Dr.
Ruth Collins-Nakai, MD
President-elect,
Canadian Medical Association
c/o
CMA Convention headquarters
Shaw
Conference Centre, Salon 4
9797
Jasper Avenue
Edmonton
AB T5J 1N9
Canada
BY
FAX (780) 442-0728
(Original
to follow by post)
August
15, 2005
Dear
Dr. Collins-Nakai and colleagues,
We
are writing this open letter to Canadian doctors as representatives from the Canadian
medical profession gather at the general meeting of the Canadian Medical Association. We
understand that delegates to the meeting will participate in a critical debate tomorrow
about privatisation of public health care.
Those
in favour of privatisation often point to Britain as an example of how the private sector
can save public health care. We are writing, as British doctors, to share what
we have learned first-hand about the dangers of private sector involvement in health care,
in the hopes that our colleagues in Canada can learn from our countrys mistakes and
reject private care and other market-style policies.
The
British National Health Service (NHS), one of the earliest and most-studied publicly
funded health systems in the world, has been under increasing threat from privatisation
for some time. Similar but more recent systems in other countries are now being subjected
to the same pressures to privatise.
The
NHS has suffered from decades of underfunding relative to other developed countries. As a
result, despite its inherent efficiency (before the imposition of market-based policies,
administrative costs were less than 6%), critics were able to point to long waiting lists
and ageing hospitals.
To its
credit, the current government has finally recognised the underlying problem and announced
that spending will rise annually until it reaches the European average by 2008. Indeed,
the annual health budget is already double that of 1997. So far so good. But although
there have been some improvements, mainly in elective surgery, doctors and the public are
puzzled that despite the extra funding there are still shortages in other parts of the
service, with hospitals having to close beds and whole units to avoid financial deficit.
The
answer to this puzzle is that much of the additional money is being diverted from its
proper purpose that is, providing front-line care by the governments
other policies. Presented to the public as modernisation, these include
payment by results, Private Finance Initiatives (PFI), competing providers, and the patient
choice agenda.
Firstly,
the money is going into private profit. Short-term improvements in easily counted and
politically important areas like waiting lists are being achieved by expensive deals with
the private sector. These include not only using spare capacity in existing private
facilities, but now the establishment of independent sector treatment centres
(ISTCs), often owned and staffed by foreign commercial concerns.
These ISTCs
are offered long-term contracts with guaranteed income at costs up to 40% higher
than the NHS. They cherry pick the simple cases and have little responsibility
for complications or follow up. Their clinical governance arrangements are currently
unclear and there are already concerns about the quality of care in ISTCs.
The
removal of much elective surgery from the NHS is putting training in some specialities at
risk. Because
fewer of the low-risk cases are being seen in NHS hospitals, young surgeons are no longer
getting the training they need.
In addition, the concentration on short-term episodic care is diverting attention and
funds from the majority of patients, whose needs are for the longer-term management of
chronic disease or disability.
The
concept was initially sold as a short-term measure to tackle the backlog until
the NHS was able to take on all its commitments but it is now clear that the government
intends the growing private sector to remain and compete with the publicly provided NHS,
frequently on an unfair basis. The resulting contestability is seen by the
government as producing a creative discomfort which will improve the service.
There is no evidence to support this assumption. There is, however, mounting evidence of
the problems it is causing. Yet, the government has said that it is quite prepared to see
units and even entire hospitals close under the new competitive regime.
We
believe that you have already experienced PFI (known in Canada as P3s or public private
partnerships) for hospital construction. This is another example of governments choosing
quick, politically useful results without concern for the long-term consequences.
Inevitably PFI hospitals are more expensive, as borrowing is at a higher rate and there
has to be profit for the shareholders. As a result, our first hospitals were too small.
Now, although PFI hospitals must be at least as large as those they replace, many defects
are appearing and the repayments the first charge on the hospitals budget
are causing financial problems. It is difficult to find anyone in the UK now
prepared to support PFI except those in government and those set to profit from it.
Secondly,
both financial resources and staff time are being wasted on the bureaucracy inherent in
trying to run a competitive market system. The Conservative government introduced competition
in the early 1990s, and as a result administrative costs doubled. The key feature was the
splitting of the service into purchasers and providers. While in
opposition, the Labour Party opposed the market and PFI. But after gaining power in 1997,
they retained both PFI and the artificial separation in which one part of the service (the
purchaser) has to buy services from the other (the provider) which
markets and sells them. This purchaser/provider split is the absolutely crucial factor.
Without it a market cannot operate, but with it, the service is wide open to
privatisation, as we are now seeing.
The
hospital service, split into separate semi-independent Trusts with boards of
directors under the Conservatives, is now to be even more autonomous, as Foundation
Trusts enter the market with the power to borrow money and sell assets. To repay
money borrowed, they will need to attract patients from outside their normal area. As all
hospitals are scheduled to become Foundations within the next few years, there will be a
very unstable competitive situation with the government accepting that some hospitals may
be forced to close. Foundation Trusts will no longer be responsible to Parliament but to
an independent regulator interestingly, exactly the system which governs our
now-privatised railways, telephone, gas, electricity and water industries.
Payment
by results means that every item of treatment will be marketed, sold and billed for.
The public sector will find it hard to compete with the private sector on this basis as
the latter does not have to provide expensive emergency and intensive care. The private
sector is also not responsible for teaching and training, the costs of which have not been
factored into the tariffs.
The
government rhetoric is that we must have a diversity of providers, which it justifies as
promoting choice. But the public has demonstrated that its first priority is a good local
hospital, without the need to shop around. It is the
system of local hospitals that is now in jeopardy.
This
is indeed privatisation in fact if not yet in name although some have
suggested that commercialisation is a better description, as even those parts which remain
in the public sector are being forced to act like commercial enterprises. These reforms
are driven by ideology and there is as yet no evidence that a competitive market improves
outcomes in health care.
There
is much more we could say. It is important to insist that any new and controversial system
is piloted and independently evaluated before, rather than after, its general introduction
and that the longer-term effects are fully considered.
Beware
the recurrent reorganisations which we have suffered over the years, which have damaged
the morale of both clinicians and managers whilst totally bewildering patients and harming
care. The most cost-effective system is the simplest an organisation with a budget
to provide services for the people of its area and democratically accountable to them.
In
closing, do not be persuaded that any improvements in the NHS are due to the government
reforms. The reality is that vastly increased expenditure has produced only modest results
precisely because of privatisation and commercialisations negative effects.
We
welcome any opportunity to further share our experiences and research with you, and hope
this letter can initiate a meaningful dialogue and exchange about these critical issues.
Yours
sincerely,
(Original
signed by)
PETER
FISHER
JACKY DAVIS
President
Consultant
Radiologist
NHS
Consultants Association
NHSCA
Executive Committee
c.c.
Editor, Canadian Medical Association Journal