Privatising the NHS

Circle, a private, profit-making healthcare company, run by a former banker, and backed by hedge funds run by Crispin Odey and Paul Ruddock, who have donated £790, 000 to the Conservative Party, is set to take over Hinchingbrooke Hospital from February. The company recently published a Stock Market Admissions report, which details the potential risks faced by the company. Amongst the risk factors was the following:

Circle’s growth has placed, and its anticipated growth will continue to place, a strain on its managerial, administrative, operational, financial, information technology and other resources and could affect its ability to provide a consistent level of service to its patients.

A spokesperson for Circle pointed out that this was just one of many risk factors outlined in the document. It stands to reason that a young company, which is currently expanding, needs to ensure its growth is managed in such a way that the risks associated with that growth are mitigated. But it’s hard not to feel uncomfortable about the tension that exists between making profit and caring for patients. And it’s hard to dispel the impression that the government are in cahoots with some shadowy financial elite, intent on privatising and profiteering from every aspect of our lives.

You can read more here.

8 thoughts on “Privatising the NHS

  1. Poor new company that will have to provide sub-standard care in some cases.

    Isn’t foreseen incompetence really worse? That one didn’t see it coming can be an excuse. That one can now foresee it should lead to more than shoulder shrugs, surely.

  2. Beware the shadowy elite! But enough about Her Majesty’s Department of Health: let’s talk about the Circle company. Anyone familiar with the stock market and who has read public company filings (which always have a “risk factors” section) will recognize that particular risk factor. It appears in the periodic filings of any growing company; just swap out “patients” for “clients” or “customers”. The reason for this is that companies are constrained to comply with the securities laws that mandate disclosure of possible risks, even fairly remote or obvious ones, about things that could conceivably happen that might negatively impact the company or its industry generally. Of course, if the government were held to the same compliance standards for risk disclosure as private companies, questionable whether anyone would want to entrust money to it. I shudder to think what NHS’ “risk factors” would look like, if it had to make securities filings. NHS ran this hospital into the ground, and the chances of new management building a better mousetrap seem pretty decent.

    That opponents of this deal are citing this “admission” as evidence of anything would seem to betoken either ignorance or bad faith; either they never read stock filings, or else they have and know they’re mischaracterising this but are counting on the unsophistication of a sufficient portion of their audience.

  3. Nemo, while I know absolutely nothing about stock markets and company filings I’m prepared to take your word for it.

    However, I’m still uneasy about the idea that you can just substitute ‘customers’ for ‘patients’. It seems (to me anyway) that there are important differences between one’s status as a ‘customer’ and one’s status as a ‘patient’: customers can take their custom elsewhere, this is not always possible for patients; customers can decide to remove their custom altogether, patients, on the other hand, do not have that luxury; while customers stand to lose out financially (and I don’t want to deny that this may have knock-on effects for other areas of their life), patients stand to lose their lives (even minor complaints can end this way in badly run hospitals).

    I’m just unhappy with the thought of a company trying to make profit out of human vulnerability.

  4. Nemo – I understand how company filings work. But this still doesn’t ease my discomfort about the tension that exists between making profit and caring for patients. Esp in light of the points Faulty Reasoning makes.

  5. Faulty,

    1. “customers can take their custom elsewhere, this is not always possible for patients;”

    A patient can go to a different doctor, medical group, hospital. It may be inconvenient; the same is true for practically any customer.

    2. “customers can decide to remove their custom altogether, patients, on the other hand, do not have that luxury;”

    But there are many industries about which the same could be said. Do you think the government should run all food markets? All clothing stores?

    3. “while customers stand to lose out financially (and I don’t want to deny that this may have knock-on effects for other areas of their life), patients stand to lose their lives (even minor complaints can end this way in badly run hospitals).”

    Also pharmacies, supermarkets, amusement parks.
    So the question is, which hospitals are safer — the ones run by governments, or the ones in the private sector?

  6. “A patient can go to a different doctor, medical group, hospital.” I’m wondering where this is still true. I have great health insurance, but it requires a referral from my primary care physician for almost anything beyond basic care. Without a referral, one is easily out hundreds or thousands of dollars. The insurance will allow one to get a 2nd opinion, but simply shopping around is not possible. If medicine in England is the same as I experienced, a similar claim can be made for it, with the proviso that specialists may refuse to see you without a referral.

  7. I live in the US, and my plan is similar, annejacobson. However, if I expressed legitimate concern to my primary care physician, he would certainly be willing to refer me to some different specialist. (If not, I would get a new primary care physician.)

    In any case, this is a problem with insurance, not with the provision of health services. It is a serious mistake to confuse these (as I believe conservative critics of “Obamacare” consistently, and probably deliberately, do). Nationalizing insurance is, I would argue, a very reasonable idea, and one supported by doctors and other medical professionals. Public ownership of hospitals is very different.

  8. I realized almost as soon as I wrote the words “swap out ‘patients’ for ‘clients’ or ‘customers’” that it would raise objections as to whether patients were interchangeable with other kinds of clients or customers. However, there I merely meant that changing those words in Circle’s stock report would make it more readily apparent that this “risk factor” is the same boilerplate language that you will find in the periodic reports of almost any growing publicly-traded company, of any size, in any industry (including healthcare), and does not carry the particular significance to which the opponents of the hospital deal (as reported in the press) were apparently attributing to it. If such a company were not disposed to include that risk factor, their lawyers would all but oblige them to do so. And if NHS were held to the same standards, it would have to include something very like it too. That’s all.

    On the other hand, to understand the market for healthcare services (whether that market is private, or a government monopoly, or somewhere in between), I think it is helpful to consider that “patient” basically means a recipient of healthcare services. In other professional service contexts, the term “client” is generally used. (“Customer” is generally used for recipients of goods or of nonprofessional services – although there’s some looseness in everyday usage.) To be sure, the relationship between an institutional healthcare provider and a recipient of healthcare services has its own unique qualities. (So does the relationship between a provider and a recipient of legal services, which in many (not all) significant respects I would regard as the closest parallel to the healthcare relationship.) But that does not mean that healthcare provision is a case entirely unto itself – at least it has not been historically understood in this way (*pace* some physicians).

    As Doc suggests, it is possible to find counterexamples indicating that there is probably nothing that intrinsically sets healthcare apart from all other markets for human needs. (And even if there were, it would require numerous additional steps of reasoning to arrive validly at the conclusion, if we could do so at all, that healthcare should be principally or exclusively provided by or through the state.)

    With regard to the supposed tension between profit motive and the market for healthcare services, I think that the real relationship between the two is often not well understood, and that it does not dictate that healthcare services ought not to be provided by the private (or even the for-profit) sector. There was an interesting discussion of that very subject here on FP last year in the comments to this post:

    In addition, I think some people mistakenly think simply because the government is “not for profit” in a technical sense, that it is not subject to a set of incentives/disincentives that are in tension with providing healthcare. Indeed, some of the same potentially negative drivers exist regardless of whether it is NHS or a corporation running the hospital.

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