Friday, 29 March 2013

How Marketisation leads to Privatisation

The 2012 Health and Social Care Act changes the NHS in ways which we are only just beginning to understand. These will have an impact on how healthcare is delivered and paid for in the future. Some have described it as a privatisation of the NHS by stealth. The changes to the NHS over the years are summarised here in three key stages.

1) Once upon a time: The Department of Health (DoH) funded all general practitioner (GP) and hospital services via Strategic Health Authorities (SHAs). Hospitals did not compete and healthcare was not motivated by profit. But the NHS was not efficient.

2) Creation of an Internal Market: The concept of relatively independent NHS Foundation Trusts (FT) was introduced in 2002. FTs were hospitals relatively free of DoH control and able to reinvest their own profits to improve local healthcare delivery. Local people could become FT members and have a say in how their local health services should be provided. Competition between FTs improved healthcare efficiency but would lead to the closure of less successful hospitals (and sadly some successful ones). Primary Care Trusts (PCTs) would commission (purchase) a variety of services from local hospitals.

3) 2012 Health and Social Care Act: Things are about to change. At the cost of £1.5 billion, PCTs have been disbanded and 211 Clinical Commissioning Groups (CCGs) created. These were supposed to be GP-led but in practice will be managed by support services outside the NHS. From April 1st 2013, CCGs will be responsible for a £65 billion NHS budget in England, commission (purchase) services from a wider variety of providers, and 'have flexibility to use competition as a means of improving NHS services'. Under Section 75 of the Act, CCGs/GPs will be forced to open up every part of the local health service to private companies via time-consuming tendering processes. These processes are almost alien to the NHS but familiar to private providers waiting in the wings. Private providers will compete with FTs. Some may collaborate with FTs but their ultimate objective will be to siphon off profits for shareholders.

PS. Since this blog was posted, the NHS Commissioning Board has been renamed NHS England.