I love that poster with the picture of Branson! The question is would you want Branson or David Cameron and minions of faceless, nameless, and unaccountable cleptocrats in charge of your health care?
Oh, the irony! As any semi-conscious person is aware, the first couple of years of the Obama administration was marked by a national discussion of American healthcare and it’s rising costs. Too often, the UK’s socialized health-care was held as a model that the US should emulate. Well, we never got there. Instead, the US ended up with an intermediate step to socialized medicine, mandated health insurance, with the government as one of the competitors.
Now, I’m not big on comparing systems like this. What may work with one nation, people, or social group may not work for another. Cultural differences have a significant impact on health care required.
But, there is one truism which is universal and extends beyond the boundaries of healthcare. Government cannot provide services as well as the private sector. Government doesn’t do much of anything better than the private sector.
English business magnate Richard Branson is into just about everything. British healthcare is no different. From the WSJ.
There are some worthwhile parts of this article. Essentially, some Brits are upset that Branson may have found a way to deliver healthcare services at a profit.
The Virgin Care unit of Mr. Branson’s Virgin Group has spent the past 2½ years supplying health-care services like podiatry and dermatology to the National Health Service, which is increasingly turning to private-sector contractors in a bid to save money and improve service.
Many doctors, patients and members of the public object to the outsourcing trend, saying they don’t like the idea of private-sector companies squeezing a profit out of the already cash-strapped NHS.
On first glance, these people seem to have a point. The NHS is out of money, and Branson is taking more out of the system and into his pocket!!! Oh noes!!! However, “the company says its contracts require it to save the NHS certain sums of money before taking a profit for itself.”
How’s that? Like any governmental agency, the NHS has a budget. It knows if it provides X service to Y people it will cost Z. So, they contract with companies such as Virgin, for a sum less than Z, saving the NHS money.
Even so, health-care workers wearing Richard Branson masks have staged more than a dozen protests outside Virgin Media VMED +0.06% stores and Virgin Active gyms in recent months, carrying signs that said: “Branson—Hands off our NHS!”
The next part of the article is where it gets particularly delicious for me. Let’s see who is protesting….
Jacky Davis, an NHS radiologist who helped organize one of the protests, said medical care “is uniquely unsuited to the commercial market.”
“Multinationals make their profits by driving down the working conditions of their employees and by cutting back on services,” she said. “In both cases patients are the losers.”
Oh, we see a government employee is helping organize the protests. Interesting. The government employee also states that the services will be cut back, as well. Hmm.
Virgin says parts of the NHS are so inefficient that there is plenty of room to improve service and make a profit too. “We all know that the NHS can provide fantastic services a lot of the time, but on occasion they can also be improved,” said Bart Johnson, Virgin Care’s chief executive. He said Virgin aims to provide “better service for patients, more convenient service for patients and a good deal for the taxpayer as well.”
The next part of the article is a bit tangential to the specific, but worth noting.
Like most Western countries, Britain is grappling with soaring health-care costs and a yawning budget deficit, forcing the NHS to find ways to cut costs. The previous Labour government began outsourcing some health-care services to private companies in the mid-2000s in what it described as an attempt to save money and improve services.
This isn’t necessarily unique to healthcare. This is unique to the common direction of most Western governments. In recent times, the governments are continually providing more services and payments to their people. In the US, we’re providing almost everything to various parts of the populace. Healthcare? Check. Housing? Check. Food? Check. In some cases automobiles and even telephones. In Western nations the ever expanding role of government has become nearly all encompassing. Why are our budgets in the red? Because there is an insistence that the government be able to provide more and more of what the people deem as a need.
Moving back to the specifics ………
In March, Virgin won one of the biggest NHS contracts awarded so far: a five-year, £500 million ($806 million) deal to provide “community health services” in the county of Surrey, near London.
The contract includes the running of seven nonacute hospitals, which perform minor surgeries and other non-urgent care, and providing services ranging from diabetes treatment and physical therapy to screening for breast cancer and sexually transmitted diseases. Under the deal, 2,500 local NHS employees were transferred to Virgin’s payroll.
Oh, we see now why the radiologist is helping to organize the protests. Government work is fun. There’s very little accountability compared to the private sector when things such as waste are considered.
… Surrey Link, a nonprofit local health-care watchdog, says Virgin has taken action “whenever we have highlighted where improvements to services must be made.” For example, the company has made repairs to buildings that “had not been invested in for a long time,” Surrey Link said in a statement.
Virgin says it also has extended the hours its facilities are open on evenings and weekends and is offering walk-in appointments, which can be hard to get from the NHS.
At most Virgin offices patients are encouraged to rank the service on a 1-to-10 scale; a spokesman said 81% of respondents give it a 9 or 10.
Oh, so maybe services are not sacrificed as radiologist Jacky Davis suggested. Lastly, the article leaves us with this…
One of the groups that lost the bidding for the Surrey contract—Central Surrey Health, a nonprofit group owned by 700 nurses and health-care workers—says it doesn’t understand how Virgin can make much profit on the deal, particularly as the NHS has grown more frugal about payments for service.
“I’m interested in the model of how they’re going to be able to make that work,” said Rebecca Jones, a spokeswoman for the group.
Central Surrey Health is working on other NHS contracts in the county and averages a 1% return on sales before interest and taxes, which it reinvests in its operations, she said.
Non-profits are funny organizations. I was most recently employed by one. They are very good at not making profits. It is inherent to the structure of the business model. In this particular case, being owned by a bunch of nurses and health-care workers, it isn’t surprising that they don’t understand how a “for profit” group can turn a profit. The problem with non-profits is that on good years, they may initially turn a profit, but they can’t. So, instead of socking it away or making long term investments, they’ll will spend the excess on whatever is the passing fancy of the day.
My personal experience can be relevant. I was hired to implement all sorts of techno goodies for a non-profit electric utility company. At nearly every turn, I would advise them to wait, to let the technology work it’s bugs out and the price to drop. At nearly every turn, I was ignored. We bought the junk, I made it work, by the time I was done on whatever project, one could look around and find a cheaper, more efficient, easier to use, more encompassing product. This is the nature of non-profits.