When does marketisation lead to privatisation? Profit-making in English health services after the 2012 Health and Social Care Act

Abstract

Governments world-wide have attempted to use market mechanisms and privatisation to increase the quality and/or reduce the cost of healthcare. England's Health and Social Care Act 2012 is an attempt to promote privatisation through marketisation in the National Health Service (NHS). While the health policy literature tends to assume that privatisation follows from private-sector entry points, we argue that this is more likely if firms expect to make a profit. This paper examines the link between privatisation and marketisation in England drawing on 32 semi-structured interviews with private-sector and public-sector respondents, campaigners, and other experts conducted 6-10 months after the implementation of the 2012 Act.By generating a theoretical framework on the conditions of profitability we seek a better understanding of the conditions under which marketisation leads to privatisation. We find that significant barriers to profit-making remain after the reforms, including a top-down squeeze on prices, uncertainty in market rules, state dominance of funding and provision, and failures to depoliticise the market. These factors restrict privatesector involvement by frustrating profit-making. Where profits are made they are through reduced unit costs and high volumes by a longstanding incumbent in a particular market segment. This, however, restricts marketisation by reinforcing entry barriers Governments world-wide have attempted to use market mechanisms and privatisation to increase the quality and/or reduce the cost of healthcare. 1 England's Health and Social Care Act 2012 is an attempt to promote privatisation through marketisation in the National Health Service (NHS). While the health policy literature tends to assume that privatisation follows from private-sector entry points, we argue that this is more likely if firms expect to make a profit. This paper examines the link between privatisation and marketisation in England drawing on 32 semi-structured interviews with private-sector and public-sector respondents, campaigners, and other experts conducted 6-10 months after the implementation of the 2012 Act. Suggested Citation Krachler, N., & Greer, I. (2015). When does marketisation lead to privatisation? Profit-making in English healthBy generating a theoretical framework on the conditions of profitability we seek a better understanding of the conditions under which marketisation leads to privatisation. We find that significant barriers to profit-making remain after the reforms, including a top-down squeeze on prices, uncertainty in market rules, state dominance of funding and provision, and failures to depoliticise the market. These factors restrict private-sector involvement by frustrating profit-making. Where profits are made they are through reduced unit costs and high volumes by a longstanding incumbent in a particular market segment. This, however, restricts marketisation by reinforcing entry barriers.

NHS market liberalisation and the TTIP agreement

“…Ham et al (2015) suggest these reforms contributed to widespread financial distress and were significant in the failure to achieve key targets for patient care. Krachler and Greer (2015) however suggest the reforms have also led to an increase in health inequalities, reduced democratic accountability, increased service rationing and ending comprehensive preventative services (Krachler & Greer, 2015). The point about reduced democratic accountability reinforces our suggestion that the reforms have been far from transparent or democratic.…”

“…The proposed reforms promoted the expansion of commissioning (procurement) reforms with the express purpose of saving public money, increasing productivity, price based competition and more healthcare provision contracted out to non-NHS providers (Krachler & Greer, 2015). The negative impact of reforms on community nurses and other workers was a pay freeze, job losses, a loss of corporate memory, fragmentation of the service, reduced innovation and many staff taking early retirement (Seifert, 2014).…”

Museums’ community engagement schemes, austerity and practices of care in two local museum services

“…A key issue for the team was the lack of sustainability of community engagement, due to the 'short termism' of projects (Lynch 2011;Krachler and Greer, 2015). This also had consequences in terms of developing trust with community organisations.…”

“…And we are part of thatwe are not staying that we help people solely to do that, but [...] we are like a link in that chain (Regional Museum engagement worker, 2012) The strategic approach developed at the Regional Museum also reflects wider policy changes in England. Faced with internal pressures and budget reductions, the Regional team was also looking for funding opportunities outside of the cultural sector and within the new public health commissioning model (Krachler and Greer, 2015). This required reframing the impact of community engagement programmes in terms of wellbeing and health.…”

“…And I say evil because it's weird to think that you have to pay for certain services, but it's probably a sign of our times' (Regional museum team member, 2011). Indeed, the new commissioning model is an attempt to promote the privatisation of the NHS (Krachler & Greer, 2015; it should be noted that welfare provision in Scotland is differently organised). However, to view the museum's new model of working in pessimistic terms as a mark of museums professionals abetting neoliberal goals is to ignore the longer tradition of progressive community engagement work in museums, and the role of staff in appropriating policy discourses and the structures of funding to alternative ends.…”