October 28, 2013 by Protect Our NHS
There’s nothing new in this blog. It’s all been written elsewhere, so we provide sources for all commentaries and leave you to make up your mind about, or perhaps ask some questions of, Mr Stevens the newly appointed NHS chief executive.
In October 2013 Simon Stevens was appointed the new NHS chief executive to succeed Sir David Nicholson. Stevens, currently president of the global health division of UnitedHealth Group, will replace Sir David Nicholson, who announced plans to step down after sustained criticism over his part in the Mid-Staffordshire hospital row. Mr Stevens was Tony Blair’s health advisor between 2001 and 2004, and before that advisor to then-health secretary Alan Milburn, However, Mr Stevens is also associated with the introduction of NHS targets, and helped create the key plan which brought them in.
So, is Simon Stevens the right person to lead NHS ENGLAND?
Yes, according to Alastair McLennan, Editor of the Health Service Journal:
The choice of Simon Stevens as the next chief executive of NHS England is a cause for celebration. It is hard to think of anyone who has the mixture of experience, knowledge and nous that he combines.
The first thing to say about Tony Blair’s former health adviser is that he knows, understands and values the NHS. He may have been working overseas since 2004, but Mr Stevens spent nine years working in the NHS and, most importantly, was one of small group of politically active NHS managers who saw what decades of under-investment had done the to the service and resolved to do something about it.
Yes, according to NHS England chairman, Professor Sir Malcolm Grant
I am delighted that Simon will be taking on this exceptionally challenging leadership role for the NHS…We have been through a rigorous global search, and engaged with a range of excellent candidates…I am confident that Simon Stevens is the right person to lead NHS England through the coming years, bringing new ideas and fresh energy.”
Yes, according to Health Secretary Jeremy Hunt
“Simon has an extraordinary reputation in the UK and abroad as a reformer and an innovator, and we are lucky to have someone of his calibre doing such a vital role.
A profile piece on Mr Stevens in the Guardian, noted (courtesy of Mike Birtwistle, a well-connected health lobbyist) that “he is as near to an A-lister as you get in health management. Forgive the football analogy, but this is like Arsenal signing Mesut Ozil,” the richly-gifted German midfielder who has visibly helped the north London side raise their game since joining two months ago. With an American wife, two school-age children, and happily settled in Minneapolis, Stevens had to be persuaded to apply. Roy Lilley, a sharp critic of the coalition’s shake-up of the NHS, whose blogs are widely read by service bosses, quipped that Stevens – a friend – was “coming back to a pay cut, a non-job, the mother of all messes and rotten weather”.
A pretty positive take then.
Probably not, implies Red Pepper magazine which asks whether Simon Stevens is going to turn out to be the undertaker for the NHS, pointing out that Mr Stevens previously specialised in showing private companies how to make big profits out of the NHS. Originally published in 2006, this piece by John Lister of London Health emergency provides a damning insight into the corporate history of the man set to oversee public healthcare provision in the UK.
‘Over-paid, over-rated and over here’ may be the damning gut reaction to the giant US-owned health corporation, United Health Europe (UHE). But the Minneapolis-based parent company has been savvy enough to front its British operation with a native English management team, including one with impeccable Blairite credentials – former Downing Street advisor Simon Stevens. Almost two years after vacating his post, Stevens is still on the select list of people invited to dine with Blair at Chequers.
As health policy advisor to Frank Dobson, Alan Milburn and Tony Blair, Stevens was widely seen as the author of the NHS Plan, which in 2000 set course towards increased privatisation and market-style reforms. Stepping out of Downing Street in 2004, he moved swiftly and seamlessly into the private sector. He had been in touch with UHE for the previous two years, during which time they landed their first NHS contract. Stevens is now reportedly pocketing a salary of £150,000 as president of UHE, and his bosses in the US clearly feel it is worth paying so highly for his services.
As the architect behind the controversial ‘modernisation’ of the NHS, Stevens has a clear view of the most promising and profitable targets for UHE’s activities. Not surprisingly, UHE has not even bothered trying to replicate its role in private health insurance, which is a mainstay of its highly profitable US parent company – whose annual turnover is almost £16 billion. The existence of the NHS with its universal health cover has left private medical insurance as a relatively marginal activity in the UK, covering just 12 per cent of the population.
Instead, like a shark scenting fresh blood, UHE, steered by Stevens and by its chief executive, former British Medical Journal editor, Richard Smith, has zeroed in on much bigger prey – the juicy prospect of controlling hundreds of millions of pounds in the commissioning budgets of primary care trusts. The possibility of opening up this vast source of income for companies such as UHE was created by New Labour’s determined efforts to establish market-style competition in the health service – as proposed by Simon Stevens. Still only 39, Stevens’ career has been characterised by a whistle-stop progress. His university education was at Oxford, Strathclyde and New York’s Ivy League Columbia University. According to his CV on the UHE website, he has since managed to slot in appearances as a ‘health authority director, general manager of a mental health service, and a group manager at Guy’s and St Thomas’s university hospitals’ in addition to working in Africa, South America and the USA. All this before spending seven years as the government’s health policy advisor from the age of 30.
A pretty clear ‘No’ then.
‘As he sowed, so shall he reap’, writes Polly Toynbee.
Simon Stevens will get his just deserts as he takes up the reins of NHS England, only to find this horse has no bridle or bit, galloping out of anyone’s control. That was, of course, precisely the explosive “creative destruction” Andrew Lansley intended. Stevens returns from the biggest US health company to an NHS whose current path he designed as Tony Blair’s adviser. Now he must piece together some coherence from the fragments of what Sarah Wollaston, MP and GP, called “a grenade” tossed into the NHS.
But now let’s separate Simon Stevens from his corporate background, and concentrate on the organisation to which he has devoted the last decade or so of his career.
UnitedHealth – A Global Giant
Keep Our NHS Public describes UnitedHealth as one of the largest health sector corporations in the world. It is based in the United States. In 2004 it ranked first in the US in net sales of healthcare insurance.
UnitedHealth UK and UHE are just two subsidiaries of the global supergiant, UnitedHealth Global (worth having a look at the very nice brochure at http://www.unitedhealthgroup.com/~/media/UHG/PDF/Services/UNH-Global-Brochure.ashx). It boasts, as follows
• Fortune magazine “most admired” company and ranked No. 1 in our industry for innovation.
• Serving more than 75 million individuals worldwide through our businesses.
• Providing health care management, consulting and specialty services globally with operations in approximately 18 countries around the world.
• Touching nearly every aspect of health care financing and delivery.
• Revenues of approximately $102 billion for 2011.
From 2009 its UK subsidiary, UnitedHealthcare UK, has been advising and running GPs’ services when it assumed responsibility for commissioning up to £200 million of acute and specialised services
But this is the same company whose US parent arm in 2004 defrauded the US taxpayers and the national Medicare system.
In 2010, the Mirror, one of the UK’s major national newspapers, reported that UnitedHealth had cheated the US health system time and time again in the previous decade.
The newspaper reported that:
• in 2000 UnitedHealth had paid over £1million in nine states for offences including overcharging and denying treatment.
• in 2004 United was fined nearly £1million in New York State for “cheating patients out of money”. The same year it settled fraud charges for £6million after allegations that it inflated its costs.
• again in 2004, United had to pay £2million to settle charges that it defrauded the national Medicare system.
• in 2009 it was fined tens of millions of dollars for fixing charges that year alone.
In responses to critics, the firm’s UK subsidiary, UnitedHealth UK, said: “These allegations relate only to the US insurance market.” So that’s ok then.
Actually, they weren’t allegations. But in any case UnitedHealth UK has distanced themselves from their US market, and government minister Paul Burstow said his officials were unaware of any wrongdoing by United in Europe.
We wonder what Mr Stevens has to say. As a senior corporate executive for the company he no doubt has some strong views about all this.
And what about UnitedHealth UK finances? It reported a loss of £13.9m in 2010, up from a £7.2m loss the previous year. The firm wrote off £5m when it disposed of its practice management subsidiary last year as its focus shifted to providing commissioning support.
In 2012, the UK arm was forced to make redundancies as, to quote an inside source, “it was under increasing pressure from its US parent company to bring in results and now faced a “ticking clock”. That ticking clock means “make more profits or else”!
And then in September 2013, 10 years after UnitedHealth started operating in the UK, during which time it reported a loss every year, it was reported that it is being wound up and rebranded as Optum Health and Technology. Documents filed with Companies House show the company lost more than £39m between 2003 and 2011 – the last year for which accounts are filed
It’s clear who pulls the strings – it’s the US parent company, UnitedHealthcare.
One question, in passing, what is going to happen to UnitedHealth UK’s provider services?
In one of its fact sheets, Keep Our NHS Public,
(http://www.keepournhspublic.com/pdf/UnitedHealthfactsheet.pdf) explains how companies like UnitedHealth make profits by:
‘cherry picking’ or ‘cream skimming’ – selecting the profitable treatments and patients by placing access restrictions on the services they offer. Wherever possible, those who are elderly, frail or at high risk of chronic illness are excluded from insurance or comprehensive health cover. For more information see
‘charging for risk’– expecting individuals with high health risks to pay higher insurance premiums, to have a more limited range of benefits, or to pay for a higher proportion of the costs of health care through charges or ‘co-payments’. For further information see http://www.scu.edu/ethics/publications/iie/v6n1/voluntary.html
‘over-servicing’– maximising income by providing unnecessary treatments. For further information see http://www.who.int/whr/2010/10_chap04_en.pdf
‘reducing quality and staffing’ – maximising income and profits by lowering the quality and cost of health care as much as possible. For example, they may close local services, reduce the numbers of staff employed and use cheaper and less qualified staff.
‘denial of care’– protecting their profit margins in the United States by denying care if payments cannot be met. The risk for the financing of health care in a commercialised health care market tends to fall on individuals and their families, while health insurance companies make massive profits. For further information see http://www.youtube.com/watch?v=FqtrgU9VH7E
Observers of the private health companies which are waiting to grab whatever nuggets they can out of the coalition government’s disgraceful rush to privatisation of our NHS will not be surprised by UnitedHealth’s American track record. You only have to look at Circle, Serco, Care UK et al to realise that the lack of control expressly permitted under the 2012 Health and Social Care Act over the ultimate owners of these giant private corporations means that the US (or global) tail will always be wagging the UK dog; and if the UK dog doesn’t provide enough profit then it will just be sold on to yet another vulture capitalist. You need look no further than the damage done to Britain’s ethical bank, the Co-op, when they fell among thieves (http://www.theguardian.com/social-enterprise-network/2013/oct/21/co-op-bank-social-enterprise-sector) to see how little control we have over our destiny.
Simon Stevens works for such a company. He knows exactly what they are like. He knows what will happen. He is not the man to run our NHS.