Trojan Horse Legislation: Turning the NHS into a $28bn Profit Opportunity

Trojan Horse LegislationTurning the NHS Into a $28bn Profit Opportunity

The 99% Organisation reveals how ministers could use the Health and Social Care Bill to transform the NHS into something like the US healthcare system

Analysis by the 99% Organisation has found that the new Health and Social Care Bill will reduce the efficiency, effectiveness and accessibility of the NHS as a universal health service that is free at the point of use. 

The 99% criticises the Bill for providing unprecedented powers to ministers and newly-created Integrated Care Boards (ICBs) without responsibility or scrutiny; enabling a move towards a US healthcare system, despite it being the least accessible and efficient in the world; and empowering a long-standing inclinations from Health Secretary Sajid Javid and other Cabinet ministers to move away from having an NHS that is free at the point of service and governed on behalf of patients and taxpayers. 

The proposed ICBs are set to replace the Clinical Commissioning Groups (CCGs) brought in by Andrew Lawnsley in 2015. The Boards will, as a minimum, include a chair, the CEO and representatives from NHS providers, general practice and local authorities – and can include private healthcare providers. 

Each ICB Chair will be appointed by NHS England or by the Secretary of State. 

These boards will then be able to decide on provision and procurement in their area – with the obvious conflict between the need of any private providers on the board to make profits vs the desire to look after patients. 

If ministers use the Bill to reduce the NHS to a brand sitting on top of a US-style healthcare system, it would be a disaster for UK citizens.

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Reducing Scrutiny and Accountability 

The new Health and Social Care Bill aims to concentrate decision-making power in two sets of hands: Government ministers and ICBs. 

It allows for ministers to have greater power when it comes to commissioning services, including circumventing the usual advertising and tendering processes for NHS providers in order to award contracts at will. 

While the Bill’s advocates would argue this would increase efficiency, the experience of the Coronavirus pandemic tells a very different story. Emergency procurement practices led to more than £1 billion of public money being spent with inexperienced suppliers. Worse, a significant proportion of what was delivered was unusable, leaving frontline workers without adequate protection.

Similarly, the development of the Test and Trace service, designed to stop the spread of the Coronavirus, has a budget of £37 billion, much of which has been spent on private providers and consultants, while the service itself has struggled to deliver – leading to two critical reports from the National Audit Office. 

If the Bill passes in its current form, the practices that led to procurement and spending failings in the pandemic would continue, with ministers empowered to procure in this way routinely and without scrutiny.

The Bill also gives ministers the power to amend or abolish existing bodies, create new NHS trusts and intervene in reconfigurations of NHS – effectively giving the Government power to restructure the NHS without consulting Parliament.

Perhaps most concerningly of all, the Bill removes the statutory duty on public bodies to arrange the provision of secondary – i.e. hospital – medical services. Instead, the power to arrange this care would be concentrated in the hands of the ICBs. Such a concentration of power without responsibility or scrutiny would be inappropriate for any government, whether well disposed towards the NHS or otherwise.

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The Shift to a US System

The analysis conducted by 99% Organisation raises concerns that the NHS is being steered towards a US healthcare system that will make the health service less efficient and less accessible. 

As the chart above shows, the US system currently performs poorly on efficiency and its insurance system means that many of its most vulnerable citizens are priced out of healthcare all together. Two thirds of American personal bankruptcies are as a result of medical bills.

However, a US-style health service would offer big profits to companies and individuals keen to make money out of healthcare. In fact, 99% estimates that the profit opportunity available to healthcare corporations if the UK adopted the US system is around $28 billion per annum.

The risk to the UK is that the size of the prize will lead to the interests of healthcare corporations trumping those of UK taxpayers and patients, at enormous cost to their lives and livelihoods.

The Bill already allows for corporations to sit on ICBs. These are profit-making organisations that will get to play an important role in NHS governance – and yet directors of corporations have a fiduciary duty to their shareholders. Where there is a conflict of interest between taxpayers, patients and company shareholders, the corporates will favour their shareholders. 

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The Motivations

With the new Health and Social Care Bill giving so much power to ministers and ICBs, we’re particularly concerned about the motivations for these new changes. 

In 2016, former Conservative Prime Minister John Major told the BBC that the NHS was about as safe with the Conservative Cabinet “as a pet hamster would be with a hungry python”. He explained how “Michael Gove wanted to privatise it; Boris [Johnson] wanted to charge people for using it; and Iain Duncan Smith wanted a social insurance system.”

The three politicians build on a long tradition of Cabinet members and others promoting NHS privatisation and shifting to an insurance-based scheme – dating far back as 1982.

Since then, Johnson has become Prime Minister and the stated ambition to undermine the principle of a healthcare system free at the point of service has been voiced by Sajid Javid. The Health and Social Care Secretary told the 2021 Conservative Party Conference that “Government shouldn’t own all risks and responsibilities in life. We as citizens have to take some responsibility for our health too”. Instead, health and social care “begins at home” and “we shouldn’t always go first to the State.”

In order to protect the principles the NHS was founded on, and to maintain it as an efficient and free at point of use service, amendments are needed to add checks and balances against ICB and ministerial power. 

What the Bill does	What it should do: Amendments Needed
The Bill removes the obligation for public tendering for NHS services and allows ministers to circumvent normal procurement rules.	The Government should protect the NHS from unnecessary and costly private sector involvement and ensure scrutiny and transparency over the awarding of contracts. The most effective way of doing that is to make the NHS the default option for NHS contracts and to tender competitively where this is not possible.
The legislation leaves open the possibility for corporate healthcare providers to gain seats on ICS boards which represents a clear conflict of interest and gives them undue influence in decision-making.	Keep governance under the control of those whose fiduciary duty is to patients and to the NHS rather than to shareholders.
There will no longer be a statutory duty on any body to arrange provision of secondary (i.e. hospital) medical services – only a power for ICBs to do so.Gives new and considerable powers to amend or abolish existing arm’s length bodies, create new NHS trusts and to intervene in reconfigurations of the health service.	Reintroduce a duty on the Health Secretary to provide a high-quality health and care service, free at the point of use for all UK citizens. Introduce a statutory duty on the ICBs to ensure provision of secondary medical services Ensure adequate funding to meet the needs of the population.
Gives ministers greater control over patient data.	Impose strict protection on patient data unless totally anonymised (not merely de-personalised) especially when given or sold to commercial organisations.

99% has launched a petition to challenge aspects of the Health and Social Care Bill.