Battleground NHS

How the imposition of market forces has forced the NHS into critical condition.

“No society can legitimately call itself civilised if a sick person is denied medical aid because of lack of means” — Aneurin Bevan

According to every media outlet in the land, the NHS is in crisis. The service’s present travails are oft discussed in a similar vein to natural events, as if they were the outcome of uncontrollable forces, whether they be an especially virulent strains of flu or extra cold weather. Yet these are merely variations on what is to be expected by any health service during the winter period.

Several decades of political choices have led the health service, a bellwether of the state of our democracy if there ever was one, to the precipice. The transformation of healthcare from a right provided to citizens to a product offered to customers can be traced back through Tory and Labour governments alike.

No democratic mandate has been secured for the imposition of this transformation. Tellingly, no political party or government has attempted to attain support for the restructuring and privatisation which has taken place thus far, in recognition of the fact that it would be nigh on impossible.

Drawing on the work of Karl Polanyi, this article aims to trace the history of how numerous governments have had to rely upon privatisation of the NHS by stealth, enforcing a market where none previously existed. If we are to fully appreciate what is happening in the NHS and other public services, we need to overcome an erroneous juxtaposition of ‘states’ and ‘markets’ in our understanding of the economy. As we shall see, under the direction of Labour and Conservative governments alike, the state has played a key role in enforcing market discipline on the National Health Service.

The Great Transformation: The Role of the State In Market Relations

The Hungarian economist Karl Polanyi would have recognised the structural changes forced upon the NHS in recent decades as a means of imposing a market relationship where none had previously existed. Though his masterpiece The Great Transformation was written in the 1940s, the ideological underpinnings of the shifts which have taken place within the NHS would have been all too familiar.

In Polanyi’s time, the very real wreckage of what is often called ‘the free market’ led to The Great Depression and the rise of fascism. It would be churlish to ignore the parallels with our own political era. Since the 1970s, we’ve had what Polanyi would have called the ‘disembedding’ of markets from wider social relations; this has led to a global financial crash which, like the Great Depression before it, has resulted in the rise of reactionary populism the globe over.

The changes forced upon the NHS in recent decades are a prime example of Polanyi’s claim that the market society is not a naturally occurring phenomenon, but is instead a political and social construct. Polanyi teaches us that markets are neither self-sustaining nor inevitable.

In the nineteenth century, with the transformation towards a more market-centred society, markets became regarded as autonomous forces in their own right. The presumption was that ‘self regulating’ market forces should organise all of society. This was in stark contrast to the vast swathes of human history that had preceded, during which the ordering principles of society, politics, religion and social norms were the prevailing forms of governance.

Today, land, labour and money are treated as commodities. There was a time, however, when they were not: they used to be more socially embedded, and subject to moral consideration, religious beliefs and community management. This control over markets had always been a recognition of the delicate nature of human social relations, as well as a means to manage these precious, finite resources.

The basic dilemma is that the free market cannot self-regulate itself. A laissez-faire economy is, in fact, planned. It necessarily needs government management and social control. In addition, because markets treat nature as essentially limitless and human beings as commodities, they are always pushing human societies and nature to the breaking point. Invariably, crises erupt that require societal interventions. The relentless imperatives of markets cannot prevail indefinitely against the irreducible needs of human beings and nature. — David Bollier, in “Why Karl Polanyi Still Matters”

For Polanyi, the development of market economies was inextricably linked to the development of the modern state, since the state was needed to enforce the changes in social structure required for a competitive capitalist economy. As a result, the relationship between state and market is a matter of political choice—states can shelter the populace from the worst ravages of the market, or they can extend its reach. Here in the UK, recent governments have chosen the latter, and the wreckage of state-imposed market discipline has become all too evident today. This stems from the relentless imperative of markets to commodify everything, including the basic provisions necessary to secure the health of the populace.

Market Ideology As Political Weapon: From Consensus to Dismantling the NHS

The very creation of the NHS can be regarded as a societal backlash against the ruinous results of economic liberalism up to the mid-twentieth century. Prior to 1948, the medical profession was unable to provide anything like comprehensive, quality healthcare at low costs the way the NHS does today.

In his drive to create a nationalised health service, Aneurin Bevan faced opposition from doctors, consultants, the Conservative Party and even fellow cabinet members. Crucially, the British Medical Association fought tooth and nail against the proposed service, with a letter in the British Medical Journal describing Bevan ‘a complete and uncontrolled dictator’. The fight against the NHS was framed by some as fighting against the Third Reich all over again, with the claim that a nationalised health service could be ‘the first step, and a big one, towards national socialism.’

In time, doctors acquiesced to the new service, in no small part due to the financial inducements which Bevan was to offer them. Even the Conservative Party, which had initially opposed the creation of the service, came to accept it. After the fall of the Labour government in 1951, the Conservatives returned to office hoping to replace the service, creating a committee to study different ways to pay for the nation’s healthcare needs. To the government’s surprise, the committee reported that the NHS was cost-effective and thus deserved more money. The Tories accepted the findings and the principle of a free health service for all, paid for out of general taxation, had been established.

The public consensus in favour of the NHS led Labour and Tory governments alike to increase spending, at an average rate of 4% per year (above inflation) since the 1950s. This stands in stark contrast to the present rate of 1.2% above inflation, a rate of growth even smaller than under the last Tory government between 1979 and 1997. Under Margaret Thatcher and John Major, the health service saw an average spending increase of 3.4% above inflation.

Though funding only dipped slightly below its historical average during the Thatcher-Major years, the government’s pro-market ideology paved the way for the present assault on the NHS. The very concept of public services provided for the common good was attacked, as an outmoded restraint on the potential offered by a fabled entrepreneurial spirit.

Building the Neoliberal Consensus—Transforming Healthcare From a Right Into a Commodity

Recent decades have witnessed the increasing use of market forces as a means to discipline any potential political backlash against economic liberalism. An elite political project to counter the growing power of organised labour over economic policy has culminated in the present neoliberal consensus amongst policy-makers. The ‘de-politicisation’ of economic policy has been central to the neoliberal project, which has had major implications for the NHS. Without securing a democratic mandate to do so, several governments have transformed a basic human and social right into a commodity to be bought and sold.

The dissemination of the ideological belief that ‘self-regulating’ markets are the most effective means by which to organise human life would have grave consequences for the NHS.

During the 1980s, Conservative MPs Oliver Letwin and John Redwood released a think-tank paper, inspired by newly hegemonic neoliberal thought, which envisioned the introduction of universal private health insurance. Letwin would cause controversy two decades later as David Cameron’s policy review chairman when he claimed a future Tory government would set ‘no limits on private sector involvement’ in healthcare provision.

In 2005, Jeremy Hunt co-authored a book called Direct Democracy, calling for the NHS to be dismantled. The book declared, “Our ambition should be to break down the barriers between private and public provision, in effect de-nationalising the provision of health care in Britain.” During his disastrous tenure as health secretary, Hunt has since gone on to implement the programme he previously expounded from the opposition benches.

Of course, it wasn’t only the Conservatives who laid the political and intellectual groundwork for the privatisation of the NHS.

The Role of New Labour

New Labour’s 1997 manifesto promise to ‘end the Tory internal market’ was promptly discarded once the party got into power. In fact, Labour continued the Tories’ efforts apace, introducing market structures like foundation trusts and GP consortia, and allowing private corporations into the commissioning process under the aegis of public service reforms.

Foundation Trusts, in particular, function as a concealed means of transferring ownership and control of publicly-owned assets out of the NHS—effectively, privatisation through the backdoor. FTs are required by law to use their assets (land, buildings, etc) primarily for the purpose of providing NHS services to NHS patients. Yet, FT hospitals are permitted to generate almost 50% of their income from ‘non-NHS services’, which often entails offering private patients better access to NHS facilities.

What’s more, trusts force their hospitals to behave like businesses, shifting priorities away from patient care and toward financial management instead. The result of forcing the NHS operate as a business is failing hospitals as well as massive indebtedness of trusts. Many are groaning under the strain of costly Private Finance Initiative contracts, the preferred means of funding infrastructure projects since the last Labour administration. These grotesque contracts, with punitive rates of interest attached, add up to £300bn worth of debt for projects worth only £55bn.

The Coalition’s Coup de Grâce

Before entering government in 2010, David Cameron promised tht he would implement no ‘top-down reorganisation of the NHS.’ This was swiftly followed by a top-down re-organisation of the NHS. Under daily operational control of chief executive Simon Stevens—formerly of the American healthcare company UnitedHealth—the service has been entirely transformed:

[In 2014] alone, out of £9.63bn worth of NHS deals signed, £3.54bn (nearly 40% of them) went to private firms. Private providers are cherry-picking lucrative services to boost their profits leaving the NHS with less money to provide comprehensive care … In effect, the NHS will become a state insurer along the lines of Medicare in the US. Meanwhile, more patients will have personal health budgets, supplemented by insurance in the future, thus making them self-paying consumers in a market-based system. The Health Act is a one-way road leading to charging and universal private health insurance. — Youssef El-Gingihy, in “The NHS is on a one-way road to privatisation”

In recent decades, the NHS has been transformed into a business operating an internal market, and is itself gradually being opened up to the wider private healthcare marketplace. The creation of a market in British healthcare provision has occurred under the radar, without being subject to public debate or vote prior to a general election.

A Politically Constructed Crisis

As Polanyi would have predicted, the imposition of this market has had disastrous consequences for the quality of healthcare enjoyed by ordinary people.

40% of NHS walk-in centres have been closed since the Conservatives came to power in 2010, placing greater pressure on A&E departments. There have been cuts to district health nurse funding and 14,000 bed capacity lost. 17,000 patients waited in the back of ambulances at A&E departments in the week leading up to New Years, an increase of 42% over the previous week alone.

Unsurprisingly, patient safety has been put at risk, with bed occupancy rates in hospitals standing at 91.7%, well above the safe level of 85%. Many hospitals have put together makeshift wards to add to capacity. This despite NHS England forcing hospitals to delay 55,000 planned operations, including cancer surgery.

Doctors are now taking it upon themselves to apologise to patients for the ‘third world conditions’ being experienced. Senior health staff say the pressure the NHS is under now is the heaviest it has ever been. “We are seeing conditions that people have not experienced in their working lives,” says Dr Taj Hassan, the president of the Royal College of Emergency Medicine.

With such conditions and outcomes worsening year on year, the term “winter crisis”, used to describe the current failings in the health service, is a misnomer. The term belies a much deeper crisis of democracy and obscures the very political choices which have led to the current challenges the NHS faces. For the NHS to survive, let alone prosper, no less than a paradigm shift in the role of the state will be required. A reorientation from enforcer of market discipline to provider of public goods and services and wealth redistribution is now critical. No doubt this will require a long-term political project in the form of a popular counter-revolution against neoliberalism. Such a counter-revolution would embody a societal backlash against the degradation wrought on our NHS and multitudinous other areas of social existence.

Society’s Backlash?

The creation of the NHS in 1948 forced healthcare provision to be re-embedded within a wider system of social relations. With a population exhausted by its wartime effort and sacrifices, there was a growing recognition that certain areas of human life were too important to be shaped and influenced by market forces. Leaving the provision of healthcare to the free market had been proven an abject failure requiring political intervention and regulation.

Today, if we wish to reverse the debasement of our healthcare system that has been wrought by the ‘free market’, we will require the same intellectual and political courage of our forebears.

Breaking with decades of party policy, the Labour Party’s 2017 manifesto outlined early plans to do what Paul Mason has described as ‘switching off the privatisation machine’ across the economy, including the NHS. Whilst greater funding of the NHS through higher taxes on the top 5 percent of earners is welcome, the most critical part of Labour’s proposals is to completely reverse the privatisation of the health service. Repealing the Health and Social Care Act would once again make the NHS the preferred provider of health services and socially re-embed health provision as existing to serve human needs — not a source of profit.

Growing anger amongst patients, junior doctor militancy, the founding of a National Health Action Party and, most critically, the Labour Party’s disavowal of neoliberal orthodoxy all signify a pushback against the destructive hold of the market over the NHS — and society itself. The battle for the NHS will not be limited to a fight for the future for the health service alone. Instead, it will be part of a wider political project, now tentatively coalescing around the Corbyn movement, in response to decades of market discipline over and de-politicisation of the economy.

This fight exemplifies what Polanyi called a ‘double movement’ against the principle of economic liberalism — the principle of social protection aiming at the conservation of man and nature as well as productive organisations. To quote its founder Aneurin Bevan, the NHS will last as long as there are folk with the faith to fight for it.