The Commons: Is The NHS Destined To Become A Two-Tier System?
Ian Taylor
As winter sets in, the UKs National Health Service has been bracing for an increase in pressure on its staff and services. With flu rates set to soar, and the NHS looking to be paying even more for many vital medications, a further round of doctor’s strikes will prove to be yet another challenge for the government going into Christmas.
Their speedy resolution to previous strikes taking place over last year had been one of the earliest achievements for the incoming Labour government, which had pledged to end disruption to NHS services and bring down waiting times. This is an area they have continued to have success in throughout this year, with the NHS backlog falling to its lowest level in the past two years this summer.
With the aim of continuing this trend, the government also announced last month that it will be using private finance to fund a whole range of new NHS facilities over the next few years. New Neighborhood Health Centers are to be set up throughout the country, with the aim of improving patients’ access, ensuring that people in deprived access areas no longer fall victim to the so-called ‘postcode lottery’, forced to travel miles to hospitals to receive care.
It was confirmed in the recent autumn budget that these plans will be moving forward, with 120 centers to be operational by 2030. This is to be funded through a combination of revenue taken from tax, including a coming tax on sugary drinks, and through private funding. The government has declared that it hopes this will help improve the speed at which it can get through the backlog.
During her delivery of the budget two weeks ago, Chancellor Rachel Reeves stated, “we’re driving down waiting lists by bringing healthcare to patients’ doorsteps and turbocharging NHS productivity with cutting-edge technology. Our record investment, combined with ruthless efficiency and reform, will deliver the better care and better outcomes our NHS patients deserve.”
However, the plans to fund this initiative by using private providers has raised some concerns among backbench MPs within the Labour Party on whether this risks undermining the founding values of the NHS, which, since its creation in 1948, has delivered universal healthcare that is free at the point of use for all UK residents.
This follows a rise in the use of private bodies in the delivery of NHS services over the past several decades; starting in the 1980s under Margaret Thatcher, and then expanded under Tony Blair, who increased the use of Private Finance Initiatives (PFIs), through which NHS premises were leased from private owners, and introduced an internal market that emphasized meeting set financial targets.
The drive towards this marketization, of what had been an entirely state-run service, continued under subsequent Conservative governments, with legislation introduced that had NHS commissioners opening contracts out to the private market. As discussed by Ben Goodair of the London School of Economics, “if you are a NHS patient receiving cataracts surgeries or hip replacements, there is a good chance that it will be conducted in a private hospital, and the NHS will pay them to do it. Evidence suggests this matters for the quality of care, due to cost cutting and profit maximization.”
Goodair points to legislation such as the 2012 Health and Social Care Act, which expanded the amount of revenue NHS trusts were able to bring in from private, self-paying, patients. The concerns over this, he states, are twofold: “That we entrench a two-tier system of healthcare where richer patients can pay to skip queues, and that we incentivize our NHS trusts to act like private companies, selling their services – and we know that commercial behaviors are often not aligned with the best interests of public health. Morally, it should not be the case that some people can afford better, quicker, or more healthcare than others.”
After the Covid-19 pandemic, further questions were raised about the role of private providers within the NHS, especially following the scandal around the sale of contracts for unusable PPE. In November of last year, the Center for Health and the Public Interest (CHPI) released a report about the contracts put in place between the NHS and private hospitals during the height of the pandemic, finding that these contracts, worth around £2 billion and put in place to help ensure NHS patients continued to access support, actually were used for the benefit of private fee paying patients rather than alleviating the burden on the NHS.
“For a large period of the pandemic, the NHS paid the private hospital sector’s full operating costs at an estimated cost of £2 billion,” the CHPI found. “The public were told that this contract was put in place so that there was additional capacity to assist the NHS when it was being overwhelmed. However, the contract with the private hospital sector contained financial incentives for the private sector to treat large numbers of fee-paying patients and placed limits on the amount of NHS patients which could be treated. As a result, senior NHS officials in London had to issue a public appeal asking NHS consultants to stop doing private work and to focus on NHS patients who were seriously ill.”
Incidents like this, and the collapse of major PPP contractor Carillion in 2018, has caused many in the Labour Party to raise concerns about the potential for such scandals to arise again, and to warn against the creation of a two-tier system undermining the NHS. Ahead of the budget, 38 Labour MPs wrote to Rachel Reeves warning that the use of private funding in new NHS facilities risked going back on pledges in their manifesto to ensure that the NHS remained fully publicly owned and funded.
“At a time when trust in politics is at its lowest, it would be very damaging for the government to renege on this promise,” this group of MPs warned. "We are asking you to learn from the mistakes of the past. We must reject the notion that private finance can be used to build public services in a way that can be to the long-term benefit of the public.”
The government has maintained that it remains committed to protecting the NHS values of universal health care and that they will be learning from past mistakes, emphasizing that their ten-year industrial strategy will look at utilizing PPPs only “in very limited circumstances where they could represent value for money, such as in certain types of primary and community health infrastructure.”
Health Secretary Wes Streeting has claimed that the use of private hospitals is vital to avoiding any kind of two-tier system, it being key to bringing down waiting lists and ensuring those who cannot pay need not be waiting longer than those who can. Critics have, however, questioned whether the latest measures will bring about any genuine improvements in ordinary patients’ waiting times.
“In my opinion, this is more likely to make things worse for patients,” Ben Goodair states. “The pool of workforce is the same for public and private practice, so I don’t expect dividing the healthcare to make it more efficient. And a two-tier system often means the public system is dealing with more complex cases without the resources to do so, which may lead to longer waiting times. There is an alternative choice where the money used to fund private health is simply taxed, invested in workforce and employment conditions, and everyone is treated under the same, well-performing system.”
