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Penny Dash, second from left, with friends


"the NHS Plan called for new contracts for consultants and GPs. It didn't call for new contracts for the rest of the NHS's staff, thousands of whom had already experienced being transferred to private employers during the 1980s when Thatcher made the NHS outsource cleaning, catering, laundry and other services. Over the years 1981 to 1994 non-clinical employment in the NHS had fallen from 260,000 to 120,000, and during that time those affected got scant protection for their wages and benefits. The cost reductions achieved by outsourcing, and the profits made by the outsourcing companies, were made largely by paying workers less."

Here a big role was played by Dr Penny Dash, Head of Strategy and Planning in the Department of Health. Before being appointed to this role in 2000, "Dr Dash had studied business administration in the US and worked briefly for Kaiser Permanente, the largest US HMO [Health Maintenance Organisation. In the US, a medical insurance group that provides health services for a fixed annual fee - PB]; from 1994 until 2000 she had worked in the London office of Boston Consulting, a leading US health consultancy."

The strategy with regard to consultants is not easy to follow because at first sight it seemed to be moving in the opposite to the desired direction. "The NHS Plan said that more of them would get the discretionary payments (usually known as 'merit awards') that substantially increase the salaries of most senior NHS consultants, but that in future such payments would depend on their demonstrating increased 'productivity' with 'proper job plans  setting out their key objectives, tasks and responsibilities and when they are expected to carry out these duties', and with 'regular reviews' of their performance. In addition, newly qualified consultants would not be able to do private work for 'perhaps seven years.'"

The proposal was accepted by consultants in Scotland and Wales but overwhelmingly rejected by consultants in England. Soon after this rejection, Dash, who had left the Department of Health to become an "'independent adviser' to the NHS and other healthcare organisations" published an article in The Guardian in which "she now declared that the English consultants rejection of the contract could 'have positive and far reaching implications for the way NHS care is delivered - not least because it may open the door to more private sector provision of healthcare.'

"She went on to spell out various ways in which consultants might escape control by NHS managers - the very control that the NHS Plan had said was needed. Now she suggested that in reality ministers might 'want to encourage surgeons and indeed other groups of doctors to form their own companies (or join existing private health providers) to sell their services back into the NHS'." In this way they could be  'freed from the stifling grip of the NHS...' She suggested that this may have been what 'Messrs Blair and Milburn' (her bosses while she was working for the Department of Health) really wanted. 

The implication is that burdensome conditions had been imposed and now a means of escape was being offered. But if that was the case, the strategy doesn't seem to have worked. The immediate upshot of the new contract was that after Milburn had threatened to impose it on consultants against their wishes, his successor John Reid apparently caved in to them, allowing the increase in pay but removing most of the conditions, including the ban on newly qualified consultants engaging in private practise - effectively a continuation of the status quo.

With regard to GPs a new contract was introduced which entailed "a bumper increase in payments to GP practices, linked largely to demonstrating performance against a set of specific standards, the so-called Quality Outcomes Framework (QOF)" At the same time 'out of hours' cover became optional, with only a modest loss of income for those who opted out. This provided "a useful entry-point into primary care for private companies, as well as a stick to beat GPs with (allowing them to be pictured as work-shy and overpaid). Companies such as Serco and Take Care Now were quick to seize the chance."

At the same time, the government proposed a "new kind of primary care contract - the 'Alternative Provider Medical Services' or APMS contract" which "replaced the traditional contract with an individual GP or a group of GP partners by one with a company employing GPs on salary, and offered a more significant opening for the private sector. It allowed Primary Care Trusts to commission primary care services from large private companies such s UnitedHealth and Atos Origin (both of which were controversially awarded practices in central London), as well as from 'entrepreneurial' GP consortia and social enterprises ... The great majority of APMS contracts highlighted the fact that they would provide services 7 days a week and from 8am to 8 pm. [I'm wondering if that should read 8pm to 8 am, ie the out of hours service not being provided by the GPs - PB] ... 

"By July 2010 227 GP surgeries and health centres in England were being run by private companies, with nine firms, including Care UK and Assura Medical (now Virgin Assura) each holding 10 or more contracts. These are not all small beer. Virgin Assura now claims to have 30 partnerships with over 1500 GPs catering for over 3 million patients, while as the market expands various new outfits such as Intrahealth, The Practice Plc, and Malling Health, are joining the ranks of corporate providers of primary care alongside multinationals such as UnitedHealth and Atos Origin."

Leys and Player outline a third plot, to outsource community health staff - "health visitors, district and community nurses, physiotherapists, speech therapists, occupational therapists, podiatrists and others ..." but when this was proposed by Patricia Hewitt as Secretary of State in 2005, there was an uproar and the plans had to be cancelled. This, however, did not adversely effect Ms Hewitt's career:

"As for Hewitt, whose attitude and policies had antagonised half the staff of the Department and almost all sections of the NHS workforce, she left the cabinet in 2007 and became an adviser to the private equity company Ciniven (which had recently bought BUPA's chain of 25 private hospitals) at a salary of £60,000 for 18 days' work a year. She also became a 'special consultant' to Alliance Boots, at an annual salary of some £40,000, and a non-executive director of BT, at a salary of £60,000 (for which she would be expected  to attend nine BT board meetings and possibly sit on committees covering remuneration and corporate and social responsibility) ..."

Patricia Hewitt

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