Speech to the Kings Fund – John Healey MP, Shadow Health Secretary

20 January 2011

The truth behind the Tory plans
Thank you for inviting me, 24 hours after the Health Bill was published, to examine the Government’s plans with you.

It is a work in progress for me, and perhaps for you.

I was advised by someone who’s views I value, that if I was speaking at the King’s Fund, to not be too political. To talk policy.

But I am a politician, not a health policy specialist. I don’t, and probably won’t ever, know as much about health policy as you do.

But in my view, you can’t fully understand public policy unless you also grasp the politics. And politics strongly shapes the delivery of policy and its implementation – which is central to my argument today.

The Health and Social Care bill published yesterday is more than three times longer than the legislation that set up the NHS in 1948.

The Government is forcing through “the biggest upheaval in the health service, probably since its inception”.

Chris, your words.

And the NHS chief executive Sir David Nicholson told the health select committee he sees the Government’s plans in the same way: “The scale of change is enormous – beyond anything that anybody from the public or private sector has witnessed”.

The general aims of reform are sound – greater role for clinicians in commissioning care, more involvement of patients, less bureaucracy and greater priority on improving health outcomes – and are common ground between patients, health professions and political parties.

They could be achieved by the evolution of Labour’s reforms, rather than Andrew Lansley’s reorganisation revolution.

The plans are high cost, and high risk.

Health experts, professional bodies and patients groups have all voiced concern and criticism.

Of course there are advocates. But most are for some, not all the changes. And the minority that may favour the full package still warn of the simultaneous scale and speed of change.

Even those expected to be most in favour are increasingly outspoken.

For GPs – who are seen as the big winners – the BMA’s Hamish Meldrum said last night “this change is going to replace one bureaucracy with another perhaps even more dangerous bureaucracy”.

For patients – who David Cameron insists will benefit – the Patients Association warns about “instability” and “a serious impact on staff”.

For NHS managers – who run the NHS – the NHS Confederation says “NHS leaders up and down the country are really worried about the prospects”.

And for centre-right policy thinkers – who generally back the Government – Civitas says “Now is not the time for ripping up internal structures yet again on scant evidence base”.

I have to say, with the NHS finances set to be the tightest for 50 years, and the Government breaking its Coalition Agreement promise of a real increase in NHS funding next year, this is exactly the wrong time for a huge top-down internal reorganisation of NHS management is the wrong reform, at the wrong time.

Top-down reorganisation is exactly what the Government promised to stop in Coalition Agreement in May.

You know more of the NHS than I do. You see more of the NHS than I do.

You are seeing that the NHS is already showing signs of strain in some areas, and with the extra pressure the changes are putting on the NHS, patients who have their operations cancelled or services cutback, and staff who see jobs cut, will become see themselves as victims of the Government’s handling of the health service.

With this wide range of views, of warnings, why are the Government forcing this huge internal upheaval on the NHS?

For me the answer lies in the politics, not the policy. This is a Conservative plan, not a Coalition plan for the future of the NHS.

The Lib Dems are hapless, helpless by-standers on the Government’s public service reforms. The main evidence of Lib Dem health policy in the Coalition Agreement programme for Government was the commitment to “elected local health boards, which will take over the role of Primary Care Trust boards in commissioning care for local people”. Well that lasted 61 days until Andrew Lansley’s white paper and simply brushed it aside.

This is a Conservative plan for the NHS. This is Andrew Lansley’s plan. No-one in the House of Commons knows more about the NHS than Andrew Lansley – except perhaps Stephen Dorrell. But Andrew Lansley spent six years in Opposition as shadow health secretary. No-one has visited more of the NHS. No-one has talked to more people who work in the NHS than Andrew Lansley.

The Health select committee concludes – in so many words – and as I believe, that these are the wrong reforms at the wrong time, “blunting the ability of the NHS to respond to the Nicholson challenge” to improve services to patients and make sound efficiencies on a scale the NHS has never achieved before.

But these plans are consistent, coherent and comprehensive. I would expect nothing less from Andrew Lansley.

In politics and public policy I think we often look and talk too much about “what” we’re doing, and not enough about “why”.

The “why” questions: why the huge disruption and distraction, when the general aims are simple to achieve? Why the waste of £2-3 billion, when NHS finances have never been tighter? Why now? These why questions have a straightforward answer.

Andrew Lansley is a Conservative. Like Oliver Letwin, George Osborne and David Cameron – who’ve all now given him backing – he believes in the free market. David Cameron said twice at Prime Minister’s Questions yesterday that the Government wanted a “level playing field” for private health providers.

They believe that competition drives innovation, that price competition brings better value, that profit motivates performance, and that the private sector is better than the public sector.

I acknowledge the ambition but I condemn this as the core philosophy being forced into the heart of the NHS.

It’s wrong for patients. It’s wrong for our NHS. It’s wrong for Britain.

The true intent of the plans is not set out in the aims of the white paper or the arguments ministers use in public. This is not a reform for the Parliament, it is a reform for the decade. The purpose lies in opening up all parts of the NHS to private health companies, and taking what remains of NHS out of the public sector.

It lies in removing the “N” in NHS, so there are no consistent service guarantees for patients wherever they live and no consistent national contracts for staff.

It lies in overriding service coordination and planning with competition.

It lies in cutting back the comprehensive care the NHS provides from cradle to grave to a core of “designated” services that will have legal protection and guaranteed funding.

If you’re in doubt, consider the moves – more advanced in education –
• To abandon a whole-area approach to education service planning, with whole communities concerns and needs as the starting point
• To promote competition between schools, rather than collaboration
• To see established schools undercut by transfers of funding to new providers – free schools – which are outside the system at present
• To introduce untested and costly changes when budgets are tight and under pressure from the promise to increase schools funding which is being broken

If you’re in doubt, take a harder look at how fundamental the changes in the new health legislation will be. And look beyond the changes that Ministers are ready to talk about, and examine the ones they’re reluctant to discuss.

I think there are two types of change contained in the White Paper and the health bill – organisational change and ideological change.

Ministers will talk about the first but downplay or deny the second.

In 57 pages of the White Paper there were only three references to the “market”, all couched as the “social market”; and the “private sector” is mentioned only three times, once in relation to the labour market. On Monday this week the Health Secretary wrote around 700 words on his health plans for the Times, without a single mention of “competition”. And in his speech on public service reform on the same day, the Prime Minister said: “These reforms aren’t about theory, or ideology”.

Organisational and ideological changes: the half-hidden truth
The NHS reorganisation is like an iceberg, with a substantial ideological bulk out of public sight.

The main changes I see at the centre of the internal NHS reorganisation can be classified as changes in organisation and changes in ideology. And importantly, the former does not depend on the latter. In other words, although the changes in organisation are underpinned by a fundamental change in ideology, they could be introduced without it.

Organisational change
The main elements of organisational change seem to me:
• Full scale and exclusive clinical commissioning by GPs, with a £80 billion budget each year
• National level commissioning, and many of the Department of Health’s current functions being placed with this big new arms-length body, the NHS Commissioning Board.
• All hospitals required to become independent foundation trusts
• Patients given the right to choose their GP out of the area they live in
• Removal of strategic management in the NHS at the regional level, and the abolition of Primary Care Trusts
• And finally the creation of health and well being boards as local strategic overview bodies
That’s on the organisational side and the organisational change.

Ideological change
The elements in the reorganisation plans which derive directly from an ideological view, not an operational imperative, seem to me:
• New economic regulator at the heart of the NHS, with its principal purpose to promote and guarantee competition including general competition laws
• All organisations, whether commissioning or providing NHS services taken out of the public sector, without the established standards of public information, scrutiny and accountability
• Requirement on commissioners to accept and use “any willing provider”
• Removal of any limit on the use of NHS hospital beds and staff to treat privately paying patients
• Introduction of price competition, with maximum rather than set tariffs for treatments
• Opportunities for profit-making in every part of the NHS, including for the first time in the commissioning of services
• Only select “designated” hospital services given protection from being closed down and lost to local people
• A risk of financial failure no longer a widely shared responsibility within the NHS, with the acceptance of hospitals going bust before the regulator moves in to act as a commercial administrator, while other providers and GP consortia can also collapse financially before being wound up and taken over.

Potential consequences of changes to patients and the NHS

The introduction in full of the organisational and ideological changes to the NHS brings seems to me to bring a number of fundamental flaws and far-reaching risks.

NHS culture and ethos
First of all to NHS culture and ethos. Forced market competition will replace collaboration for the patient at the heart of the NHS, creating in my view barriers to the co-operation and integration of services we’ve seen in recent years, for example with cancer and other networks.

Hospitals
Second, hospitals. Patients will see two-tier NHS services, those with the protection of “designated” status will be guaranteed funding to continue, those without won’t if they fail.

Competition based on price will lead to fragmenting services and cherrypicking work by new providers. The unit of competition in the new system will not be the provider, but the line of service. If £1million of work on hernia operations or path testing is removed from Rotherham hospital, £1 million overhead costs are not removed at the same time, putting hospitals providing a comprehensive service for complex and costly problems at a serious disadvantage and at serious risk.

The closure of hospital services or whole hospitals will happen and will result from failure to compete not from the planned development of better alternative community based services.

Commissioning
And on commissioning. Private health companies contracted to do commissioning with GPs, means the opportunity to profit at the point of buying services, and this will raise an outcry from the public and patients about money paid in dividends to shareholders not available for funding care.

When private health companies can run commissioning for GP consortia and take work as willing providers of services for patients, there will be a clearer and clearer conflict of interest.

Patient choice of any provider and treatment means, if it’s introduced as the Government talks, rationing at an individual level, not just collective level, which will inevitably be unequal and unfair.

GP consortia will not be public bodies, like PCTs are now. They will be making the same decisions on the services available to patients but will have none of the obligations to meet in public or publish monthly financial information, so we will see “commercial in confidence” stamped on many of the most important decisions taken in the NHS.

Disguising the truth
If the public and NHS professionals have not seen this clearly, no one can blame them. Ministers are disguising the truth with soft language; they’re downplaying the huge shift to put market competition at the heart of the NHS – not so much “patient-centred”, as Andrew Lansley said yesterday, as “profit-centred”.

Expect this double-speak to continue.

Different to Labour
Expect also the claims that this is simply the logical extension of Labour policies to continue. This is wrong, and again disguises the fundamental changes to the heart of the NHS in the Government’s plans.

On GP commissioning, we as a Labour Government certainly fostered the early involvement and leadership of GPs and those cited in Cumbria and Nottingham as models are working within the current system. But we ensured these developments always had the proper public openness, and scrutiny and accountability which will not be required in the new system, and we always recognised the important role other clinicians, professions and specialists need to play alongside GPs.

On private health providers, we used the private sector when it could add to established NHS care, either to offer patients something new the NHS was not doing or increase capacity to clear waiting lists and reduce waiting times for patients. But this was always competition within the planned and managed development of services, and was never competition based on undercutting through price.

So make no mistake, this is a revolution for the NHS not an evolution.

The flu jab test
If you put aside the pig picture for a moment and consider the flu jab test. These reforms fail the flu jab test. Today the NHS Director of Immunisation confirms the Government isn’t even confident that GPs can be left to order flu jabs for next winter, and said they plan to organise it centrally – just as we did last year. The serious point is that the responsibilities and requirements of the NHS add up to so much more than the sum of the health of individuals patients on GPs’ lists.

Having been slow to act at every stage in preparing for and responding to this year’s widespread flu outbreak, the very bodies Andrew Lansley is relying on to deal with flu in future – Primary Care Trusts, Strategic Health Authorities, the Health protection Agency and NHS Direct – are being abolished.

Labour’s principles
Labour has never accepted the status quo in health or accepted a “second rate” NHS.

Our commitment to the NHS is in our political DNA. And we will defend to the end, a health service that is there for all and fair for all.

We recognise the unprecedented pressures on the NHS now, which is why I have said in the public and to the House of Commons that I will back sound efficiencies as long as all the savings are reused for front-line services to patients.

Our Labour principles for the future in Opposition must be consistent with our approach in Government:
• So we will champion change only when it’s in the best interests of patients
• We believe the best innovations and improvements in health or social care come from greater collaboration, integration and partnership
• We insist the NHS as our pre-eminent public service, funded by the public for the public, must have the highest standards of public openness, scrutiny and accountability
• We know far-reaching further reforms are required to improve services and outcomes for patients, and to improve value for money, especially in the shift of services out of hospitals and closer to people in the community
• We support the evolution of personalisation, and choice and controlled competition in services, where this brings better benefits and better outcomes for patients.

The broad ambitions, the objectives we first spelt out in “Good to Great” in 2007 still hold good and guide us today.

False prospectus
Finally let me reflect on the observations I’ve offered, and in particular suggest to you that the combination of organisational and ideological change, the willingness to talk about one element but not the other, mean that most in the NHS are being presented with a false perspective. The half-hidden agenda, combined with the fundamental flaws in a full market system, mean the Government is selling almost everyone a false prospectus – hospitals, councils and NHS staff.

But the two great beneficiaries of the reform, according to the Government, have most reason to look hard at the small print of the plans.

Patients
Most patients’ GP in practice will not be doing what the Government claims. As GPs only spend an average of around 8 minutes with each patient, if they going to continue seeing patients, commissioning will not be done by them, GPs, but in their name – either by the managers in the PCTs who currently carry out the function or by private health companies under contact.

Expanding open-ended choice of treatment and provider in the way the Government describes, means supporting unused and underused capacity in the system so is highly unlikely to happen with the present financial pressures.

And despite the Government’s boast about “putting patients at the heart of everything the NHS does”, there’s no place for patients on the bodies that will make the most important decisions – GP consortia, the NHS Commissioning Board and the regulator Monitor.

GPs
GPs are being told they will call the shots on deciding who provides care for their patients. But they’re likely to find their hands tied by Monitor, the Office of Fair Trading and the courts enforcing competition law. Their decisions challenged by private companies if they don’t accept any willing provider, especially if that any willing provider is willing to offer to undercut on price.

GPs will find themselves required to make the decisions to change and cut services to hit the £20 billion challenge of efficiency savings.

If local hospital services do fail, it’s the GPs that will find themselves held responsible by their patients and the local public when forces of competition beyond their control may have caused the problems.

And finally because they will be making rationing decisions as well as referral decisions, GPs will find themselves faced with patients asking if the their doctor is making treatment decisions that are in their best interest of their budget and consortia business.

This is not what people expected to see when David Cameron say I will protect the NHS. This is why the NHS is the Prime Minister’s biggest broken promise to date.