THE DANGER POSED BY REPEALING SECTION 75 OF THE HEALTH AND SOCIAL CARE ACT 2012
Why pushing for the removal of the requirement for competitive tendering by repealing Section 75 of the Health and Social Care Act 2012 (HASCA) will legalise monopoly takeover of our NHS by the American health insurer UnitedHealth completing the planned privatisation launched in the 1980s.
Section 75 of the Health and Social Care Act 2012 (HASCA) prised open the NHS to allow private providers in as minority participants in the NHS market to be paid from the NHS budget, but repeal of that alone now will simply remove a legal barrier to completing the NHS privatisation, leaving it under monopoly control by a foreign corporation.
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This document will explain why S75 of HASCA 2012 should not have been introduced, and why removing it again in the absence of full renationalisation would enable privatisation of the “purchaser” (as opposed to the “provider’’) part of the NHS the “primary care system”, which has until now been overseen by GPs and has since HASCA 2012 been paid for from CCG budgets.
S75 of HASCA 2012 embodies an EU competition law trick which is intended to take a double-bladed axe to the NHS. This lock-in to the EU competition law regime was imposed to enable for-profit interests to tap public sector budgets; the responsible state is banned from excluding them or in any other way exercising coordinating control of the system. Its repeal, now that destabilisation has taken place, will only serve to legalise the current ongoing capture of the system’s budget and direction by a single private corporation from abroad.
Section 75 https://www.legislation.gov.uk/ukpga/2012/7/pdfs/ukpga_20120007_en.pdf says:
75 Requirements as to procurement, patient choice and competition
(1) Regulations may impose requirements on the National Health Service Commissioning Board and clinical commissioning groups for the purpose of securing that, in commissioning health care services for the purposes of the NHS, they—
(a) adhere to good practice in relation to procurement;
(b) protect and promote the right of patients to make choices with respect to treatment or other health care services provided for the purposes of the NHS;
(c) do not engage in anti-competitive behaviour which is against the interests of people who use such services.
(2) Requirements imposed by regulations under this section apply to an arrangement for the provision of goods and services only if the value of the consideration attributable to the services is greater than that attributable to the goods.
(3) Regulations under this section may, in particular, impose requirements relating to—
(a)competitive tendering for the provision of services;
(b)the management of conflicts between the interests involved in commissioning services and the interests involved in providing them.
(4) The regulations may provide for the requirements imposed, or such of them as are prescribed, not to apply in relation to arrangements of a prescribed description.
This provision effectively locks the NHS into EU competition law and the mirroring regime introduced into our national law by the Competition Act 1998, by tying it to Title VI (formerly Title V) of the Consolidated Treaty Introducing the European Community. This Title of the EU Treaty imposes competition law, which is a variant of global trade law as enforced by the World Trade Organisation. Article 82 (formerly Article 86) within this Title
“prohibits the exploitation by any entity of a dominant position over a market or part thereof”
http://ec.europa.eu/competition/legislation/treaties/ec/art82_en.html https://www.ipglossary.com/glossary/article-101-102-formerly-articles-81-and-82-and-before-that-85-86/ .
Private companies such as Virgin (via subsidiary Assura http://ccpanel.org.uk/cases/index.html) have used this clause, as embodied within Rule 5 of the Rules for Cooperation and Competition which overtly seeks to maximise choice for patients, to sue the state for excluding them from competing for NHS budgetary allocations on equal terms with the NHS’s own subunits; the embedded assumption in competition and trade law is that the more competition there is, the better it is for consumers. The trade law lobby’s argument is that the extra competition is supposed to drive the market price down as explained in microeconomic theory. In practice it doesn’t work like this in medical service provision, primarily because of information asymmetry: see Kenneth Arrow’s 1963 explanation of why markets are unsuited to healthcare provision (as well as information asymmetry between prescriber-seller and patient-buyer, also the irregular, unpredictable nature of medical demand and the need for a nationwide referral system to specialists relevant to each case, the issue of meeting need versus financial considerations, public health, infection control and human rights considerations, and so on): https://aheblog.com/2017/03/07/kenneth-arrow-on-healthcare-economics-a-21st-century-appreciation/ .
Whenever the private sector wins one of these contracts and thus takes over the budget to pay for it, there is no longer a budget available to pay ongoing salaries for the NHS staff who used to do this work. When NHS specialist teams are discontinued because of the transfer of the budget to a private sector provider, that functionality is permanently lost from the public sector NHS, but there is no onus on the private supplier to arrange for any continuity should it not find the exercise profitable or convenient. Section 75 provides the means for private companies to cherry-pick the most profitable tasks, thus undermining the NHS teams which used to provide those services as part of a coherent whole-service NHS.
This market-based cherry-picking also destabilises the funding of the public sector NHS more generally, by taking away activities which were subsidising other harder-to-fund health functions. Typically, the private sector will seek to capture elective (pre-planned) care for uncomplicated, cheap-to-treat cases which provide easy money, leaving the NHS with the harder and more expensive cases of people with multiple life-threatening conditions but with disproportionately shrunken funds to pay for this. The removal of all the easy cases from the public sector NHS also undermines the ability of teaching hospitals to train up our future doctors – they need to see these simple cases while they are learning, but where these have been taken over by Virgin and their ilk they are no longer available for student learning.
So we can see that section 75 has been critically important in the NHS privatisation https://www.opendemocracy.net/en/ournhs/quick-guide-to-section-75/ . It has allowed private sector interests to invade both the “purchaser” element (primary care and referrals, until now run by GPs), and the “provider” element (hospital and other services to which GPs can refer patients). Why then would its removal not be a good thing? Indeed, for all the reasons above there are NHS campaigners promoting its removal as a step in the right direction but note that the privatisation-controlled astroturf contingent (for those not familiar with this term, it refers to campaigners who are not genuinely grass-roots campaigners but who are working with, or are plants from, the privatisation lobby) is keen to persuade us to remove it too.
The
reason S75 must
remain for now (until it can be removed as part of complete NHS
renationalisation – see our A MANIFESTO FOR RENATIONALISING THE
NHS) is because the ban on abuse of dominant market position applies
to any
entity in a monopoly or oligopoly situation, not only the state. It
makes illegal, say, the takeover and control of all or part of the
NHS by a foreign corporation which legally entered NHS service
provision as a minority player under S75 HASCA 2012. Is such a
dominant entity present in the 2019 NHS? Indeed it is: both the most
senior employee of the NHS (Simon Stevens, the CEO of NHS England)
and the Optum company which is embedding itself in processing GPs’
referrals of patient to hospitals
https://calderdaleandkirklees999callforthenhs.wordpress.com/2019/04/24/optum-increases-dominance-of-nhs-thanks-to-former-employee-simon-stevens-now-nhs-commissioning-quango-boss/
are creatures of the American health insurance corporation
UnitedHealth Group Inc, which is reported to have committed major
fraud against the US government, inter alia:
https://www.nytimes.com/2017/02/16/business/dealbook/unitedhealthcare-improperly-took-money-from-medicare-suit-says.html
.
UnitedHealth Group, known to have been hovering over the NHS
since at least the Blair years via its links with Blair Health
Adviser (1997-2004) Simon Stevens
https://www.vice.com/en_uk/article/ppm89g/nhs-england-simon-stevens-corporate-health-lobbyist-734
, is currently surreptitiously taking over control of GP services and
GP referrals via Integrated Care Providers contracts
https://blogs.bmj.com/bmj/2015/05/01/alex-scott-samuel-simon-stevens-cheerleader-in-chief-for-nhs-privatisation/
. If UnitedHealth/Optum can achieve that, as looks likely at this
juncture, they will control the purse-strings of almost the whole NHS
budget, since hospitals are nowadays paid from budgets tied to that
referral process (this arrangement was made legally mandatory by
HASCA 2012 and marketed to the public as “money following the
patient”, for instance see
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/213823/dh_117794.pdf
).
At present, should the wider public finally wake up to this surreptitious takeover, we could use EU competition law and the Competition Act 1998 to oust UnitedHealth from our NHS, via pressure on Monitor/The Office of Fair Trading. Removing S75 would take away a possible legal defence against this foreign infiltration of the NHS and raiding of its budget
If the people who are currently recommending removal of S75 become competent concerning the legal side and are also on the side of preserving the NHS to serve the population rather than investors, they will instead mount a legal challenge to oust UnitedHealth Group and Optum from our NHS using Section 75.
The way to remove competition and the privatisation threat from the NHS is not by repealing S75 but by renationalisation of the National Health Service, the dedication of the entire NHS budget to the provision of medical care according to need in a way that will protect it from trade treaties and competition law.
Removing S75 alone merely assists UnitedHealth/Optum, unless and until its removal is part of the full renationalisation that would also remove the NHS permanently from vulnerability to attack under competition-based global trade rules, and the EU treaty and UK competition laws that mirror them into our legal system here to constrain the state’s freedom of action.
Whether the people recommending repeal of S75 alone are confused, naive or actually complicit with the NHS privatisation, we need to contradict them quickly and loudly!
Please help get the word out about the UnitedHealth/Optum takeover of our NHS, and let’s keep S75 in place for now, use it to rid the NHS of the infestation by UnitedHealth, and work together for NHS renationalisation in line with Arrow’s arguments.
By The Great NHS Heist Technical Team
20 May 2019
