The Future of Health Care and Privatisation

The truth about the quality of care provided by some private hospitals has been well documented: “Investor-owned hospitals have higher costs, despite spending less on clinical personnel than non-profit facilities. Death rates and postoperative complication rates are also higher at investor-owned hospitals, and nurse staffing levels are lower. Investor owned health maintenance organizations have worse quality scores and spend less on care and more on administration and profits than not-for-profit plans” (Harrington et al. 2001).

Then, why the much repeated myth that care in a private hospital is necessarily superior to that given in a public facility?

The Free Market Libertarian perspective is interesting on paper. You open everything up to private enterprise with no Government involvement and the nature and competition of the market forces the highest quality of care and the lowest costs. Their only motivation is being the best, because that’s what sells. They argue the involvement of the Government creates artificial monopolies as they play favoritism with regulation and contracts, whether through incompetence or back-hand deals. They’re not necessarily wrong.

The trouble is the Free Market Libertarian ideology is a pipe dream. The Conservatives selling off public institutions because the national books are in the red, is not a positive step towards the Free Market, it’s the very opposite. It’s corporate socialism, handouts and benefits for a select few corporate cronies. The NHS is not going to be opened up to the free market…what market? Unless there is a truly free market across the board, there will always be artificial factors at play. NHS contracts are going to be carefully handed to private firms and incompetently regulated, with artificially inflated pricing and substandard care. The reality right now is that private health-care in Britain does not have a good track record and there’s no reason to think it will improve.

3,000 sick children at the BMI owned Mount Alvernia Hospital in Guidford, were found to be left in the care of untrained staff, when the Quality Care Commission (CQC) made unannounced inspections (December 2012, January 2013). “Staff were untrained and had very limited experience of caring for sick and post operative children. The hospital management team were dismissive of concerns and blocked action to improve the situation,” the CQC report said; adding that correspondence between nurses and managers “showed that the hospital management were made aware that the use of untrained staff was putting patients at risk and contravened all published guidance.” It can be added that the QCQ report also highlighted a surgeon refusing to let women patients have chaperones during intimate examinations. Another did not wash his hands between patients. A consultant sedated patients and left them without adequately trained staff to look after them. The same consultant would talk on the phone during surgery! – beats driving whilst doing so! One patient had a nerve block on the wrong side of his body! Resuscitation team members had failed to attend emergency calls.

BMI Healthcare is owned by General Healthcare Group (GHG), which is £2bn in debt. GHG was acquired in 2006 by Apex Partners, a private equity company, which borrowed to finance its takeover by securing its debt against properties (private hospitals), with an extra £222m of debt secured against the profits generated from these hospitals. (See Who Owns Care Homes?, Nightingale 2013). BMI manages 72 hospitals owned by GHG (that is, in reality, owned by lenders such as Barclays, Mitzuho, and Pfandbriefbank), in partnership with the NHS and such private providers as Bupa. GHG is not able to meet its debt repayments, and an option for their lenders is to seize GHG’s properties. This is unlikely, in that it would be a major ‘spoke in the wheel’ of the state’s propaganda machine, which extols the virtues of the private sector; though such ‘news’ would undoubtedly be relegated to those late night TV slots which are not primarily concerned with the drivel given out about the twin entities of royalty and celebrity. That concentrating the minds of the masses on escapist trivia is paramount is shown by the comparative lack of publicity given to the acquisition (July 2013) by Bain Capital of 80% of Plasma Resource UK, a government owned asset, which is a major blood plasma supplier to the NHS. Bain Capital was formerly run by Mitt Romney, the Republican Party presidential candidate in the United States.

Jennifer Rankin ( 2013) reported:

“Lord Owen, a former Labour health minister in the 1970s, who created a service to make the UK self-sufficient in blood supplies, said it was “hard to conceive of a worse outcome” than the £200m sale of an 80% stake in the Hertfordshire-based company to private equity … A privatised company posed risks of contaminated plasma, he suggested … The worldwide plasma supply line has in the past been contaminated … We in this country should do everything in our power to avoid being reliant on open market tendering processes for NHS patients.” Rankin added: “Professor Allyson Pollock, professor of public health research and policy at Queen Mary University London, said there was “not a shred of evidence” to support government claims that private firms would boost innovation in plasma treatments. Where is the evidence that when you use venture capital such as Bain Capital that they invest and they don’t asset strip? … The sale illustrated “why we are concerned at the way that NHS and NHS associated products are being denationalised and privatised and put out to the market place as a source of profit rather than responding to patient needs … The sale of the 80% stake adds to the growing list of privatisations now underway, including the Royal Mail, Search and Rescue, which will be taken over in 2015, and a tranche of the student loans book.”

What of the future of health care in this neoliberal utopia of privatisation? To some degree this question is relatively easy to answer, for whatever model of care provision prevails in the USA will be adopted in the UK, as surely as the adoption of the same foreign policy. A model of paying for care currently receiving attention in the USA is Direct Primary Care (DPC). This is a scheme in which companies or unions pay a monthly fee per member, from which future health care costs are met from an aggregated fund managed by a DPC company, which charges a management fee. The self employed who are not in a union will be encouraged to take out private health insurance. Mount Alverna – here we come! It is claimed that such schemes will be cheaper than private insurance. The DPC company will source the most ‘economic’ (cheap) service available for each individual participant’s needs, thus creating a ‘market’ in which the most inefficient (costly) providers go out of business – ‘Darwinising’ health care provision. Such a process would lead to fewer and larger types of provision, with the ill, for instance, having to travel considerable distances to ‘super’ surgeries or ‘super’ hospitals, no doubt being owned by private equity firms.

It is reasonable to assume that any costs bore by companies will be factored into wage rates. In essence, workers will be paying for their care in the form of accepting lower levels of disposable income.

Those individuals who can not afford a monthly fee – the unemployed; those not in a union or employed by a participating company – will have it ‘credited’ to them by the government, probably being taken from benefits (including in-work benefits), rather than being additional to them.

Generally, DPC providers claim they will be able to address 80% of the most common diagnoses, with the remainder, including such expensive to treat conditions as cancer, needing to attract additional fees.

Companies which participate in this type of scheme gain benefits – the worker becomes their captive, being willing to accept poor pay and conditions through fear of losing their job and its attendant provision of health care, for both themselves and their family. Unions would have similarly docile members, who would not question their union’s acceptance of company’s business objectives. In this regard, consider the RCN’s statement concerning its ‘corporate relations’ – “We understand your business, your issues and motivations and we can help you achieve your business objectives” (RCN 2012). Thus, the RCN is indistinguishable from those who exploit its members – “the creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which” (George Orwell 1945).

The lie will undoubtedly be spun in the UK that health care is still free, not having to be paid for as the need arises, but its costs will have been pre-paid, in terms of lower unemployment and disability benefits, lower wages, and unrelenting servitude, in which even those who have little will cling to what they have in fear of becoming as one who has less.

This is the road to the soup-kitchen. I conclude with the advise given anonymously in a notice posted in the market place of Hitchin in 1800: “Advice to all poor tradesmen and labourers. With one consent lay all work aside and meet together in a body and see what is to be done in this case; for your work, all you can do, will not support you or your family. Your vile oppressors, see how they use ye, what yoke of bondage you are brought under. Be not afraid of horse nor standing arms but come forth with courage and resolution. If you give way to those villains you will always be bound under these chains wherein your liberty and freedom is entirely lost. Nothing’s to be done without you take this step” (Hammond and Hammond, 1949).



– Hammond JL, Hammond J (1949) 1st pub 1917. The Town labourer (1760-1832). Volume ii., p. 118. Guild Books.

– Harrington C,   Woolhandler S,   Mullan J,   Carrillo H,  and  Himmelstein DU, MD Journal: American Journal of Public Health – AMER J PUBLIC HEALTH , vol. 91, no. 9, pp. 1452-1455, 2001.

– Nightingale L (2013) Who Owns Care Homes.

– Orwell  G. (1945) Animal Farm. Secker and Warburg

– Rankin J (2013) Bain Capital Bus Majority Stake in Plasma Resources UK., 18 September 2013.

– RCN (2012) Model Recognition Agreement

Follow WideShut



  • carol dimon

    I am going to pose questions. Is privatization a deliberate aim by the Govt (whatever political party is in power) fueled by the provision of a limited budget to the NHS? There are some who argue that money does not exist and can be printed in any case. Yet we know, budget can be misspent— even it seems, by the Govt.Then why the aim? Is it because the Govt is not then responsible for the quality of care or because, lower standards can be provided and less are aware of it as in the example above? (We know there is good care–).Is it because, politicians are friendly with many of the major business men involved? Who pulls the strings? If private companies fail– the Govt steps in anyway regarding essential services, thus they get it back again. Think I will have a slice of this risk free financial venture–.