When the US sneezes…health and social care futures in the UK

What is larger than the UK’s entire economy, soaring in price, wildly profitable, the leading cause of personal bankruptcy, bankrupting the United States and a massive economic bubble that nobody has heard of yet? Healthcare in America… a modern-day gold rush is on as young Americans clamour for healthcare careers in the same way that young adults were jockeying for technology careers at the peak of the Dot-com bubble in 1999.

The US approach to health and social care provision continues to exert defining influence on the possible futures of UK provision and at least some can see the dangers inherent in this. How can we understand developments in the US and how does this arm us to understand – and intervene in – developments in the UK?

The US spends more on health than any other country in the world, nearly a fifth of its GDP in 2015 compared with 9.1 percent in the UK, 11.2 in Germany, 5.5 percent in China and 4.7 in India (all figures for 2014). In 2015, US health care spending reached $3.2 trillion, or $9,990 per person. Primarily, increased spending was driven by rising costs for private health insurance, hospital care, physician and clinical services. Alongside this, rising general poverty meant more people drew on Medicaid and Medicare, state health benefits for poor US citizens. The price of drugs continues its inexorable rise, rapidly soaking up state benefits which have failed to keep pace with rising health costs.

This rising cost context of health care has seen share prices in health-related industries soar. In 2017 three vast health conglomerates were in the top 10 of the US Fortune 500 – each of them richer than former market giants such as General Motors and AT&T. Health market leader McKesson is a pharmaceutical distributor and health technology developer. Another, United Health, a health insurance provider, has over 100 million customers globally.  Health industry mergers in the US have been accelerating over the last 15 years, peaking in 2015 and 2016 in a process of what Marxist would call the centralisation of (health) capital. In 2015, the record year for M&A in the sector, total deal values were in excess of $100 billion, over a third of the total UK GDP for that year.  Mergers and Acquisitions in health industries is a worldwide phenomenon with, in the UK, M&A in the sector actively promoted.

The global expansionist ambitions of the US health industry helps drive this trend, and capital is currently being sucked into global health industries as never before by the promise of what is known as the “Rising Billions”   Over the next five years, between three and five billion new consumers world-wide will become connected to the internet. The ‘Rising Billions’ are consumers of goods and services, but are also patients in need of medical care and medical commodities, so called ‘health customers’. Alongside the health commodities these health customers might consume, eHealth systems are areas of profitability for the health industry giants. eHealth includes things like, for example, systems of communication between health providers and practitioners and remote health monitoring, potentially useful areas of innovation. Problems arise, however, when this technology is used to enhance profit rather than service provision. For example, virtual consultations between doctors and other professionals and patients, another growth area, bring the possibility of doctor ‘call centres’ advising patients from anywhere in the world steps closer radically changing doctor-patient relationships and health professionals roles and status.

This technologically-driven approach to health and social care is already evident in the UK. For example, Jay Strickland, director of Southwark Council’s Adult Social Care department quoted in the Financial Times  extols the virtues of using motion detectors to replace care workers in older people’s homes: ‘We could pop in at lunchtime to see someone…[But at] five past one, she could be on the floor. So there’s no real value to this.’ Once a motion detector system of monitoring patients has been embraced, then there’s no need for monitoring staff to be in the same borough or city, or even country. Again, a call centre approach is implied here, perhaps with a smaller care staff on standby locally to attend in a crisis in this neoliberal ‘Just in Time’ approach to health care delivery.

A key driver behind the avalanche of UK legislation over the last five years is the aim to construct a legislative framework in which new, privatised, joint institutions of health and social care can be developed. Twenty three so-called ‘vanguard sites’ have been tasked with exploring new, population-based market-oriented for profit models for local health services. Multispecialty Community Provider (MCP) and Primary and Acute Care System (PACS) vanguards are aiming to integrate NHS services and social care. The MCP care model is described as a ‘new type of integrated provider’ which aims to combine the delivery of primary care and community-based health and social care services. Importantly, this will include providing ‘some services currently based in hospitals, such as some outpatient clinics or care for frail older people, as well as diagnostics and day surgery’.   In other words MCPs are vehicles for shifting some NHS provision into the Independent Sector for private capital to run at a profit.  PACS are non-hospital based private health and social care provision, seemingly expanded versions of MCPs. The Kings Fund says of PACS:

Under this new care model outlined in the NHS five year forward view, a single entity or group of providers take responsibility for delivering the range of primary, community, mental health and hospital services for their local population, to improve co-ordination of services and move care out of hospital.

While some vanguards continue to use informal partnerships, commissioners and providers in many areas are putting in place more formal governance arrangements – in some cases describing the new arrangements as integrated care organisations (ICOs) or accountable care organisations (ACOs) or systems. In April 2017 this direction of travel was taken to its logical conclusion when health leaders in Manchester’s NHS and social care commissioners offered a tender of £6 billion over ten years for one organisation to provide all ‘out of hospital’ health and social care provision. Their tender document sets out plans for ‘local care organisations’ to provide all non-acute services – including social care – across the city. The LCO will hold a single 10 year contract to provide services for a population of around 600,000 people. Meanwhile, neighbouring Stockport’s vanguard project, which is somewhere between a MCP and a PACS, is being developed without a competitive process. The standard MCP model set out by NHS England incorporates primary, community, mental health and social care services, but leaders in Stockport are looking to expand this to establish a privately-run health conglomerate also providing hospital services including the emergency department, acute medicine and frail elderly care. Clearly, the care models can be moulded to the needs of the local authority, so long as they are focussed on releasing more of the state health sector to private profit.

This commitment to a qualitatively greater amount of funding in one tranche to the Independent Sector comes very swiftly on the heels of the first experiment in this direction, when Circle Health took on the running of Hinchingbrooke Hospital in Cambridgeshire. The contract to run the hospital was supposed to last from 2012 for 10 years and was worth £1bn. Circle announced its intention to quit after less than three years saying the contract was “unsustainable”. In September 2015 the Care Quality Commission found that patients were being neglected at the hospital, that hygiene was inadequate, and that staffing problems were affecting care.  Clearly, practical lessons will have been learnt from this total failure. However, the key one won’t have been – that the failure is a consequence of attempting to run health and social care to previous standards of delivery for profit. As the disasterous privatisation of the social care sector in the UK over the past twenty years has clearly shown, this is not possible. The problems at Hinchinbrooke and the problems of the social care sector were not caused by ‘inefficiencies’ or ‘poor execution of service’ but by the US-inspired health provision for profit model itself.