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Issue #1664      November 12, 2014

An eye to privatisation

BRITAIN: More details about a private contract for National Health Service (NHS) eye operations which left patients in pain and with poor sight are slowly appearing. A report of an investigation has slipped out. Getting the facts about NHS privatisation isn’t easy. So I want to add some facts of my own.

The firm behind the “painful” and “rushed” eye operations is backed by a leading Tory donor who hangs out with Iain Duncan Smith. And thanks to its financial set-up, it takes money out of the NHS but doesn’t pay any of the corporation tax that could be used to fund the NHS.

Back in May doctors were alarmed when nearly half of the 62 NHS patients given cataract surgery by a private contractor at Musgrove Park hospital in Taunton, Somerset, reported blurred vision and other complications. Vanguard Healthcare, a private firm which sells eye ops to the NHS under government privatisation rules, was supposed to carry out 400 operations in its mobile surgery – basically an operating theatre in the back of a truck – but was suspended after a week’s work.

Musgrove Park hospital was reluctant to release its report into the event in case it was sued for libel. But last month the BBC got a copy under freedom of information rules. The report found that only 25 of the 62 patients had “normal” recoveries.

Operations were suspended after NHS staff said that complications were “10-fold” the normal rate. Three patients needed further surgery because of retention of lens matter, two suffered eye burns, while six patients were found with microscopic metallic fragments in their eyes.

Patients found the surgery “rushed” and “painful.” The report says: “The pressures of operating on 20 patients each day may have contributed to the possible deterioration of surgical quality and reduction in patient experience.” Investigators found that because Vanguard subcontracted a lot of work, surgical staff were working with “new equipment” which was “unfamiliar.”

Time was short and “patients were arriving at the Vanguard facility while training was going on, creating pressure to start the lists promptly and shorten training.” Also arrangements for patient follow-up were not in place when operations started.

These are all indications that the privatisation, with its subcontracting, haste and disruption, was at fault. The report’s main recommendation was to try to use the NHS hospital’s own in-house eye surgery more.

Some of the patients are suing for damages – represented by Laurence Vick, an experienced medical negligence lawyer from Michelmores solicitors. But as Vick pointed out, it isn’t clear who will pay any final settlement – Vanguard or the NHS.

So that’s a whole heap of arguments against NHS privatisation – possible commercial pressures for over-fast work, unclear responsibility and inadequate use of the NHS’s own resources – so why does it go ahead?

Unfortunately too many people around the government have an interest in it.

Vanguard Healthcare is part of the “current portfolio” of the investment company of a top Tory donor. Rory Brooks has given the Tories £276,000 since 2008. He founded and leads the venture capital company MML Capital.

Under his leadership, MML has invested more than £18 million in Vanguard Healthcare. Brooks set up MML in 2008 and is one of its partners, with special responsibility for European investments.

Another MML director, Ian Scott Wallis, sits on the Vanguard board thanks to its investment in the health company. Vanguard Healthcare’s chief executive Ian Gillespie appears on the MML website, where he is quoted saying that “MML have been ambitious for us” and have “been fantastic for our business.”

Brooks, 60, is a member of the Tories’ “leaders’ group” whose members dine with David Cameron and his ministers.

He made his most recent donation, £50,000, this February. So he has funded the Tories, then his business profited directly from their NHS privatisation – while patients have suffered. According to the Conservative Party’s own registers, Brooks has attended at least one leaders’ group dinner.

He is also a director of the Centre for Social Justice, a think tank founded by Duncan Smith. Vanguard’s annual reports show how much its business depends on NHS policy.

In 2009, before the election, the firm complained about “NHS uncertainty about the future direction of emphasis and priorities.” In 2011, its annual report said the company was concerned about “uncertainty” over then health secretary Andrew Lansley’s pro-privatisation health Bill, which faced fierce protests.

In its latest report, Vanguard says: “The ‘hospital reform’ agenda is growing and Vanguard will benefit from the new thinking around healthcare delivery as we look forward across the UK and Europe.”

The involvement of a private equity firm like MML in the NHS has another effect – MML takes money from Vanguard in the form of interest and debt repayment, which is taken out off the firm’s overall profits, and so reduces the amount of corporation tax paid by the NHS supplier.

In its current annual report Vanguard Healthcare boasts of a good “operating profit” of £1.6 million. This “operating profit” is one of the firm’s “key performance indicators.”

However, thanks to debt repayments to MML and other lenders, Vanguard makes no overall profit. Consequently Vanguard has paid no corporation tax since 2009. On its website, MML says investors should “watch Vanguard make history.” The firm is backed by investment from a Tory donor’s firm. Thanks to Tory-backed privatisation, Vanguard is doing NHS operations from the back of a van. Patients have been left in pain and their eyesight impaired. Vanguard’s hurried, subcontracted work seems to be at fault.

Thanks to its financial organisation, the firm doesn’t pay any of the corporation tax which is used to fund the NHS. So I think it is making history – but unfortunately it is a horrible history which we need to make a thing of the past.

Morning Star

Next article – Win ugly or lose pretty

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