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Labour plans to treat 100,000 more NHS patients each year in private

hospitals, build more hospitals under the private finance initiative

and extend public-private partnerships to provide more choice for
patients in how and where they receive NHS treatment. Does this amount
to total privatisation of public health care?

Labour insists that it does not want to privatise the NHS; merely use
private hospital capacity in the UK and Europe (to ensure NHS patients
are treated more quickly), bring in private sector expertise (to run
treatment centres for high-volume routine operations such as cataract
removal) and use commercial money and expertise to build and maintain
new hospitals under the private finance initiative (PFI) or
Public-Private Partnerships (PPPs).
For Labour, the important thing is not who provides the service to
patients (it could be the private, public, or voluntary sector) but
that the service is swifter and treatment is of equal or superior
quality to the NHS, represents value for money and is paid for, free
at the point of delivery, by the NHS, which is its principle duty.
As the health secretary at the time, Alan Milburn, said in July 2001:
"This is not privatisation - the taking of services out of the NHS. It
is bringing into the NHS private sector help in those areas where it
has a track record and where there are benefits for patients. The
private sector will help but the NHS is - and will remain - Britain's
dominant health care provider."
For years in opposition it was standard Labour rhetoric to claim the
Conservatives were "privatising" the NHS by contracting out support
services - such as cleaning - to the private sector, or proposing to
build hospitals under the private finance initiative.
Unlike the Tories, Labour used to believe that public services should
be provided as far as possible by the public sector as the guarantor
of standards, quality and good value. Now that Labour believes
partnerships with the private health sector are key to revitalising
the NHS, people are understandably a little confused. The government
health secretary admitted that the government "has not defended PFI as
well as [it] should have [done]".
Both Labour and the Tories support a mixed economy for healthcare. But

while Labour believes that the private sector can "help out" the NHS
(which would remain the dominant provider) the Tories would like to
encourage the private sector to compete openly with the NHS for
contracts to provide publicly-funded healthcare, a view which Labour
has only recently begin moving towards.
Labour traditionally believes that health provision should be paid for
by the NHS entirely out of central taxation (although people should be
free to take out private insurance if they wish), whereas the Tories
believe the NHS budget should be supplemented by encouraging
individuals, through tax breaks, to take out private health insurance.

Partly through necessity, Labour has learned to love the Private

sector. In order to kick-start its massive hospital building plan,
Labour had little choice but to fund it through PFI, thereby
transferring a swathe of NHS support workers to the private sector. It
has broadly kept to its 97 manifesto pledge of "opposition to the
privatisation of clinical services" but has been continually forced to
hire private hospitals to carry out thousands of routine operations in
order to meet its election pledges on reducing waiting lists.
The prime minister, Tony Blair, has been frustrated by the alleged
unwillingness of many parts of the public sector to reform inefficient
and outdated practices and he regards private expertise as a useful
catalyst to help transform NHS performance.

In 2001, the BUPA hospital unit in Redhill, Surrey, under the terms of
the contract ceased to carry out private work and devoted itself
exclusively to NHS operations. No public assets were sold; extra
capacity was bought (in the private sector) to provide 5,000
operations a year for NHS patients. The staff are a mixture of BUPA
and NHS employees. This wasnt a shock announcement: the NHS plan
promised that 20 diagnostic treatment centres (providing orthopaedic,
surgery, routine day surgery and diagnostic facilities) would be
created to provide swift, high volume operations. These would be
managed by the private or public sector. The unit has also been one of
the first to accept a consortium of formerly NHS nurses to take on
public sector work in a private capacity, the type of co-operative
arrangement that is right in line with government aspirations for the
evolution of the health service.

Labour believes that while the majority of people support a tax-funded

NHS as a means of financing healthcare, they do not mind who provides
their treatment as long as it is swift, of good quality, efficient and
paid for by the NHS.
Some critics have doubts over the quality of some care in the private
sector - the government says all potential private providers will be
tightly vetted to ensure that standards are up to scratch. On the face
of it, receiving vital health treatment quickly can only be good for
patients who otherwise might languish on waiting lists.

As far as limits to the use of the private sector in health care, the
government has defined four areas of NHS care where the private sector
can be used. First, using private hospitals to perform operations on
NHS patients; second, using private hospital providers to build and
run standalone surgical centres; third, using PFI not only to build
new hospitals, but to construct new health centres and procure
expensive equipment; and fourth, using private sector expertise to
provide IT systems.

Critics of the private health care scheme worry that this is the thin
end of the wedge. The fact of the matter is, the wedge is already
quite thick: the private sector runs the bulk of residential homes for
the elderly and disabled, as well as half of all medium secure units
for the seriously mentally ill. The voluntary sector provides a wide
range of NHS services for the mentally ill and people suffering from
learning disabilities. The NHS spent 1.25bn in 1998-99 treating
patients in private hospitals, around 4.6% of the NHS budget. The
government argues that it is not heralding a revolutionary expansion
in the provision of private health care, merely formalising an ad-hoc
contribution that is already formidable.