NHS : Privatisation Issues And Related News : Failings / Scandals / Rip Offs

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Scrap laws driving privatisation of health service, say NHS bosses

NHS England calls for end to rules under which firms have won £10.5 BILLION of contracts.


NHS bosses have urged ministers to scrap controversial legislation that has led to the widespread privatisation of healthcare as part of a big revamp of the health service.

NHS England outlined detailed plans that would repeal key parts of the Health and Social Care Act 2012 in order to squeeze out private providers such as Virgin Care and let the NHS again deliver more of its own care.

Their proposals include axing regulations that have allowed profit-driven health firms to win an estimated £10.5bn of NHS contracts in England in the five years after the act came into force in April 2013.

At its monthly board meeting on Thursday, NHS England published proposals that, if adopted by ministers, would dismantle large parts of the shake-up instigated by Andrew Lansley, who was health secretary from 2010 to 2012 in the coalition government.

Theresa May has acknowledged that the 2012 act – widely considered to be the most damaging ever to affect the NHS – is hindering a drive by the health service in England to provide better care by integrating key services.

Section 75 of that act and, separately, the public contracts regulations 2015, together force clinical commissioning groups in England – which hold the NHS budget locally – to put out to tender any contract for care worth more than £615,278 over its lifetime. That led to a big expansion in the amount of care being provided by firms such as Virgin Care and Care UK.

Virgin Care, owned by Richard Branson, now holds more than 400 separate contracts.

In a document outlining its ideas, NHS England said: “We propose that the regulations made under section 75 of the Health and Social Care Act 2012 should be revoked.” It instead called for a “best value” test.

It said that the increased competition arising from the regulations has wasted NHS time and resources. “Current procurement legislation can lead to protracted procurement processes and wasteful legal and administration costs in cases where there is a strong rationale for services to be provided by NHS organisations, for instance to secure integration with existing NHS services.”

NHS England has launched a two-month public engagement process on its proposals. The Commons health and social care select committee will also hold an inquiry and carry out pre-legislative scrutiny of whatever proposals for reform ministers put forward.

Simon Stevens, NHS England’s chief executive, said it wanted to see “if some targeted changes could be made to the law”.

Paul Evans, who runs the NHS Support Federation, which tracks NHS privatisation, welcomed the move. “The Lansley reforms have been a damaging and wasteful experiment in forcing competition on the NHS and inviting in the private sector.

“The market-based experiment has led to the collapse of multiple contracts, to patients getting substandard care or the denial of it altogether, and to the huge waste of public resources.”

NHS England made clear that the ambitions outlined in its long-term plan, the blueprint it unveiled last month, could be implemented under existing legislation, “but legislative change could make implementation easier and faster”.

Niall Dickson, chief executive of the NHS Confederation, which represents most health service trusts, backed the plan. “Many aspects of the 2012 NHS reforms are no longer fit for purpose. These proposals should remove some of the barriers to effective collaboration [and] reduce the burden of the current procurement regime.”

Under the proposals, the Competition and Markets Authority’s power to block mergers between hospital trusts would transfer to the regulator NHS Improvement. This is likely to lead to a series of mergers, some of which the CMA has rejected.
Firm in NHS row over cystic fibrosis drug paid almost no UK tax.

European division of Vertex made loss while paying large sum to profitable US owner.



A drug company that has been in dispute with the NHS for two years over the high price it wants for a cystic fibrosis medicine has paid virtually no UK corporation tax, the Guardian can reveal.

Vertex Pharmaceuticals (Europe), based in London and Oxford, had a turnover of £5.3bn in the five years to the end of 2017, largely from sales of its cystic fibrosis drugs Orkambi and Kalydeco.

The company declared an operating loss in 2017 after paying its profitable US parent company to manufacture the drugs. It received £7m in tax credits from the UK government for investing in research and development.

The NHS does not offer patients Orkambi, which was put on the market at £105,000 per patient per year. Vertex and NHS England are in stalemate over the drug, which is one of the first to treat the underlying genetic causes of cystic fibrosis, a disease that kills half of those who have it before the age of 31.

NHS England says Orkambi is not cost-effective and the bill to provide it would be unaffordable. There are 10,400 cystic fibrosis patients in England, of whom 40% are thought to be suitable for the drug.

Vertex has said it has offered “the best price in the world” to NHS England and has rejected a counter-proposal of £500m over five years for access to Orkambi and other drugs in the pipeline.

Patients and families are distraught. Robert Finlay, whose seven-year-old daughter is suitable for Orkambi, said: “I’m sure what they are doing must be legally acceptable under the tax rules, but it seems to me it is completely ethically unacceptable. It seems to me it is more proof, if it is needed, that this company’s moral compass has fallen off.

“If it was down to me personally, I’d have the entire NHS budget spent on my daughter until she is cured, but I know it is not fair and I know it’s not right.”

Finlay, who preferred not to use his real name, was speaking a day before his daughter was due to go to hospital to begin a further course of a lifetime treatment that will deal only with the symptoms of the disease.

“It’s an extra burden on a girl who just wants to be a seven-year-old. She just wants to play,” he said. “She is eligible for Orkambi. She could have been on it almost three years already.”

Cystic fibrosis patients lose an estimated 2% of their lung function each year. Orkambi is available from Vertex only on compassionate grounds to those who have deteriorated so far that they may need to join the lung transplant waiting list.

Emily Birchall, whose two-year-old son has cystic fibrosis, said: “They are clearly a company driven by excess profiteering and that’s the only motivation I can see.”

She said one of the main arguments Vertex made to patients and their families was that the appraisal process used by Nice (the National Institute for Health and Care Excellence) in deciding the cost-effectiveness of drugs did not work in rare diseases, where companies could not make much money because there were relatively few patients.

“They are incentivised in other ways. They have got tax breaks for developing drugs for rare diseases,” she said.

Vertex Pharmaceuticals (Europe) is responsible for the global sale of Vertex products and employs 300 people. It has reported total sales of $7bn (£5.3bn) over the past five years but did not pay any UK corporation tax over the period, instead receiving £7m in tax credits.

A spokesperson said the company had not paid corporation tax because the business had been running at a loss. Accounts filed with Companies House for 2017 show the company lost $237m on revenues of $2.45bn.

Its outgoings included nearly $1.9bn on “cost of inventory”. This usually refers to producing and storing products, which one pharmaceuticals expert told the Guardian would more typically cost between 10% and 30% of revenues.

Asked about the size of the figure it reported for cost of inventory, Vertex said the sum was paid to its parent company Vertex Pharmaceuticals Inc, based in Boston. The company said it applied OECD guidelines and all relevant legislation to transactions between companies within the same group. The US firm made a net profit of $263m for 2017, which it described as an “outstanding year”.

A spokesperson said: “We have invested heavily in the US and the UK and expect the majority of our income to be recorded in these countries. We anticipate being a significant taxpayer in both these locations over time. We anticipate increased taxes being paid in the UK starting 2021, assuming continued growth of our non-US operations and future reimbursement.”

While Vertex’s UK-based European business is ultimately owned by the US-based Vertex group, its immediate parent company is registered in the Cayman Islands, a notorious tax haven.

Vertex said the Cayman Islands entity did not receive any income or revenues and was instead used to house the intellectual property of some of its drugs.

Vertex Inc has previously been criticised for a $78.5m remuneration package awarded to its chief executive, Jeff Leiden, in 2017. He was the third highest-remunerated healthcare CEO in the US S&P 500.

Leiden and NHS England will give evidence on Thursday to the health and social care select committee, which is investigating the impasse over the cystic fibrosis drugs.

Last month the Guardian revealed that two UK directors of Vertex received £15m worth of share options in 2017.
NHS cancer centre loses scanning contract to private firm.

Doctors express disgust after eminent hospital fails to win tender for PET-CT services.



NHS chiefs are pushing through plans to let private companies take over scanning services that are vital in treating cancer patients, having told ministers last week that privatisation was harming patient care.

Despite its international reputation for cancer care, Churchill hospital in Oxford has lost its contract to carry out PET-CT scans to InHealth, a private company, as part of the tendering process, the Guardian can reveal.

Doctors at the hospital said they were “disgusted” by the loss of the contract, warning that people receiving cancer treatment in the hospital will have to be taken by ambulance to two new locations at which InHealth’s scanners will be located. The decision has raised questions about NHS England’s professed desire to end the outsourcing of patient care, which it outlined in a detailed policy document released at a board meeting last week.

The Churchill is the first NHS hospital to lose out as a result of NHS England deciding in 2016 to put positron emission tomography-computed tomography services out to tender. The 3D scans of inside the body help doctors spot tumours and check if cancer treatment is working.

NHS England initiated the tender process to save money. However, major teaching hospitals, including King’s College hospital in London, and cancer hospitals such as the Christie in Manchester, are also at risk of having PET-CT services handed to the private sector.

NHS England has invited profit-driven companies to bid against NHS trusts for contracts to provide PET-CT scanning in 11 different areas of England.

Labour demanded that the health and social care secretary, Matt Hancock, block the sell-off.

“This latest NHS privatisation exposes as utterly hollow the health secretary’s promises to parliament that there will be no privatisation on his watch,” said Jonathan Ashworth, the shadow health and social care secretary.

“Just last week, NHS England claimed it wanted to bring an end to the constant tendering of contracts that the Lansley reorganisation ushered in. Patients will therefore consider it bewildering this privatisation has been allowed to proceed.”

Oncologists at the Churchill are “very concerned” by InHealth – a British company that already provides diagnostic services to the NHS – starting to provide PET-CT scans to the 2 million people who live in the Thames Valley area.

The hospital, which has performed that role since 2005, will now have to hand back the two scanners it leases in order to produce the images.

“Another provider might offer scans more cheaply, but will they match the quality?” an oncologist said.

“We’re worried people may end up needing rescanning and, at the end of the day, ultimately it is patients who will suffer.”

The expertise of the Churchill’s nuclear medicine department in undertaking high-quality PET scans will be lost to the NHS, the doctor added.

Specialist cancer doctors at Oxford University hospitals NHS trust, which runs the Churchill, said they have “concerns about the potential impact on the safety and quality of patient care at the loss of the current PET-CT service at the Churchill”.

They added: “If the service was no longer provided here, it would mean that very sick patients at the Churchill would need to travel off-site for a scan, which could have a negative impact on their health.”

Paul Evans, who runs the NHS Support Federation, which monitors privatisation of healthcare, said: “There’s a jarring contradiction between the proposals to privatise these cancer services and recent statements from NHS England about the failure of this kind of tendering.

“PET-CT is of crucial importance in the management of patients with cancer. So why risk the care of patients by taking this service away from a world-renowned centre with an established team of experts in the field, working together within the NHS, to move the service into the private sector?”

InHealth did not respond to requests for comment.

NHS England insisted existing EU-wide procurement law meant it had to tender the services. “The law is as yet unchanged in the way we recently recommended it should be, so in the meantime, existing procurement rules apply. In the Thames Valley, this particular process means two new sites being introduced for this particular scanning,” a spokesperson said.
Halt privatisation of cancer screening or risk patient harm, MPs tell NHS England.

Doctors say awarding PET-CT contracts to private firms " Will undoubtedly cause clinical harm. "


Government and opposition MPs are urging NHS bosses to halt the privatisation of cancer screening services in Oxford, which doctors are warning will damage patients’ health.

Conservative, Labour and Liberal Democrat MPs in the area have united in protest at the deal. The private firm InHealth has controversially been handed a contract to deliver positron emission computerised tomography (PET-CT) scanning in the Thames Valley.

Cancer specialists say PET-CT scanning plays a vital role in helping them diagnose the disease, track whether treatment is proving successful at shrinking tumours and guide surgery.

NHS England has sparked anger by taking the service away from Oxford University Hospitals (OUH) NHS trust’s Churchill hospital, despite its international reputation for cancer care.

In a related move, the Guardian can reveal that NHS PET-CT scanning service in south-east London will also be part-privatised. Alliance Medical is part of a consortium that has been awarded the contract, alongside King’s College hospital and Guy’s and St Thomas’ NHS trusts.

Victoria Prentis, the Tory MP for Banbury, has written to Simon Stevens, the chief executive of NHS England, saying she was “extremely concerned’ that patient care will suffer as a result of the switch in Oxford.

Multi-disciplinary meetings at the trust – at which each patient’s treatment is discussed in detail – could be affected by OUH no longer proving every element of cancer care, she said. “Outsourcing a key service to an offsite provider could make it more difficult for the necessary clinicians from the various disciplines (including surgeons, oncologists, radiotherapists) to meet to decide on the best course of treatment for each patient,” she wrote.

InHealth beat OUH to the seven-year contract partly because it pledged to provide PET-CT scanning from new sites in Swindon and Milton Keynes, as well as Oxford.

Prentis was also “dismayed” that NHS England had given InHealth the contract without, she claimed, undertaking proper consultation or talking to Oxfordshire MPs.

Oxford East Labour MP Anneliese Dodds, whose seat includes the Churchill, has written to NHS England chair Lord Prior – a Tory peer – demanding a halt to PET-CT privatisation and a debate on how best to provide the service.

Layla Moran, the Lib Dem MP for Oxford West and Abingdon, also urged a halt. “This is no way to be treating vulnerable cancer patients. NHS England’s insensitivity is a real cause for concern, specially regarding appointment availability, service quality and distance of travel,” she said.

Tory ex-minister Ed Vaizey, the MP for Didcot and Wantage, said: “Whilst in principle I do not oppose competitive tendering for medical services I am concerned about the handling of this tender service by NHS England. Local patient groups have raised with me several potentially troubling issues with the new provider.”

OUH doctors have voiced their anger at the deal, too. Nick Maynard, a surgeon at the trust, has tweeted his opposition, saying: “If InHealth take over our PET CT service it will undoubtedly cause clinical harm to our patients. This cannot be allowed to proceed.

“Let us be absolutely clear – if this goes ahead, it will lead to patient harm.”

An oncologist at the Churchill said: “I find this very worrying. We use PET CTs regularly to assess for hidden cancer or disease response. Privatisation of this vital service will only result in the detriment of care to my patients.”

NHS England has been “stupid” to outsource the service, said Tim Goodacre, a plastic surgeon at OUH. “I cannot believe we are seeing this sort of political ideology motivated stupidity from our health service managers. This particular decision merits an urgent ‘pause’ and transparent open review. This must be stopped”, he tweeted.
King's College hospital trust makes biggest overspend in NHS history.

London trust to record annual deficit of between £180m and £191m after series of setbacks.



A leading London hospital trust is expected to record an annual deficit of between £180m and £191m – the biggest overspend in NHS history, the Guardian can reveal.

King’s College hospital trust believes it overshot its projected £146m deficit for 2018-19 by a further £34m-£45m after experiencing a series of setbacks, documents seen by the Guardian show.

The trust is struggling with the most serious financial problems in the NHS as a result of a private finance initiative (PFI) contract, high use of agency staff to cover its chronic lack of nurses, and being fined for missing the four-hour A&E target. The 2013 takeover by King’s of the Princess Royal university hospital (PRUH) in Orpington, Kent, has also increased its costs while it is paid less than other nearby hospitals for providing certain types of care.

It has found it impossible to balance its books for several years as the government’s policy since 2010 of limiting the NHS to annual budget rises of just 1% a year, at a time when demand for care has been rising, has pushed many hospitals into the red.

Drastic budget overruns led to the trust being placed in “financial special measures” in December 2017 and the departure of most of its leadership team, including the then chair, Lord Kerslake, the former head of the civil service.

King’s posted a deficit of almost £132m in 2017-18 – which until now was the largest ever seen – and £48.6m the year before. But last year’s record overspend of £180m-£191m represents a major worsening in its already precarious finances.

Papers circulated to the trust’s senior managers say: “King’s started the 2018-19 financial year with a deficit control total of £146m.” However, they then detail how that projected deficit has risen by at least £34m as a result of delays to its new critical care unit (£4m), failure to hit its savings target (£8m), and loss of expected income because of “poor operational performance” – its inability to meet targets for A&E care and planned operations.

The papers say: “We have experienced further one-offs not foreseen in the original budget of £17m, taking the expected in-year deficit to £180m. We have submitted business cases which, if not approved by [the NHS regulator] NHS Improvement, would increase the in-year deficit to £191m.”

King’s is also grappling with severe staff shortages, according to papers submitted to its board’s most recent meeting. For example, 26.3% of nursing posts in acute and emergency care at the Princess Royal hospital are vacant, as are 12.4% of such posts in its children’s care unit. The nurse vacancy rate in A&E and acute medicine at King’s itself, in Camberwell in south London, is not as bad, having recently fallen from 11.2% to 6.5%. But it still has serious nurse shortages in cancer care (19.4%), children’s care (15.4%) and operating theatres (12%).

“Much of the NHS is in the red but the deficit figures at King’s are in a completely different league”, said Sara Gorton, head of health at the union Unison.

“Such huge and sustained pressures on budgets are having a real impact on staff and patients across the hospital. Massive gaps in staffing mean sky-high agency bills, making it harder than ever for the trust to get back on an even keel, while demand on services is continually growing.”


“The situation here is reflective of the chronic shortage of nurses across the health service. It is particularly worrying that trusts, despite best efforts, are struggling to fill the gaps in vital areas of care like cancer, A&E and children’s services,” she said.

“The effect of the nursing vacancies, of which there are around 40,000 across the NHS in England alone, should be treated as a national crisis which if left untended to will do serious damage to patient care.”


NHS trusts in England had not managed to balance their books since 2012-13, said Anita Charlesworth, the director of research and economics at the Health Foundation charity. “The NHS has been trying to manage these problems through short-term fixes such as loans to support trusts in difficulty, raids on capital budgets and growing waiting lists. But it’s clear this approach is not working and in many cases the gap between spending pressures and the funding available is widening,” she added.

A spokesperson for King’s said: “Our current financial forecast is higher than that planned this time last year. However, over the past year, a number of changes have been implemented that will enable the trust to improve its productivity and stabilise its longer-term stability. Despite the financial challenges, the trust continues to deliver excellent, high-quality care and services to patients.

“Following a number of successful recruitment drives in the last year, King’s has cut its nursing vacancy by half to 7.3% – one of the lowest nursing vacancies rates in London. Additionally, a number of recent appointments have been made in areas with higher clinical vacancy rates, such as the PRUH [Princess Royal] emergency department.”
NHS offering £127m of contracts to private companies despite health secretary pledging : " No privatisation on my watch."

Labour calls on Matt Hancock to " Be true to his word and block these latest NHS privatisation proposals."
The NHS is offering more than 20 contracts to private companies, despite health secretary Matt Hancock having insisted there would be "no privatisation on my watch", Labour has said.

The party released data showing 21 NHS contracts worth £127m are currently out to tender - 19 of which have been put out since mid-February.

The figures were revealed by House of Commons Library analysis and include a £91m contract to run an NHS assessment service in the South East, a £16m deal to provide health services in Leicestershire and a £6m tender for a GP surgery in High Wycombe.

Labour accused Mr Hancock of breaking his promise to prevent further privatisation of the NHS.

In February, the health secretary said he wanted to be clearer than his predecessors about the role of private companies in the health system.

He told the House of Commons health and social care committee: "I am going to be much more concrete. There is no privatisation of the NHS on my watch, and the integrated care contracts will go to public sector bodies to deliver the NHS in public hands."

Commenting on the latest figures, Jon Ashworth, the shadow health secretary, said the contracts should be kept in public hands.

Speaking on Saturday at the annual general meeting of Health Campaigns Together, which opposes privatisation in the NHS, he is expected to say: “Since the Tories’ wasteful reorganisation of the NHS we’ve seen privatisation after privatisation of NHS services, breaking up integrated care, costing the taxpayer and leaving a poor quality service for patients.

“A few weeks ago the health secretary told MPs there would be no privatisation on his watch and yet we’ve seen cancer PET-CT scanning services in Oxford privatised, and today we’re revealing another £36m worth of contracts put out to tender in the last few weeks.

“Rather than focusing on his own personal manoeuvrings for the Tory leadership, Mr Hancock should be true to his word and now block these latest NHS privatisation proposals.”

Under laws introduced by the Coalition government, NHS trusts have to put to tender any contract worth more than £615,278, resulting in more services being given to private companies.

NHS England has called for the rules to be scrapped in order to "cut delays and costs of the NHS automatically having to go through procurement processes".

In 2017-18, £8.8bn of the health service budget went to organisations in the independent sector - around 7 per cent of the total budget.


A Department for Health spokesperson said: "We're committed to a world-class NHS that's always free at the point of use now and in the future.

"We want to put patients and the NHS first, so as part of the Long Term Plan we have asked the NHS to develop legislative proposals to remove unnecessary bureaucracy, including changes to the competition and procurement regime.
What a surprise ?
One in four NHS wards has dangerously low numbers of nurses, researchers find.

Dilution in skills for hospital patients as healthcare assistants used to shore up staff numbers/


One in four NHS wards routinely operates at staffing levels so low that patient safety is threatened, experts have warned.

Researchers have found that a national shortage of nurses and a failure to increase their numbers sufficiently has not been addressed.

They pointed to a dilution in skills on hospital wards as healthcare assistants were being used to shore up staff numbers.

The University of Southampton researchers also said lessons learnt from the Mid Staffordshire scandal had been somewhat lost because of a lack of investment in staffing and the nurse shortages.

A 2016 study by the university found that, for every 25 patients, substituting just one nurse with a lower qualified member of staff was linked with a 21 per cent rise in the odds of patients dying.

The latest study said the number of full-time-equivalent nurses employed in NHS trusts had increased by 10 per cent since 2013, while numbers of healthcare assistants and support staff had grown by 30 per cent.

“The disproportionate increase in support staff numbers has resulted in a slight lowering of skill mix,” the study said.

“Registered nurses (RNs) account for 66 per cent of nursing staff in 2017 compared with 69 per cent in in 2013.”

Following the Francis Inquiries, which examined the scandal at Mid Staffs where neglect contributed to patient deaths, the National Institute for Health and Care Excellence (Nice) recommended that a level of eight patients per registered nurse trigger a review of staffing.

But the latest study, which included questioning 91 directors of nursing, found a quarter of NHS wards regularly worked at this unsafe staffing level.

The researchers pointed to an average vacancy rate of 10 per cent for registered nurses, with some trusts reporting rates of up to 20 per cent.

Nurse numbers have increased since the 2013 Mid Staffs inquiry, but growth in patient numbers means there has been no improvement in staffing levels.

Professor Jane Ball, lead author of the study, said: “One of the biggest challenges has been the national shortage of registered nurses.

“The ongoing national shortage of RNs, and failure to increase supply sufficiently, has not been addressed.

“This failure has prevented safe staffing levels from being achieved.”

She said a lack of investment meant trusts had a clear vision of safe staffing but without the sufficient means – in terms of registered nurses – to deliver on it.


Patricia Marquis, the Royal College of Nursing’s director for England, said: “Now that there are 40,000 unfilled nurse jobs in England, it is time for ministers and the NHS to get a firm grip on the situation before it deteriorates further.

“The legacy of the Francis Report was a once-in-a-generation opportunity to increase nurse staffing levels but any short-term progress in hospitals has fallen away.

“Rising patient numbers are outstripping small nurse increases.”
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