On 15 January, the NHS Confederation, representing top doctors and medical managers, put out a formal warning in advance of the Government's Health and Social Care Bill, to be published on 19 January.
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The Government's plans, said the Confederation, are "extraordinarily risky", and could lead to hospitals being closed, treatment being rationed more, and patients suffering.
The central plank of the Tory plans is to abolish the Primary Care Trusts (PCTs, the "purchasers" under the NHS's current "purchaser/ provider" structure) and replace them with "GP commissioning".
GPs are too busy seeing patients, so in fact this means that "purchaser" power in the NHS will shift to private companies whom GPs pay to do their "commissioning".
The Tories also want to "liberate" the health market so that private healthcare firms can bid competitively for contracts. They want healthcare teams to split off from the NHS to form their own "social enterprises".
All Trusts will be encouraged to become Foundation Trusts. Health Secretary Andrew Lansley has said "I am looking forward to a world where the Department of Health does not own Foundation Trusts". Who will "own" them? And will the rules making the Foundation Trusts not-for-profit be scrapped?
The cap on raising revenue from private patients will be lifted. The Tory plans point towards a tiered healthcare system based on ability to pay.
Since the 1980s the NHS has gradually become a slush fund for redirecting tax revenue into the profits of private corporations. Service companies like Serco, pharmaceutical companies like GlaxoSmithKline, and construction firms like Tarmac plc have all profited enormously.
The new Tory-Liberal government plans to accelerate privatisation whilst implementing £20bn of cuts.
These are shattering new blows of the neo-liberal axe to a public-service structure which has been battered and bashed over 30 years now.
In 1948, when the NHS was established, the national debt was almost 240% GDP (it is currently around 50%), but the post-war Labour government was brought to power by a combative working-class movement. In 1943 Tory MP Quintin Hogg had said: "If you do not give the people social reform, they will give you social revolution".
The Labour government created a system of free state-of-the-art healthcare for all, regardless of ability to pay.
The NHS was never perfect. But compared to the rest of Western Europe, let alone the USA, Britain had not only a relatively fair, but also an efficient healthcare system.
Britain spent two to four times less (in proportion to GDP per head) than the USA, yet had consistently better rates of infant mortality and life expectancy than the richer country.
The NHS almost completely eliminated internal market mechanisms. It bought from external providers like pharmaceutical companies, and it received money from a few private patients, but otherwise funding was based on redistribution, risk pooling, risk planning and equity, not on market mechanisms.
Before 1991 hospitals and community services were funded and controlled by health authorities. The health authorities received a block of funding calculated by a needs-based formula and distributed it to the services in their charge. Very detailed accounts were available for public scrutiny. Despite the massive expansion of administrative staff, accounts of that quality and detail are no longer available.
GPs had the freedom to send their patients wherever they thought they would receive the best care. High-risk, high-cost patients were a burden spread across the whole service.
Bythe time Thatcher came to power in 1979, the NHS suffered from cumulative underfunding. Long waiting times, staff shortages, low pay and ancient buildings were all common. But the NHS was still firmly committed to and delivering on its founding principles of comprehensive, universal and equitable healthcare.
In 1983, Thatcher asked supermarket boss Roy Griffiths to write a report on how to run the health service. His first proposal was that they needed to pack the upper ranks of the NHS with business people like himself. From 1986 to 1995 the number of senior managers rose from 1000 to 26,000. Admin costs rose from 5% of the budget to over 12%.
Griffiths's second proposal was to outsource cleaning, catering, security, and auxiliary staff. From 1981 to 1990 the number of non-clinical staff working for the NHS fell from 260,000 to 157,000. Privatisation helped to weaken union organisation in the NHS.
The third proposal was to scrap NHS coverage for opticians, dentists, and long-term care of the elderly. By 1999 over 50% of all dentistry was paid for privately. By 2003 private companies managed 69% of long-stay care beds.
Those changes mark the end of the NHS as a comprehensive service. We still had free state-of-the-art healthcare... so long as it did not involve eyes or teeth. We still had a service "from the cradle to the grave"... so long as you died quickly and did not slowly deteriorate in old age.
After John Major came to power in 1990, he went for an "internal market" in the NHS. Hospitals would become "providers", getting their income by selling services to "NHS purchasers" - Health Authorities and some "GP fundholders". Health Authorities were stripped of their planning capacity.
Now, for complex and expensive cases, such as heart surgery or eating disorders, hospitals needed to appeal to the Health Authority for an "extra contractual referral" before they could start treatment. Hospitals would plan or deny treatment on the basis of the ability of the NHS purchaser to pay. Sometimes appointments would be moved, staff would be put on unpaid leave, and wards, theatres and their staff would close, as money ran out towards the end of the financial year.
The internal market also increased geographical health inequalities. The admin costs ballooned. The bureaucracy more than doubled, while the government restrained overall NHS funding so it barely kept pace with inflation.
With the landslide Labour victory in 1997 there was great hope for the NHS to be returned to its founding principles. But for the first two years in power, Labour maintained the Tory spending plans. Frank Dobson as health minister failed to reduce waiting times or improve services. He made only limited attempts to abolish the "internal market". His main contribution was to replace the Health Authorities with Strategic Health Authorities who oversaw Primary Care Groups (later Trusts).
The PCG/Ts now controlled 75% of the NHS budget and commissioned services from NHS providers, buying broad categories of care under three (instead of one) year contracts. If the hospitals had been ill-equipped to take on the planning role of the HAs, the new PCTs were even worse so. With each PCT covering around 100,000 patients, the risk-pool was very small. If one area had exceptionally many patients in need of very expensive drugs, then some patients would have to do without or other services would be cut.
Dobson's term at the DoH also saw the massive expansion of the Private Finance Initiative (PFI). PFI had been conceived in the early 1990s by the Conservative government. Their plan was that private consortia of banks, construction firms, and service corporations would stump up the capital investment for a large building project (such as a hospital) and provide all the maintenance and support staff for the building over a period of thirty to sixty years, and the taxpayer would pay them off like a hire-purchase scheme.
By 1996 the Tories had failed to get the detail sorted out. However, Blair's government seized on PFI and ran with it. The cost is huge.
States can borrow money more cheaply than private businesses. Long-term, PFI means the taxpayer paying the extra borrowing costs. PFI schemes tie the NHS into contracts that last several decades, by which time health needs may have radically changed.
For example, in 2006 the Bart's and London Hospital Trust in East London provides a good example signed a contract for a £1 billion new 1000 bed PFI hospital with the Skanska Innisfree Consortium. By 2010 the hospital was almost ready to open, but the Trust announced that it could not afford to staff all 1000 beds. Instead, 200 beds wouild stand idle. The estimated cost to the taxpayer will be £5 to 6 billion over 42 years.
After 2000 Labour promised real term spending increases of 6.1% over 4 years. The "NHS Plan" sought to build 100 new hospitals, bringing 7000 new hospital and intermediate care beds. It would train 7500 new consultants, 2000 GPs, 20,000 nurses, and 6,500 new therapists by 2010.
At the same time, elective and critical surgery and intermediate care (for people who no longer need acute hospital care but are still not well enough to return home) were opened up to private business. Pharmaceutical companies were encouraged to get involved in developing the new "National Service Frameworks" allowing them to write the guidance on "disease management".
Labour planned to reduce waiting lists by setting up Diagnostic Treatment Centres where private firms would provide extra resources. It ran into trouble. The NHS could still do all this surgery much cheaper than the private sector. Also, all the best surgeons and staff worked in the NHS. The NHS carried all the risk for these centres. If something went wrong in surgery then the private firm would just call an NHS ambulance and ship the patient back to an NHS hospital.
In 2004, all the most powerful teaching hospitals were allowed to become Foundation Trusts. FTs were dubbed "public benefit corporations". They were set up with an independent regulator, Monitor, out of the control of Strategic Health Authorities and the Department of Health. FTs, unlike the DoH, did not have a legal duty to provide universal, comprehensive and equal care.
Foundation Trusts were not allowed to make profit but they were free to enter into contracts and joint ventures with private providers. They could also make money by selling their assets. Previously, such money would have been redistributed across the NHS but now it remained within the FT.
FTs were free to set their own pay scales and to get themselves into debt, though so far only one FT, Southend Hospital, has opted out of the national pay scale.
The introduction of FTs coincided with an attempt to work out a national tariff for treatments.
By 1998 the DoH had published "reference costs" on a whole host of procedures by working out the average cost; by 2003 they decided that these "reference costs" should form the basis of a "national tariff"; and by 2005 there was a national tariff for all outpatient, admitted inpatient, and A&E procedures.
The government calculated averages and made them the procedures' prices. If a hospital could not perform the procedure at the given price, then they would have to find money from another source. If a hospital spent less on a treatment than they received, then it could keep the extra cash.
In the privatised USA health system, 30% of total health spending goes on admin charges. The NHS is going the same way. A privatised system requires an army of paper-shufflers who put the service out to tender, negotiate with the private companies, draw up the contracts, set quality criteria, inspect the work of the private firm, make the payments, etc. The private firm also has its own bureaucracy: a hierarchy of managers, payroll, HR, procurement, sales and estates departments etc.
Some people do not get the health care they need; others get more than is good for them. Pharmaceutical marketing guru Vince Parry specialises in "condition branding" whereby he rebrands a particular illness in order to sell a particular drug under a particular patent.
Parry explains: "No therapeutic category is more accepting of condition branding than the field of anxiety and depression, where illness is rarely based on measurable physical symptoms and, therefore, open to conceptual definition." There are some limits to "condition branding", but marketisation opens up the NHS to capital's tendency to define your health problem in terms suited to their profit-making needs.
All this is part of a broader project of global capitalism.
US health giants, like United Healthcare and KaiserPermanente, were keen to tap into the low risk tax revenues of the European health sector. They campaigned for privatisation of public services through international capitalist bodies such as the World Bank and World Trade Organisation.
In 1995, an international free trade agreement was signed called the General Agreement in Trade in Services (GATS). GATS committed governments to open up their public services to privatisation and foreign investment.
The agreement included an exemption for services which were not provided on a "commercial basis" or not provided in "competition with one or more service providers". At the time, the Tories and New Labour said that the NHS was exempt from the GATS agreement because it was run as a state monopoly.
The latest round of reforms can tip the UK health sector into full commercialisation, with the effect that the NHS could only be renationalised by a government willing to opt out of GATS.
Part of the story of the NHS since the 1980s has been about taxpayers' money being siphoned off into the pockets of private profiteers. The banking bailout took this logic much further. In effect, we are now being asked to give up our welfare state in order that the government can pay for a welfare state it provided for the rich.
Yet the world could be run democratically for human need, not private profit. The old NHS shows how even a very limited amount of democratic control and planning could create a better health care system. But we should fight for much greater democratic control.
We need to fight for a world which is controlled by human beings, not the hidden hand of the market. For this we need to build a movement of healthcare workers in solidarity with other sections of the working-class movement. We need to organise for collective action, including occupation of hospitals threatened with closure.
