Unlike Scotland, which still has its NHS, the dismantling of the health service continues apace in England with the Government imposing £26 billion of planned cuts and closures. The NHS in England is also struggling with the costs of the opening up of healthcare to the private market. The NHS must now bid for thousands of commercial contracts each year against corporations like Circle, Virgin and UnitedHealth.
Virgin Care has more than a billion pounds worth of NHS contracts. It recently won an undisclosed sum in damages from the NHS when it lost a bid to provide £82 million worth of children’s services. Circle walked away from its Hinchingbrooke hospital contract when it couldn’t make a profit, as a Chief Inspector of Hospitals’ investigation highlighted “a number of serious concerns surrounding staffing and risks to patient safety particularly in the [Hinchingbrooke] A&E department and medical care. There were substantial and frequent staff shortages in the A&E department ... a number of other areas of concern, some of which related to the way in which the trust is led and run.”
Commercial contracting and privatisation are the result of the Health and Social Care Act 2012, which put in place the mechanisms to break up the NHS and end public ownership in England. The Act ended the duty on the Secretary of State to provide health services throughout England and made commercial contracting virtually compulsory. The Government is also planning more private sector takeovers. To speed up the process, Mr Hunt intends to change secondary legislation to enable US-style Accountable Care Organisations (ACOs) to operate in England. But the absence of public consultation and parliamentary debate about whether the NHS should undergo this major change in England is deeply worrying and we are involved in plans to take the Health Secretary to court over that. The proposals include what the Government calls a “dissolution of the boundaries” between health and social care. Unlike in Scotland where personal care is free, in England personal care is means tested and charged for. This is likely to signal another major shift of NHS care to charged-for personal and social care.
If ACOs are allowed to operate as planned, multi-billion-pound health and social care budgets could be given to ACOs under commercial contracts for up to 15 years. ACOs could include privatised, for-profit organisations which cannot operate under current laws. Crucially they will be non-NHS bodies and behind the ACO, it appears that there can be a network of sub-contractors, insurance and property firms. NHS England says ACOs would be in charge of allocating resources. So they could effectively decide which services are provided, to whom and which are available free and which are means-tested. They can take over patients on GPs’ lists; they can sub-contract all “their” services. Inevitably entitlement to NHS-funded care will decrease.
ACOs were conceived in the US in an effort to stem rising health care costs in a commercial system. They involve government and private insurers awarding large contracts to commercial service providers. The evidence on quality improvement is contested, and at best mixed, while projected savings to federal budgets translated into a net loss in 2015; spending may have increased. The costs of commercial contracting and healthcare administration in the US are considerable: around 30 per cent of the budget in the US (before profits), compared with less than 6 per cent in non-market systems such as in Scotland.
The implications of introducing ACOs in England for people living in Scotland have not been thought through. Under the Barnett formula, Scotland’s share of the block grant that funds its NHS will decrease as a result of a failure to meet NHS spending requirements in England. As more people in England are forced to pay for more of their care, what will that mean for those living in Scotland or Wales? So at least, there should be a public consultation. Introducing US-style ACOs into England is so fundamental for everybody in the UK that the justification must be set out clearly and debated. Good and transparent administration requires nothing less. This is why we are taking legal action. If England goes the American way – will Scotland have to follow suit as budgets are slashed south of the border?
Allyson Pollock, a proposed claimant in a legal action against the Health Secretary and NHS England, and Peter Roderick are Newcastle University academics