John Penrose MP
House of Commons
London SW1A 0AA
Thank you for your letter of 13th December regarding Weston Hospital.
I would like to raise the question of whether the tendering process for WGH services is equitable, and also whether it is legal.
My understanding is that any NHS providers tendering for partnership will be working under annual budgets which mean that they have to use up the allocations for that specific year. Any unused monies are clawed back and the amount allocated in the subsequent year is reduced by the amount of under-spend. This was the case when I was involved in hospital budget allocation in the past, and I am not aware of any changes.
I believe also that private companies are free of this constraint. They can vary their spending according to the circumstances of that year, holding money over, or drawing on future allocations.
I expect that the exact arrangements are more complex than I have outlined above, but if it is broadly correct, any NHS provider tendering for the WGH contract is clearly in a disadvantageous position. It is absurd to suppose that cash requirements will be the same from year to year. If NHS providers are indeed disadvantaged in this way, the tendering process is inequitable. Assuming that there are legal requirements for the tendering process to be even-handed, funding differences of the sort that I have outlined above would be illegal, and unless the situation is made even, any decision could be potentially subject to judicial review, with all the costs that would entail.
I would be very grateful if you would be so kind as to find whether there are indeed discrepancies in the funding mechanisms available to tenders from NHS partners vi a vis tenders from private corporations.
Thank you for your letter of ...
In this letter I want to deal with your last point about ideology, because it is fundamental to this correspondence, and raises one important question which I pose at the end of this letter. You allege that in opposing private for-profit contractors for what you believe are ideological reasons, I could be insisting on an inferior level of care for patients.
In theory it is possible to conceive of a situation where the same patient with the same condition receives better treatment and care at the hands of a private corporation compared with treatment and care provided by a public service, even though the level and provision of funding in the two cases were identical.
On the other hand it is equally, if not more, possible in theory to conceive the opposite, where public service provision is better than private, especially in a situation where the funding levels were the same.
However, as I am sure you will agree, we are not dealing with theory, but with political and economic realities.
The first reality to acknowledge is that the NHS is more efficient than private provision, as evidenced by the fact that health care in the UK comes in at nearly half the cost of health care in the USA, despite the fact that US health care excludes the poorest (and therefore most needy) section of the population.
The second reality is that for ideological reasons, the NHS is being slowly but surely being pushed towards the American Health Maintenance Organisation (HMO) insurance based system. Each of the 13 or 14 top-down reforms that have taken place in my time in the NHS has made the organisation more oven-ready for privatisation. The purchaser-provider split, fund-holding practices, the imposition of Foundation Hospital status, the whole sorry gamut of reforms, they have all nudged the health service towards privatisation. The current news is that 70% of health service contracts issued are going to private corporations. The Transatlantic Trade and Investment Partnership, if adopted, will legally open the NHS to competition from US health corporations.
Therefore, in a few years’ time, we can realistically envisage that Weston Hospital, having been taken over by Serco or similar organisation, and the NHS having been transformed into an insurance-funded rather than a tax-funded organisation, discovers that a patient referred to their services has, for whatever reason, no insurance cover and no private wealth. The patient is rejected, and dies shortly afterwards. This situation is a stark example of where private care is inferior to public care.
In short, your theoretical scenario where private is better than public is first neutralised by the opposite scenario, and is then trumped by the case where the present franchising operation has given way to full blown privatisation and care is denied to patients on financial grounds.
To put it clearly and simply, the present situation for Weston is the thin end of the wedge, a step towards a situation where health care is allocated on financial and not humanitarian grounds.
This is the reason why the WGH Patients Before Profits Campaign is set adamantly against franchising out Weston's services to a private corporation.
You will say that this is not the intent, and that Serco or whoever will continued to be funded from the public purse. But you know as well as I that insurance based funding of the NHS has been under discussion. All it takes is for some future Government, even without an electoral mandate, just as your Government passed the Health Services Act 2013 without an electoral mandate, dictates that all who want to receive NHS care must take out health insurance. That is all it will take, and when it happens, we are in the inhumane situation I outlined above.
You have suggested that by rejecting the franchising of Weston Hospital to Serco or the like, I could theoretically be presenting patients with inferior health care. I have shown that the whole trend of successive NHS reforms is leading the NHS towards the private US healthcare system, which means that people who have no means to pay will be denied health care.
Aneurin Bevan said "no society can legitimately call itself civilized if a sick person is denied medical aid because of lack of means". I am not a dogmatic socialist, but as a doctor I strongly agree with the truth and importance of that statement.