Theresa May's NHS funding birthday present is a Trojan horse for privatisation – here's the proof

Trust me when I say as a doctor that we have been here before with the mental health care in the community programme, which started in the 1980s and is responsible for the dire state of mental health units today

Theresa May recently announced an extra £20bn NHS funding package by the year 2023 as a 70th birthday present. However, it is worth paying attention to the small print in order to interrogate this birthday bonanza.

Over the past eight years, the NHS has undergone the biggest financial squeeze since its inception. The extra £20bn set for five years’ time would still fall short of the four per cent historical average increase in funding per annum (as pointed out by various commentators).

It is important to highlight that the NHS debate has been largely contained to the issue of funding with little discussion of the juggernaut of privatisation. Liberal voices presenting themselves as defenders of the NHS – ranging from media outlets to MPs – refuse to talk about privatisation, probably because they are afraid of taking on the power of multinational corporations and financial capital. This is convenient for the government, to say the least.

In the wake of the Health and Social Care Act 2012, the percentage of NHS outsourcing to the private sector has doubled from four per cent in 2009-10 to eight per cent in 2015-16. While foundation trusts – particularly world famous names such as The Royal Marsden and Great Ormond Street Hospital – have taken advantage of new rules allowing them to make up to half their income from private patients. In other words, a two-tier system is already in place.

Furthermore, the augmented funding comes with strings attached. It is tied to the implementation of US-style "accountable" or "integrated" healthcare. On the surface, integration of physical, mental and community health services with social care appears laudable. The government is selling accountable/integrated care as the abolition of the internal NHS market and the end of the era of competition represented by the Health and Social Care Act 2012. NHS England plans to move towards collaborative care working at scale.

Accountable/integrated care systems would envisage multiple stakeholders – hospitals, GPs and councils, for example – working together. The ultimate destination of an accountable care model would see one provider take charge and subcontract services to other providers.

Yet accountable care models mean something very different in the US, where they originate. These models are used in the US threadbare safety net known as Medicaid for the poorest, who cannot afford insurance. They bring together multiple care providers in an attempt to align financial incentives. In reality, this means that care is restricted in order to deliver savings and often diverted away from expensive hospital settings towards cheaper care in the community.

Initially, accountable care appeared to represent a shift towards more patient-friendly and caring health providers, while moving away from the most objectionable aspect of US healthcare known as Health Maintenance Organisations (HMOs), which is dominated by insurance companies. HMOs have become notorious for restriction of care, screening of sick patients, denial of claims and exorbitant executive salaries. However, in recent years, the insurance industry – the likes of UnitedHealth, Humana and Aetna – have disturbingly taken the driving seat in accountable care models. The negative publicity generated by comparisons with US-style healthcare being transplanted here have necessitated a rebranding exercise to rename accountable care as integrated care.

At the same time, tens of hospital trusts across the country are facing closures, mergers and downgrades. Hundreds of GP surgeries have closed with hundreds more set to close. Forty per cent of walk-in centres have shut since 2010. The combination of £40bn in efficiency savings (cuts) and billions siphoned off towards privatisation (from running an inefficient market system to private finance initiatives) has led to increased rationing of care available on the NHS.

The government plans to create chains of super-hospitals and networks of GP surgeries. The Dalton Review stated that super-hospitals could be run by the NHS or private companies. NHS England previously announced that it intended to reduce the number of major A&Es for England down to between 40 and 70, although political expediency has put this plan on the back burner for the time being.

Economies of scale are certainly more enticing and lucrative for corporate takeovers and private investors. Look at social care in which chains of nursing and residential homes are owned by private equity and hedge funds, resulting in wealth extraction from captive public services, which is a chilling forecast of the direction of travel for the NHS.

This can all be seen to dovetail with devolution of health and social care to the regions, as evident in the devo-Manchester experiment. Yet devolution – whilst being sold as localism and empowerment – might translate as devolving austerity and diverting blame away from Whitehall. It is likely to herald the fragmentation of a national health service into a regional one without national standards for both staff and patients. It would also see the NHS, social care and local government compete for meagre budgets and scarce resources.

We have been here before with the mental health care in the community programme, which started in the 1980s. This saw the closure of psychiatric wards and hospitals, without the necessary resources in the community for serious mental illness. This is one of the main reasons behind the dire state of mental healthcare today. Accountable care would see physical health services following down this disastrous route.

The government is planning to bring about this fundamental reorganisation without legislation and therefore parliamentary scrutiny. It would potentially mean that non-NHS, non-statutory bodies could be handed 10 to 15-year multibillion-pound contracts for health and social care for whole regions. In other words, there would be nothing to stop private healthcare and insurance companies from winning these contracts.

As if to underline that this threat is not merely a conspiracy theory, Nottingham and Nottinghamshire have awarded a £2.7m contract to Capita and Centene UK (the UK arm of a major US health insurer) to help bring about the transition towards an accountable care system.

All of which will lead to the divergence of a two-tier NHS – the expansion of private health insurance for those who can afford it and the reliance on a basic, third class US Medicaid style service for those who cannot. Clearly this undermines the founding principles of a comprehensive, universal NHS free at the point of need.

The perpetual NHS crisis has been manufactured by deliberate policies. Increased funding means tens of billions more for PFI companies and multinationals, such as Virgin, sweeping up outsourced contracts. A new documentary by filmmaker John Furse, titled Groundswell: The Grassroots Battle for the NHS, charts the fight of campaign groups against the dismantling and privatisation of the National Health Service. It is an urgent, compelling film that deserves to be seen widely.

What the NHS really needs as a birthday present is the NHS Reinstatement Bill to restore it as a publicly funded, provided, owned and accountable health service. So Happy 70th birthday NHS. But beware of Greeks bearing gifts, especially when that present is a Trojan horse for privatisation.

A new, updated and expanded edition of ‘How to Dismantle the NHS in 10 Easy Steps’ by Youssef El-Gingihy will be out later this summer