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Don't feed the fatcats: how the NHS became corporate health

When privatisation is already so deeply embedded in the NHS, we can’t just blindly argue for ‘more funding’ to solve its problems, explain ESTHER GILES, NICO CSERGO, BRIAN GIBBONS and RATHI GUHADASAN

NHS workers on the picket line outside St Thomas' Hospital, London, May 1, 2023

THE NHS was built on the principle of universal access to publicly provided healthcare according to need. Nye Bevan’s In Place of Fear describes the transformative introduction of the NHS: “A free health service is a triumphant example of the superiority of collective action and public initiative applied to a segment of society where commercial principles are seen at their worst.”

Since Thatcher, administrations and corporate interests have colluded to reconfigure the NHS, working to commercial principles, despite the best endeavours of its workers. This 40-year corporate onslaught culminated in the sub-NHS provision we see today: “new models of care,” fake doctors, fake A&Es, understaffing, bed cuts, outsourcing and PFI. The devastating impact of this erosion of care is described in the 2025 RCN report, On the Front Line of Britain’s Corridor Care Crisis.

We have, systematically and relentlessly, moved from public provision and service to enabling corporate health. We have witnessed hollowing out, deskilling and then outsourcing throughout the public sector. Across education, energy, transport and mail, state institutions were systematically looted by capital interests.

To claim its effects stem from a lack of funding is to misunderstand the nature of corporate capture and the associated privatisation — as extreme a privatisation as we could imagine, with policy and decision-making transferred to corporate interests.

Public services were pared back to extract profit, with business mechanisms like marketisation, capital charges, public dividend capital, dividend and interest payments integrated into the heart of the service. “NHS” bodies have been designed and incentivised to recreate the self-interested motivations of the commercial sector.

New managers and accountants were directed to focus on the bottom line. They implemented policies of “choice,” competition and “sustainability” (profitability), went on exchange schemes with their US counterparts and fawned over proponents of the US Accountable Care Organisation (ACO) model.

The market, with its endless, costly hand-offs between commercial entities and constant reorganisation, destroys staff morale and diminishes patient care.

The revolving door

The corporate creep continued regardless of which government was in power. Executives shuffled through a revolving door from transnational corporate roles into the NHS and back again — recruited into the NHS to transform it into the commercial model we see today.

These “hot-shot revolvers” include Michael McDonnell, the former Blair adviser whose policies offered an “enormous opportunity” to the private sector. Later at Sensyne Health, he said his NHS background was useful for reaping such opportunities; subsequently, he became strategy director for both NHS England and UnitedHealth.

Next, we have Timothy Ferris, seconded from the US as NHS England director of transformation: “If we can keep our spending below [set costs], then we will share in some of the savings, and that’s the basis for the accountable care organisation contracts.”

For NHS England’s strategy unit (under McDonnell), this is an Integrated Care System’s (ICS) central purpose: “Risk and reward sharing is a key feature of the policy agenda for Accountable Care Organisations in the US and Integrated Care Systems in England. [It offers]... a commissioner the opportunity to co-opt and incentivise a provider to moderate growth in healthcare demand by sharing in the savings or cost overruns.”

We also have Sam Jones, new care models director at NHS England, CEO of US giant Centene’s British operations, Operose Health and Boris Johnson’s health adviser. He has now been named by Wes Streeting as the permanent secretary of state at the Department of Health and Social Care (DHSC), at the same time as Streeting claims “Labour will never privatise the NHS.”

Other revolvers include Mark Britnell, who said “the NHS will be shown no mercy” and UnitedHealth’s CEO Simon Stevens, star of New Labour’s efforts to “Americanise” the NHS.

The transnational capitalist model for the NHS

The 42 separate ICSs — emulating US ACOs — are derived from the World Economic Forum (WEF) Centre for Health and Population studies, which develops international strategies to facilitate corporate growth within public services.

WEF health policy alumnus Alan Milburn, secretary of state for health 1999-2003, collaborated with UnitedHealth and Kaiser Permanente to reshape the NHS and is now appointed to the board of the DHSC.

Private equity vultures

Private providers such as Virgin gained NHS service contracts, mainly in lucrative community services created by government hospital closures. In 2021, Virgincare was acquired by Twenty20 Capital, a private equity (PE) firm, forming HCRG Care. It boasts: “The provision of entrepreneurial capital and strategic know-how differentiates our approach from other private investment boutiques and means that challenging situations are seen as pre-eminent opportunities.”

It later acquired Operose Health and now has NHS contracts for community, GP, ophthalmology and dermatology services across England.

PE invests in businesses with a goal of increasing their value over three to five years on average before selling the company at a profit, which they enhance through cost-reduction and asset-stripping.

The FT reported in 2023 that “private equity firms have bought up dozens of British healthcare companies, including ambulance fleets, eye-care clinics and diagnostics businesses over the past two years as they seek to cash in on spiralling NHS waiting lists.”

The income from NHS and local authority health and social care budgets attracts PE companies. The social care sector, for vulnerable adults and children, is almost exclusively owned by PE companies.

Bed closure policies in the mental health sector have resulted in over 30 per cent private provision of NHS mental health hospital capacity, including over half the child and adolescent psychiatric beds and almost all of the secure adult beds. The Priory Group was acquired by the PE group Waterland in 2020. Although known for treating celebrities, its main business is taxpayer-funded — receiving £440 million from the NHS and £179.8m from social services in 2021.

The austerity lie

The need for austerity is a myth. We can and have afforded a comprehensive, public NHS. And this is what most people want. Yet instead of a service, the NHS is simultaneously designated a cost centre (for the taxpayer) and a profit centre (for corporate healthcare).

Sadly, a new government has not brought the much-needed change in direction. Having committed to increasing funding for waiting lists and essential services (largely through the private sector), Streeting has now decided to abolish the corporate-led NHS England, although this will not address the fundamental problems caused by corporate capture and marketisation.

These issues are addressed in the 2018 NHS Reinstatement Bill, which describes how to dismantle the wasteful internal market and restore our NHS.

The NHS of the future

The enduring task for the NHS is to deliver for all people of Britain a level of health based on their needs rather than ability to pay through publicly provided and comprehensive NHS services, operating within a functioning welfare state which holistically addresses the social determinants of health.

Simply demanding “more funding” for a system that pays cash incentives to reduce services will not deliver the population health we need, and understanding the corporate interests influencing health policy is essential for effective NHS campaigning.

Front-line staff continue to treat patients despite the market mechanisms and “incentives” in place. Without these mechanisms, they would continue their work more effectively and under better conditions. We believe that NHS workers and the public fully support our call to reinstate the NHS.

The Socialist Health Association has been campaigning for health and wellbeing through socialist principles since 1930. More details on the information in this article can be found in their 2023 publication, In Place of Profit — visit SocHealth.co.uk.

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