And the problem is what?

You have had a socialised service, which has had it’s funding doubled in 13 years (to a statistical equal with the OECD GPD % average), which has resulted in productivity staying exactly the same, which has some of the worst cancer survival rates in the western world, the lowest ICU beds per head of population, poor trauma survivorships, poor CT/MRI availability.

And of course, the PFI project was started by the Tories and expanded under Labour, so no-one (and I doubt the LDs were seriously opposed) comes away with any foresight/integrity.

No doubt we will hear the hysterical screeching of ‘privatisation’, but let me remind everyone, these hospitals were built out of money taken from taxpayers and administered through central government. Had a private company had to fund a hospital through it’s profits (i.e. taken voluntarily through active participants in their business), such a calamity would not have occurred.

Once again, the sinking ship of the NHS reaches a new depth, yet people are still advocating trying to plug the holes.

In fact, as the Barnet vs Chase Farm vs North Middlesex shows, the PFIs are likely to be kept at the expense of the non PFIs.

One of the big PFI hospitals was that of St. Helens and Knowsley, where the Labour government, bravely, built 2 PFI hospitals, 10 minutes drive from each other!

Cap NHS spending, reduce it’s services as well as taxes and protect the elderly and children and cut from their entitlements the last.

Last comment:

Don’t forget the NHS deficit is 15-20 billion, despite a doubling of monies allocated to it under Labour – this statistic on it’s own should send alarm bells through those who advocate an economic reason for keeping the NHS.

I contend that if we (in the long term) left the EU, controlled migration (e.g. 95% of 2 million jobs created under labour given to ‘foreigners’) , cut back on welfare (2.9 million/35million workforce on long term incapacity benefits, giving out more than income tax revenue, i.e. has risen in proportion to amount of money spent on it), cut taxes and cut the NHS, the vast majority would get better care (100 billion divided by 35 million workers) and those that didn’t could rely on personal/public charity.

It is not the principle of PFI that’s the problem so much as the detail of the way the deals were structured. Labour paid millions to its chums in the consultancy trade, yet ended up with what anyone with any business nous would recognize as a set of bad deals.

The deals will have to be re-negotiated, where that is legally possible. If it isn’t, then retrospective legislation (which I’d normally be against) might be the only way.

@2, no you cannot go back on a contract because it was badly written – this is a violation of basic rights (fallacy of the end justifies the means).

The only way the contracts can be ripped up is if the hospitals go bust/go bust and be taken over by someone else (i.e. the private sector).

I guess, it would be a bit like the railways in reverse!

Roshan

@2, no you cannot go back on a contract because it was badly written – this is a violation of basic rights (fallacy of the end justifies the means).

Not necessarily so.

If the contractor wants any more business from you in the future, he may see it in his interest to re-visit the terms of existing contracts.

Also, there are well-tried ways of recouping any excess profits: windfall taxes and the like.

Finally, there is always the possibility that some of these contracts were corruptly, fraudulently or dishonestly stitched together. It could take some time – and some collateral reputational damage – to discover. There may be some people who’d rather not go through all that.

In any case – re-negotiation is what is going on. There’s a team of ministers and officials doing it right now across the whole of the public sector. Labour created the mess. The coalition is clearing it up. If that means they have to play hardball – tough.

Roshan, I’m not saying a don’t believe you, but where do you get the ominous allegations on NHS productivity, cancer and trauma survival rates, ICU bed availability and access to scanning equipment from?

When you suggest
“Cap NHS spending, reduce it’s services as well as taxes and protect the elderly and children and cut from their entitlements the last.”
What services do you suggest should be removed? As for protecting the elderly and children, do you not believe that also looking after the health of working age, productive adults – you know, the ones who actually currently fund the NHS – is quite important too?

And don’t forget that the “NHS deficit” only exists because the government have insisted on swingeing year-on-year budget cuts.

The Health secretary is using PFI as an excuse to sell hospitals

Its a feature, not a bug.

@1 – Free at the “point of contact”.

Which isn’t much use to the poor when the hospital’s a few hundred miles away and they can’t afford to go back and forth. 22 is only the *start*.

Protecting funding for the children and elderly is pointless when they can’t get there.

And sure, wreck the economy (minimum 20% GDP loss), lose the financial and media centres to Europe and Canada respectively, have tens of thousands starve and freeze every winter, people sleeping on the streets en-mass again…. a lovely third-world country you want.

There are two reasons why a hospital is in financial trouble.

1) outgoings too high
2) income too low

PFI payments come in #1 (as do wages, which, earlier this week, we were told were “unsustainable”).

Income, #2, comes from the number of patients the hospital treats: how many and how much per patient.

The “how many” has gone down in the first 3 months of this financial year (since April) referrals have gone down 4.7% compared to a year ago – this is rationing of care. Fewer patients means less income for the hospital.

The “how much” is called the national tariff, a fixed price list for most procedures. Usually the tariff goes up each year because of inflation (note: inflation is rising at the moment). In April slasher Lansley cut the tariff by 1.5%. That means that every procedure must cost 1.5% less than it did last year, even though drugs are more expensive.

So the solution to saving the 22 (or the 60, whatever figure you like) is to stop cutting the NHS. Reverse the 1.5% tariff cut.

@1. Roshan

“You have had a socialised service”

Ah, you are using the term coined by Reagan. Now we know where you are coming from.

“funding doubled in 13 years”

Yup, from a very low baseline. It needed it.

“resulted in productivity staying exactly the same”

Hospitals are not widget factories, but I commend you on using the ONS figures and not the hysterical ones that some right wingers use. Can you tell me how the productivity of private healthcare has changed over that period? You see, it is difficult to measure productivity in healthcare and the only meaningful way to use productivity figures is when they are *relative*. The government likes to compare NHS “productivity” with the private service sector, which is nonsense of course.

“which has some of the worst cancer survival rates in the western world”

First, they started at a low baseline – Major bequeathed a rundown dilapidated system. Cancer rates have improved since then – faster than in any other Western country. Indeed, according to the Journal of the Royal Society of medicine we have had bigger improvements per dollar spent than any other country with the exception of Ireland. Second, the UK is unique in its completeness of gathering cancer survival rates. In other countries the stats are sporadic and tend to be just for the affluent. Third, cancer rates are not “worst in the western world”.

“the lowest ICU beds per head of population, poor trauma survivorships, poor CT/MRI availability.”

Nope.

Also bear in mind that the US is so expensive precisely because of the high availability of CT/MRI – people get scanned when they do not need it, but insurance still pays. And CT uses X-rays, so you really should only have a scan when you *need* it.

“these hospitals were built out of money taken from taxpayers and administered through central government. Had a private company had to fund a hospital through it’s profits (i.e. taken voluntarily through active participants in their business), such a calamity would not have occurred.”

You clearly do not know how NHS hospitals are funded. Have a read of hospital accounts. They have to make a “profit” (in NHS-speak, they are surpluses). Monitor says it should be 6.5% every year. The surplus comes after they have paid other outgoings, and PFI payments are one. Every trust has a shareholder – the government. Every trust has to pay a dividend to the shareholder. For example last year UCL Hospital FT had a turnover of £520m and paid a dividend of £8m to the government. They have £223m PFI and pay £31.2m every year until 2040.

Last July Lansley announced that there would be no more capital grants to FTs. So if an FT wants to upgrade a facility, it has to take out a commercial loan (as my local hospital did earlier this year to install a £1m CT scanner).

“Cap NHS spending, reduce it’s services as well as taxes and protect the elderly and children and cut from their entitlements the last.”

What? The NHS is one of the most cost-effective systems in the world. If you cap[ spending all that will happen is people will pay for more expensive private care, or die. That’s bonkers.

“Don’t forget the NHS deficit is 15-20 billion,”

Actually, no. The NHS is not in deficit, quite the opposite. For the last three or four years it has underspend. There is something like £1.5bn of this overspend in the DH. The £20bn you quote is a “efficiency saving” over 4 years which is not a deficit.

“and those that didn’t could rely on personal/public charity.”

Yeah, right. Go to the US and join the tea-partiers. It is your natural place.

“The “how much” is called the national tariff, a fixed price list for most procedures.”

and there’s your problem. In a nation as diverse as the UK there should not be a national tariff, nor national wage bargaining come to that.

After 60 odd years of ever less efficient socialist provision can we please try something else? The continental systems and others all appear rather better, lets give them a go.

http://docs.google.com/viewer?a=v&q=cache:vvaivf03mzoJ:www.ons.gov.uk/ons/rel/psa/public-service-productivity/healthcare-2011/public-service-output–input-and-productivity.pdf+office+of+national+statistics+NHS+productivity&hl=en&gl=uk&pid=bl&srcid=ADGEESjNJ3ED5EAsALJDs4yewnmmwJSUfbSeacBb9XdLFGGx-ZYK4gv5JiiWhEPvG3tnE1iI_qrBBuR2plVs6-2fitU2PT3aNHDZEAIq7U6fgFgU8FLk8kIl8xX-_3p30r7HXu5iUSO1&sig=AHIEtbQ3V3Apwuq50jrBMu7pDK7EvSFBlQ&pli=1

efficiency fail

Google COMET study in the lancet as well as OECD cancer survival study for details.

Furthermore, google ICU beds OECD for the ICU bed issue.

Sorry, I meant CONCORD study in the Lancet, not COMET.

@10 – Ever less efficient? Cite!

@Roshan

I googled the COMET study and only found once that covered 1993-4 and then was followed up in 1999. Do you have a link to a more recent study because the one through google actually doesn’t prove your point because its over ten years old.

@ Roshan

Oops I’m copying the mistake, still came out with the same study with CONCORD though, so my previous statement stands.

@roshan

There are some special cases where one party can unilaterally rewrite contracts on preferable terms – public sector pensions.

I’d also take public sector productivity statistics with several tonnes of salt – the problems in accurately measuring the productivity of a non-marketised service with long-term benefits and multiple social objectives (as well as the political impediments to e.g. health service configuration) are far too great to make such exercises that informative. Also, it is well-known that productivity in labour intensive services such as health lags other sectors (the so-called Baumol’s Cost Disease) so there’s no like-for-like comparison (e.g. what productivity gains have been made by private sector activities such as hairdressers, airline pilots, theatre actors or live orchestras over the past few years?)

@flowerpot

The Government wants (indeed, given capital expenditure plans needs) to use PFI in the future. Re-writing terms will not encourage investors to do so

@ Roshan

The link from the ONS also specifically states that healthcare quality has increased by 0.9 per year from 2002 which puts to bed any idea that service is getting worse in terms of healthcare output. Furthermore a drop of 0.2% in productivity can hardly be considered a crisis for the NHS it would be hard to even call it statistically significant. The fact that they have been able to increase health quality and maintain productivity with a growing and aging population is bloody fantastic. The paper is basically saying we are getting improved outcomes for the money we are putting in, sounds like a good deal to me.

The Tories are just hell bent on breaking up and privatizing the National Health Service to line their associates pockets.

The Tories financial backers and others are eagerly waiting for their payback and this is just a deceitful ploy to make that a reality.

You know what ? At some point these evil people/Tories are going to get their piece of cake and soon !

Kiss goodbye to the NHS as we know it and expect people to suffer and die as a result.

Always remember that brownshirt conservatives hate anything they can’t own. If they or their wealthy backers can not buy it, it must be destroyed.

All of this was foretold in by Paul Gosling in 2003 – he said;
“The collapse of some of the United States’ largest companies – particularly WorldCom, Enron and Global Crossing – has led investors, politicians and commentators to ask how it could happen. Where were the auditors? And just why were those same auditors allowed to earn fortunes from providing a range of other services to some of those companies? Didn’t this create a conflict of interest for the audit firms and could this help to explain the audit failures?
What few people have asked is whether there is a similar conflict of interest for those same audit firms – PricewaterhouseCoopers, KPMG, Ernst & Young, Deloitte & Touche and, until it collapsed because of its role in Enron, Andersen – in the Private Finance Initiative (PFI) and other forms of Public Private Partnerships (PPPs) in the UK”.

Some people think it is possible to apply principles governing wigit production to the health of the nation – the 12 million patients currently sailing on the good ship ‘PFI’ may soon have the misfortune to learn that markets do indeed create winners and losers.

Yet, when the sh*t hits the fan even the relatively well off modernisers realise what a bargain the NHS has been:

“The illness has changed him in so many ways, he says. Not least politically. The story of Philip Gould’s cancer could be a parable. Here was the archetypal moderniser who had so lost faith in traditional Labour values that he took the private healthcare route. A surgeon in America told him he did not need the extreme surgery that the NHS had suggested. Gould took his advice and the cancer came back. By the time he returned to the NHS, it was too late. He’s painfully aware of the ironies. “When I came back I began to realise that NHS facilities, particularly for this cancer, were fantastic. Now I wouldn’t go to a private hospital. I have completely changed my view.”

Has cancer changed his political position? “Oh yes. Certainly. No question.” He’s more old Labour? “Old Labour? It has certainly made me more aware … yes, it’s made me more leftwing is the answer. It has made me realise the importance of public service and community. The other thing that has moved me is being in intensive care, which is really tough for the nurses. I don’t know what they get, £35,000 a year? [The highest pay-grade is £34,189.] They do 12-hour shifts on one patient who is seriously ill and then they start talking about Wayne Rooney or whatever, and you realise with that level of inequality it’s impossible to continue to get people to do these jobs because these jobs are based on the sense within society that there is some fairness about the level of contribution and the level of reward and that has broken down. So that changed me.”
http://www.guardian.co.uk/politics/2011/sep/20/philip-gould-cancer

What utter madness this market fundamentalism is driving us into.

Just remember folks, all of this is being done thanks to the spineless, political dumb Lie Dems. The tories have no mandate for this. But thanks to the retarded Lie dems we can give thanks to the sell off of the NHS.

Apparently, the very stupid lie Dems seem to think attacking the tories over things like the Euro, while defending the privatisation of the NHS is a great move. Well good luck with that morons.

Lie Dems! You see what Sally did there? She so clever!!!
What? No Brown Shirt Nazi jokes you commie bint?

Sally, whilst I agree, my bitterest feelings are towards New Labour. Without them this would have been much less likely.

According to this news report, the prospect of a private company buying up an NHS hospital is about to happen:

“Private company to make joint bid for Epsom Hospital . . If successful, Circle Health will be the first private company in the country to manage an NHS hospital.”
http://www.epsomguardian.co.uk/news/9263622.Private_company_to_make_joint_bid_for_Epsom_Hospital/

It happens I was in Epsom hospital for elective surgery last year. What I can’t work out is why do I need to worry about the hospital being bought by Circle Health if the NHS pays the bills for surgery there?

That’s Circle Health who are almost bankrupt? Who have only ever run a small private hospital in Bath? Is this another AssetCo fiasco in the offing?

[25] If ‘Circle’ go bust – who gets to pick up the pieces – and will it involve extensive job cuts, or a government bail out?
http://www.independent.co.uk/news/uk/home-news/job-cuts-spark-calls-to-bailout-southern-cross-2294587.html

I take strong exception to this statement:
“And of course, the PFI project was started by the Tories and expanded under Labour, so no-one (and I doubt the LDs were seriously opposed) comes away with any foresight/integrity.”
I was a member of a small Unison NHS senior managers delegation that met with Dawn Primarolo at the Russell Hotel in London before the 1997 election that brought Labour to power, (in fact I flew down from Scotland specially) and we did our very best to persuade her to drop the Tories PFI initiative. She didn’t listen, or she couldn’t get the message to the inner circle, and the rest is history. But, at least we tried. Unison comes out of this looking pretty good.

So the problem with Circle Health buying Epsom Hospital is that Circle Health might make losses?

That’s interesting because Epsom Hospital is presently part of the Epsom – St Helier University Hospitals Trust, which is facing a budget deficit of £38 million this year – [proportionately] the largest in the country.
http://www.yourlocalguardian.co.uk/news/local/epsomnews/9025887.Hospitals_facing_biggest_budget_deficit_in_country/

The two hospitals are divorcing because it looks as though the existing hospitals trust, combining both the hospitals, will not be financially viable. The hospitals are therefore looking separately to merge with other hospitals in order to secure their respective financial futures. St George’s Hospital has bid to merge with St Helier Hospital but Paul Burstow MP, the minister of state for health and a local MP, has declared that he is opposed to such a merger.

Compare Epsom Hospital under NHS management. Shortly before my operation last year I was presented with a consent form to sign. All routine, the form was all neatly typed up but with the wrong operation so the surgeon had to change it by manuscript before I would sign. After 7 days in the hospital I was discharged to a private convalescence home with bed sores.

On the face of it, the prospect of Circle Health buying Epsom Health and contracting a merger with another Surrey hospital to form a financially viable trust is attractive as the present arrangements are not sustainable. No change is not an option.

7. Leon Wolfson

And sure, wreck the economy (minimum 20% GDP loss), lose the financial and media centres to Europe and Canada respectively, have tens of thousands starve and freeze every winter, people sleeping on the streets en-mass again…. a lovely third-world country you want.

Which is precisely what the Loonie Right told you would happen with the Euro. Don’t say you weren’t warned.

27. the a&e charge nurse

If ‘Circle’ go bust – who gets to pick up the pieces – and will it involve extensive job cuts, or a government bail out?

Probably a bit of both but mostly the shareholders losing their money. So what if it goes bust? The hospital will still be there. So will the doctors and nurses. Presumably the management will be cleared out, wage contracts re-negotiated and the hospital will carry on. Much as is likely to happen with Southern Cross.

A big improvement on what happens when the NHS is run badly.

@30 – Oh, so because you quacked and quacked about how things would happen if you carried out your far right plans, directly trying to causing them is acceptable?

…

No, it’s not, and attempts to cause them are attempts to sabotage the future of this country, no more and no less. Be satisfied with the dismantling of the NHS which you’ve won from the LibDems.

I’m confused here.

As I understand it, PFI hospitals are not part of the NHS estate. They belong to the consortia who built them, and the NHS rent them (and pay for the PFI build) from the consortia. The whole point of it was to avoid the capital charge; a levy of around 4% on NHS buildings and property. It does not matter if you close wards, close the building, burn it down. The consortia still have to be paid and selling them to someone else as I see it is not going to change that, It’s still got to be paid. There is leverage in getting consortia to hand over the profits from the re-financing of PFI loans and there is a voluntary agreement that they should give 30% of the profit back to the NHS, but it’s not followed. As we now own about 80% of the banks, it would seem that it is just a question of political will to get the consortia to do that (many bank are involved in the consortia). Can anyone enlighten me here, if I’m wrong about this? Btw, some of the leases on the land that PFI buildings stand on are for 100 years. The public sector needs to get a whole new set of lawyers if you ask me.

[32] “The public sector needs to get a whole new set of lawyers if you ask me” – a not unreasonable conclusion until we factor the dual effect of political ideology and influence of powerful lobby groups on the general direction of our health care.

What is the endgame for Lansley, or what had NuLab been planning before Dave & Nick took the con?
In short the answer is ‘managed care’ – now on paper managed care is “intended to reduce unnecessary health care costs through a variety of mechanisms, including: economic incentives for physicians and patients to select less costly forms of care; programs for reviewing the medical necessity of specific services; increased beneficiary cost sharing; controls on inpatient admissions and lengths of stay; the establishment of cost-sharing incentives for outpatient surgery; selective contracting with health care providers; and the intensive management of high-cost health care cases” – put more simply, the NHS is to be refashioned on the sort of model that has resulted in by far the highest health costs on the planet.

Lansley is asking us to put out trust in “any willing provider”, a synonym for the circling health corporations who will each have their ow set of anxious shareholders and clever lawyers and accountants.

Ironically the bureaucracy associated with ‘managed care’ gobbles around a third of America’s entire health spend – in 2003 administrative expenses were put at $399.4 billion (out of total health expenditures of $1,660.5 billion) – that’s more than enough money to provide health care to all of the USA’s uninsured.

In comparison the clever fatcats who bamboozled the poor old DoH over PFI contracts is relatively small beer to what is coming?

@ 19:

I suppose I’d be wasting my time if I were to point out that most brownshirts weren’t actually that conservative?

Sevillista @ 16

The Government wants (indeed, given capital expenditure plans needs) to use PFI in the future. Re-writing terms will not encourage investors to do so

That’s almost as stupid as saying “the government will need IT in the future, so scrapping a wasteful, poorly procured £12bn IT contract is wrong ‘cos it might upset IT providers.”

A signal that the taxpayer is no longer going to be taken for a ride by New Labour cronies in Accenture, KPMG etc. will lead to better, not worse, procurement.

@flowerpower

The Government needs to convince potential investors it will honour future PFI contracts. If I was considering investing in PFI and I thought that the Government would renege on that agreement to pay me what it promised when it signed the contract, I would not invest or demand a sizeable premium to reflect this additional risk.

Or do you think there are a lot of stupid investors out there for the government to harvest?

@ 36 sevillista

Well, fortunately neither the government nor the National Audit Office agrees with you.

The renegotiation process has started and word is, it’s looking good.

As for your investors, on one project where they ended up getting a 60% return (as opposed to 15% originally envisaged) they were happy to go 50/50 with the government on the windfall during re-financing.

I’m afraid Labour were SO incompetent that there’s plenty of room for investors to still make a healthy profit
AND for the taxpayers to get some justice.

The main rip-off of PFI is that they charge the hospital or other business they run – the same cost for each little maintainance job as getting a contractor to come do the job so that a worker previously employed directly by the hospital at say £10 per hou total can be charged to the PFI hospital at about £160 per hour