Public squalor or private rip-off?

New Labour’s leading think tank, the Institute for Public Policy Research (IPPR), recommends an even bigger role for the private sector in the NHS than is suggested in the official party manifesto.

These proposals, strategically leaked during the election campaign to enhance Tony Blair’s tough image, have provoked an angry response from leading medical figures and health service trade unions, supported by radical academics and the remnants of the old left.

Both sides in the great public-private debate are guilty of turning a blind eye to the past and of wishful thinking about the future.

In their faith that private enterprise can resolve the problems of the public sector, New Labour’s strategists have forgotten that the state was obliged to take over the provision of health services in Britain in the 1940s because the private system had effectively collapsed. The inherent defects of the market mechanism in health, which led to the wartime debacle, are already apparent in areas where private sector involvement in health has been growing in recent years.

While New Labour is ignorant of the past, many of its critics dream of returning to it. Nostalgic for the postwar NHS, they ignore the bureaucratic, paternalistic and inegalitarian character of the services it provided. They also evade the degradation of the ethos of public service, by state intervention as well as by market forces – the key problem facing any attempt to reform the health service.

New Labour’s conviction that the private sector points the way forward for the NHS appears naive to anybody with experience of the world of private health. It is a commonplace assumption among doctors that Harley Street includes some specialists of high quality – and others who are corrupt and incompetent (doctors also know how difficult it can be for patients to tell the difference).

There is a flourishing world of private general practice, often catering to patients from ethnic minorities whose lack of English makes it difficult to gain access to mainstream services; others run shady clinics selling slimming pills or dubious treatments for drug addiction. While some of these doctors provide a decent service, some are charlatans offering shabby treatment at rip-off rates.

In a letter written to the British Medical Journal in the light of the scandal at the Bristol children’s heart surgery unit, the chairman of the medical advisory committee at a private hospital, indicated the sort of problems that came up in the under-regulated private sector:

‘What does one do if a colleague who is not an orthopaedic surgeon or hand surgeon operates on Dupuytren’s contractures, or a colleague who is not a plastic surgeon performs breast reductions, or a colleague who is not a gynaecologist inappropriately operates on genital prolapse? What do you do if a colleague always finds something to operate on no matter what the patient is referred with? And what do you say to the anaesthetist who always puts in a regional block as well as giving a general anaesthetic in order to bump up the fee?’ (1)

Before Alan Milburn contracts out non-urgent surgery to private clinics, he would be well advised to make sure that the public does not end up subsidising such sharp practices. He should also conduct discreet inquiries into the rate at which patients currently undergoing such procedures privately find themselves on a fast-moving trolley going through the back door of the nearest NHS hospital, when things go wrong and they need proper intensive care staff and facilities.

The experience of the expansion of private sector involvement in the NHS over the past few years has not been encouraging. One of the most controversial initiatives of the Thatcher era was the introduction of compulsory competitive tendering for hospital ancillary services – laundry, cleaning, catering, portering, etc. Though this policy succeeded in one of its key objectives – crushing the hospital unions – there is little doubt that it has also contributed to the increasing squalor of the hospitals and to the demoralisation of hospital staff.

Both the government and the IPPR are keen to emphasise that the NHS has much to learn from private sector management. Yet, despite the increasing involvement of private managers in the health service – ever since Thatcher brought in Roy Griffiths from Sainsbury’s in the early 1980s – the benefits remain unproven.

The most striking outcome has been the proliferation of the jargon of ‘mission statements’ and ‘quality initiatives’ which only seem to draw attention to the apparent loss of mission and the deterioration in the quality of service. Another common theme of the politicians and their advisers is the potential of the private sector as a source of investment, through the Private Finance Initiative, which is now set to expand from hospitals to GPs’ surgeries. To its many critics, the benefits of this high-cost loan scheme accrue largely to the private sector.

It is true that, as government ministers point out to their radical critics, there has always been a partnership between the public and private sectors in the provision of healthcare. Within months of the formation of the NHS, the postwar Labour government, alarmed at the scale of demand unleashed by the new service, introduced charges on prescriptions, spectacles and dentures.

The same government accepted the persistence of private medical practice, often conducted in reserved wards and rooms within NHS hospitals. Largely funded by corporate or private insurance, this sector has steadily expanded so that it now covers around 10 percent of UK households (though the scope of this coverage has been reduced by increasingly restrictive terms); private hospitals now account for around 20 percent of all hospital expenditure. In the postwar years, even moderate Labour Party politicians regarded the existence of a marginal private health sector as a threat to the egalitarian principles of the NHS. Now the Labour leadership looks to a private sector long regarded as parasitic to improve the NHS.

In another concession to the principles of private enterprise – and to the small shopkeeper traditions of general practice – the postwar NHS allowed GPs to continue to operate as independent contractors, even though virtually all GPs earned virtually all their income within the NHS. Here New Labour’s enthusiasm for privatisation has had to take second place to its determination to establish more direct state control over the medical profession.

While pushing other NHS workers into becoming subcontractors, the Department of Health has given every encouragement to schemes in which GPs work as NHS employees on a salary (its refusal to allow the BMA to negotiate on behalf of these GPs is a key aspect of its current dispute). Yet another example of public-private collaboration in the sphere of health is that between the NHS and the pharmaceutical industry. However, the record of price-fixing, profiteering, duplicate production, dodgy advertising and marketing ploys and other abuses mean that the government does not generally offer its dealings with the drug companies as a model for relations between the state and business.

It is striking that opponents of the drive to extend the private sector in health now limit themselves to a rearguard defence of the existing public sector. In the past, when the role of the private sector was much smaller, the left campaigned for the abolition of private practice (at least within the NHS), for all GPs to be salaried and for the drug companies to be nationalised. But what does it now mean to defend the public sector in healthcare?

The NHS was a product of the Second World War. The exigencies of war necessitated the nationalisation of a collapsing hospital system, and the spirit of national collectivity and class compromise facilitated the consolidation of state intervention in the postwar years. Within this framework an ethos of public service sustained a chronically under-funded health service which stood high in popular esteem.

From the point of view of the vast majority of people in Britain, the postwar NHS undoubtedly represented a major advance. It offered a comprehensive and universal service, financed through taxation and free at the point of use. The removal of the stigmatising and discriminatory aspects of the previous arrangements and the general improvement in hospital standards guaranteed the popularity of the new system. The fact that the first two decades of the NHS were also a period of dramatic developments in antibiotics and other drugs and surgical techniques contributed to the enhanced prestige of the health service and the medical profession.

The medical profession was, for the most part, hostile to the introduction of the NHS. The tale of how its leaders were outmanoeuvred and bribed by Labour’s charismatic health minister Aneurin Bevan has been often told. The familiar depiction of the doctors’ leaders as a self-serving clique, cynically promoting the slogan of ‘clinical freedom’ to secure the power and income of the profession within the new system, undoubtedly tells part of the story.

Yet, from the perspective of our own, more pervasively cynical era, this account perhaps also underestimates the importance of the principle of professional autonomy and unfairly disparages doctors who were legitimately wary of state incursions into their work and their relations with their patients. Doctors were concerned to improve their income – many were poorly paid – but they were also concerned to uphold their professional standards and their freedom to treat their patients without external interference. Once the NHS was securely established, the medical profession came to terms with the new order. Clinical practice and medical research thrived within the culture of social solidarity that prevailed both in the health service and the wider society.

The NHS was never, as its Labour sponsors liked to depict it in sentimental speeches at party conferences, an island of socialism in a sea of capitalism. As a state-run public service within a market-dominated system, it reflected the class-divided society within which it operated. The NHS provided an inequitable service, not only as a result of the persistence of the private sector, but much more importantly through the multitude of informal mechanisms that maintained within the public sector what one radical commentator famously dubbed ‘the inverse care law’ – the greater your need, the poorer the care you received.

The medical profession, intensely hierarchical and paternalistic, ruled a hospital system that was sustained by an army of poorly paid workers. Out in general practice, the public’s low expectations were reciprocated in generally poor standards of practice in shabby premises. When politicians claimed that the NHS was ‘the envy of the world’ – as they often did – this was true in one sense: health economists and policy advisers, particularly in North America, were jealous of the cost-effectiveness of the British system, which they attributed largely to the success of GPs in acting as effective gatekeepers to the hospitals.

I offer a thumbnail sketch of the postwar NHS and the postwar world out of which it emerged because it is the collapse of these arrangements over the past two decades that is the key to the current crisis. On the one hand, all forms of state-run public services, from the Soviet Union to Sweden, have been discredited; on the other, the unleashing of market forces and the politicisation of health have generated increased consumer demand on health services while eroding the spirit of public service that sustained the old NHS.

In a remarkable reversal of their historic struggle against the NHS, the British Medical Association and other doctors’ organisations now cling fiercely to its disintegrating fragments. Unfortunately, they have also largely abandoned the cause of professional autonomy which they upheld in the past. Far from resisting further state incursions, GPs – particularly newly qualified doctors – are opting to give up their independent contractor status in favour of becoming salaried. (Whereas Bevan notoriously claimed that to win the consultants’ acquiescence to the NHS he ‘stuffed their mouths with gold’, Alan Milburn has been careful to link niggardly incentives to strict performance indicators.)

More broadly, it is sad to see the enthusiasm with which many doctors are embracing New Labour’s authoritarian and moralising social engineering initiatives, in areas such as drugs, parenting and teenage pregnancy, betraying both professional principles and their patients’ interests in the process.

One potent symbol of the degradation of the ethos of public service and professionalism in the NHS is the current preoccupation of health service staff – from doctors to ambulance workers – with the threat of violence from patients. Whereas in the past there was a degree of social solidarity between NHS workers and the public – a spirit that on occasions cut across the hierarchical divisions that resulted from the hegemony of the medical profession – now sentiments of fear and suspicion prevail. Another common theme among health service staff is the claim that undue levels of stress are resulting in burnout, resignation and premature retirement. Doctors who once took a stand on the principle of clinical freedom are now reduced to self-indulgently parading their existential despair.

The experience of the past couple of years, since New Labour sharply increased spending on health, indicates the scale of the problem of financing the health service. Though the government has frittered away much of these increased resources on political stunts like NHS Direct, it has also tried to improve basic hospital and community services. The problem is that, at a time when popular anxieties about health are running high, every new initiative further raises demands and expectations.

Given that health services in Britain have suffered long-term under-investment, provision is destined to lag inexorably behind popular needs. This is why, despite all the political hype about health, the queues in A&E just get longer. The acceleration of demand ahead of supply means that the burden of the health service is likely to be unsustainable either by a demoralised public sector or by a venal private sector, or by collaboration between them.

In conclusion, two modest proposals. First, the drive to expand the sphere of health to cover wider and wider areas of the life of society is a key contributory factor to the current crisis. Driven by the government’s quest for legitimacy, this is bad for the health service, bad for the medical profession and bad for the public. In particular, it contributes to the unsustainable burden of health spending. Restricting the NHS to the provision of healthcare would be both socially and economically beneficial.

Second, doctors need to redefine their relationship with the state in the direction of retrieving their professional autonomy. This would not only help to redress the current loss of professional self-respect, it would contribute to the recovery of some ethic of public service without which no health service can operate.

Dr Michael Fitzpatrick is the author of MMR and Autism, Routledge, 2004 (buy this book from Amazon (UK) or Amazon (USA)); and The Tyranny of Health: Doctors and the Regulation of Lifestyle, Routledge, 2000 (buy this book from Amazon UK or Amazon USA). He is also a contributor to Alternative Medicine: Should We Swallow It? Hodder Murray, 2002 (buy this book from Amazon (UK) or Amazon (USA)).

(1) British Medical Journal, 19 September 1998