McKee, Martin

LSHTM Research Online

McKee, M (2014) Mutual ownership: privatisation under a differentname? BMJ (Clinical research ed), 349. g5150. ISSN 0959-8138DOI: 10.1136/bmj.g5150Downloaded from: http://researchonline.lshtm.ac.uk/1898273/DOI: 10.1136/bmj.g5150Usage GuidelinesPlease refer to usage guidelines at http://researchonline.lshtm.ac.uk/policies.html or alterna-tively contact researchonline@lshtm.ac.uk.Available under license: Creative Commons Attribution Non-commercialhttp://creativecommons.org/licenses/by-nc/2.5/FUTURE OF THE NHSMutual ownership: privatisation under a differentname?Will taking NHS providers out of state ownership and giving them to their employees to manage bea charger to the rescue, or a Trojan horse for private equity?Martin McKee professor of European public health, London School of Hygiene and Tropical Medicine,London WC1H 9SH, UKWhat is to be done with the NHS in England? By commonconsent, the coalition government’s reforms have failed toachieve their stated objectives—perhaps because their complex,largely incomprehensible design made it impossible for themto succeed.1 True, GPs were supposed to be in the driving seat,but in reality they are driving away from the NHS to an earlyretirement as they leave in droves.2 So what is the answer?The latest “solution” to appear on the scene is mutualisation.This is the idea that NHS providers would be privatised(although its advocates seem reluctant to use that word) by beingtaken out of state ownership and managed by their employees.Politicians, such as the Cabinet Office minister Francis Maude,are promoting them enthusiastically,3 dropping hints that thiscould be the future of all current NHS provision after aConservative victory in 2015. They draw encouragement froma recent report chaired by Chris Ham, of the King’s Fund, thatreviews the extensive and unsurprising evidence that employeeengagement brings many benefits. It also shows that many,although not all, existing NHS providers already achieve highlevels of engagement.4Levels are very slightly higher in mutual organisations thatprovide services to the NHS than in foundation trusts (0.06points on a five point scale, although with no indication ofwhether this is statistically significant). However, the report’sactual recommendations have conveyed nothing like as muchenthusiasm as that of the politicians who have drawn on it. Thereport merely suggests that NHS providers should have greaterfreedom to test mutualisation, although those of a suspiciousnature might recall that similar language was used in relationto foundation trusts not so long ago.The idea of mutualisation can be superficially attractive, and afewmutual organisations have very high reputations. Strikingly,though, the list of enduring successes rarely seems to extendbeyond John Lewis and Arup. Indeed, the good reputation ofthe former has been hijacked to create the misleading term “JohnLewis-style”—as applied to Circle Health, the operator ofHinchingbrooke Hospital, in which employees hold a minoritystake but the real power lies with a group of hedge funds.5Yet there is one problem that none of those advocating mutualsseems willing to tackle: how do you ensure that they remainmutuals—and what happens if they change their status? Acollective amnesia seems to exist about the many othercompanies that went badly wrong after they were demutualised.This somewhat inglorious roll-call includes Northern Rock andBradford and Bingley, whose reckless behaviour contributed tothe financial crisis; and the Automobile Association, whosereputation plummeted after its new private equity owners cutcosts, increased its debt, and eventually walked away with £2bn(€2.5bn; $3.3bn) in profit.6As these examples show, the journey to mutualisation, eitherby accident or design, could simply be the first step towardsbeing swallowed up by a major corporation—one that isinterested not in the care of patients, but rather in arranging itsaccounting practices to maximise profits and minimise its taxbill. The example of Southern Cross—a care home providerthat collapsed after its scheme to sell and then lease back itsfacilities went badly wrong, causing severe anxiety to thousandsof elderly and vulnerable residents and their families—shouldserve as a warning of what could happen if a chain of what arenow NHS hospitals followed the same path.Can we learn lessons from other countries where mutuals doplay a greater role in healthcare, such as Germany, with its socialinsurance systems? The crucial difference is that mutual statusin Germany is underpinned by legal safeguards, and employeerepresentation is achieved by involving the trade unions, whoserole as social partners is also enshrined in law. Consequently,it is inconceivable that a German social insurance fund couldbe taken over by a private equity firm based in an overseas taxhaven. But a mutually owned hospital in England would enjoyno such protection. If those politicians arguing for mutual statusbelieve that it should not be simply a stepping stone tomartin.mckee@lshtm.ac.ukFor personal use only: See rights and reprints http://www.bmj.com/permissions Subscribe: http://www.bmj.com/subscribeBMJ 2014;349:g5150 doi: 10.1136/bmj.g5150 (Published 21 August 2014) Page 1 of 2ObservationsOBSERVATIONScorporatisation, then it is incumbent on them to put in place asimilarly protective legal framework.Continental European countries may also have something toteach us about employee engagement. German companies havetwo tier boards that exercise management and supervisoryfunctions; and employees, who are represented mainly by theirtrade unions, have statutory membership of the latter. As thepolitical economist Will Hutton and others have noted, thismodel of “Rhineland capitalism” has beenmuchmore successfulin creating sustainable growth than the much less regulatedmodel in the United Kingdom.7 Crucially, it shows thatemployee engagement can be achieved without changingownership.Once again, the debate on the future of the NHS in Englandseems characterised by taking an axiom with which few willdisagree, whether it be “putting patients first” or “increasingemployee engagement,” and then moving rapidly to a proposedsolution, such as the Health and Social Care Act—or, in thiscase, mutual ownership—without the usual intermediate stepof diagnosing what the problem actually is.Few people would disagree with the need to improve employeeengagement. But, in the absence of adequate legal safeguards,it seems somewhat foolhardy to rush rapidly into a model ofownership that might be achieved in other ways, but whichcould easily lead to NHS providers being stripped of assets byprivate equity companies sheltering from taxation, and publicscrutiny, on tropical islands.Competing interests: None declared.Provenance and peer review: Not commissioned; not externally peerreviewed.1 McKee M. Does anyone understand the government’s plan for the NHS? BMJ2012;344:e399.2 Rimmer A. Six in 10 GPs are considering early retirement, BMA survey finds. BMJ Careers2014. http://careers.bmj.com/careers/advice/view-article.html?id=20016882.3 Mason R. Hand hospitals over to their staff, says Francis Maude. Guardian 29 July 2014.www.theguardian.com/society/2014/jul/29/nhs-hospitals-hand-over-mutuals-francis-maude.4 King’s Fund. Improving NHS care by engaging staff and devolving decision making: reportof the review of staff engagement and empowerment in the NHS. 15 July 2014. www.kingsfund.org.uk/publications/articles/improving-nhs-care-engaging-staff-and-devolving-decision-making.5 McKee M. Circle Health is not like the John Lewis Partnership. BMJ 2011;343:d7897.6 Wachman R. A sorry Saga at the AA? 1 July 2007. www.theguardian.com/business/2007/jul/01/privateequity.observerbusiness.7 Hutton W. The state we’re in: why Britain is in crisis and how to overcome it. Vintage,1996.Cite this as: BMJ 2014;349:g5150© BMJ Publishing Group Ltd 2014For personal use only: See rights and reprints http://www.bmj.com/permissions Subscribe: http://www.bmj.com/subscribeBMJ 2014;349:g5150 doi: 10.1136/bmj.g5150 (Published 21 August 2014) Page 2 of 2OBSERVATIONS

Mutual ownership: privatisation under a different name?

M. McKee

Crossref

http://researchonline.lshtm.ac.uk/1898273/1/bmj.g5150.full.pdf

Mutual ownership: privatisation under a different name?

Abstract

Similar works

Full text

Available Versions

LSHTM Research Online

Crossref