Could US companies run NHS services after Brexit?
Along with the pomp, protests and politics, President Trump’s visit to the UK brought renewed debate about whether a post-Brexit trade deal between the two countries could involve opening up the NHS to US companies.
Mr Trump told a press conference: “When you’re dealing with trade, everything’s on the table – so the NHS or anything else”.
He quickly rowed back, saying he did not consider the NHS to be part of trade – though not before MPs from across the political spectrum had come out to say the health service was “not for sale”.
The question is what “for sale” would actually mean.
As health think tank the Nuffield Trust points out, “a trade deal would not have the power to stop the NHS being a free, universal service”.
But could greater market access to the health service for US companies be up for negotiation?
Private companies in the NHS
The NHS is funded by government through taxes. Decisions about how to spend money and how to deliver care are made by public bodies, not operating for profit.
But there are already various opportunities for private companies – including US firms – to win business within the NHS.
Out of a budget of more than £120 billion a year, 7.3% was spent on private providers in England in 2017-18, according to government accounts. That’s up from 5.3% in 2011-12.
All drugs and equipment have to be bought from the private sector, and the UK imports about £2bn of pharmaceutical products a year from the US – 9% of total drug imports in 2018.
And while the vast majority of care is done by staff directly employed by the NHS, the health service also pays private companies to deliver some care, which is still free for patients at the point of use.
That might be via a contract to run a specific service, like an immunisation programme, or under a rolling agreement with a private hospital that they will take on some NHS patients for elective surgeries like hip and knee replacements.
US companies can already bid for these kinds of contracts.
It’s worth pointing out that health is a devolved matter and there are different commissioning arrangements in place around the UK.
US companies in the NHS
There are a number of US companies working in the NHS, particularly in England, though on a fairly small scale.
The biggest private providers of NHS services at the moment are British, while companies from Australia, South Africa, the EU and elsewhere also deliver some services.
US healthcare giant UnitedHealth has an offshoot company in the UK called Optum. It gathers and analyses data on population health, which is then used to help make decisions about which services to buy in.
It doesn’t run any clinical services, although its parent company UnitedHealth did run six GP practices until 2011.
HCA Healthcare, also known as the Hospital Corporation of America, runs some private hospitals, mainly in London.
It says that less than 1% of the care it provides is to NHS patients, “predominantly where we have provided additional capacity to the NHS when they are faced with increased pressures in their hospitals.”
It has three “joint ventures” with the NHS in London and Manchester, where it provides paid-for treatment for private patients within an NHS hospital. HCA pays the NHS for use of the hospital space.
The Acadia Group, which owns the Priory chain of hospitals, again mainly does private work in the UK. But it does have beds for NHS patients in 87 of its hospitals, which provide a range of mental health services including for addiction and eating disorders.
How could they become more involved?
The UK currently opens up its market, including public services, to competition as part of the EU single market. That means companies can use competition law to sue the NHS.
This was taken further in England by the 2012 Health and Social Care Act, which says that contracts have to be put out to competitive tender.
Under EU law, though, there are explicit protections for health services which a judge has to take into consideration if a dispute between a foreign company and a member state gets to court.
It’s possible the US would want a trade deal that didn’t include these kinds of protections, according to Martin McKee, Professor of European Public Health at the London School of Hygiene and Tropical Medicine.
It’s also possible, according to Prof McKee, that the US negotiators could use a trade deal as an opportunity to push for more favourable contracts in the NHS, for example contracts allowing them to only treat less complex and more lucrative patients, leaving the NHS with the most challenging and expensive cases.
Whether the UK would agree to this is a different matter.
This was a sticking point in the negotiations over an EU-US trade deal – the Transatlantic Trade and Investment Partnership (TTIP) – which failed.
The US wanted to be able to use an Investor-State Dispute Settlement (ISDS) process which is very commonly used in international treaties. It means that if an investor in a country feels it is being discriminated against, it can take that country to an arbitration panel to seek compensation.
The concern from campaign groups in the UK at the time was that this process would be closed and not as transparent as if it had to go through the courts.
These are all issues which would be likely to become relevant again in any future trade negotiations.
Independent MP Sarah Wollaston told the BBC that President Trump’s recent comments still left the door open for drug prices being part of trade negotiations.
She referred to comments by the US health secretary on CNBC last year that the country would use trade talks to “pressure” other countries to pay more for their drugs.
A document from the Office of the US Trade Representative in February, setting out negotiating objectives with the UK, includes a section on pharmaceuticals mentioning “full market access for US products”.
Jane Lethbridge, director of the Public Services International Research Unit at the University of Greenwich, says drug companies could use trade talks as an opportunity to lobby for more influence on decision-making.
For example, they could attempt to influence the fixed cost per benefit price the National Institute for Health and Care Excellence (Nice) uses to decide whether a drug should be commissioned in the NHS, opening up a market for more US drugs.
And they could seek to push up drug prices. In the United States-Mexico-Canada (USMCA) trade deal, the US negotiated greater protections for new drugs it develops, stopping competition from other companies to develop generic versions of them for longer periods, keeping prices higher.
It remains to be seen what the US would ask for as part of trade negotiations, but it would still be the case that the NHS as a large single buyer has a lot of clout to negotiate prices.
Read more: https://www.bbc.co.uk/news/health-48527328