John McTernan: Private sector NHS’s best medicine

Healthy competition will provide a better service for patients, argues John McTernan. Picture: PA

Alex Neil isn’t telling the truth when he says the SNP won’t privatise the NHS. As the health secretary well knows, you can’t privatise what is already private. The vast bulk of medical services in Scotland are provided by the private sector. Nine out of ten visits to the NHS is to a GP – and she is a private contractor paid for services supplied. Not to mention the privately built hospitals with private sector supplies of hi-tech machines, pharmaceuticals and other supplies.

The NHS has never been a nationalised industry – and for good reason. The father of the NHS, Nye Bevan, never confused ends and means. Old union banners proclaim “the health of the people is the highest law”. That was the benchmark when the NHS was established, and it should be the benchmark now.

If an opposition to privatisation is not about banning private sector suppliers to provide health services direct to patients, then what is it about? As the joke goes, any stigma to beat a dogma. Privatisation is a catch-all smear not for private involvement in healthcare, but for choice and competition of any sort.

This is important. As government has rightly retreated from direct ownership of primary industries, infrastructure and manufacturing it has reduced its span of direct power. Control of public services remains one of the few areas where politicians can feel that they are in direct charge of the levers of power. Now, you might well think that the objective of our health service is the achievement of a healthier Scotland. And that the fulfilment or empowerment of politicians wasn’t the aim at all.

There is a fallacy and a fantasy at the heart of the NHS in Scotland. The fallacy is that we are the right size as a country to make all critical decisions about health centrally in St Andrew’s House. The fantasy is that it would be desirable, even if it were possible. Assuming that what we all want is the best outcome for patients, and the general population, then the kit we need for driving up standards is information, choice and competition. You can call these privatisation if you think insults trump facts; or you can look at how private means can deliver public ends. Information is the least contentious. Knowing how much operations cost allows us to know how efficient hospitals are. The length of waiting lists and total waiting times help us know which hospitals to go to. Or it they would, if we had free choice of provider.

Information is good in itself, but its value is multiplied if it helps to drive choice. Hard data, when combined with the clinical judgment of a GP, can put patients in the driving seat. Choosing which hospital and which specialist is true empowerment. It also provides a real-time, real-world competitive pressure.

Here’s the nub of the issue: how is quality best delivered? Harold Wilson nailed the point in a cabinet discussion of the merits public ownership being extended to further private companies. “Ah,” he said, “so that Marks & Spencer can be run with the efficiency of the Co-op.” Britain has seen food prices fall in real terms and quality rise because it has the most competitive supermarkets in Europe. What is special about hospitals that they shouldn’t have to compete?

One objection is routinely trotted out. “Why do I need choice? Why can’t I just have a great hospital locally?” The answer? You don’t need to choose. Only a handful of patients actually need to choose to make a difference. If 5 per cent of patients move from one hip surgeon in one hospital to another, it sends a signal to that department and that hospital management. If they act on that signal, then balance will be restored. If they don’t, then over four years they could lose a fifth of their income – enough to put them out of business.

This is when the second objection is made. “Competition leads to closures and that’s not fair to doctors, nurses and patients.” There is, of course, a fundamental objection to keeping poor services open because they provide employment.

But this is where privatisation is your friend. Public services end up delivering poor quality because of poor management and weak leadership. Why should managers and chief executives be protected from their failures? Where there is a market in hospital management, you can simply remove the leadership of a failing hospital and replace it. The buildings remain, employing the staff and serving patients and community.

Objecting to privatisation is, in effect, granting a licence to failing health service leaders to practice in perpetuity. That’s not an objective worth fighting for, it’s barely a principle.

None of which is to say that delivering the health of the people is easy. So many of our conditions are self-created – through smoking, drinking and eating badly. Changing behaviour is the hardest challenge for governments because it is the hardest challenge for the individuals.

How many of us have started diets and fallen from them, or joined a gym but failed to stay the course? We know how to become and stay healthy – we just don’t know how to make it a habit.

Making real patient choice into a pantomime villain by describing it as privatisation is at best a cynical diversionary tactic. It is our choices that make us unhealthy; it needs to be our choices that make us better, too.

That is as true in the choice of the provider of the NHS services we should receive as it is in the healthy habits of living we need to adopt. An adult conversation starts from this insight – choice, like public provision itself, is a means not an end.

• John McTernan was until recently communications director to Australian  prime minister Julia Gillard. He was political secretary to Tony Blair and a senior special adviser to first minister Henry McLeish