The Growth of Healthcare Capitalism

Across the world, private healthcare corporations are growing in power - and will fundamentally undermine public healthcare within a generation if they are not challenged.

Credit: Virgin Care

Neoliberalism kills. During the twenty-first century, as part of an economic and political era stretching back to the late 1970s, the world and everything in it has been characterised by what has become known as neoliberalism. Healthcare, and health itself, are no exception to this. 

Across the world private healthcare has come to dominate large sectors of health and social care provision. What has become known as a medical–industrial complex, comprising vast multinational companies many of which are based in the US, has spread its reach over the past 50 years. In the process, an idea has taken root that it is perfectly legitimate that we should regard healthcare – and indeed health itself – as a commodity, something to be bought and sold on a neoliberal market controlled by private industry seeking to generate profit.

At primary care level, systemic and ideological changes associated with neoliberalism impact on a daily basis on general practice as the traditional roles of community doctors are reconfigured by the increasing commodification of health. General practitioners (GPs) are required to establish the ethnic and religious backgrounds of their patients as a way of rationing health provision through their responsibility to follow GMS1 Form and ‘Prevent’ strategy duties. Meanwhile, in hospitals by 2018, it was becoming increasingly common for patients from black, Asian and minority ethnic backgrounds to be asked for documentary evidence of their rights to treatment. 

Through the business-oriented auspices of CCGs, with responsibilities to decide on health priorities in specific regions, local GP surgeries have become semi-independent businesses themselves, with a responsibility to run surgeries to strictly controlled budgets. This has put additional pressure on GPs, who are not trained as business managers. As a result, in many areas ‘super-partnerships’ have evolved, bringing together surgeries to produce fewer, centralised facilities in order to generate sufficient economies of scale to support the employment of business management specialists. 

The result: more business managers and fewer doctors, with surgeries run at low staff levels with the increased use of locums. Research suggests that this is already beginning to erode surgery–community links. Then there is Big Pharma, which impacts upon drug provision agendas such that GPs are constrained with regard to prescribing over-the-counter drugs. Primary care in the UK is becoming focused on fewer, bigger, more impersonal GP surgeries, run primarily with tight budgets in mind, given more policing roles and subject to an ever more powerful global medical–industrial complex.

‘Super-partnerships’ are indicative of a much broader trend occurring in the UK and beyond, a trend that since the 1990s has already reshaped social care and which continues to influence healthcare generally. Since the early 1990s, an accelerating process of what is known as the centralisation of capital has set the context of the development of the UK’s care sector. This is not just a UK phenomenon. Globally, there has been a fundamental shift in resources away from the public sector towards independent providers.

In 1993, the independent sector in the UK, comprising charities, not-for-profit voluntary and for-profit agencies, provided just 5 per cent of care services. By 2013, this had risen to 89 per cent. There are over 160,000 charities and 70,000 social enterprises overall, with a combined annual income greater than £60 billion, employing 1.6 million workers in 2012. This represents over 4 per cent of UK GDP and 5 per cent of UK employment. It is a huge and increasingly important employment and economic part of modern societies. 

In the UK, since the 1980s, governments have worked hard to create this privatised and semi-privatised independent sector industry in social care, initially seeking to concentrate financial resources — through local government grants and loans — in the hands of a plethora of relatively small, independent sector businesses. Over time this strategy changed so that rather than enabling a further extensive growth of small care providers, governments aimed to concentrate services in fewer, bigger organisations. According to the Financial Times, “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 Mergers and Acquisitions across healthcare services.”

In the UK, spending on healthcare as a percentage of gross domestic product (GDP) is around the average for EU countries generally at around 9.8 per cent. For 2017–18, planned spending for the Department of Health in England was approximately £124.7 billion. Though funding for the Department of Health grew, the rate of growth slowed considerably compared to historical trends. The Department of Health budget will have grown by 1.2 per cent in real terms between 2009–10 and 2020–1. This is far below the long-term average increases in health spending of approximately 4 per cent a year (above inflation) since the NHS was established in 1948. In 2018, it was below the rate of increase needed to maintain current standards of service based on projections by the Office of Budget Responsibility (4.3 per cent a year). 

The 2018 British Social Attitudes survey shows that in 1997 half of the public were dissatisfied with the NHS. Between 2001 and 2010, satisfaction increased significantly as a result of increases in NHS funding and consequent reductions in waiting times for accident and emergency, elective treatment and other improvements in the quality of patient care. British Social Attitudes surveys have consistently shown health spending to be one of the top two priorities, and surveys indicate that an increasing proportion of the population support boosting NHS spending.

Healthcare spending impacts on the quality of services, and more fundamentally the quality of people’s lives. This presents governments attempting to move away from a reliance on publicly provided services to private healthcare with major political problems. The NHS employs over 1.5 million people, representing the fifth biggest single employer in the world. Healthcare is labour-intensive and heavily based on human interaction and customised care. As such, efficiency improvements through the use of technologies and automation, the trend in all other industries, is much more difficult. Despite this, the healthcare industry continues to gamble vast sums of money and its hopes for future global profit on medical technological developments. 

Certainly, in terms of ratios of nurses to patients in hospitals the numbers have fallen, with the safety limit of one nurse for every seven patients set by National Institute for Health and Care Excellence guidelines in 2018 regularly exceeded. Reducing staff numbers and making the rest work harder (increasing the rate of exploitation) is a tried and tested way in which industrial capitalism has traditionally sought to generate more profit, and this is evidenced in healthcare generally through a wealth of recent research. 

At a European-wide level, Rachel Tansey of the Corporate Europe Observatory reports that squeezing profits for shareholders out of health services contextualises deteriorating working conditions across the European Union. Worse pay, reduced staff levels, greater workloads and more stress all negatively affect safety and quality of care. Greater health inequality is fostered as private, for-profit providers ‘cherry pick’ lower-risk and paying patients, while higher-risk and poorer patients, or those needing emergency care, remain reliant on under-resourced (thanks to austerity) public health service provision. 

A combined set of EU-level pressures have helped create a pro-privatisation environment. While there is no single channel of influence in Brussels of private healthcare interests, there is evidence of corporate lobbying influenced by big business groups, companies and think tanks. This, and a shared underpinning ideology centred on the idea that health markets are better at providing for our health needs, helps feed the financial and political agenda that encourages more privatised models of healthcare. The model rests on the view of healthcare as a commodity, bought and sold on a healthcare market. Moreover, health itself becomes a commodity, secured and maintained by an individual’s ability to afford sufficient health-promoting goods. As Thomas Kuhn would put it, this market-oriented view of health forms the ‘dominant paradigm’ in health and healthcare today.

Healthcare models globally have fundamentally changed over the last half century and they continue to do so. Previously, in the years following World War II, governments were primarily responsible for attending to the health needs of their populations, developing versions of state-driven welfare provision to provide medical and social care directly. From the late 1970s onwards this began to change, and increasingly healthcare came to be dominated by private healthcare capital, which now touches every corner of the globe. 

This article is excerpted from  Vital Signs: the Deadly Costs of Health Inequalities.

Get your copy for 20% off today by  visiting Pluto Books  and adding the coupon code TRIBUNE20.

About the Author

Lee Humber is a health and social care academic and activist. He has contributed to numerous journals including Critical and Radical Social Work and Disability and Society. He is the author of Vital Signs: The Deadly Costs of Health Inequality (Pluto, 2019).