as the financial services industries, banks, insurance companies and their kind gained ascendancy over historic agriculture and the making of things.
‘The wider context is what economists sometimes call financialisation’
They seek to reduce all exchanged value to some form of financial instrument.
That’s appropriate in some circumstances: I work, you agree to pay me, the taxman takes her cut to fund public services for the common good.
Most of us grasp the case for injecting stronger financial discipline into the NHS (there’s a way to go yet, as Simon Stevens keeps discovering), because good will and hard work is never enough even in good times, which ours haven’t been for seven years and won’t be again any time soon.
I go further than many friends in accepting that NHS provision could do with more devolution and diversity, including more private and third sector involvement. In 20 years it hasn’t killed the BBC: we barely notice who made the programme.
Drawing the line
But where do we draw the line and establish a healthy balance? I don’t share nostalgia for the values and practices of the 70s ( I was there) when Uncle Cyril fiddled with the kids whenever Ted Heath and the miners put the lights out.
Financialisation has helped make society richer, though more unequal since more profits go to the self styled masters of the financial universe.
‘PRP is a racket. No wonder staff nurses get upset’
In the real world most of them couldn’t actually run a care home, as Guy Hands’ Terra Firm crowd seem to be finding out at Four Seasons. Government cuts and its “living wage” policy aren’t helping, though looming cuts in the Care Quality Commission’s (CQC) budget may ease the pressure.
Part of the trouble is that big money’s values seep through the system. Town hall and hospital trust CEOs wrack up huge salaries, canny GPs and dentists take £500,000 a year out of the NHS.
Even Dame Una O’Brien, permanent secretary at the Department of Health, felt moved to take a performance-related (PRP) bonus of £17,500 last night on top of her £222,000 package. It’s not dignified, Dame.
PRP is a racket. No wonder staff nurses get upset working 12 hour shifts alongside agency colleagues being paid two or three times as much. Better manpower planning is what dames get paid to do better without a bonus.
Inadequate performance or worse among elites fuels resentment and mistrust, especially when combined with telephone number rewards.
I used always to give Andrew Lansley the benefit of the doubt, as an honest if misguided guy, when the health secretary was accused of secretly “privatising” the NHS or selling out to commercial lobbyists or party donors on health related food, drink and tobacco issues, despite his wife, Sally Low, being involved in the opaque world of strategic consultancy.
‘Lansley’s face now appears on the home page of Low Associates’ website’
Lansley’s face now appears on the home page of Low Associates’ website and he is also advising US management consultants, Bain & Co (Mitt Romney’s firm), which advertises its enthusiasm to win NHS contracts.
David Cameron periodically deplores the Whitehall revolving door, but doesn’t slam it on ex-colleagues fingers.
Does that amount to a retrospective plea of naivety?
No, but like Alan Greenspan, free market chair of the US Federal Reserve before the crash, I am surprised by firms’ and folks’ willingness to financialise their reputations.
Such behavior is the opposite of the whistleblower’s, someone who takes great risks for the public good, with no prospect of reward, quite the reverse.
I still hope and believe the NHS can benefit from private sector skills and capital.
Why only the other day I read some City page tipster explaining why the FTSE 100 Index will be much healthier when dominance by boom and bust commodity firms which dig out the earth’s minerals is replaced by health firms in an ageing world.
But they have to be properly taxed and regulated by politicians and officials who mean it and don’t have one eye on that revolving door.
Michael White writes about politics for the Guardian