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Shock therapy for the NHS

nhs getty 35306t 222x300 Shock therapy for the NHSIt’s called “the shock doctrine” and it originated in the University of Chicago over fifty years ago. It was designed by a group of economists headed by right wing ideologue Milton Friedman. They possessed an almost religious belief in an unregulated, laissez faire, free market utopia and their idea was simple; the best way to introduce whole system privatization and an unfettered free market in any arena is through chaos. Though its origins were academic, it is a methodology that has been applied practically on numerous occasions around the globe in recent years. But, with disastrous consequences each time. Still, evidence never inhibits a zealot.

Just after the collapse of the Soviet Union, these same economists travelled to the former communist bloc and advised Yeltsin that the system needed “shock therapy”. They persuaded him to sell off virtually the entire slate of state industries in one go. Even Thatcher took eleven years to privatize a relatively small chunk of the UK economy, but the Russians – following the path of shock therapy – did it overnight by issuing share vouchers to individual citizens. People suddenly lost their job security, state incomes, benefits and pensions, and instead walked round with certificates which meant nothing to them. So they sold them to the few in the system (often former KGB or Communist Party officials) who had some money at bargain basement prices; and thus, virtually overnight, a whole class of Oligarchs was born. Russia, as we well know, has since been rife with inequality and the inevitable corruption that ensued in the wake of such a crippled state.

Modern history is littered with further examples of the application of the shock doctrine. In the aftermath of Hurricane Katrina when almost 2,000 people lost their lives and many thousands more lost their homes, schools and livelihoods, the free market ideologues descended again. The Friedmanite American Enterprise Institute enthused that “Katrina accomplished in a day … what Louisiana school reformers couldn’t do after years of trying”. They insisted that instead of spending a portion of the billions of dollars of reconstruction money on rebuilding and improving New Orleans’ existing public school system, the government should provide families with vouchers, which they could spend at private institutions. Public school teachers called Friedman’s plan “an educational land grab”. Observing what appeared to be a very deliberate strategy, journalist Naomi Klein coined the phrase “disaster capitalism”, referring to, “orchestrated raids on the public sphere in the wake of catastrophic events.” She went on to describe it in detail in her excellent book; “The Shock Doctrine”. She cites examples of its utilization from Chile to Iraq and what many free market economists have discovered since is that, rather than wait for a disaster, the ideal conditions for such a revolution can also be created.

Working within the NHS today, I have witnessed first hand the sheer confusion and, in some quarters, borderline panic, that has ensued as a result of the governments recent announcements. PCTs were established as the purchasers in the system – deciding in a planned way what services from hospitals should be purchased on behalf of GPs. These are massive strategic planning decisions that involve many billions of pounds. Overnight, the government plan to remove all of them, and hand the totality of their powers over to GPs. They have not described how GPs – with no training in accounting or management – can take up this role. They have not provided guidance as to how GPs might pool together to achieve this. As the so called “GP consortia” can be as large or as small as anyone chooses, a chaotic bout of “run around” has ensued with GPs trying to partner up with each other across boroughs and local boundaries, unsure which way to go.

The PCTs have already started to dismantle and in London, staff with no future are haemorrhaging in droves, leaving a skeletal operation alone to determine the allocation of billions worth of spending. The Chair of The Royal College of GPs has described the proposed changes as the end of the NHS as we know it. The BMA, the Royal College of Nursing and several of the specialist medical Royal Colleges have spoken out against it. Calls to phase it in and start with a series of gradually building pilots have fallen on deaf ears. No one is sure how it will work or how adversely it will effect patient care. The very people who will be tasked with implementing such rapid change are already utterly perplexed by it.

That is because they are supposed to be. It is an engineered shock.

All the while, waiting in the wings, with a metaphorical defibrillator, will be the private sector. The large American insurance based corporations – with their profits about to be decimated by Obama’s universal healthcare legislation – are eyeing the soon to explode UK healthcare market with salivating mouths. The vacuum that is being created, is being created for them. They will be hired to do the commissioning by and instead of GPs who are, through no fault of their own, clearly untrained and unable to do it. And it won’t be long thereafter before these same private organisations start hiring themselves as providers instead of NHS Trusts, many of which will ultimately go bust. The government are, in fact, proposing to rig the market in their favour by requiring every single contract to go for competitive tendering. This means that, even if there is a high performing Trust with which the local population is happy, they will still have to submit themselves for retendering to the commissioners on a regular basis who will then be legally obliged to consider private sector organisations as part of the process.

Subjecting hospitals to the instability of a retendering process could be disastrous. I have seen it happen myself. Staff numbers will fluctuate wildly as doctors and nurses, unsure if their organisation will survive, start moving between providers – just as they do in, say, the banking sector. This will potentially destroy continuity of care, as well as in-patient and emergency service provision which relies on regular staff numbers round the clock. A hospital shutting down as a result of loosing a bid to a private sector provider, who has undercut their costs as a way of breaking into the UK market – rather than failing to provide an adequate service – could be a potentially dangerous event resulting in the collapse of secondary health care provision for the entire local area.

This is why unfettered free markets are a bad idea for health care, and why the US experience has led to a hard fought reversal away from marketization. This is also why, if they were asked to vote for it, the public never would. In fact, in the last election they clearly did not. The Conservative manifesto, with its “no major reorganisations” commitment gave exactly the opposite impression. The only way such drastic privatisation can ever be achieved is through a short sharp shock to the system. Nick Boles, the pro Cameron Conservative MP, laid it out starkly, “’Chaotic’ in our vocabulary is a good thing.” Friedman would be proud. As he himself said, “only a crisis – actual or perceived – produces real change”.

This is clearly not chaos by incompetence. It is chaos by design.

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  • niceladydoctor

    Excellent article. I went to a meeting last week of all the GP practices in our area (I’m a GP) to discuss applying for “pathfinder consortium” status. It was well attended but that did not mean there was general support for the reforms. Rather it was GPs wanting to find out what was going on, fearful of being left behind, aware of the vacuum in the local health planning functions with the decimation of our PCT and wanting to be able to influence events which were rapidly progressing, even before the reforms have become law. The level of ignoraance about the reforms was astonishing. Most GPs had no idea about what was being proposed. They did not know about competition law, the role of Monitor, the requirement to competitively tender for most services. They thought the current collaboarative relationship with the local hospital could continue. PCT staff were there too, and they and most GPs present thought that if PCT staff worked with the emergent consortium they could keep their jobs, albeit employed by the consortium. We were soon disabused of this notion – the person from the department of health made it clear in her presentation that even support functions for consortia will have to be competitively tendered. I can’t see our ex PCT members being able to compete against KPMG, who, incidentally, are currently contracted to prepare the sepcifications that pathfinder consortia should use when commissionig support now, and most likely when they are proper consortia. United Health are working with KPMG in this. They are also providers – talk about conflict of interest! And as your article says, the big multinationals and US companies are eyeing up these opportuntities. They have been advising both Conservative and Labour governments for years. Their place men have held key advisory roles at the heart of government. The 200 strong commercial directorate, set up by Labour, had about 90% of its staff from the private health sector. There is a revolving door between the commercial health sector, the government (including ex health ministers) and the civil service/department of health. We need some good investigative journalists to expose all this. Why have the mainstream papers failed to cover this?

  • StrokeVictim

    Oh that is it was it? Doctor Jock helpfully explains that the whole purpose of the NHS to pay the doctors salaries. A more classic example of the naked self interest and arrogance of the (retired) hospital consultant could hardly be found. I bet that was on top of the list drawn up by Nye Bevan. Socialised health care, tick, free access for all, tick, cradle to the grave, tick, free at the point of treatment, tick, but much more important than all that, its a system to introduce a doctors payments scheme. Thats clearly why the doctors opposed it and why Nye was so passionate about it…..stick to doctoring and that goes for all doctors – its what they are good at, not managing or commissioning!!!!!

  • highlandjock

    You may be interested to know that ALL the evidence given to the Royal Commission to which I refer was that the system should change in the way I indicated. It is not a matter of how much doctors are paid (and they are paid very poorly compared with vast numbers of public employees and save lives rather than killing people as generals and bankers do). Doctors did not choose to be nationalised, and would prefer to be independent of politicians, as are lawyers.
    Incidentally, I was in no way arguing for more money for doctors, but you may be interested to know that my income would have been TEN TIMES as much in any other Western country.
    Nye Bevan was an idiot, who thought that once treated, the level of illness in the population would diminish.
    Management is what doctors do all the time, you charlie. ‘Managers’ in the NHS are omly required to run the ‘hotel’ functions of hospitals.

  • StrokeVictim

    Yep. Arrogance in spades. Nice to know that Nye Bevan was an idiot and my career was spent as a glorified chambermaid

  • highlandjock

    Yep. Stupidity in spades.

  • HJ777

    “The BMA, the Royal College of Nursing and several of the specialist medical Royal Colleges have spoken out against it.”

    In other words, the unions representing the interests of their members are against it.

    These bodies are hardly famed for their concern for the users and funders of the NHS, are they? In fact, their interests are usually diametrically opposed to those of patients and taxpayers – we want good service at minimum cost, they want minimum effort for maximum rewards.

  • Guest

    GPs will effectively privatise much of the NHS: localism does this.

    Medical accountants will clean up and corruption will become rife.

    When what will still be called the NHS is utterly discredited Chameleon will bring in a US style insurance led system. It will still be a national health system because it will cover the whole geographical area of the UK, but a third of the population will not be covered much beyond “voluntary” euthansaia.

    As Jeff Randall wrote of the scunner years back: “He never knowingly told the truth when dissemblance was a plausible alternative.”

  • HJ777

    Medics badly paid?

    Medicine is by far the highest paid profession on average in this country (much higher than bankers, for example). Our medics are also by far the best paid in Europe – GPs, in particular, are paid nearly twice the European average, as recent OECD report showed. Only in the US do they get more (and Americans generally are paid 30% more on average anyway).

    I’d also be interested to hear more details about bankers killing people, as you allege.

    Medics actually have relatively little positive influence on health – and most of the benefit comes from a few cheap, simple and well-established treatments. Sanitation engineers are far more valuable than medics. Think too of all the safety critical systems that you rely on every day (car braking systems, aeroplane safety systems, electrical safety systems, building structures, etc.) – all the work of engineers, not medics.

  • http://www.facebook.com/profile.php?id=1000086508 Tom J Maggio

    We al want minimum effort for maximum rewards… I don’t think that argument is valid. However, after getting half-way through “The Shock Doctrine”, I will say with regret that the UK is in for a rude awakening.

  • HJ777

    So you think I’m wrong, but you think that Naomi Klein makes sense?

    Oh dear.


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