Private NHS planned in 1987

An interesting article (thanks to let me look ‏@letmelooktv for sharing the info)
Opening the oyster: the 2010–11 NHS reforms in England
Lucy Reynolds, Research fellow⇓ and Martin McKee, Professor of European public health

LINK TO FULL ARTICLE http://www.clinmed.rcpjournal.org/content/12/2/128.full
with links to documents and papers.

How Rothschilds privatization unit members Oliver Letwin & John Redwood proposed plans to gradually privatize the NHS

http://www.cps.org.uk/files/reports/original/111027171245-BritainsBiggestEnterprise1988.pdf

Some excerpts :

We argue that a clear narrative does underlie the bill, but that it is very different from that advanced by ministers. It can be traced back to the mid 1980s and the search for ways to increase private sector opportunities in healthcare provision in the UK. An important background context is the evolution of not-for-profit health organisations in the USA. In the 1970s, American investors took over many of the non-profit health maintenance organisations (HMOs) that had, since 1929, been created to provide medical care for communities and workforces in the USA.17 By the mid-1990s, the health insurance market in the USA was saturated, with little scope for further growth.18 Its investors started to look elsewhere for profitable opportunities and identified Latin America, where healthcare was paid for from social security funds, which presented an attractive target for investors.19 As Latin America’s high sovereign debt became increasingly unaffordable following a rise in interest rates in the late 1970s, creditors were able to force the opening of the public sector to international investors through a large-scale privatisation programme (‘structural adjustment’) of all public sector services.20 By the late 1990s, managed care was established through much of the continent, albeit against some resistance.21

The NHS in the UK, funded from general taxation and directly managed by government, offered little in the way of investment opportunities in the 1980s. The scope for growth in the indigenous independent sector was very limited because of the high quality of the national system. New ideas were needed to open gaps through which corporations could enter. The arguments were the same as those used to support structural adjustment in developing countries, propagating a narrative of intrinsically inefficient state provision (while downplaying its strengths) and extolling the virtues of operating public services through a market (neglecting to mention the substantial literature on market failure in health care21 and, especially, the cost of paying a substantial return to investors).

One can thus discern a sustained assault upon the values and organisation of the NHS in the UK, which has gradually laid down the framework within which a market could operate. Small reform by small reform, it has moved us toward thinking in terms of an ill-fitting consumer model of healthcare and away from the original paradigm of a communal pooling of resources to provide care according to medical need. Because of strong public support for the NHS, this transition has been slow and has been masked by concurrent changes that partially addressed some of the system’s weaknesses, such as inflexibility and weak management information. After a quarter of a century of opening to the market, only around 5% of the NHS’s budget for secondary care is spent on private provision22 and forays into primary care provision, although subsidised, have so far largely failed.
We are now reaching the point when that oyster will finally be opened wide by the current reforms, which will bring fundamental changes in our healthcare provision,23,24 by which the introduction of private sector competition throughout both primary and secondary care will be funded on equal terms with existing NHS public sector organisations. Investors will be able to achieve their goal of direct and large-scale access to tax funding and, as Tim Evans, chief negotiator for the now defunct Independent Healthcare Association, stated: ‘The NHS would simply be a kitemark attached to the institutions and activities of a system of purely private providers’.10

In 1988, the pro-market Centre for Policy Studies (CPS) published a series of short studies exploring this agenda (although step 6 vanished as inexpedient, as reflected in Tim Evans’ comment cited above). One study was published as a pamphlet entitled Britain’s biggest enterprise by Conservative members of parliament (MPs) Oliver Letwin and John Redwood.30 Around this time, both of these MPs headed NM Rothschild bank’s international privatisation unit,31 and in 1988 Oliver Letwin published a book Privatising the world: a study of international privatisation in theory and in practice, with a foreword by John Redwood.32

Letwin and Redwood summarised and tried to justify the 1987 plan,30 starting by identifying their perceived failings of the NHS. These were not concerned with poor health outcomes; in fact, outcomes were not mentioned at all. Instead, Letwin and Redwood identified the ‘minimum’ components of reform, as follows:

NHS to be established as an independent trust (or trusts)

increased use of joint ventures between the NHS and the private sector

‘extending the principle of charging’, starting with a system of ‘health credits’ to be combined with a contributory national health insurance scheme based on personal health budgets.

The pamphlet’s final statement comments on the political feasibility of the reform:
A system of this sort would be fraught with transitional difficulties. And it would be foolhardy to move so far from the present one in a single leap. But need there be just one leap? Might it not, rather, be possible to work slowly from the present system toward a national insurance scheme?
One could begin, for example, with the establishment of the NHS as an independent trust, with increased joint ventures between the NHS and the private sector; move on next to use of ‘credits’ to meet standard charges set by a central NHS funding administration for independently managed hospitals or districts; and only at the last stage create a national health insurance scheme separate from the tax system.

In a subsequent CPS pamphlet also published in 1988,33 Redwood proposed that groups of GPs could act as HMOs, purchasing services from capitation fees received. Another pamphlet, coauthored by MP David Willetts, suggested importing the American model of competing HMOs into the NHS.34 A series of documents over the subsequent 20 years echoed the same themes as preparations were put in place that would allow the Lansley reform to ‘liberate’ the whole system.

The next stage: health insurance to pay for NHS services

The conservative think-tank Reform has, according to the British Medical Journal, been funded by at least three of the prospective entrants to the new English healthcare regime (General Healthcare Group (GHG), KPMG and McKinsey).46 Reform’s 2008 paper on the NHS sets out a plan for conversion of the NHS to an insurance-based system with personal top-up payments. This plan is alluded to in the 2010 white paper in the opaque phrase ‘money will follow the patient’. This refers to the impending roll-out of personal health budgets for all those registered with the NHS. These have been greeted with enthusiasm by patient groups, somewhat strangely when one considers that the NHS currently undertakes to cover all costs of care, whereas the concept of a finite budget implies that it is possible that the actual costs of care could exceed that budget, leaving the patient to cover the excess.

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