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Profiteering from the NHS – have we reached a new low?

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Back in 2014, I predicted that we would, in the future, question the values that are used to make public spending decisions.  However, we now seem to have reached a new low.

Following an unsuccessful bid for a children’s services contract in Surrey, Virgin Care had threatened legal action.  This has resulted in hundreds of thousands of pounds (if not a few million) being taken out of the local cash-strapped NHS, which could have been used to help diagnose and treat people of all ages, in order to settle the dispute out of court.

Virgin Care has the power of a big corporation and a team of lawyers behind its every move.  Most tenderers could not, and would not, sue the NHS if they failed in a bid.  However, when the internal values of the business are first and foremost commerciality, the logical step is to challenge if you can.  I also wonder if this tactic will make other Commissioners think twice about turning down a Virgin Care bid?

With more than 400 contracts, Virgin Care has a growing track record in the health and social care world, but at what price?  They might make a big deal about how they will improve services and treat staff well, but someone has to suffer with profit maximisation being squeezed from the tight NHS budget.  The cuts in front-line staff ultimately lead to a poorer service for patients, who have no choice in the matter.

At least in this case the winners of the bid were two social enterprises and an NHS Trust, which will not be focused on creating profits for shareholders.  Surely it would make sense for this to become a more explicit criterion for commissioners to judge a contract?  Not only is it better value for money, but the values of the service are aligned to NHS delivery.

My Christmas message, and wish for 2018, is that public spending decisions need to become more values based!

Profiteering from the sick and dying…chapter 2

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Another bonanza for the shareholders?

This blog follows on from a previous blog on this subject, published in 2014

My family and I have recently been subject to the vagaries of NHS system and the bewildering world of social care.  Like so many families when a loved one falls seriously ill, you take a dive into a parallel universe that you might have thought about, but suddenly get thrust into for real.  It starts with shock and confusion and pretty soon moves on to frustration at trying to find your way round a system that is supposed to put the patient first, but often fails due to being overstretched and managed by too many ‘cooks’.  I am aware, however, that in many ways we are in some ways more fortunate (if that’s the right word) than others in this situation – the illness is cancer, not dementia.  The NHS goes into full swing for us and we don’t have the added stress of to try to work out which care agency to use, how much it’s going to cost and how to pay for it.

The Conservative Manifesto suggests that in the future more social care will have to be paid for privately, if necessary by remortgaging any property without a financial cap.  I understand that there are pressures on the system, but what will the real cost be and who will be the winners if this policy is enacted?  It probably doesn’t take a detective to work it out, but one thing’s for sure, with an aging population there will certainly be profits to make.  The likelihood is that the private care sector will ramp up to fill the gap with little or no protection on costs from the government, along with equity release companies who will charge interest for the privilege of staying at home.  You only have to look over the Atlantic to see the impact that such private companies have on the lives of people who should be concentrating on caring for their loved one, rather than being stressed out about deciding which care/health company is good or bad, whether the insurance will cover it, and if not how to pay for it (possibly selling/remortgaging their house).

It is a shame that more creative and equitable solutions are not being considered in the future of social care as well as how to fund it – they do exist!  There is always a rush to look for a private solution, with the same old business models, which put their shareholders first.  The Manifesto talks about encouraging Public Sector Mutuals, but the current Government has made no real effort to encourage the formation of social enterprises that could reinvest profits back into the system as well as behaving more ethically.  The local community could even have a stake in such companies!  What is clear though is that if we are talking about delivery outside the state, then there is a need for regulation and a guarantee that people can have confidence that shareholder financial gain is not the underlying goal – profiteering from the sick and dying is inexcusable, morally questionable and one of the key reasons that the NHS was set up in the first place.

Profiteering from the sick and dying

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Lucy’s latest blog explores profiteering from delivery of NHS contracts. This blog was first published on the 2degrees network.

At the beginning of the summer there was an announcement that Staffordshire Clinical Commissioning Group plan to contract out their cancer and end of life care to the tune of £1.2bn. By my estimation, given the profit margins of at least 10%, this is at least £120m profit taken out of care services, for shareholders (and could be as much as £240m). I suspect there will be a lot of interest from the private sector as an opportunity to get into this potentially lucrative market.

Almost in tandem with this announcement there was a Daily Mail article which reported survey results showing most people do not care who delivers NHS services as long as it’s free. On the face of this, it is discouraging news for social enterprises. However, if you were to turn this around, given the latest health and care scandals, I’m sure that trust would be the number one priority. Social enterprises with their local knowledge, approachability and transparency are very well placed to engender this. They are not some faceless corporate just after a fast buck, because their number one reason for being set up is to deliver that service to fit their social mission.

I am really encouraged that the Labour Party is now talking about ring-fencing a number of public sector contracts for social enterprise delivery, although this does miss the point that there is an inherent difference in the way that a social enterprise delivers – because of its primary social motivation. I am due to meet with Chi Onwurah and I will be making this point. At least there is recognition that social enterprises do offer a good alternative.

My prediction is that in years to come, we will all be questioning the values (or lack of them) that were used to make public spending decisions.

There must be wider recognition that social enterprises not only often take a lower profit margin, but they are also reinvesting and devising a service that is aimed at the people they serve – a win-win! Just looking at the price and not what’s going on behind the scenes is not good enough. We need commissioners and politicians to understand this fundamental point.