Analysis

The finance dudes were all over this and couldn't find a loophole which would allow us to get out of it. Pretty annoying considering that we've just analysed our service contracts on cancer treatment machines - contracts from private companies £700k per annum. Cost of staff + equipment + all on costs to provide a better maintenance programme (2 minute response time + 99% uptime) £500k per annum. So the NHS service is still cheaper than the private sector equivalent even considering the 20% discount at the present time...

Here's the deal: An NHS Trust procuring equipment can either: 1) buy medical equipment direct, then manage it themselves (maintenance, QA etc), or 2) buy a managed equipment service, where you get the equipment + refresh every 7 years + maintenance, QA etc. Under route 1) the NHS pays VAT at 20% on the purchase price of the equipment. Under route 2) VAT is refunded in full. Our Trust owns around £80M worth of equipment, so a 20% refund over 7 years is a great incentive to sign up to one of these private sector deals. The private sector bids can cost considerably more than the NHS equivalent but would still be cheaper to the Trust. Trusts cannot legally set up their own equipment management services to provide equipment to themselves and reclaim VAT. Sounds great, until you think through where the 20% saving comes from (lost revenue to the taxpayer) and where a large proportion of it finishes up (lining the coiffers of an equipment management company). Is there an MP somewhere making a bucket out of this?

The last points are (were) covered. The Care Quality Commission both regulates and audits the NHS. They look at all aspects of the service, such as quality and safety of care, treatment outcomes, national minimum standards etc. The National Institute for Care Excellence looks at each new drug / therapy and decides whether this should be offered on the NHS and for what bearing in mind scientific evidence etc. The Audit Commission used to look at whether the NHS delivers value for money and has made some excellent savings in my opinion - delivering some scathing reports in to localised poor management and poor procurements which have prevented other NHS organisations from making the same expensive mistakes. They were conveniently disbanded in the recent 'bonfire of the quangos', just in time for the massive private sector healthcare procurement excercise which is just about to kick off.

Apply for one then. Plenty of people moan about how great public sector jobs ae on here, but never actually get off their backsides and apply for one. Or are you not qualified?

Incidentally, I think the chap from PricedOut played an absolute blinder. Spot on the money and kept his cool which is always hard in these adversarial discussions - plenty of people on Today just start ranting and blow their case out of the water.

Thanks for the question. Unfortunately I don't know these figures. PFI is definitely expensive, as contracts are very heavily loaded in favour of the investors once the hospital is built. The benefits of PFI as I see it are: 1) Hospital gets built on time, and to spec or there are significant penalties 2) Less capital outlay for the govt up front Overall, having been involved with one I think it is expensive. As to whether it's worth it or not you would have to ask one of the finance dudes. The NHS was very run down and it is true to say that the last govt put significant funds into turning this around. It was not unusual for people to have to wait 18 months in a lot of pain for surgery, or to find themselves abandoned in the corridors of A&E. I see at lot less of that nowadays. We also now have state of the art surgical, radiotherapy, radiology equipment etc now rather than the rubbish we had 15 years ago. So much so that we can attract private sector clients into NHS hospitals. Salaries were absolutely dreadful compared to the private sector a few years ago - few perhaps remember the public outcry for the nurses and firemen who could not afford to buy their own home. Nowadays salaries have improved in the NHS, but nobody in the country can buy their own home! So I would say that it is a lot better than it was; perhaps people don't remember how bad it was back then. I'm sure it is not 100% efficient, but then neither is any large organisation, public or private. From what I see now I suspect we'll be going back to the two tier system which was developing nicely last time round; rubbish state sector provision and good private provision for those who have the means.

Bank credit magicked out of nowhere? Are you saying you don't spend any of your income with private companies?

Just anecdotally, I had a skim round a couple of people in the department and found: 1) A colleague who is currently on £45254 who was offered £80k recently to go to another hospital in the NHS - and turned it down (unbelievable) 2) A colleague who left the NHS on £30460 for a private hospital in 2009, then returned a year later on £38851 (a bit smarter) We did capture somebody from the private sector this year, who took a cut in salary to 'get off the road' and into a single location job. It's all about supply and demand at the end of the day. They make the same arguments about the creme of the banking sector; the difference is that they have apparently been allowed to use taxpayer's money to carry on paying disproportionate salaries / bonuses etc.

So how does money flow into the private sector if not from taxpayers? My understanding of the situation is that you spend a proportion of your income in tax which is currently used to fund (amongst other things) essential services, and a proportion of your income in the private sector. Or do private sector companies just magic it up from nowhere? The difference is that you have a choice whether to pay for private services or not. You could scrap tax and give everyone the choice about whether to pay for healthcare etc, but I think we've done that argument ad nauseum in the previous 19 pages.

My point precisely. It just took you 18 pages to get there...

Already open 8-8 in many departments at my Trust - which is a significant change on 10 years ago. Private patient numbers up (we're having a drive at the Trust to get £1M per annum of business in at the expense of smaller private institutions locally). Sounds as though this is happening in NHS Trusts elsewhere looking at other posters. We do some quite cool stuff with training - we have an OR with 15 cameras, weblinks, robotic surgery etc and are teaching all around the world now. In my own speciality we do some work abroad and could readily expand this should profit be the name of the game. No reason not to compete globally on actual healthcare provision in a bigger way either. Except that there will be less time available (and motivation) for us to treat non-paying patients and to carry out non proft making activities. I have no problem with all of this, as long as people are given the facts and can make an informed decision, rather than be told that there will be no NHS cuts and by the way you have to pay the banks all that money. Goodnight...

Bang on the money. You obviously know a bit more about what's really going down.

Good luck on getting that when you're 50 and two of your blood relatives have died of cardiomyopathy. You may want to look at the 'exclusions' section of the policy. Not covered? I guess the NHS will pick up the tab as usual then...

Fairly patronising, but I think the gist of your reply is that you can run healthcare on the cheap as long as you have enough mugs to work in it on a low salary and you don't make it too good. My point was really that people are sleepwalking into a situation where healthcare is being run down and making your own private provision will be pretty important, whilst apparently having no choice over adding £1.5tn to the public bill to bail out banks, or £950M to RBS staff just in case they leave the country. They are not being given the choice. Did you ask to bail the banks out and pay the bonuses? Did you ask to have a cut in NHS services? Or were you told that you had to pay the bonuses as the alternative wasn't worth thinking about, and that there will be no cuts to NHS services; ringfenced budget etc etc. Give the people the facts and let them decide.

The last time WHO looked at this, healthcare in the UK and France (public) cost around $3000 per capita per annum. In the USA the cost is $6000. All of the healthcare indicators in their study showed that healthcare in the USA was less effective (Infant mortality was higher, life expentancy lower etc). Even my own quick look at cost of CT scans the other night showed that the cost in the NHS was around 2-3 times lower than in the private sector (see earlier post). You may aspire to opt out, but I would spend a little time studying the facts first.

I think people want this though because they're currently all caught up in the whole deficit thing. Cut the public sector. More private sector. They're not too pleased about the £1.3bn half year profits from Centrica mind (cue list of profits from other privatised utilities), so I don't think they've perhaps thought it though that carefully.

So why not privatise healthcare and education to make profits? You still haven't explained that?

This is exactly what is happening - a great way to balance budgets with a decreasing government spend. What it means in reality of course is that the 'free' component of healthcare will be wound down. People have perhaps forgotten the regular '24 hours in A&E sitting in their own excrement' headlines of 15 years ago and I hope we don't get back there any time soon, but the signs are there already that the public service is going to get quite a bit worse. Those who are unhappy with the state of affairs will then go private and this will relieve the burden on the taxpayer. No problem perhaps (except that private healthcare seems to cost double or more state healthcare for an equivalent or worse outcome - but that's another argument). I just think the coalition should be honest about this. The UK public do genuinely have some choices here. We could keep bailing out banks and financiers (£1.5trn at last count: http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8262037/Bank-bail-out-adds-1.5-trillion-to-debt.html). Or we could take some of that money an invest it to maintain a better state healthcare system. Even if you stopped those £950M bonuses at RBS you could pay a year's budget for a few NHS Trusts. At the moment, people are not being given the choice.

But there comes a point where it is not economically viable to carry on doing work that you enjoy but not get rewarded for it. I have looked at jobs in the private sector which offer the same kind of satisfaction benefits; if pay and benefits are much better then I will go, surely? Some people will stay in low paid jobs through thick and thin because they love what they do. I am suggesting that there are also a fair proportion (3 in my department in the last 6 months for example) who would also jump ship if the pay and conditions were better.

That was one example. Private sector wages rose by 2% or so last year as a whole. You only need a few years of this before pay and conditions in the public sector are significantly eroded c.f. private sector. The public might want this, but must have to accept that you will lose the best talent to industry. If finance goes on as it has, then most scientists will continue to go into finance if they have any sense.

So you would presumably agree with the following business model: Find something with a large customer base, with demand growing as time goes on. Service industry where a majority of customers will not be able to buy the product abroad. Highly specialised staff and equipment gives big barrier to entry. Should be a pretty good industry to create in the UK? Plenty of potential for profit? Now couple this with the idea that you can reduce people's tax bills significantly. Does this sound like what the country needs? More profit making companies? Lower taxes for all? The solution you are proposing is simple. Privatise the NHS. Privatise schools. Privatise emergency services. You'll save a fortune off the tax bill and get the profit making industries this country needs.

So how would you run an average NHS Trust with, say 3000 employees with no management?

"'have you considered cutting the wage? Have you considered cutting the pension?" Have you seen the news recently? Wage freeze for 2 years against RPI at 5%. Pension costs rose by up to 1.5% in 2008 and will rise again by up to 3-4% over the next 4 years. Barclays investment bankers got a rise of 23% last year: http://www.guardian.co.uk/business/2011/feb/15/barclays-capital-average-pay-236000-pounds. Over the whole private sector there was a 2% or so average rise in wages. At some point, you have to think that you will start losing the 'creme' of public sector employees to the private sector. If that doesn't bother the public then there's not a problem.

I would like to see the scientific evidence for this

I suggest your mate applies for the next Consultant Psyciatrist post that comes up - sounds as though he's missing a trick.