Existing health services are being deliberately destabilised to pave the way for an ideologically driven privatisation programme
By John Lister
Wednesday July 20 2005
The Guardian

How is it that with spending on the NHS now running at double the level of 1997, the service is running into an autumn crisis, with debts totalling at least 750m pounds, bed closures, theatres closed, services cut and estimates of 8,000 or more redundancies?

The answer lies in the breakneck process of “modernisation”, under which existing services are being deliberately destabilised to establish a competitive market system incorporating for-profit private providers, in place of a planned system of public healthcare.

Under John Major the NHS was buying less than 200m pounds worth of treatment from private hospitals a year. This will have increased 10-fold by 2007. Up to 15% of elective surgery will be hived off to private hospitals, leaving NHS trusts to cover the remainder.

Hospital buildings have also been privatised: private finance initiative schemes worth more than 5bn pounds have been completed since 1997 or are being built, and another 12bn pounds of projects are under negotiation – all of them locking trusts into costly, long-term leasehold deals.

But while New Labour ministers press relentlessly on, opposition is starting to coalesce. Last week in London a group of consultants, academics, MPs and trade-union officials met to plan a “save our NHS” coalition against these “stealth reforms”, which have little public support – a recent poll showed 89% against private provision of NHS care – and are little reported or discussed.

That is likely to change in the autumn as huge, unprecedented budget deficits – and cuts in services – begin to take shape alongside the new competitive health market.

Soon all patients must be allowed to “choose and book” elective treatment from a list including both NHS and private providers. Millions will be siphoned out of trust budgets into private-sector treatment centres: Brighton and Sussex University Hospitals NHS Trust stands to lose 85% of its elective orthopaedic work, worth 15m pounds.

The attempt by the health secretary, Patricia Hewitt, to claim the mantle of Nye Bevan in her defence of New Labour’s NHS reforms earlier this month – arguing that even Bevan “saw a role for the private sector” – should have drawn a gasp.

When Bevan nationalised the flagging network of voluntary and municipal hospitals in 1948 he made compromises that left some relics of the pre-NHS private sector intact – pay beds and private practice for consultants, and allowing GPs to remain as “independent contractors”.

But what for Bevan were concessions, to ensure the passage of ground-breaking changes, have for Hewitt become a point of principle. Billions are now diverted from NHS budgets to create a new, expanding private sector, which will now be free to poach staff from NHS hospitals. Hewitt’s first announcement in her new job was that another 3bn pounds was to be spent on services exclusively from private providers – with NHS hospitals forbidden to bid. Two modern NHS treatment centres are to be privatised, reversing Bevan’s modernisation. This is neither expanding capacity nor supporting patient choice, since existing high-quality NHS services will no longer be available in these areas.

Hewitt is also creating a new private sector in primary-care services, while GPs are encouraged to act more like businesses, and allowed to retain unspent surpluses from “practice-based commissioning”.

A survey of more than 40 countries shows that for 15 years England has gone furthest and fastest down the road of market-style reforms; but there is no evidence that these reforms improve efficiency or cut costs.

Thatcher’s 1990s marketising reforms, by fragmenting the NHS into purchasers (health authorities and GP fundholders) and providers (trusts), massively increased administrative costs and boosted the number of senior managers.

Throughout Europe and around the world, insurance-based systems with separate purchasers and providers cost more to administer than the NHS: admin costs in France and Germany are over 20% of health spending, while in the US almost a third of the $1.4 trillion spent on health goes on administration.

New Labour came to office pledging to scrap the costly internal-market system, and began to do so – only to turn rapidly back towards the current policy, creating a market in which the NHS competes on unequal terms with a private sector free to cherry-pick the most profitable specialities and treatments.

NHS productivity has been hampered by soaring costs of goods and services from the private sector. For every £1 spent on NHS staff in 1995, according to the Office for National Statistics, 71p was spent on procurement of goods and services from the private sector; by 2003 the figure was 1.15 pounds for every 1 pound on staff.

Hewitt’s plans to spend billions on buying in treatment from private hospitals and treatment centres will therefore increase costs – just as private-sector care, especially for-profit care, costs more in almost every country where it is purchased alongside public provision.

New Labour’s ideologically driven modernisation reinvents failed policies and ignores the evidence. Competition, which brought fragmentation, dislocation and widened inequalities under the Tories, is coming back as “payment by results” from next April; it is already destabilising local NHS hospitals, and will bring more closures. Foundation Trusts ape failed experiments that were dropped in Spain, brought soaring debts in New Zealand, and led to outright privatisation in Stockholm.

In Britain, what is called modernisation has already increased costs and overheads, demoralised and alienated staff, undermined planning – and done nothing to ensure equal access to local care. It cannot continue to go unchallenged.

John Lister is the information director of London Health Emergency, and lectures in health policy and journalism at Coventry University; his book Health Policy Reform – Driving the Wrong Way? is published this month.

Copyright Guardian Newspapers Limited

By Ceci Connolly
Washington Post Staff Writer
Tuesday, July 26, 2005; Page A11

Regardless of age, legal status or insurance coverage, immigrants, on average, receive about half the health care services provided to native-born Americans, according to findings released yesterday that immediately fueled the debate over tightening immigration policies.

Immigrants received an average of $1,139 worth of care, compared with $2,564 for non-immigrants, according to the analysis, published in the August issue of the American Journal of Public Health. The gap was especially pronounced among immigrant children, who received one-quarter the care given to U.S.-born youngsters.

“Our study lays to rest the myth that expensive care for immigrants is responsible for our nation’s high health costs,” said co-author Sarita Mohanty, an assistant professor of medicine at the University of Southern California. “The truth is, immigrants get far less care than other Americans.”

The report is based on government data that tabulated health spending for 21,000 people in 1998, the most recent year for which figures were available. The analysis includes legal and illegal immigrants.

“If we think our high health care costs are due to immigrants flocking to our shores, we’re wrong,” said co-author David Himmelstein of Harvard Medical School. Although immigrants accounted for 10 percent of the population, they consumed 8 percent of total health services, the study found.

Some immigration experts, however, said that tracking per capita spending ignores the larger societal costs of a growing immigrant population that is far less likely to have health insurance.

“The fact that immigrants, when uninsured, might use 27 percent less medical care doesn’t change the fact that they’re 200 percent more likely to be uninsured in the first place,” said Steven Camarota, research director at the Center for Immigration Studies, a Washington think tank that favors strict controls on immigration. “Why have a system that allows in so many people who aren’t self-sufficient?”

Immigrants account for 18 percent of the costs associated with the uninsured — expenses likely to be borne by taxpayers and charities, Camarota said.

Both sides said financial, cultural and language differences all make it hard for immigrants to afford care, understand medical advice or embrace recommendations from American doctors and nurses.

A much higher percentage of adult immigrants lack a high school education, which makes it difficult for them to navigate the health care system, said Elena Rios, president of the National Hispanic Medical Association.

“They don’t understand the lingo,” such as what a cholesterol reading signifies, she said. “Because of limited education levels, you can’t connect the dots and think about what prevention like physical exercise means in terms of the future and things like heart disease and cancer.”

Immigrants often live in low-income neighborhoods with fewer hospitals, clinics, physicians and pharmacies, she said. And many Latin Americans, coming from countries with government-run health systems, are unfamiliar with the concept of buying insurance.

In addition, many immigrants do not qualify for government health programs that are targeted at specific groups such as retirees, American Indians and veterans, Camarota said.

Over the long term, Himmelstein said, the potential ramifications for children are most alarming. The data showed immigrant children had fewer doctor visits, took less medication and made fewer trips to the emergency room. But their emergency room costs were nearly triple those for non-immigrant children, suggesting that immigrant families missed routine checkups and waited until a condition was more serious before seeking treatment, Himmelstein said.

It is far more likely, he said, that immigrant children do not receive standard vaccinations and let chronic problems such as asthma go untreated.

Even better-educated, insured immigrants — and U.S.-born minorities — received less care, probably because of racism and cultural differences, Mohanty said.

The paper’s authors, who are active in the liberal Physicians for a National Health Program, said one solution would be to provide everyone with basic health coverage. Short of that, they advocated lifting restrictions on government health programs and easing entry into employer-provided health plans.

Camarota, who agreed that legal immigrants should have greater access to care, said lawmakers need to take a more critical look at who is allowed into the United States. He said, “The solution to the problem is make them go home or not let them in in the first place.”

© 2005 The Washington Post Company

Dear Colleague:

This summer marks the 40th year since the enactment of Medicare, the landmark health care program for the nation’s most vulnerable—the elderly, frail, and disabled. For the past decade, the Fund’s Program on Medicare’s Future has focused on the experience of beneficiaries, evaluating how new policies or emerging trends affect their coverage and access to care. In conjunction with the program’s anniversary, we are pleased to offer a new Medicare Resources page, a collection of selected Fund research on some of the program’s current challenges, including implementation of the new drug benefit, a restructured managed care program, and growing pressure to improve the quality of care while controlling costs.

Check this page again next week for a link to a webcast of a July 26th event at the Henry J. Kaiser Family Foundation conference center in Washington, D.C., noting the 40th anniversary of enactment of the laws establishing both Medicare and Medicaid, the jointly funded federal-state program that helps states provide medical assistance to low-income individuals and families. This historic event will include remarks from a half-dozen former Health Care Financing Administration (HCFA)/Centers for Medicare and Medicaid Services (CMS) administrators, former Health, Education, and Welfare Secretary Joseph A. Califano, Jr., and other health policy experts, including Kaiser President Drew Altman and Fund President Karen Davis. Also on the 26th, Health Affairs, in collaboration with the event’s co-sponsors, will publish several perspective articles by former HCFA/CMS administrators.

Dear Colleague:

This summer marks the 40th year since the enactment of Medicare, the landmark health care program for the nation’s most vulnerable—the elderly, frail, and disabled. For the past decade, the Fund’s Program on Medicare’s Future has focused on the experience of beneficiaries, evaluating how new policies or emerging trends affect their coverage and access to care. In conjunction with the program’s anniversary, we are pleased to offer a new Medicare Resources page, a collection of selected Fund research on some of the program’s current challenges, including implementation of the new drug benefit, a restructured managed care program, and growing pressure to improve the quality of care while controlling costs.

Check this page again next week for a link to a webcast of a July 26th event at the Henry J. Kaiser Family Foundation conference center in Washington, D.C., noting the 40th anniversary of enactment of the laws establishing both Medicare and Medicaid, the jointly funded federal-state program that helps states provide medical assistance to low-income individuals and families. This historic event will include remarks from a half-dozen former Health Care Financing Administration (HCFA)/Centers for Medicare and Medicaid Services (CMS) administrators, former Health, Education, and Welfare Secretary Joseph A. Califano, Jr., and other health policy experts, including Kaiser President Drew Altman and Fund President Karen Davis. Also on the 26th, Health Affairs, in collaboration with the event’s co-sponsors, will publish several perspective articles by former HCFA/CMS administrators.

JULY 21, 2005 — Legislation that would make it easier for small businesses to band together to purchase insurance and bypass state mandates is “a license to steal,” says a study released Thursday.

“The consequences are predictable: bankruptcy, delayed or forgone medical care, and loss of coverage for America’s businesses and workers,” said report author Mila Kofman, an assistant research professor at Georgetown University’s Health Policy Institute.

The report is referring to a bill (HR 525)—expected to pass the House next week—that would allow association health plans (AHPs) to bypass state regulation in areas such as mandating insurance coverage for specific treatments and procedures. Exempting AHPs from state laws, advocates say, would make it easier for small businesses to join forces and cut better deals with insurers when purchasing health care coverage for employees.

But Kofman said that the lack of state regulation of AHPs creates an easy opportunity for scam artists to come in, get their money and go out of business. “In law enforcement circles, these are called ‘cash cows,'” she said at a press conference.

The legislation would prohibit state regulators from shutting down fraudulent AHPs and would stop states from making it illegal to sell phony insurance to federal AHPs, Kofman said.

The bill would require the Department of Labor to monitor AHPs, a responsibility the agency cannot handle, Kofman said. And the bill would rely too heavily on self-reporting and self-regulation by the plans. “Crooks won’t be notifying the feds of lying, cheating, and stealing,” she said.

Between 2000 and 2002, fraudulent AHP-like plans affected more than 200,000 policyholders and left businesses and workers responsible for $252 million in medical bills, Kofman said. While the states shut down 41 illegal operations selling coverage through phony and real associations, the U.S. Labor Department shut down just three, Kofman found.

Rep. Sam Johnson, R-Texas, the leading sponsor of the House AHP bill, said such plans “protect people and increase the insured. The last time I checked, the Department of Labor has done a tremendous job monitoring the health plans of big business. I’d like to see small business have that same advantage—and their employees insured,” he said in a statement.

Groups such as the U.S. Chamber of Commerce, the National Federation of Independent Business, and the National Association of Manufacturers are pressuring Congress to pass the AHP legislation. They say such plans would help reduce the number of uninsured Americans by giving smaller employers the same market clout that larger businesses now enjoy when they purchase health coverage for their workers.

While the legislation has passed the House several times and is expected to do so again, it faces more opposition in the Senate, where Sen. Olympia J. Snowe, R-Maine, has introduced a similar bill (S 406).

Kate Sullivan Hare, executive director of health care policy for the U.S. Chamber of Commerce, said the AHP measure includes a number of licensing and solvency requirements to help prevent fraudulent companies from offering coverage. Hare also said the Department of Labor would add staff to help monitor the AHPs if the legislation became law.

“There’s nothing any of us can do about the scam operators—it’s buyer beware,” Hare said. “They’re out there now.”

Jill and Brent Burgess, who attended the press conference with Kofman, were the victims of one of those fraudulent operators. The couple, which operated their own business, lost their health care coverage for themselves and their three children when the company they bought insurance from was shut down for operating illegally, Jill Burgess said. Saddled with $30,000 in unpaid medical bills, her family had to file bankruptcy. “There was no other way out of this nightmare,” she said.

Kansas Commissioner of Insurance Sandy Praeger said there will be more victims like the Burgess family if Congress approves the AHP bill. “Simply put, allowing federal AHPs to operate outside the authority of state regulators will expose consumers to more fraud and insurance scams,” she said.

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