NHS market costs: calculations & key CAUTION by Lucy Reynolds

This account summarises the issues very nicely.
The most recent quote it cites, £30 billion a year spent now on the NHS market looks perfectly possible to me as a current cost of the NHS market, though probably is no higher than that as yet.
I calculated the £10 billion cited a couple of years ago, based on what was known of whole-system cost breakdowns, as a very conservative figure that could not be attacked as an over-estimate.
It is certainly a considerable underestimate, actually. If the cost of the market was already 14% of budget (York study, which looked at 2005 data) before the EU Commissioning rules were introduced into the NHS by Mark Britnell in 2006-2007, I would think it must now be well over that 14%.
If the true cost of administration in the USA is around 31% of the money spent on it, then we must now be somewhere in the middle of the envelope 14% to 31%. If you consider, for instance, the mid-point of that range, 22.5%, on a budget of £115 billion a year (source for £115 billion: http://www.nhs.uk/NHSEngland/thenhs/about/Pages/overview.aspx ) that would be about £26 billion a year.
The £30 billion figure from the LDs represents an assertion that 26% of the £115 billion NHS budget is spent on the market.
Note also that the NHS spent between 3.5% and 5% of its budget on administration during the period 1948-1978. 3.5% may be as low as we can go.
CAUTION: the reason that so many voices (including LDs now with that £30bn estimate) are now attacking the market provisions of the Health and Social Care Act 2012 is that they are leading up to a narrative of “we made a mistake on the NHS”.
This narrative has already started to appear in the national press, and it will lead on to a bill removing certain aspects of HASCA 2012 in such a way that a private sector monopoly of the NHS becomes legal – because the takeover of Commissioning Support Units by UnitedHealth subsidiary companies through joint ventures, mutuals and social enterprises that is currently underway could be challenged in the future by its private sector competitors (or indeed by the public sector) on the grounds that HASCA 2012 bans all monopolies in the NHS. This ban was used to break into the public sector hospitals’ monopoly of access to the NHS budget, but now the public sector NHS is collapsing as planned and UnitedHealth needs to get a monopoly of commissioning support in order to be the only insurance company that has access to NHS patients’ medical notes (those carrying out the commissioning need this access in order to carry out the commissioning task). Such monopoly access to medical history information of those it insures is invaluable when it needs to find reasons to deny claims.
While I would of course not argue for maintaining any part of HASCA 2012, removing even the whole of it is no help to the NHS. The foreign corporations can enforce their “rights” to a share of the NHS budget using EU competition law, TTIP, etc, unless we qualify it for the exemption from these by renationalising the NHS completely.
The privatisation from now on involves the gradual shrinkage of the public sector NHS offer, in order to build the private health insurance market. See chapters 4 to 6 of this for details:
The other issue which will be swept into the “we made a terrible mistake on the NHS Bill” will be the removal of the PFI contracts from the hospitals, which has been marketed as “a way to save our hospitals” to the extent that it has found its way into the current text of the NHS Reinstatement Bill. It is, however, a move to complete the hospital privatisation, if copied in isolation into a Tory Bill, along with the removal of HASCA 2012’s ban on monopoly provision in the NHS as explained above.
I suggest we all raise our voices loud and clear for NHS renationalisation. With Mr Corbyn’s arrival, such discussions are back on the table. While I applaud his endorsement of rail and utility renationalisation, it’s the NHS renationalisation that is the urgent one!
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