Hinchingbrooke - a (very minor) correction

Mr Birrell has, correctly, pointed out that I was mistaken in saying that the Public Accounts Committee had condemned the franchising arrangements at Hinchingbrooke Hospital. In fact, the Committee has yet to issue a final report. I should instead have said that members of the Committee had condemned it. I was thinking, in particular, of the closing comments of one of their members in their report of evidence taken: “I have to say, this should never ever happen again, because it is a financial disaster for value for money and for taxpayers. ”

I should also have mentioned the report into the franchising by the National Audit Office, which was the basis of the Committee’s hearing. Although measured in its wording, concludes that “The Authority should work with the Department to undertake a formal lessons learned process before agreeing any further franchise agreements.” This is on the basis of a long catalogue of problems, including a lack of clarity about transfer of risk and what measures of success were being used. One of the Committee members, used to reading these reports, describes it as “probably the worst report of financial incompetence in the NHS that we have seen.” The chair noted that “I haven’t read a Report as bad as this on the health service. This is probably the worst.”

The views of the members suggest a fairly consistent tone of incredulity, such as “this report is chock-a-block full of people saying, "Never before anywhere in the NHS has this level of savings been achieved." McKinsey, who are probably the consultants who are around the NHS more than anybody, say that they think it is unachievable. We accept that it is early days. We know from Mr Parsa that they have not got to where they planned to be when they put the bid in to you. We know from the document here that they added 25% savings in at the last minute to give you a viable bid that you could accept. You seriously sit here and think that that will be achieved? You are seriously doing that?”

Of course, as the evidence presented to the Committee and the NAO report indicate, there are many serious concerns about the franchising process, and not just the fact that Circle has a get out clause if it racks up excessive losses. But then, maybe this is unsurprising, given the description of the calculation of risk in public-private partnerships as "pseudo-scientific mumbo-jumbo".

I do hope that this has put the record straight. The Committee has not yet reached a considered conclusion on the Hinchingbrooke franchise but, I would suggest, it is already pretty clear what it is likely to be.

NHS privatisation - we are right to be afraid

Just before Christmas David Cameron’s former speechwriter, Ian Birrell, wrote in praise of private sector involvement in the delivery of healthcare (NHS privatisation fears? Grow up). It is no secret that many members of the current government see the NHS, along with the BBC and the Royal Mail, as ripe for privatisation (or what you and I might describe as untapped opportunities for profiteering by their friends and supporters in large corporations). Yet Birrell’s enthusiasm for privatising the NHS overlooks two fundamental characteristics of private companies. They hate uncertainty (as their advocates tell us again and again) and they will invest their capital wherever they can be sure of making the greatest profits.

For health care to be attractive to them it is necessary to distort the delivery of care so much as to make it almost unrecognisable. As Margaret McCartney has set out in detail in her excellent book, The Patient Paradox, it must exclude anyone whose condition cannot be put into a tidy box and costed. Hence, the concern he voices for elderly and disabled patients seems at odds with the profit imperative to get rid of them, ideally to the social care sector where their care will be means tested. As we have shown in a recent paper, this is only part of a multipronged attachment on older people (or as certain politicians would say, sotto voce, those who have outlived their usefulness). Consequently, while no-one wants to see older people stuck inappropriately in hospital, we must consider the motives of those now suggesting that they should never be in a hospital at all. Recall that, in many cases, it is only possible to know that someone is entering the final few months of life in retrospect. The exclusion of old people from the health system will free space needed to screen the worried well until some harmless anomaly can be found and treated at a guaranteed profit.

Private providers will only contract with the NHS if the market is rigged in their favour, for example by capping their losses as happened in the deal with Hinchingbrooke Hospital, since condemned by the Public Accounts Committee. He invokes Germany as an example of a country where the private sector is heavily involved in health care delivery but seems unaware of the very different model of Rhineland capitalism in force there, with trade unions represented on supervisory boards of firms. The benefits of this approach over the Anglo-Saxon model we use have been set out at length by Will Hutton. The situation in our two countries is entirely different.

Birrell’s claim that “competition works in health, just as it works elsewhere” displays an ignorance of a literature stretching back fifty years. The theory was set out in 1963 by the Economics Nobel Laureate Ken Arrow and the empirical evidence gathered since then. He must surely know that the research he cites has generated results that are medically implausible and have been heavily criticised.

People with complex disorders, cannot be commodified. The abject failure of the market-based health system in the USA to improve health outcomes, despite spending vast sums of money, should give him pause for thought. On a whole range of measures, the NHS in the UK outperforms those in other industrialised countries. When someone is proposing something so completely at odds with the evidence, it is only reasonable to ask why and who will benefit?