Burnham, the NHS and private providers

Andy Burnham has brought a new impetus to Labour’s opposition to the NHS reforms. There has been a step change in its pace and effectiveness. The “Drop the Bill” campaign has liberated our opposition from Westminster, into hospitals up and down the country.

The rhetoric around the cost of implementing these reforms has found traction, especially when broken down into regional costs. It contrasts well with the government stripping spending from A&E rooms and intensive care wards. The assertion that a postcode lottery will shortly form and waiting lists will increase is both wise and soon to be proved correct.

The next stage of our opposition must be to form clear policy alternatives. As part of this we need address that which we as a party find most difficult to talk about: private providers. Every time that Burnham attacks the “full blown market”, “private profit before patient care” and “cherry picking” he now needs to clearly define Labour’s policy on private providers in the NHS.

Private companies in the NHS

Private companies played a notable role in Labour’s governance and improvement of the health service. Our future policy must do more than demonize private medical companies – it must recognise what markets can and cannot do.

Markets struggle to work when the costs of setup are high and only a limited number of companies can enter the market, which is the case in much secondary care. A market can’t be expected to work when the “good” can’t be priced or can be accessed by those who aren’t paying; which is the case in much of public health. It also seems unlikely that private companies can co-operate and interact in the way required to manage complex patients with co-morbidities.

Markets also offer opportunities for the NHS. They are more flexible than government organisation and can react quicker to the needs of an area. The use of private companies can mean that government does not have to fork out the set-up costs of a new treatment centre or clinic. And, if this service is decommissioned, the cost of the shutdown is minimised.

Our policy on private providers should be based on taking what the market can give the NHS and protecting it from the damage an unchecked market could do.

Burnham is right to say that in many areas of health care, the needs of the patients are complex and cooperation is required over competition. Some health care is simply not suitable for competition. He is also right to assert that in some specialities private providers will be able to carefully select the easier, more profitable patients, leaving the public provider to deal with the more costly patients. Finally, he would be right to raise the problems that coordinators of care – patients and GPs – will have in navigating a “full-market” NHS.

However, Labour needs to recognise that the NHS is now providing far beyond the basic services that it was created to provide. Bevan never imagined a day when the NHS would provide elective gastric banding or plastic surgery for psychological benefit. Our NHS is a world class health service providing clinical excellence throughout a full range of services. If we want an NHS that continues to provide this level of service, at less than 10% of our GDP, we have to recognise that the extra capacity will need to come from many different providers; most of them public, some of them profit making.

Going forward

Our health team needs to define where and how the next Labour government will allow private companies to compete; if the focus is on elective procedures and “isolated” treatments, such as knee and hip replacement, they will be on the right track. Burnham also needs to calm the nerves of the left by highlighting the fact that commissioning is different to buying. When commissioning, the service required is defined and a provider is found that can fulfil this requirement. Buying is simply taking what the market already offers. This is an important distinction, which allows the NHS to make private companies “work” for patients. Finally, as a party we need to recognise that the founding principles of the NHS – a health service free at the point of entry, available to all, funded out of progressive taxation – are not betrayed by the limited use of private providers.