Private Island: Why Britian Now Belongs to Someone Else (23 page)

Throughout the current debate on the health service's future, the Conservatives have praised it as an abstract concept, pledging to uphold ‘an NHS that is free at the point of use and available to everyone based on need, not the ability to pay'. But it is quite possible to praise something even as you legislate it out of existence. Changes don't need to be advertised as embodying a cumulative destructive purpose for that purpose to be achieved. The fall of the Roman Empire was never announced, yet its fate was sealed once its rulers, no doubt for reasons of efficiency, introduced a choice of competing barbarians to defend its borders.

In their book
The Plot Against the NHS
, Colin Leys and Stewart Player argue that, having failed to persuade the public and the medical establishment under Margaret Thatcher that the NHS should be turned into a European-style national insurance programme, the advocates of a competitive health market gave up trying to convince the big audience and focused on infiltrating Whitehall's policymaking centres and the think tanks. As a result the government and the cast Leys and Player call ‘marketeers' – private companies, lobbyists, pro-market think tankers – publicly praise the NHS, while taking incremental steps to turn
it into an NHS in name only: a kitemark, as one prominent marketeer puts it in the book.

Yet there was a huge gap between the end of John Major's administration in 1997 and the Tory-Liberal pact of 2010. Labour, the party that created the NHS, that has pledged to defend it and has denounced the Lansley reforms, was in power for those thirteen years. So how did a surgeon like Martyn Porter end up, in 2011, so accustomed to the world of commercial competition and the bottom line? As Leys and Player show, it was the governments of Tony Blair and Gordon Brown that began replacing the public components of the NHS with private ones, the effect concealed by large spending increases, long before the Coalition took charge. If the Conservatives and their Liberal allies are dismantling the NHS, it was Labour that loosened the screws.

The first attempt to introduce market competition into the NHS was made by Kenneth Clarke in 1990, in the dying months of Thatcher's rule. An ‘internal market' was rushed in, against the advice of the medical profession. It was watered down; it had less effect than its critics feared or its supporters hoped. Tony Blair's first health minister, Frank Dobson, read its funeral rites when Labour came to power seven years later. Yet at the turn of the millennium, Alan Milburn replaced Dobson, and Labour introduced a new, more radical version of that market.

It was Labour that introduced foundation trusts, allowing hospital managers to borrow money and making it possible for state hospitals to go broke. It was Labour that brought in the embryonic commercial health regulator Monitor. It was Labour that introduced ‘Choose and Book', obliging patients to pick from a menu of NHS and private clinics when they needed to see a consultant. It was Labour that handed over millions of pounds to private companies to run specialist clinics that would treat NHS patients in the name of reducing waiting lists for procedures like hip operations. It was Labour that brought private firms in to advise regional NHS managers in the new business of
commissioning. And it was Labour that began putting a national tariff on each procedure.

The more closely you look at what has happened over the last twenty-five years, the more clearly you can see a consistent programme for commercialising the NHS that is independent of party political platforms: a purposeful leviathan of ideas that powers on steadily beneath the surface bickering of the political cycle, never changing course.

A key source of those ideas was Alain Enthoven, an American economist. Enthoven spent most of the 1960s in the Pentagon, one of the cerebral ‘whizz kids' on the staff of the defence secretary Robert McNamara. McNamara was a wonk, confident that no mystery could withstand statistical analysis, and Enthoven was the chief wonk's wonk, crunching numbers to judge whether the new weapons the generals wanted were worth it. In 1973, Enthoven reinvented himself as an expert in the economics of healthcare. He believed the US health system, as a whole, was a failure (he described tax relief for private health insurance as a disaster), but thought one part of it, a California-based outfit called Kaiser Permanente, was exemplary. His ideal was something called ‘managed competition', and in 1985 he wrote a paper for the Nuffield Trust suggesting it could work for the NHS.

Enthoven himself seems to have been taken aback by the speed with which Thatcher's sunset coterie latched onto him. In an interview with the
British Medical Journal
in 1989 he said of the Conservative proposals: ‘I was very surprised by the lack of detail … I thought that I was throwing out a general idea that needed to be developed.' It is eerie to read the interview now. Everything that Enthoven prescribed then was either brought in by New Labour or is being put in place by Labour's supposed opponents a generation later. ‘I recommended that the district health authorities be recast as purchasers of services on behalf of the populations they serve, with choice of where and from whom they buy the services, rather than being cast as monopoly
suppliers' – check. ‘Another very strong idea is that money follows patients' – check. ‘Pay hospitals prospectively by diagnosis-related groups as our Medicare programme does' – check. ‘Self-governing NHS trusts' – check.

What seems to have happened since 1985 is that Enthoven's ideas have become embedded in individual careers, financial aspirations and personal relationships independently of the rise and fall of parties. For individuals, there is money to be made by promoting the market. In 2006,
Accountancy Age
reported that the NHS was spending more on consultants than all Britain's manufacturers put together. The figure for 2007–08 was £308.5 million. The post-political careers of the Labour cabinet ministers responsible for marketising the NHS don't make for comfortable reading. Alan Milburn became an adviser to Bridgepoint Capital, a venture capital firm backing private health companies in Britain, and to the crisps and fizzy drinks maker PepsiCo; for eighteen days a year advising Cinven, which owns thirty-seven private hospitals, Patricia Hewitt, one of Milburn's successors as health secretary, was paid £60,000. The revolving door has become a blur. Simon Stevens, Blair's special adviser on health, became a senior executive at UnitedHealth, one of America's largest private health companies; he is now back on the government payroll as head of NHS England. Mark Britnell, a career NHS manager who rose to become one of the most powerful civil servants in the Department of Health, upped sticks in 2009 to become global head of health for the consultants KPMG.

This last move did have the advantage of giving an insight into what had actually been going on in Whitehall and Downing Street. In 2010 Britnell was interviewed for a brochure put out by Apax Partners, a private equity firm: it had organised a conference in New York on how private companies could take advantage of the vulnerability of healthcare systems in a harsh financial climate. ‘In future,' Britnell said, ‘the NHS will be a state insurance provider, not a state deliverer … The NHS will be shown no mercy and the best time to take advantage of this will
be in the next couple of years.' Responding later to the dismay his comments had caused, Britnell said in an article for the
Health Service Journal
that the NHS had saved his life in the year he left government service, that he would always support it, and that the quotes attributed to him ‘do not reflect the discussion that took place' at the conference. But he didn't deny making the comments. ‘Competition,' he added, ‘can exist without privatization.'

Yet Britnell had topped his own ‘no mercy' line in an article he'd written for the same magazine the previous week. There he made the unremarkable if contentious point that ‘all over the world, the size of the state has been increasing.' What furrowed the brow was the base year he chose for the comparison with today's level of public spending: the year was 1870, when infant mortality in Britain ran at 16 per cent, working-class men had just been given the vote, and four years had passed since a cholera epidemic killed 3,500 Londoners.

Critics of the NHS often cite Enthoven's favourite health organisation, Kaiser Permanente, as a model for efficient, integrated care. And yet from the British point of view Kaiser stands out among American providers not because it's better or worse than the NHS but because it looks a bit like it. It's huge: it provides medical care to a mainly Californian membership roughly the size of the population of Austria. Its doctors are salaried and its hospitals are non-profit. It offers patients a complete service of hospitals, labs and family doctors, as the NHS does, although it also has its own pharmacies. And one explanation for its efficiency, as with the NHS until a few years ago, is that it actually limits choice. Most Kaiser members have a health plan that offers them or their employers relatively low premiums in exchange for using only Kaiser facilities.

Kaiser is doing a lot right. Its model of ‘integrated care' – where a single health organisation looks out for people not just during treatment but before, after and between, and hospital admission is seen as a failure – has long been a goal for progressives in the NHS. It seems to have done a better job than the NHS of getting
medical information off paper and into computers. A 2003 study in the
British Medical Journal
, investigating the length of time the over-65s spent in hospital, found that for hip replacements, British pensioners went home, on average, twelve and a half days after admission; Kaiser patients were home after four and a half. Kaiser doesn't tie its consultants to its thirty-five hospitals; those who deal with chronic conditions are as likely to be in its 455 medical centres, alongside family doctors.

Getting ideas from Kaiser is one thing (as alluded to by Martyn Porter, NHS lengths of stay in hospital have dropped sharply since 2003); using it as a template is another. The major problem that militates against importing the Kaiser model to the NHS is money. England isn't the only country that has studied Kaiser. In 2011 a Danish think tank, the Rockwool Foundation, reported on its investigations. Its team, led by Anne Frølich, found that Kaiser was better than the Danish health service at getting its constituent parts to work together, at getting patients to take responsibility for their own health and at preventing unnecessary hospital admissions. Everything was great, except that for every krone Denmark spent on healthcare, Kaiser spent one and a half. According to the latest OECD figures, Denmark outspends Britain on healthcare, head for head, by 25 per cent. On the basis of the Rockwool study, the Kaiser system could be reproduced in Britain only if health spending were increased by 87 per cent. That is not going to happen on any Tory or Labour planet in this galaxy.

The curious thing about the Lansley plan is that it was supposed to save money, yet despite the increase in spending on the NHS under Labour, the organisation remains a bargain. The two foreign systems with which it is most often compared, the American and the French, are more expensive, are coming to be seen as unaffordable in their own countries and contain elements that it would be hard for Britons to accept. Kaiser works well and is cheaper than traditional American healthcare. But it reflects the US model. Although that model is being changed
by the introduction of President Obama's Affordable Care Act, it remains idiosyncratic. Most people over sixty-five are eligible for Medicare, a kind of gold-plated American NHS for the elderly, but otherwise, if you have no insurance, you have no guaranteed access to medical facilities, including Kaiser's. If you fall seriously ill in the US, aren't insured and aren't rich, you have two main options: to go to a hospital's accident and emergency unit, where they're obliged to treat you, or to try to get Medicaid, a government programme to help the poor and disadvantaged run on a state by state basis. But the hospital will charge the full rate for treating you, which it will then try to recover against any assets you have, while Medicaid is means-tested. In other words, being uninsured and having a serious car accident in the United States is hard to make compatible with owning a house.

The Affordable Care Act (ACA) is a giant step towards equality of opportunity in America, though it falls short of a revolution. The new law proposes that all fifty states accept a more generous means test for households trying to enrol in Medicaid. The threshold depends on household size; in most states, a family of four could be earning up to $32,500 a year and still qualify. In many parts of the US, where the current threshold is less than $12,000, this is a massive increase, and should enable proper health care for the first time to millions of low-paid working Americans whose employers are too mean to cover them. But a swathe of southern and mid-western states with Republican legislatures, including four of the five with the highest poverty levels, Mississippi, Louisiana, Alabama and Texas, are refusing, with the approval of the Supreme Court, to implement the system.

For middle-class Americans, the new system is just as radical. Individuals still aren't forced to take out health insurance, but they now suffer a stiff tax penalty if they don't. In return, for middle-income households earning up to $94,000, the government offers hefty subsidies on a choice of health plans, and has abolished the brutal ‘pre-existing condition' rule, which allowed insurance companies to refuse coverage to people who were
already ill. All businesses above a certain size will be obliged to start offering their employees health cover. Supporters of the law believe it will more than pay for itself; its increased costs will be offset by thinning out the armies of walking wounded who throng hospital emergency rooms, and by spreading risk more widely.

But as many as thirty million people will still be left without medical cover – low-paid people in the pro-inequality states, illegal immigrants and people who gamble that they won't need a doctor and prefer to pay a tax penalty rather than a premium. And even if you are insured in America, and have access to some of the world's finest medical facilities, just paying the premium each month doesn't make healthcare free at the point of delivery. Two standard features of US health insurance, before the ACA and under it, are the ‘copay', a fee for consultations or drugs, and the ‘deductible', an amount the patient is expected to pay before the insurance kicks in, like the excess on car insurance. The lower the premiums, the higher the copays and deductible.