How to Destroy a National Health Service

How to Destroy a National Health Service

How to Destroy a National Health Service

Over several decades, a toxic combination of underfunding and stealth privatization efforts have brought Britain’s widely beloved NHS to its knees.


Soon after Covid-19 started to sweep through the United Kingdom in March, thousands of residents began appearing at their windows every Thursday to applaud the National Health Service. While the pandemic has evidently caused a wave of renewed appreciation for the NHS, the universal health care system has been a source of immense British pride for over 70 years. What many Britons fail to realize, however, is that some of the past and present government officials clapping alongside them, including Prime Minister Boris Johnson, have had a hand in the decades-long efforts to privatize their beloved NHS.

Founded in 1948 by the Labour Health Minister Aneurin Bevan, the NHS rose from the ashes of World War II as part of a welfare state designed to slay the “five giant evils” outlined by the economist William Beveridge: want, disease, ignorance, squalor, and idleness. As Bevan envisioned the NHS, it would provide world-class medical care that was always “free at the point of delivery” for everyone, including nonresidents, overturning a system in which the majority, especially women and children, could not afford health care. With these principles at its core, the 1946 National Health Service Act lay the foundation for a radical redistribution of wealth by funding the service through a progressive tax on income.

In its original iteration, the government transferred ownership of all existing hospitals in Britain to the NHS, which then employed staff, using taxpayer money, to deliver services without charging out-of-pocket fees. Some charges were implemented soon after its founding, including fees for dentures and glasses, as well as prescription payments brought in by Winston Churchill. Although many conservatives, including Churchill, opposed the idea of a fully public service, the story of the private sector’s incursion into Britain’s health service started on Margaret Thatcher’s watch.

“The privatization of the NHS began in the 1980s,” says Professor Allyson Pollock, author of NHS plc: the Privatisation of Our Health Care, “and it’s been an incremental process over several decades where there’s been an ideological commitment to the private sector despite great opposition from the public.”

Although Thatcher promised Britons the NHS was “safe with us,” it has since been revealed that she commissioned an American right-wing think tank to draw up privatization plans, including a proposal that promised it “would, of course, mean the end of the National Health Service.” Thatcher, much like her American counterpart Ronald Reagan, was a staunch believer in free market principles and aimed to introduce them into everything from housing to hospitals. While she was ultimately prevented by its immense popularity from privatizing the NHS outright, her government began to chip away at the foundation of the public health service to create an opening for the private sector.

Low-wage services such as catering and cleaning were the first to be outsourced in 1983. These may seem irrelevant to health outcomes, but they serve as an example of the dangers outsourcing can represent to public health. In 2016, a University of Oxford study revealed that the deadly MRSA “superbug” was more than twice as prevalent in hospitals that had replaced in-house cleaning staff with low-cost contractors that were able to slash prices by underpaying staff and providing worse labor conditions.

“Our study finds that contracting out NHS services may save money, but this at the price of increasing risks to patients’ health,” said the study’s co-author David Stuckler. “When these full costs are taken into account, contracting may prove to be a false economy.”

Though Bevan’s design for universal health care began to erode under Thatcher, it was New Labour’s Tony Blair who swung the NHS’s doors wide open for private industry. When first elected in 1997, the Blair government promised to increase NHS spending to reach the EU average and initially seemed poised to reverse some of the previous governments’ privatization attempts. But in 2001, with another election on the horizon, Blair decided to finish what Thatcher started and turn the UK’s health sector into a competitive market.

New Labour brought in lucrative contracts with independent sector treatment centers (ISTCs) to perform “elective” procedures, paid for at inflated rates with taxpayer money, while leaving more expensive, complex surgeries to the NHS.

“Tony Blair dictated that 1 percent of the budget must be given to private contracts to support his experiment,” says Dr. Tony O’Sullivan, a retired pediatrician and cochair of the campaign group Keep Our NHS Public.

“He used the pressure of waiting lists at the time,” he adds. “Instead of investing even more in the health service, he insisted that ISTCs would be used to take people off waiting lists. That’s the way he forced the door open to allow more clinical services to be provided by the private sector.”

By 2006, Blair was openly boasting as he introduced partnerships with nearly a dozen private health care firms that 40 percent of the public health service would soon be privately run “under the NHS banner.” All of this was done under the guise of shorter waiting times and increased choice. Perhaps one of New Labour’s worst legacies, under both Blair and his successor Gordon Brown, was the expansion of public hospitals built using £11.4 billion ($14 billion) from private finance initiatives whose fees and borrowing costs will ultimately cost taxpayers more than eight times the initial outlay—and have already bankrupted several NHS hospitals.

As the NHS was grappling with the damage inflicted by Blair and the center-left Labour party, David Cameron and his coalition government arrived on the scene to fully dismantle NHS core principles and structures.

Eighty-four percent of us want the NHS to be in public hands, and yet it is being privatized as quietly as possible,” says Cat Hobbs, the founder of We Own It, an organization that campaigns for public ownership of services. “That’s been the case for some time, but it’s gotten much worse since 2012 with the Health and Social Care Act, which created new markets in the NHS and really ramped up the privatization.”

The legislation Hobbs mentions relieved the head of the Department of Health and Social Care of the legal duty to provide care for UK residents within its first two pages. The rest of the lengthy document is dedicated to creating an incredibly complex bureaucracy that not only delocalized funding decisions, but allowed larger portions of taxpayer funds designated for the NHS, which annually amount to roughly £112 billion ($137 billion), to be funneled toward the private sector. This takes numerous forms. One example is illustrated in John Pilger’s documentary The Dirty War on the NHS, which shows how private ambulances may carry the blue-and-white NHS logo, but often fail to meet the service’s necessarily stringent standards.

Other private companies that eat into NHS funds are consulting firms like Deloitte and PWC that slithered into the newly minted Clinical Commissioning Groups that decide how much funding health care providers receive. Providers include a slew of private hospitals and general practices run by, among others, Virgin Care, an arm of billionaire Richard Branson’s Virgin empire, as well as over a hundred NHS Foundation Trusts that are also able to contract services from the for-profit sector.

The Health and Social Care Act ultimately paved the way for vulnerable members of British society, such as the homeless, elderly, and undocumented migrants, to fall through the cracks of health care coverage. Dr. Bob Gill, creator of “The Great NHS Heist,” believes there are two motives underpinning privatization efforts.

“There’s a belief amongst our ruling classes that health care should not be a right; it should not be available to everybody,” says Gill. “But there’s also the element of private gain.”

As the 2012 legislation was being debated in the halls of Parliament, a Mirror investigation revealed that at least 40 members of the House of Lords had financial ties to companies that stood to gain from the reforms. It’s not just British politicians and companies that have profited from changes to the health service, however. American think tanks, insurance companies and consulting firms, as well as pharmaceutical manufacturers, have also been present at every step Britain has taken towards privatization. US companies such as UnitedHealth, Hospital Corporation of America, and the Acadia Group have been operating within the NHS and profiting from British taxpayers for several decades now. But when British health care advocates warn about the “Americanization” of the NHS, they aren’t just concerned about an increased presence of companies from across the Atlantic. Many, such as Gill and Hobbs, are terrified that the UK’s National Health Service will be transformed into an American-style health insurance system where access to care is largely dependent on wealth.

Even a cursory comparison of the two systems reveals the very real basis for such fears. In 2018, the United States spent over 17 percent of its GDP—-about $10,000 per capita—on health care, making it the most expensive system in the world. Yet 27.5 million Americans remained uninsured as the coronavirus pandemic hit, a number that’s rising alongside record unemployment. In the same year, the UK’s health care costs amounted to $4,000 per person, and while even insured Americans still pay out-of-pocket fees, most of the British public receive care covered nearly in full by their taxes. Although some politicians have toyed with ideas like “top-up fees” and monthly “membership charges,” none have succeeded in changing the basic funding model. It is this fact that likely makes the piecemeal privatization of the NHS difficult to discern on a day-to-day basis.But what hasn’t escaped Britons’ notice is the underfunding that has led to hospital bed shortages and reduced staff and services, especially under post-2008 austerity measures.

While overall funding has increased every year since 1948, the rise in spending has slowed and varied depending on the party in power. Since the 1980s, Tories have increased annual health spending by less than the previous average of 4 percent, including a shocking low of less than 1 percent from 2010–15. Labour governments from 1997–2010, on the other hand, raised the yearly increase to 6 percent. The UK now spends nearly a 10th of its GDP on health care, but where that money is spent is part of the problem. When you factor in the hundreds of non-NHS, privately run services that operate under the logo, it turns out 18 percent of the NHS budget already goes to for-profit companies every year. There’s also a vicious cycle in which funding cuts lead to increased outsourcing, in turn creating the false economy Stuckler highlighted in his 2016 study. Additionally, administrative costs, which originally made up about 8 percent of NHS spending, are estimated to have more than doubled since privatization efforts began.

NHS funding is so important to Britons that during the 2016 referendum on EU membership, former mayor of London Boris Johnson successfully led the “Leave” campaign by coasting around the UK on a red bus with a misleading slogan emblazoned on its side: “We send the EU £350 million a week. Let’s fund the NHS instead.” Johnson, who became prime minister in 2019, seems to want to make good on his promise to increase NHS funding, pledging to raise spending by £34 billion ($42 billion) in the next four years. However, as news emerged in recent weeks that Johnson’s government was fast-tracking private contracts as part of the UK’s Covid-19 response, including with for-profit giants like Deloitte, SERCO, and the American company Palantir, it became apparent the latest prime minister is just as devoted to transferring public wealth to private pockets as his predecessors were.

During the December snap election that cemented Johnson’s rise to power, Labour Party leader Jeremy Corbyn presented the public with leaked documents from US-UK trade talks that implied the NHS would be “on the table” in post-Brexit negotiations, as President Donald Trump once let slip. Johnson has continually declared that “the NHS is not for sale” and denied that American companies will be granted greater access. But the Mirror has once again exposed a number of ties between the private health care industry and Tory officials; meanwhile, several members of Johnson’s cabinet, including Secretary of State Dominic Raab, authored a manifesto that proposed increased privatization of the NHS. US companies, who have been greedily eyeing the NHS for decades, see a US-UK trade deal as a golden opportunity.

As the coronavirus pandemic claims more lives in Britain than anywhere else in Europe, and Brexit and a US-UK trade deal loom large, Britons need to think long and hard about what kind of NHS will protect them in a future that could be riddled with public health crises. Dr. John Lister, cofounder of the Health Campaigns Together initiative, believes that despite private companies’ shambolic involvement in the Covid-19 response, an opportunity is emerging amid the chaos as NHS debts are scrapped and Health and Social Care Act structures are suspended for the sake of efficiency.

“There’s going to be a good case after the pandemic to say, ‘Let’s not go back to December 2019,’” says Lister. “‘Let’s increase funding and put in some more sensible structures that are going to make the NHS a public service that we can all be even more proud of.’”

At least one thing should have been made abundantly clear since March: America’s entirely privately run, insurance-based health system, which has led to the worst coronavirus death rates in the world, is hardly a model to aspire to. In fact, it is Americans who should look to Bevan’s vision for a health care system that is up to the task.

“Society becomes more wholesome, more serene, and spiritually healthier,” the Labour health minister wrote in 1952, “if it knows that its citizens have at the back of their consciousness the knowledge that not only themselves, but all their fellows, have access, when ill, to the best that medical skill can provide.”

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Katrina vanden Heuvel
Editorial Director and Publisher, The Nation

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