Coronavirus has exposed the dangerous failings of NHS marketisation | David McCoy | Opinion

Though it’s too early to judge how successful different countries have been in managing this pandemic, it’s hard to escape the view that the UK has failed in several respects. The government muddled its initial epidemic control strategy and was slow to roll out testing and contact tracing. Shortages in PPE may have contributed to the tragic deaths of frontline health workers. And measures to shield the vulnerable in care and residential homes have been inadequate.

These failings aren’t just the result of recent decisions – in England they’re also symptoms of structural weaknesses in the health system, many of which can be traced back to the 2012 Health and Social Care Act. In October 2011, nearly 400 public health experts signed an open letter asking members of the House of Lords to reject these reforms, the brainchild of the former health secretary Andrew Lansley, warning they would “undermine the ability of the health system to respond effectively to communicable disease outbreaks and other public health emergencies”.

The reforms were so extensive that David Nicholson, the former chief executive of the NHS, described them as “visible from space”. They abolished primary care trusts (PCTs) and created new clinical commissioning groups (CCGs). The Health Protection Agency, whose functions included protecting the public from infectious disease epidemics, was replaced with Public Health England (PHE). Where the Health Protection Agency was closely linked to the NHS, PHE was closer to Whitehall and the government.

This shift was significant. PHE has remained conspicuously quiet during the pandemic, and it has fallen to independent public health experts to point out the errors of the government’s approach. Having worked for government, I know how difficult it is to promote rational and evidence-based public health policy. But this is why public health officials must be given the independence to speak for the public and their health, rather than for the interests of government and Whitehall.

Behind the 2012 act was a deep commitment to promoting market competition and expanding the role of private companies in the health system. The Lansley reforms reshaped the NHS as a loose, fragmented collection of public and private enterprises that would compete for funding. We can’t know yet for certain how these changes have affected our response to Covid-19, but there are signs that the public health experts who cautioned against the reforms in 2011 were correct.

By pushing the NHS further away from being a coherent, unified and integrated system, the 2012 reforms produced disorganisation and instability. The drive towards commodifying healthcare and enforcing market competition has weakened the NHS by diverting funds to pay for the administrative costs of running a market in a sector that is particularly prone to market failures. Logistical planning is far more difficult in a competitive system that is designed to respond to short-term market signals. That the government had to recently ban NHS trusts from competing against each other to procure ventilators and PPE, thus depleting the national supply, is an example of how illogical market forces are in the face of a pandemic.

By increasing the role of the private sector, the government also shrank the public sector’s share of the healthcare market. The number of NHS hospital beds fell by 5% between 2012 and 2019. Inevitably, the government has rented private hospital beds for Covid-19 patients at great cost. But it gives no indication that the public sector’s share of healthcare won’t continue to shrink. It has recently contracted Deloitte to run Covid-19 testing centres and Serco to run its contact tracing programme, indicating a blind commitment to profit-making businesses rather than to a public health system working in the public interest.

The government has long argued that privatising some areas of the public sector delivers greater efficiency. But an estimated £1.5bn leaks out of the care home industry every year to private companies and financiers. Money lost on ruinous PFI contracts is similarly eye-watering. From 2010 to 2015, companies that ran PFI contracts to build and run NHS hospitals and other facilities made pre-tax profits of £831m. Over the next five years, almost £1bn of taxpayer funds (£973m) will go to PFI companies in the form of pre-tax profits – equivalent to 22% of the additional amount of money (£4.5bn) that the government has pledged to the NHS over this period.

The belief that NHS organisations should be managed like businesses shifted power from health professionals to finance managers and accountants, and led to changes in management culture. Tensions within healthcare organisations have been a source of difficulty for managers and healthcare professionals alike. Recent cases of clinicians being disciplined and punished for raising questions about clinical safety have raised alarm bells. Were concerns about the lack of PPE treated similarly?

The 2012 act was aimed at opening up opportunities for private finance to extract profits from the health and social care sector. But it was also driven by a sincere belief that market competition would improve productivity, efficiency and innovation in the NHS. Yet the health and social care workers and local government staff who have often risked their own lives on the frontline of this pandemic haven’t been motivated by market forces, but by the values of professional duty, public service, solidarity and compassion. Almost overnight, Covid-19 overturned the orthodoxies of market competition that have hindered effective care.

The coronavirus crisis has cast light on many aspects of society – including the way that we fund, organise and manage our health systems. Now, more than ever, the government must agree to a review of the Health and Social Care Act. We need new legislation that restores the NHS to a properly managed public service that works in the public interest, driven by cooperation, compassion and professional ethics.

David McCoy is a professor of global public health and director of the Centre for Public Health at Queen Mary University of London

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