Health and social care provision around the globe is in crisis. Over a decade of neoliberalist health policy has reduced services to near breaking point. In the UK the pace of the attacks on the practice and principles of the NHS has accelerated markedly over the past three years, culminating in Tory manifesto promises to slice off great slabs of it for immediate privatisation. Two Health and Social Care Acts (2012/2015),1 a Care Act (2014),2 the Five Year Forward View (2014),3 “vanguards”, “MCPs” and “PACS” are all already undermining its foundations, seeking to speed up the process of bringing health and social care services together into smaller numbers of much bigger, privately-run conglomerates. This article will explain these terms and developments, and examine their implications for our future struggles against NHS privatisation. The article is broadly structured by a comparative study of health provision in the UK and the United States.
The social care workforce in the UK is huge with, in 2012, 1.63 million workers. Social care is labour intensive and currently an area of capital accumulation that private capital is finding it difficult to generate profits from. Potentially, problems for the non-statutory sector will worsen as, from 1 April this year, the national minimum wage has been set at £7.50 per hour. This will have a massive impact on social care provision, an employment sector with low and widely differing levels of pay. When the new rate came in, 43 percent of care workers, 341,000 people aged 25 and over, were being paid less. In a dozen local authorities, over three quarters of care workers were on below this rate of pay.4 “This is good news for the notoriously underpaid social care sector”, said Richard Humphries of The King’s Fund, a health think-tank: “The question is: could it have unintended consequences?”.5 The central consequence to which The King’s Fund alludes is the very real possibility of the hike in wages sending so called “independent sector” organisations (which include both private and voluntary sector care providers) out of business altogether. As the journal Community Care shows, 47 major care providers closed in 2014-15 alone and this trend is likely to have accelerated over the past year.6 A recent care provider conference in Oxfordshire estimated that during the first part of 2017 four or five providers went bust each month in the county alone, causing a crisis that saw council administration staff being sent in to some residential homes to provide care themselves.7
The care crisis is also affecting provision in the US. The new administration’s widely trumpeted American Health Care Act (AHCA) has, at the time of writing, passed its first legislative hurdle, having been passed by the Republican-dominated House of Representatives after initially stalling. The AHCA, laughingly called “Trumpcare”, aims to replace “Obamacare”—the Affordable Care Act (ACA), which enabled tens of millions of Americans to buy health insurance after its implementation four years ago.8 As the Washington Post reported: “Independent arbiters such as the Congressional Budget Office say [the AHCA] would increase the number of uninsured by millions, cut Medicaid by $800 billion, and raise premiums and deductibles—especially for those with pre-existing conditions”.9
Across Europe, state-run provision of all kinds is under intense pressure as a result of years of austerity, with—especially but not only in so-called “periphery” countries like Spain, Portugal, Ireland and Greece—the selling off and slashed funding of publicly-run health and social care provision.10
This global social care crisis presents complex problems for capital and its nation states. Health and social care services are an essential part of how individual states manage and maintain their labour supplies and the closer integration of the two services accentuates this. Since at least what Eric Hobsbawm calls the “second industrial revolution”11 at the end of the 19th century, governments worldwide have accepted the necessity of intervening in some way to support a population’s health and social welfare, in order to ensure an adequately healthy workforce. Since that time governments, at least in the Western world, have conceded the need to commit resources in order to do so, the amount being determined by historically-specific combinations of social and political forces, discussion of which is beyond the scope of this article. The problem for capital now is how it can ensure care services are robust enough to avoid causing chaos in broader health systems, while at the same time reining in state expenditure on them. And how can governments contain the political unrest attached to this volatile, potentially long-term and seemingly intractable social problem?
To address these questions I will focus on health and social care provision in the US and in the UK. Comparing and contrasting the problems faced by these two countries illustrates the depth of the crisis in social care globally. As I will argue, the health industry in the US is the most highly developed in terms of seeking to generate profit from ill-health and thus provides a model for other countries seeking to do the same. The US system—if such a term can be used for the anarchy of this market in ill-health—represents one possible future for health and social care provision elsewhere. It is certainly one that private health investment in the UK is drawn to. An analysis of it, in tandem with an understanding of the direction of travel in the UK care systems, can arm socialists for the fights ahead. The article ends by considering some of the fundamental contradictions between the capitalist mode of production and meaningful concepts of something called “health”.
The US: health industry, imperialism and the “Rising Billions”
Donald Trump’s incoming administration set as one of its key goals the dismantling of ACA, so-called “Obamacare”, a system of subsidies for those who could not afford health insurance cover that enabled more people to insure themselves. In effect, the ACA is an indirect subsidy for health insurance companies since it provides them with new customers, and it has been criticised as such by elements of the American left, more of which below. The ACA is set to be replaced by the AHCA despite opposition to this from the American Medical Association, the American Hospital Association, the American Nurses Association and the lobby for seniors, the American Association of Retired Persons.
Healthcare in the US is a commodity bought on the market and paid for through insurance. Over 45,000 people die each year simply because they can’t afford health insurance.12 A recent survey found that 52 percent of Americans can’t afford more than $100 per month on health insurance, an amount likely to buy bare-bones coverage only.13
There are two broad safety nets if you can’t afford coverage. Medicare and Medicaid are two different government-run programmes created in 1965, when American society was in the midst of the civil rights movement and the beginnings of the anti-Vietnam war revolts. The schemes were part of President Lyndon Johnson’s so-called “Great Society” project, a partial acknowledgement in the midst of this social upheaval that the state needed to do something to meet the healthcare needs of its population. Medicare provides health coverage if you are 65 and older or have a disability, no matter your income, in a national (federal) programme, administered locally state-by-state. It most closely equates to what we might call social care. Medicaid is a state and federal programme that provides health coverage if you have a very low income and have no insurance of your own.
In terms of residential accommodation for, in particular, older people needing social care, most Americans enter residential homes as private payers, spending their assets until they qualify for coverage from Medicaid. Since residential care home places are expensive, averaging $45,800 a year in 2013, it does not take long for many Americans to spend personal wealth and qualify for Medicaid assistance.14 The Medicare programme covers a limited number of days only for nursing home care for rehabilitative services, usually after discharge from hospital. If people need care beyond the Medicare limit, they must pay privately or qualify for Medicaid coverage. In 2015, Medicare provided health insurance for over 55 million—46 million people aged 65 and older and nine million younger, disabled people.15 On average, Medicare covers about half of the health care charges; the other half must be paid for by individuals themselves. If they can’t pay, they aren’t covered.
Originally, plans for a national long-term care insurance scheme called the Community Living Assistance Services and Supports (CLASS) Act, were included in the Affordable Care Act of 2010.16 This would have gone further in developing what exists of a social care system. However, the CLASS Act was repealed in January 2013 before implementation had begun. Congress then established the Federal Commission on Long-Term Care to look for an alternative solution, but it failed to reach agreement.17 CLASS was effectively stymied by austerity-driven Republicans in both the House of Representatives and the Senate.
ACA was one response to a genuine crisis of ill health—and poverty-related ill health—stalking the US. Low-wage workers are most often not offered health insurance at work or are offered plans that are too expensive or too skimpy.18 Most of the low-wage jobs that potential Medicaid recipients could obtain do not provide health insurance. According to the 2014 Medical Expenditure Panel Survey, only 28 percent of employees of private firms with low average wages (eg retail, food service, agriculture) get health insurance through their jobs.19 Expanding and deepening poverty in the “richest country in the world”, and the ill-health that accompanies it, is the social crisis that underlies the crisis in health and social care. Over 15 percent—nearly 46 million people—live below the poverty line, representing a vast army of unemployed and low-paid workers unprotected by any kind of healthcare provision:
If you are poor, you are more likely to develop many illnesses, more likely to become injured, more likely to become disabled, and more likely to die early. You are less likely to have access to high-quality medical care—or any medical care at all—and less likely to have access to preventive services…you are less likely to have adequate knowledge about threats to your health and to the health of family members, and less likely to know how to navigate our complex health care system…you are more likely to live in communities with hazardous outdoor and indoor air pollution. Your children are more likely to have elevated lead levels and resultant problems, such as lower IQ scores and reading levels, attention deficits, and behavioural problems.20
Even when low-wage businesses offer insurance, workers are often ineligible because they work part-time or have not been on the job long enough. When job-based insurance is available, the monthly premiums are frequently too high to be affordable or have such high deductibles (eg health savings account-compatible plans) that they do not offer meaningful access to care.21 The ACA helps low-wage workers move from public to private coverage if their job opportunities expand and incomes rise. When earnings rise above the Medicaid income eligibility level, under the ACA workers are able to use advance premium tax credits and cost-sharing reductions to afford private insurance. Workers are given a state subsidy to enable them to buy insurance, in effect passing on this subsidy to the insurance companies.
It has been argued by sections of the American left that Medicaid in effect subsidises low-paying employers, while the ACA subsidises insurance companies.22 This approach potentially leaves socialists adrift of the, albeit limited, merits of and popular support for both. Medicaid and the ACA are both acknowledgements of the state’s responsibility to provide a level of support for its citizens. Neither are ideal, or perhaps even fit for purpose, but in pointing this out socialists need to acknowledge that they are a step on from the naked savagery of no health support, private health insurers and healthcare, and should be critically supported by socialists as such. During his race to the White House and in stark contrast to the Tea Party movement, Trump was careful to support both Medicare and Medicaid, reflecting the programmes’ popularity. But, after his election one of the central planks of “Trumpcare” is an $800 billion cut in Medicaid provision.
US capital has a genuine need to devise a means by which these tens of millions of low-paid workers are kept healthy enough to continue to be exploited by US bosses. Interruptions in the supply of workers for retail, agriculture, care work and the rest, can cause labour shortages and the potential for resultant wage hikes, especially given Trump’s threat to restrict migrant workers—a key resource for all of these industries.
Two other factors are also impacting on the health and social care crisis in the US currently, one to do with the rising costs of health care, the other to do with the potential the US health industry sees for global expansion—the dream of the so-called “Rising Billions”. The rest of this section will focus on a brief discussion of both of these.
The US spends more on health than any other country in the world. As the Centers for Medicare and Medicaid Services report shows, in 2015, US healthcare spending increased by 5.8 percent to reach $3.2 trillion, or $9,990 per person.23 The coverage expansion that began in 2014 as a result of the ACA, continued to have an impact on the growth of healthcare spending in 2015. Additionally, faster growth in total healthcare spending in 2015 was driven by rising costs for private health insurance, hospital care, physician and clinical services.24 Also, rising poverty meant more people had to rely on Medicaid, while the price of drugs continues to rise.25 The overall share of the US economy devoted to healthcare spending was 17.8 percent in 2015, up from 17.4 percent in 2014. The US spends nearly a fifth of its GDP on health and the trend is further upwards.26 This compares 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).27
As an aside, Republican Congressman Tom Price has recently been confirmed as secretary of the huge Health and Human Services department. The six-term Georgia Republican now oversees vast social programmes and leads the Food and Drug Administration, the Centers for Disease Control and Prevention, the National Institutes of Health and other agencies. The Department of Health and Human Services, with a budget of $1 trillion, is the world’s largest source of funding for medical research. Price oversees FDA policies regulating drugs, medical devices and diagnostic tests. CNN, the New York Times, and the Wall Street Journal have all recently carried stories showing that Price traded more than $300,000 worth of stocks in companies that stood to benefit from legislation he supported or drafted. Such is the calibre and integrity of those entrusted with overseeing the biggest-ever health resources on the planet.28
The huge cost of US healthcare is serviced by individual expenditure, with the average “healthcare consumer” now facing far greater financial exposure to medical costs. Between 2010 and 2015, employees’ contributions to health insurance grew almost three times faster than wages. Recent research showed that so-called “middle class” Americans are feeling this burden the most—their healthcare spending as a percentage of household income has increased 60 percent since the 1990s with their healthcare costs now almost half of a typical mortgage payment.29 Americans are going into debt to service health insurance, spreading health costs to the financial sector more generally.30
This rising cost of healthcare 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. As a result, US health industries have never been as powerful, or as rich. In the Fortune 500 the three health companies—at numbers five, six and seven—are each richer than former market giants such as General Motors and AT&T. Health market leader McKesson is a pharmaceutical distributor also concerned with the development and distribution of health technologies—a kind of health Walmart. At number six, United Health, largely a health insurance provider has, it is estimated, over 100 million customers globally. An accelerating context of mergers and acquisitions (M&A) has accompanied and further facilitated this process.31
The tendency for capital to evolve into a smaller number of large, industry-specific companies, has been recognised from capitalism’s beginnings and the process is currently very much in evidence in health. Health industry mergers in the US have been accelerating over the last 10 to 15 years, peaking in 2015 and 2016. The total reported deal value of M&A in the US health industry in 2016 was $71.7 billion.32 That was down 59.6 percent from 2015, the record year for M&A in the sector when the figure, in excess of $100 billion, was equivalent to over a third of the total UK GDP for that year.33 This is—on a somewhat smaller scale—a worldwide phenomenon. As I show below, mergers and acquisitions have been actively promoted by UK governments.
This growing tendency towards merger in the US as elsewhere is a process of what Karl Marx called the “centralisation of capital”, the coming together of individual capitalists into fewer, larger conglomerates. This article discusses this process in full in the section below looking at the concentration and centralisation of capital in the UK health and social care context. Here, it is important to recognise that the centralisation of capital is an important tendency identified in capital formation in its imperialist phase. In the US the trend towards, and the capitalists’ rationale for actively promoting and pursuing M&A, was outlined at the beginning of the 21st century, when it was argued that “facing the drivers of change—deteriorating public health, poor quality and safety, and unaffordable health care—the industry is poised to experience convergence among the major suppliers”.34
“Poor quality and safety” here refers to the fact that US hospitals increasingly represent a danger to your health. In 2013 medical errors in hospitals were the leading cause of preventable death in the country, accounting for nearly a quarter of all preventable deaths that year, beating smoking and obesity-related illness into second and third place.35 In 2005 it was estimated that there were over 98,000 preventable deaths each year in US hospitals, costing the system over $38 billion annually.36 The point also refers to the seemingly uncontrollable and utterly unethical practices of global drug companies, extensively documented by Ben Goldacre and others, with drug companies routinely hiding data seen as problematic to the development of new drugs, while laws remain largely toothless to prosecute them even if such data and practice is exposed.37
These are some of the, if you like, material reasons put in defence of the ongoing M&A trend. The financial press is littered with claims of the benefits for US workers’ health of the ever-expanding, though fewer in number, health conglomerates.38 Global expansionist sentiment is the other driver of health industry dominance, and capital is currently being sucked into the health industry as never before by the promise of the growing potential of a global health market, which has been called the “Rising Billions”39
This is the idea that, over the next five years, between three and five billion new consumers will be connected to the internet for the first time and are reachable by internet and mobile devices. The rising billions are consumers of goods and services, but are also patients in need of medical care and therefore potential customers for health-related commodities, so called “health customers”. An example of this health technology salesmanship is the “Hemafuse” autotransfusion device. Currently being touted across sub-Saharan Africa and elsewhere, Hemafuse helps patients to deal with internal bleeding, as the advertising literature says “perhaps from a car accident or a complication during pregnancy”.40 In order to survive, patients need to have their blood removed, filtered and returned. As the publicity for Hemafuse claims, the simple device allows even untrained persons safely to treat internal bleeding. No need to call on the services of potentially expensive—or non-existent—health and social care workers, with your own Hemafuse, perhaps bought cheaply via eBay, your next door neighbour could help you with your internal bleeding problems! It sounds ridiculous, but this kind of “blue sky” thinking is currently contributing to the sky-rocketing market in US health industry shares. Technological innovation, fenced by grubby, unscrupulous hucksters, is driving this forward, unsupported by case study, ungoverned by ethical practices of any rigour.
Alongside the physical technologies outlined above, eHealth systems are a massive growth area in the US and elsewhere. eHealth covers a broad field including systems of communication between health practitioners: remote health monitoring (many people already use such devices—Fitbit for example—to monitor their own physical wellbeing), and virtual consultations between doctors and other professionals and patients. The list of technologically-driven change seems endless and without boundaries. If we move to virtual consultations then why not use call-centres of doctors based in areas around the world with low labour costs? You can see why the brokers are salivating.
Some of the consequences of this technologically-driven approach in the UK context are already evident. Jay Stickland, director of Southwark Council’s adult social care department, is quoted in the Financial Times extolling the virtues of using motion detectors to replace care workers in older people’s homes: “We could pop in [to see someone] at lunchtime, at one o’clock. [But at] five past one, she could be on the floor. So there’s no real value to this”.41 And, of course, once you move to a motion detector system of monitoring patients or service users more broadly, there’s no need for monitoring staff to be in the same borough or city, or even the same country. Why not employ the cheapest staff around the globe, as other industries have already done? Potentially, with a smaller care staff on standby locally, the monitors can raise an alert when a crisis arises in a “just-in-time” approach to healthcare delivery!
In later texts, Marx talks about the drive towards technological advance inherent in capitalism, and the labour-saving machinery produced by it potentially eliminating arduous labour for future societies.42 But technological advance under capitalism, as Marx was at great pains to point out, primarily aims to replace some workers while increasing the rate of exploitation of those left. Marx describes the three “circumstances” of exploitation rates—the length of the working day, or the extensive magnitude of labour; the intensity of labour, or its intensive magnitude, and the overall productivity of labour.43 In the global health industry, manipulation of all three of these is currently evident, in differing combinations in different geopolitical circumstances, underpinned by and reinforcing austerity, technological changes and the centralisation of capital.
The increased potential for a quick profit resulting from this is sucking finance capital into US health like never before. Some commentators at least are uneasy about this:
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 1999.44
The threat of a health bubble collapse makes previous industry collapses—like those in the US auto and building industries—seem like child’s play in comparison. The US auto industry contributes around 3.5 percent of US GDP and employs 1.7 million people. This industry was deemed “too big to fail” so the US government bailed it out, investing around $80 billion from 2009 to 2014 to keep it from collapsing. Healthcare is five times larger than the auto industry in terms of its percentage contribution to GDP, and is ten times larger in terms of the number of people it employs. It’s estimated that any comparative bail-out of the health industry would cost the government upwards of $400 billion.45
Already, the health industry has a parasitic relationship with the US state, dependent on it to open up new international markets. US military interventions around the globe have made areas “safe” for health industry expansion. Countries including Iraq and Afghanistan, others in the Middle East and parts of Africa are considered regions worthy of US health industry investment.46
Writing in 1917 Nikolai Bukharin wrote:
In the epoch of finance capitalism…the centre of gravity is shifted to the competition of gigantic, consolidated and organised economic bodies possessed of a colossal fighting capacity in the world tournament of “nations”. Here competition holds it orgies on the greatest possible scale, and together with this there goes on a change and a shift to a higher phase in the process of capital centralisation. The absorption of small capital units by large ones, the absorption of weak trusts, the absorption even of large trusts by larger ones is relegated to the rear, and looks like child’s play compared with the absorption of whole countries that are being forcibly torn away from their economic centres and included in the economic system of the victorious “nation”.47
The interests of the US state are in many ways already partially fused with those of the US health industry and the finance capital driving its expansion, and together these contextualise an increasingly impoverished home country and the increasing subjugation of foreign lands. Sounds like Victorian Britain. Trump’s “America First” rhetoric and anti-globalisation tone might be perceived as representing a potential threat to the future profitability of these health behemoths, and with it a potential threat to the wellbeing of the US economy itself. A collapse of the US health industry would be disastrous for US capital generally; meanwhile its profitability is teetering on the razor edge of a globalised eHealth promise.
Health and social care provision in the UK
Explaining the concentration and centralisation of capital Marx wrote:
This fragmentation of the total social capital into many individual capitals, or the repulsion of its fractions from each other, is counteracted by their attraction. The attraction of capitals no longer means the simple concentration of the means of production and the command over labour, which is identical with accumulation. It is concentration of capitals already formed, destruction of their individual independence, expropriation of capitalist by capitalist, transformation of many small into few large capitals. This process differs from [simple accumulation] in this respect, that it only presupposes a change in the distribution of already available and already functioning capital. Its field of action is therefore not limited by the absolute growth of social wealth, or in other words by the absolute limits of accumulation. Capital grows to a huge mass in a single hand in one place, because it has been lost by many in another place.48
This process of centralisation of capital has been shaping the development of the UK’s care sector for the past 20 years. In terms of the provision of social care, there has been a fundamental shift in resources away from the public sector towards independent providers. In 1993, the independent sector provided just 5 percent of care services. By 2013, this had risen to 89 percent. Health and social care is the third biggest employment sector in the UK. The total social care workforce was estimated to be 1.63 million in 2012. As part of this, there are over 160,000 charities and 70,000 social enterprises overall, with a combined annual income greater than £60 billion. This represents over 4 percent of UK gross domestic product and 5 percent of UK employment.49
The state has played a leading role in creating this privatised and semi-privatised so-called independent sector industry in social care, comprising private and voluntary agencies and companies. It is a kind of Keynesian approach to the primitive accumulation of capital, the concentration of financial resources in the hands of a plethora of petty bourgeois, private and voluntary independent sector capitals. As the Financial Times has pointed out, this trend is set to continue but, rather than enabling a further extensive growth of individual care capitalists, it centralises that capital into fewer and fewer hands: “Further promotion by the government of alternative models used by the private sector, combined with the removal of barriers to the sector’s increasing participation, will create a positive environment for ongoing consolidation and M&A across healthcare services”.50
By far the largest spend for local authorities funding social care provision are services for older people and for people with learning disabilities. For example, in Oxfordshire these services account for nearly 70 percent of the total spend, and this is representative of national trends.51 In terms of provision for people with learning disabilities, business analysts LaingBuisson show that the total value of the UK’s combined market for residential and non-residential care was £8.2 billion in 2012-13, with over 80 percent of services provided by the independent sector.52 The contracting out of services remains a key strategy for local government, for which it represents a huge saving. In 2013, the average cost of independent sector-run residential accommodation was 23 percent lower than the equivalent provided by local authorities, while in home-based care, the saving was even bigger, with average independent sector costs being £14.70 per hour compared with £35.50 per hour for council-run services.53 These financial savings for local authorities have become even more important over the past few years of austerity-driven cuts in central government funds made available to local authorities. Funding over the last five years has fallen by a massive £5 billion,54 strongly encouraging the movement of social care provision to the much cheaper independent sector.
Social Impact Investment and zombie capital
Though local authority contracts and funding remain central to financing independent sector social care provision, the sector has been strongly encouraged to take on debt to finance care. “Social Impact Investment” (SII) opportunities have been made available to independent sector organisations through government-backed schemes, in part to wean them off a reliance on public sector funding. SII schemes are a way for governments to provide incentives, in the form of tax relief and other benefits, to support individual and corporate investors providing cheap loans to social care agencies.55 Between 2000 and 2014, there were 25 SIIs, including Bridges Ventures (owned by Sir Ronald Cohen, “the father of British venture capital” and “the father of social investment”), Futurebuilders, Big Society Capital and others.56 Funds are primarily provided for fixed capital purposes, to build independent sector capacity rather than to actually provide care. All of them are primarily to encourage private and multinational investors. Services are provided by a complex system of “demand” organisations and agencies (which include cooperatives, charities, social enterprises, mainstream businesses and government commissioning) which are serviced by a range of “supply” agencies via another range of “intermediary” organisations. Supply agencies include individual investors, institutional investors, government investment, charitable foundations, philanthropists and corporates. The intermediaries include social banks, fund managers, infrastructural elements, instruments (by which is broadly meant investment schemes) and Community Development Finance Institutions (CDFIs).57 This complex, three-tier system has evolved to replace the central government-local authority-service provision relationship of pre-1980s welfarism. As yet, little research has been published showing how much money is absorbed at each stage of the new system through staffing, administration and other take-outs, but it is likely that resources that should have gone to care are substantially reduced in this way.58
It is apparent that the very idea of financing care services through encouraging relatively small, independent sector organisations to take on debt is problematic. A range of consequences have been identified, including the challenges that independent sector agencies face in generating profits with which to repay loans. Funding services through loans can also drive organisations away from the core purpose of their services, in search of profits to finance repayment.59 This finance model also has a more general, pervasive effect, driving organisations into searching for SII finance and away from a more traditional donor-based approach.
Debt levels in the UK residential care sector are enormous. Research in 2013 found over 700 companies were “zombie” businesses with liabilities worth more than assets.60 This is, remember, during a period of historically low interest rates. Even a small rise in rates could have disastrous consequences in this already extremely fragile environment. Even shares in market leaders such as Four Seasons, Care UK and NHP are officially rated as junk bonds, or sub-investment grade, and dangerously risky for investors to buy. NHP, for example, had debts of £1.8 billion in 2013. In December 2016, the Financial Times reported that Four Seasons had closed or sold 51 homes for older people during 2016, seeking to cut costs. It is due to dispose of a similar number this year.61 The National Care Association highlighted the fact that nearly a quarter of independent sector care providers are likely to “exit the market” as a result of debt and lack of central and local government support, causing a “loss of 40,000 beds in the independent social care market, and the worsening of a bed-blocking crisis already in evidence across much of the NHS”.62 A recent report by the GMB, a leading union for care industry workers, showed that one way ailing care homes are attempting to deal with this is by taking on more fee-paying customers, with private residents paying on average 40 percent more than publicly funded residents.63 LaingBuisson report that 2015 saw the first fall in the number of places in residential homes for a decade, with 3,000 fewer beds available.64
The UK care sector has seen an influx of international capital. Anchorage Capital, better known for its recent purchase of MGM Studios in Hollywood, is one of the more prominent corporations to buy a stake in the UK residential care industry (or rather in its real estate—most often these companies have little interest in care).65 Multinational corporations lease land and properties back to care organisations, absorbing financial resources that would otherwise go to support service users. Accountancy firm Moore Stephens reported recently: “Many care homes have…lost control over their increasing property costs by selling ownership of the property they occupy to an investor and then renting the property back from the same investor with pre-agreed rent increases they can no longer afford”.66
The shortage of available beds in the care sector has a knock-on effect in hospitals which are increasingly having to retain patients who would be discharged if a place in a community setting could be found.67 This so-called “bed blocking” crisis is an expression of the broader problems in the social care sector, and a direct consequence of the marketisation of services. Buyouts, bond issues, refinancing and other corporate and ownership strategies make the residential care sector very difficult for local authorities to monitor or control, even if they wanted to.68 Left to the anarchy of the market, with no central body overseeing and planning provision, with a plethora of independent sector organisations competing for scarce resources and needing to make a profit from them, with their buildings rented from multinational corporate conglomerates beyond the reach of local control, the system bumps along in crisis mode and will continue to do so.
In April this year the government announced an extra £3 billion will be invested in social care over the next three years. But this looks unimpressive when compared with the estimated £1.2 billion annual reduction in central and local government funding that the independent social care sector has experienced on average since 2011.69 Furthermore, given the context outlined above it is unlikely much of this funding will find its way to patient care.
I have already shown how technological change at a broad level is making an impact on social care provision. In the Southwark example quoted above, motion detectors in cared-for people’s homes are replacing the daily visit from carers, and the service there is well on the way to a “just-in-time” approach to care, with carers sent in when a watched service user has a potentially dangerous fall or other life-threatening event. This section considers some specific technological changes that have impacted on the quality of social care in the UK. But first, it is important to contextualise these within the general changes in welfare provision that have made social care more difficult to access.
A major change at a broad systemic level concerns the introduction of Universal Credit and, specifically for disabled people, Personal Independence Payments (PIPs), which have largely replaced the Disability Living Allowance (DLA). When these changes were first mooted, learning disability charity Mencap pointed out that, according to government figures, up to half a million disabled people would lose out. Mencap believed that the introduction of PIPs would “threaten the ability of many people with a learning disability to live independently”.70 Although there are no current figures assessing the impact of PIPs on people with learning disabilities, it was felt at the time of their introduction that the changes would impact particularly on those with mild or moderate learning disabilities, who would simply be transferred from DLA to Jobseeker’s Allowance (JSA) during the period of transition, reducing individuals’ benefits income and making them less able to buy support. As David Congdon of Mencap argued in 2012: “a person with a learning disability who lives independently, but who needs some level of help each week with things like cooking, shopping and sorting their household bills, may no longer be eligible for the benefit”.71 Exposed in this way to the sanctions-based regime governing eligibility to JSA, people with learning disabilities, unsupported through their non-eligibility for PIPs, are further discriminated against by the sanctions system. According to Mencap, the sanctions regime is “grossly unfair” to people with learning disabilities and helps to “trap them in poverty”. In this way, resources have been withdrawn from people with mild and moderate learning disabilities, who have simply been “disappeared” and decategorised from learning disabilities data and/or subsumed into the general bank of jobseekers comprising what Marx called the “relative surplus population” or reserve army of labour.72
The “liquid cosh”
As well as these broad changes to welfare, at an industry level there have been technological innovations aimed at maintaining and increasing rates of exploitation through staff cuts and raising the productivity of those left. The ever-increasing use and misuse of medication is a disgraceful trend widely recognised as a major problem in care homes in both the UK and the US.73 The trend is also well documented in learning disability services. For example: “anti-psychotic and anti-depressant drugs were found to be prescribed for people with learning disabilities in England in the absence of the conditions for which they are known to be effective”.74 Research commissioned by NHS England in July 2015 found that:
There is a much higher rate of prescribing of medicines associated with mental illness amongst people with learning disabilities than the general population, often more than one medicine in the same class, and in the majority of cases with no clear justification; Medicines are often used for long periods without adequate review; There is poor communication with parents and carers, and between different healthcare providers.75
The benefits for the employers of this drugs strategy are obvious. With more service users sedated—whether they are old and in care homes, or people with learning disabilities in residential or supported living—fewer staff can attend to more people, cutting staff costs and increasing the rate of exploitation of the rest in one fell swoop. Joe Greener’s work looking at how the marketisation of care provision has seen the quality of service deteriorate consistently over the past 20 years, also highlights the point about staff cuts and how the work for those left is “highly routinised within a system of bureaucratic control which emphasised the physical, ‘dirty’ tasks of care”.76 As Greener shows, even within this regime, old people in his study were routinely left to wander around in dirty clothes and for long periods of time with soiled incontinence pads, despite the best efforts of a skeleton staff to avoid this.
Centralisation and the quality of care
As in the US, the tendency in the UK is towards the centralisation of provision, with a well-documented trend towards smaller capital being subsumed in or partnering with larger organisations. This is leading to the growth of larger residential homes which has already been shown to lower the quality of care.77 The most prominent recent example of both of these tendencies is the scandal of abuse of people with learning disabilities at Winterbourne View residential home. The abuse, exposed in 2011, graphically illustrates the alarming decline in both the quality and quantity of residential care for people with learning disabilities in particular, as well as illustrating many of the issues involved in the move to fewer larger institutions across the sector generally. Sir Stephen Bubb, who led the investigation into the abuse, said: “It is outrageous that in the 21st century we still treat people with learning disabilities and autism in this appalling way—seclusion, restraint, injections. It is unacceptable”.78
Following Winterbourne View, the Care Quality Commission carried out a national survey of learning disability provision in England which showed generally very poor standards of care.79 Significantly, the audit showed that in terms of the quality of care and length of stay, community-based NHS provision was much better than that provided privately, despite decades of successive governments seeking to build private provider capacity. Bubb, along with Sarah Lambert of the National Autistic Society, also argued that shortages of locally-based residential provision leads to people with learning disabilities being “inappropriately” sent to unsuitable residential units at a distance from supportive friends, family and communities.80 Meanwhile, for profit-driven independent sector care providers these larger units allow for economies of scale, underpinning the supervision of more residents by fewer staff.
The fact that the market in social care as it has developed over the past 20 years is failing to provide adequate levels of care, is one of the drivers behind the plethora of health and social care policy documents, including the Care Act of 2014, which represents the biggest change in 60 years in the way that social care is provided. It would not be relevant for this article to spend time attempting a broad analysis of all the elements of these documents. For a full analysis of the Care Act see the Disabled People Against the Cuts website and in particular its summary, drawing on the excellent work of Professor Luke Clements.81
However, it is important to discuss one of the issues at the heart of this stream of health and social care related documents. That is the bringing together—under privatised control—of health and social care provision. In other words, the policy solution for the failure of the market in social care, run by a relatively larger number of individual capitals, is to encourage their replacement by a smaller number of much larger ones stretching across the traditional health and social care divide. For the past three years the government has been trialling different ways of doing this, attempting to develop models through what it terms “vanguard” projects, whereby one agency or partnership of agencies can be funded by the state via local authorities to take on the full responsibility of providing all social care. The next phase would be the final step in the transformation of local authorities from provider to purchaser, begun in the 1980s, the final step away from any notion of democratic accountability for social care provision. This aspect of the recent legislation is the next link from concentration of capital in numerous, smaller, petty bourgeois care providers, to the future of fewer, much larger, centralised health and social care providers.
Some 23 vanguard sites are developing new, population-based models for local health services. Multispecialty Community Provider (MCP) and Primary and Acute Care System (PACS) vanguards are aiming to bring together budgets and more closely integrate NHS services and social care:
While the initial focus was on the new care models, commissioners in many of the vanguards are now considering how to contract for the new systems, including which streams of funding to bring together within a whole population budget and which services to commission within a single contract. There is considerable interest in bringing together the budgets for core primary care services with other services.82
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”.83 In other words MCPs are vehicles for shifting some NHS provision into the independent sector for private capital to run at a profit.
PACS (primary and acute care systems) are non-hospital based private health and social care provision, seemingly expanded versions of MCPs. The King’s 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 coordination of services and move care out of hospital where appropriate.84
This article analyses a potential pilot PACS below. While some of the vanguards continue to use informal partnerships to take forward their plans, 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 or accountable care organisations or systems. As they prepare to contract for the new models, many commissioners and providers are considering which entity or partnership should hold a whole population budget and the relationship it should have with other services in complex local systems.
In April this year this direction of travel was taken to its logical conclusion. Health leaders in Manchester’s NHS and social care commissioners, offered a tender of £6 billion over ten years for a single organisation to provide all “out of hospital” health and social care provision. April’s edition of the Health Service Journal gives details of the tender. The headline reads: “Biggest ever NHS tender launched as £6 billion contract put on market; Manchester launches search for single ‘out of hospital’ provider”.85
As the Health Service Journal explains, the tender document sets out for the first time the contract value and other details of the plan to set up “local care organisations” to provide all non-acute services—including social care—across the city. The local care organisation will hold a single ten year contract to provide services for a population of around 600,000 across the city. The contract will be let by Manchester Health and Care Commissioning, itself a partnership between the city council and a newly-formed single clinical commissioning group. Meanwhile, neighbouring Stockport’s vanguard project, which is somewhere between an 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, as 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 Ltd 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 £1 billion. 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.86
This experience hasn’t deterred the government or private health capital. Vast sums of money are currently being gambled on projects with a recent history of catastrophic failure. It is a sign both of the extent of the social care crisis and of the desperate determination to shift as much of public social care provision out to the independent sector as quickly as possible, to feed the thirst of the health industry capitalists. The merged Central Manchester University Hospitals Foundation Trust and University Hospital of South Manchester is a perfect illustration of the tendency discussed here at length. Where small capital has failed, big capital will take over. If the history of this process of centralisation tells us anything it is that this tendency makes the whole system more unstable, not less, less responsive to need, not more, more inflexible, more ruthless in its pursuit of profit and less person-centred.
“Voodoo demography” and concepts of health
The concept of an “ageing population” is the nearest thing there is to any kind of justification for the relentless programme of cuts and privatisation of publicly-provided social services and welfare provision ravaging healthcare globally. The argument goes that populations all over the world are getting top-heavy, with fewer children being born and older people living much longer than they did previously. The old people are a general burden on the rest of us, the argument goes, because they use up valuable health and social care provisions due to their age-related illnesses and disabilities, and because they draw on other welfare provision for longer than previously in history. Closely aligned to this is the idea that an ageing society exacts an unfair price on the young, who have to pay to meet the needs of this elderly social burden. But, these ideas don’t stand up to serious analysis. They have been called by some “apocalyptic” or “voodoo demography”.
The idea that population ageing is a bad thing originated in the US. It was informed by both academic and popular media discourse, and political action. In 1984 Samuel Preston, at the annual Population Association of America, talked about the growing tensions between elderly and young people, who were described as the ones footing the bill for the rising health and social care costs associated with illness and disability related to old age.87 Laurence Kotlikoff developed a “generational accounting framework” using poorly-evidenced data and assertion to develop a political argument for reform of social and economic policy to discredit and punish older people.88 Another extreme example of this is the work of Daniel Callahan, who argues that the ageing population is such a threat that healthcare social services for older people should be rationed and/or withheld from them.89 Of course, in effect thanks to the rising costs of healthcare in the US, and the near-catastrophic problems caused by the introduction of the market and pseudo-markets in social care provision in the UK, this is exactly what is happening.
The critique of “voodoo demography” points to the many fallacies in the ageing population argument, its almost complete lack of evidence base and its numerous and fundamental methodological flaws. One of the key problems with the argument is the use of dependency ratios as a measure of the costs of changing social age structures. Gee and Gutman show that defining everyone over 65 as dependent on social support and on others in society is completely arbitrary and homogenises older people’s experiences.90 This point is developed further by more recent research. As Spijker and MacInnes argue, in the UK as in North America the old age dependency ratio defines all people above the statutory pension age as dependent, regardless of their economic, social or medical circumstances. With a simple adjustment of this ratio to take into account projected life expectancies and the numbers of people in employment, they find that, far from rising, dependency levels over the last four decades have actually fallen, completely undermining the politico-ideological case for restructuring social care and welfare provision more broadly on the basis of the ageing population argument.91 As they point out, regarding older people’s levels of dependency:
Over one million are still working, mostly part time, many with valuable experience or specialist knowledge. The spending power of the “grey pound” has risen inexorably. Many do volunteer work vital to the third sector or look after grandchildren. We know that most acute medical care costs occur in the final months of life, with the age at which these months occur having little [economic] effect.92
Far from being a burden, older people continue to contribute to society in a huge variety of ways. For example, as a result of spiralling childcare costs, hundreds of thousands of families all over the UK depend on grandparents to look after children while parents work. The vast majority of grandparents miss out on National Insurance payments owed to them for doing this, simultaneously saving the government millions.93
Politico-ideological offensives by the state and the ruling class based on demographic catastrophising are of course not new. Karl Marx and Friedrich Engels waged war against Malthusian ideas of the causes and consequences of population expansion through the late 1800s.94 Later, the theories of eugenics took root globally, blaming all and any social problems on “mentally deficient” elements and finding their logical expression in the barbarism of Nazi Germany. In the case of the current ageing population argument, socialists need again to point out that the problem is not a demographic, but a political one. It is not the case that old people are using up valuable and shrinking health and social care resources, but that a capitalist market in health is actively seeking to establish scarcity in order to increase prices and grow profit, while bourgeois states worldwide seek to reduce welfare provision and its associated costs in order to enhance their competitiveness during this period of the imperialist “world tournament of nations”.
Finally, though there is no room here to develop this at length (I hope to do so elsewhere soon), what has all this to do with something called “health”? It is clear that the well-established and very powerful health industry in the US is little concerned with health. Rather, it is concerned with profiting from ill-health. Equally, as the marketisation of health and social care in the UK moves inexorably forward, any semblance of the protection—let alone the active propagation of—health, is disappearing. As relatively small independent sector agencies morph into or are subsumed by larger and larger conglomerates (or, of course, go to the wall), and the market and the generation of profits are put before all else, they leave behind their founding beliefs and drives to enable, empower and support their service users/clients/patients. As Engels’s classic of 1845, The Condition of the Working Class in England, made painfully clear, capital is concerned with our health only to the extent that we are fit enough to labour for it and no further. Capitalists, health capitalists included, are primarily concerned with competing with others like them to maximise their own profits:
Ultimately it is self-interest, and especially money gain, which alone determines them. I once went into Manchester with such a bourgeois, and spoke to him of the bad, unwholesome method of building, the frightful condition of the working-peoples quarters, and asserted that I had never seen so ill-built a city. The man listened quietly to the end, and said at the corner where we parted: “And yet there is a great deal of money made here, good morning, sir”. It is utterly indifferent to the English bourgeois whether his working-men starve or not, if only he makes money. All the conditions of life are measured by money, and what brings no money is nonsense, unpractical, idealistic bosh.95
As even a cursory review of history illustrates, improvements in our health outcomes have always resulted from the self-activity of our class. That remains the case today, and will remain the case over the coming years as we continue our struggles against the increasing barbarism of a market in health.
Lee Humber is a former special needs teacher currently working as a tutor in Health and Social Care at Ruskin College, Oxford.
4 O’Connor, Tetlow and Bounds, 2017.
5 O’Connor, Tetlow and Bounds, 2017.
6 Carter, 2016.
7 Oxfordshire Social Care Provider Conference at Ruskin College, Oxford in April 2017, see also Walker, 2017.
8 Mangan, 2016a.
9 Leibenluft, 2017.
10 Navarro, 2012.
11 Hobsbawm, 1999.
12 Cecere, 2009.
13 Mangan, 2016b.
14 Rice and others, 2013.
15 Rice and others, 2013.
16 Commonwealth Fund, 2014.
17 Commission on Long Term Care, 2013.
18 Ku and Brantley, 2017.
19 Ku and Brantley, 2017.
20 Levy and Sidel, 2017.
21 Ku and Brantley, 2017.
22 See for example Cooke, 2017.
23 Centers for Medicare and Medicaid Services, 2015.
24 Morris, 2015.
25 Campaign for Sustainable Rx Pricing, 2017.
26 Morris, 2015.
27 World Bank, 2015.
28 See for example Grimaldi and Hackman, 2016.
29 Singhal and Coe, 2016.
30 Doty, Edwards and Holmgren, 2005.
31 Donkar, 2017.
32 Donkar, 2017.
34 Pierce, 2005.
35 James, 2013.
36 Pierce, 2005.
37 Goldacre, 2013.
38 See for example the collection of papers at http://healthcare.mckinsey.com/sector/payor-insights.
39 Stoakes, 2015.
40 Aue, Biesdorf and Henke, 2016.
41 O’Connor, Tetlow and Bounds, 2017.
42 Wendling, 2009.
43 Marx, 1976.
44 Colombo, 2017.
45 Howrigon, 2017.
46 Dorlester, 2011.
47 Bukharin, 1972.
48 Marx, 1976, p777.
49 UK National Advisory Board to the Social Impact Investment Taskforce, 2014, p5.
50 Plimmer, 2012.
51 NHS Digital, 2016.
52 LaingBuisson, 2013.
53 LaingBuisson, 2013.
54 Humphries, 2016.
55 UK National Advisory Board to the Social Impact Investment Taskforce, 2014.
57 UK National Advisory Board to the Social Impact Investment Taskforce, 2014, p7.
58 Finn, 2009.
59 Kramer, 2017.
60 Lakhani and Whittell, 2012.
61 Plimmer, 2016.
62 Taylor, 2015.
63 Ruddick, 2016.
64 LaingBuisson, 2013.
65 Plimmer, 2014.
66 Donovan, 2016.
67 Thompson, 2015.
68 Lakhani and Whittell, 2012.
69 National Audit Office, 2014.
70 Learning Disability Today, 2012.
71 Learning Disability Today, 2012.
72 Marx, 1976, p797.
73 NHS Choices, 2013; Cohen, 2014; Guardian, 2009.
74 Northfield, 2015.
75 NHS England, 2015.
76 Greener, 2016.
77 Care Quality Commission, 2015.
78 Atkinson, 2015.
79 Care Quality Commission, 2015.
80 Atkinson, 2015.
82 Collins, 2016, p3.
83 NHS England, 2016, p5.
85 Illman, 2017.
86 Stone, 2015.
87 Preston, 1984.
88 Kotlikoff, 1993.
89 Callahan, 1987.
90 Gee and Gutman, 2000.
91 Spijker and MacInnes, 2013.
92 Spijker and MacInnes, 2013, p21.
93 McFaul, 2017.
94 Meek, 1971.
95 Engels, 1986, p222.