You are hereBlogs / dr-no's blog / Very Great Deal

Very Great Deal

Posted by Dr No on 11 March 2012

cam-clegg-williams.jpgRight queer goings on at the Lib Dem Spring Conference this weekend, after Shirley Williams started bowling from the pavilion end last week. A procedural vote yesterday to decide which NHS motion should be debated today had the ditch-the-bill motion win on first past the post; and then, by some quirk of bent Lib Dem voting logic, the Williams didn’t-we-do-well motion won. Since the two motions were in some respects mirror images of each other, it did not seem to Dr No that yesterday’s vote was the end of the world: a vote against Squirls’ motion sends much the same message as a vote for the ditch-the-bill motion, the only significant difference being the former lacks the explicit ‘ditch’ directive of the latter.

We have now had the debate and vote. Squirls, inevitably last speaker before the vote, continued to bowl from the pavilion end. Having LBW’d bill opponents, she continued bowling hard, telling delegates Lib Dems had achieved a ‘very great deal’ - an intriguing turn of phrase. She naturally reminded delegates that most people – unlike Lib Dem peers - do not understand the details of the bill, before having another poke at the press – read Polly T - for parroting lies, like the claim that 49 percent of beds will go to private patients; a ‘lie’ that Dr No will return to shortly.

And then came the vote, or rather two, and a right queer result. The first vote, to remove the clause calling on ‘on Liberal Democrat peers to support the third reading of the bill’ from the motion succeeded, by 314 to 270 votes, but then so too did the second vote on the now gutless ‘didn’t-we-do-well’ motion. If Dr No reads this right, it is a hollow victory for bill opponents: party activists have explicitly not backed a mandate for Lib Dem peers to support the third reading. But nor have they achieved a vote calling explcitly for the bill to be dropped. It is a queasy weasely sort of outcome. One fears that when push comes to shove, the Lid Dem peers will indeed achieve a ‘very great deal’ with the Tories, and vote for the third reading; and soon after the NHS (Annihilation) Bill will indeed gain Royal Assent. Pandora’s Box will be officially open.

Now, the 49 percent row is interesting, because it gives us insight into how both sides present their case; it also, in passing, shows how convoluted and difficult to follow this amended bill of amendments has become. The heart of the question is how much private work NHS hospitals can do. Historically, the percentage, with rare exceptions, has been low, in single figures. Given that rather puts the choke on revving up private activity, the Tories intend to lift the cap to just under half, judged by trust income, just under half being chosen for legal reasons, so that the majority, even if only just, of trust activity can be said to be health ie public service activity. The relevant clause doesn’t mention 49 percent, although it is clearly implied. In its roundabout legalistic way, the amended bill defines the primary purpose of an NHS foundation trust to be “the provision of goods and services for the purposes of the health service in England” and then adds:

“The NHS foundation trust does not fulfil its principal purpose unless, in each financial year, its total income from the provision of goods and services for the purposes of the health service in England is greater than its total income from the provision of goods and services for any other purposes.”

Or, in simpler terms, a trust may get up to 49 percent of its income from private activity. At this point, it does look as though Polly is correct: trusts do have, in effect, even if it is not worded that way, a ‘right’ to the 49 percent, giving rise to the opening line of her article that so incensed Squirls: “On Thursday Shirley Williams led her erstwhile rebels into the government lobby to vote for hospitals' right to use 49% of beds for private patients.”

This is the kind of language up with which the Baroness will not put. For a start, Polly converted 49 percent of income into 49 percent of beds - which may or may not be reasonable. Squirls hit back hard, saying yesterday: “There has never been a right for hospitals to offer 49% of their places for private patients. The so-called 49% is a myth or, to put it in non-parliamentary language, a lie.”

Neither side has told the truth, the whole truth and nothing but the truth. But it does seem, at least to Dr No, the effect of the clause, despite the fact it mentions neither a right nor 49 percent explicitly, and notwithstanding further amendments that require approvals before raising the percentage, is to enshrine in law (and so in effect make it all but a 'right') an option, subject to approvals, for trusts to earn all but half their income from private activity.

Squirls may be correct on the strict letter, but Polly is right on the broad effect. The clause does indeed appear to offer a ‘very great deal’ to foundation trusts. Parrot one, Peer nil.


More likely, in my view, is not that 49% of income will come from private patient but that 49% of income will come from NHS patients having to pay for part of their care, so called 'hotel services'.

That well known anagram of Shirley Williams!

The 49% rule is of income, but could only be reached by a few very specialised hospitals such as the Royal Marsden. In Borsetshire private patients would look at me in bewilderment if I suggested treating them at Borchester General. A large part of the reason to go private is to escape BGH!

In practice this is a ceiling that will not be reached, indeed the opposite is true with about a quarter of private hospital income coming from the NHS. What we are seeing is not privatisation but nationalisation. The work is done at reasonable rates, but a fee for service rather than salary basis.

The real vision of the future is found here with one of the governments favourite consultancies: particularly interesting are the documents on reconfiguration.

Like all management consultants they state the bleeding obvious before recommending on the basis of a twentysomething MBA radical changes that Trust management are afraid of, but that they cannot refuse. Finnamores list of reports cover most of England and they will have their ideas heard in Whitehall.


Boots - Dr No agrees the rule is about income, not activity/beds/ops/whatever, and he doesn't see a sudden big bang conversion on day one to that figure. He also agrees that the money flow is a two way street, reflecting two of the three prongs of privatisation, privatisation of funding and privatisation of provision (the third prong being privatisation of commissioning - 'CSOs' etc).

Instead, Dr No suspects that some FTs, the more entrepreneurial ones, will be unable to resist playing market games, and so will slowly but surely increase their private capacity. BGH patients will be able to choose between plain digestives in the NHS wing, or M&S chocolate ones in the private wing (and a TV that doesn't have that infernal Lansley loop on it) - ie Yoav's 'hotel charge' development.

If the private wing was a new wing that added capacity, then it is more difficult to oppose, but it is also possible the new wing will be carved out of existing beds. Just so long as 51% or more all its income comes from public NHS funds (and the governors approve it), it will be perfectly legal. Why - who wouldn't want a few more (no one will think of jumping to 49% overnight) smart renovated wards, doing easy money ops to boost trust income? Although it will usually be the same surgeons operating in both wings, the case mix will not be the same; and in the now squeezed NHS wing the care too will be squeezed. A few years later, a business case will be advanced, to enlarge the successful private wing - only by a small amount, of course. But over time, it will add up, and perhaps a decade later we will have a health apartheid, the enlarged private wing doing very nicely, thank you, and the NHS wing slowly but surely regressing to a poor law workhouse.

Dear Dr No, we already have such a division. Those with long memories will remember the campaign against pay beds in the late 70's under Labour. Until then most private practice outside London took place on private wings of NHS hospitals. That and the Healey cuts to the NHS in 78-79 (the only time in its history that the NHS has had real cuts in budgets) were the real spur to private practice, creating new private hospitals up and down the land. Other than creating economic growth and prosperity, the tories did little to create a viable private sector. Indeed it was a tory chancellor who got rid of the tax deductable health insurance.

It is Labour in the 1970's and again in the 2000's who did most to create the NHS/private split, thouhh perhaps unintentionally. I see Andy Burnham was once again made to look a pillock today by having tories quote his manifesto pledges in favour of private sector involvement.

One could make the case that NHS private wings are a return by the NHS to its roots! Finnamores, who have done well out of the tripartite policy of privatisation show the real future, whichever party is in power.


Tax deductibility was a casualty of Gordon Browns first budget in 97, the tories got rid of tax deductable life insurance and mortgage interest.

...neither party has the proper interests of the NHS at heart.

Dr No suspects (and has said before) that all the main parties want to get the NHS off their books. They are terrified of a fiscal-demographic implosion, and an exploding drugs bill. Dr No is not persuaded yet that the evidence is necessarily there for either. Although you can do scary 'what-if' graphs in Excel on the former, the fact is that demographic change is by nature a slow process, a bit like watching the grass grow, which means there is time to adjust, as we have done in the past (Dr No was going to say get the mower out, but that might have led down the wrong track). There is no demographic time bomb: just gradual changes over time. There is also, in passing, the question of whether more years of life means more years of ill-health.

There are many ways of looking at the rising cost of the drug bill. The first is to note how small the current scary estimate of the annual growth is (£600m out of say £100bn - just over half of one percent). The second is to get serious about cracking down on pointless over-prescribing; and that overlaps with cracking down on medicalising everything. The third is that as we get smarter - for example using genetics to predict responders/non-responders - we can target drugs more effectively (and further reduce pointless over-use). And lastly, it seems very plausible that we may be moving out of the Golden Age of New Drugs - we have for now discovered most of the big ones (there will of course be new drugs, but not at the rate there has been over the last half-century). That is why drug companies are panicking - their patented drugs are going to all go off patent and so the cost will, to use that phrase politicians seem to like these days, fall off the cliff edge - donepezil (Aricept) being a good example.

It suits politicians to have enemies at the gates to justify policy - but Dr No is not persuaded that either demographic change or the cost of drugs are the devils they suggest they are.

Add a comment...

Will show as anonymous if no name added

If added, your name will be a link to the address you enter

If left blank, first few words of comment will be used

• Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li>
• Web page addresses and e-mail addresses turn into links automatically
• Lines and paragraphs break automatically

NOTE: Dr No's spam filter can be somewhat overzealous. If your comment has been wrongly rejected, Dr No apologises, and asks that you let him know (via Contact Form in side-bar). Many thanks.