Conflicts of interest and NHS reform

A conflict of interest (COI) occurs when an individual or organisation is involved in multiple interests, one of which could possibly corrupt the motivation for an act in the other. For the first part of this post, health professionals are the ones with COI and their duty to act in their patients’ interests is corrupted by their personal and institutional financial interests. Since there is considerable overlap between vested and conflicting interests, I will deal with them together. At the end of the post are examples, which I will keep updated, of conflicts of interests amongst policy makers.

Secretary of State for Health, Andrew Lansley and many others believe that breaking up a state monopoly on NHS provision will reduce vested interests.

I will argue that the NHS reforms will significantly increase conflicts of interest.

The increased use of market mechanisms with the threat of bankruptcy for hospitals and GP commissioners, combined with unprecedented financial pressures will force doctors to balance the interests of their patients with interests of their finances more than ever before. The loss of public accountability inherent in the reforms will make it much harder to prevent and then investigate cases of conflict of interest when they occur. The consequence will be a loss of trust in the medical profession and the loss of care for those whose need is greatest, but whose care is least profitable.

In public health, the government’s capitulation to junk food and alcohol manufacturers involves ‘fundamental conflicts of interest’, though I will not cover that here.

The Health and Social Care Bill converts the NHS, which at present is overwhelmingly a public service into a series of lightly regulated, competitive markets. The ‘purchaser-provider split’ gives hospitals a financial interest in over-treating some patients in order to generate a profit, and GPs a financial interest in restricting or refusing treatment.This has been a concern since the dawn of medicine until the present day and it is why the medical historian, Henry Sigerist (discussed in my last post) concluded,

“… that medicine must undergo an evolutionary process that ends–by necessity–in socialized medicine.” John Hopkins University

Dr Arnold Relman, Professor Emeritus of Medicine and Social Medicine at Harvard Medical School has written more about the subject of professionalism and conflicts of interest than most.

“Medical professionalism cannot survive in the current commercialized health care market. The continued privatization of health care and the continued prevalence and intrusion of market forces in the practice of medicine will not only bankrupt the health care system, but also will inevitably undermine the ethical foundations of medical practice and dissolve the moral precepts that have historically defined the medical profession.” ccjm 2008

General Practice and conflicts of interests.

There have always been conflicts of interest in General Practice, with, for example the possibility of profiting by providing a low-level of care to a large population. Almost all GPs agree that the reforms will worsen the scope for conflicts of interest.

Clare Gerada, the Chair of the Royal College of General Practitioners has raised concerns repeatedly since the health white paper came out last year, “My worry is that we are building in an inherent conflict of interest within GP commissioning.”

In a provocative article, the Kings Fund suggest that entrepreneurial GP commissioners could earn £1 million by setting up an Integrated Care Organisation and pocketing savings made by reducing referrals and cutting prescribing costs. For some people this is rewarding efficiency, but to others GPs will be profiting from rationing patient care. Since GPs are both commissioners (purchasers) and providers of care, it will be impossible to avoid conflicts of interests. Pulse magazine found one GP in 10 on the boards of new commissioning consortia also holding an executive-level position with a private provider. Last month, the UK division of US health insurance giant UnitedHealth sold its GP practices to The Practice, focusing instead on providing commissioning support to GP consortia. UnitedHealth also own a program called Script Switch, which automatically suggests cheaper alternatives when a GP types in a prescription. It can also be used to restrict the range of prescribable drugs. UnitedHealth have identified that commissioning, rather than general practice, is where the profits are. They have a history of restricting care in the US where they underpaid millions of people in New Jersey, Florida and California after determining insurance reimbursements for out-of-network care.

The NHS reforms propose abolishing GP practice boundaries and allowing GP commissioning consortia to set up wherever they like, cherry-picking profitable populations, leaving the potential for ‘sink practices’ or ‘sink consortia‘ to care for the most vulnerable patients and worsening the post-code lottery. This will result in the NHS resembling the Health Management Organisation (HMO) insurance model in the US, (see NHS unboundaried)

A GP can increase their income by refusing to register unprofitable patients, such as those who are housebound or have mental illness and chronic diseases, drug addicts and the homeless, in short, those who also happen to be the most vulnerable. In theory this is not allowed, and generous GP incomes and large risk pools meant that it rarely happened, but occasionally it does. Most of the arguments against competition in health care are based around the fact that caring for the most needy is not profitable and so markets are inappropriate for the provision of universal health care. This is the Inverse Care Law. The reforms will make patient selection much more likely as practices and consortia will be looking to save (and make) as much money as possible from a much reduced NHS budget.

A GP surgery in Horsham is opening its doors to a private company offering patients a full heart and stroke screening for £159. Park Surgery in Albion Way has sent its patients a letter offering them private health tests from Health Screen First for discounted prices. The same controversial service was offered four years ago. This is clear profiteering. If screening tests are recommended they are available on the NHS free of charge. This behaviour takes advantage of the trust that has been built up between the doctors and patients over years thanks to the gift economy of the NHS. It exploits patients who are anxious and has nothing to do with clinical need.

Hospitals, specialists and conflicts of interest

The excessive use of medical interventions for profit has been well documented by George Bernard Shaw in 1911,

“That any sane nation, having observed that you could provide for the supply of bread by giving bakers a pecuniary interest in baking for you, should go on to give a surgeon a pecuniary interest in cutting off your leg is enough to make one despair of political humanity.”

Ninety-eight years later, US surgeon Atul Gawande showed that the most expensive healthcare in the US was due to doctor-owned, for-profit hospitals that have financial incentives to investigate, medicate and dissect as many patients as much as possible. ‘The Cost Conundrum, what a Texas Town can teach us about healthcare‘. Shaw, Sigerist and Gawande all believe that doctors will serve their patients better if they are not profiting from them, and that they should be paid a salary rather than profit or loss according to clinical activity. Two years after Gawande wrote this article, ABC news revealed that enormous costs and blatant fraud was still continuing in the same Texas town.

The impact of financial pressure is to make the problems of conflicting interests much worse, as doctors seek to preserve their incomes and maintain the financial health of their hospitals and surgeries. With the pressure on hospitals to make unprecedented (6-7%) savings over the next 4 years (what ‘ringfence’?) they will need to take drastic action including shutting wards and sacking nurses and shedding unprofitable services. A hospital medical director this week told me he honestly didn’t know how his hospital could continue to provide care for the unprofitable. The unprofitable services for most hospitals are elderly care, mental health, paediatrics and maternity. The most vulnerable patients are the least profitable. Money can be made from services that are easily broken down into commodifiable parts and organised predictably (the Toyota production system) such as endoscopy, routine orthopedics, dermatology etc. The lower hospitals put their thresholds for investigations and procedures, the more they over-investigate and treat and the more money they can make. Personal care for the elderly is not profitable. Hospitals are being put in the appalling position of having to choose between being able to afford to keep patients alive or keep them clean. See previous posts about hospitals and perverse incentives and the neglect of the elderly.

There are concerns that not only hospitals, but also new (any willing) providers will cherry pick the profitable services, so that care is not planned according to need, but according to profitability. Research from Zack Cooper from the London School of Economics, frequently cited by advocates of competition in the NHS, showed that when private providers are competing with NHS hospitals they select lower risk patients, leaving the NHS with the more complex, costly cases. Ian Greener has discussed Cooper’s claims about the benefits of competition on his blog.

Conflicts of interest and the unions.

Despite this, it is the attitude of the Secretary of State for Health, shared by many others on the right, that the NHS needs to be broken up and markets introduced, in order to reduce conflicts of interest.

They believe that unions such as UNISON, UNITE, the BMA and the RCN have vested interests in the status quo and are afraid of competition. For an example, see this Telegraph opinion piece, “The RCN is a trade union, after all” published immediately after the Royal College of Nurses conference last month in which 98% of nurses carried a vote of no confidence in Andrew Lansley. The argument is that the workers want to protect their jobs and conditions, even though patients are suffering. The belief that competition will drive out poor quality staff and drive up clinical standards is not supported by any evidence from competition in health care.

In a recent interview with Total Politics, Lansley,

… put forward his opinion that the British Medical Association’s (BMA) opposition to his reforms was premeditated. “The BMA did this before the election. The ‘Keep the NHS public’ was a BMA campaign before the election, and they’ve just carried it on.”

The one exception that he identifies, in his view of the broadly consensual reception his bill has received, is that of the BMA and the trade unions. Lansley says they are against the idea of “any qualified provider”, under which the private sector would be able to bid to provide NHS services. He is dismissive of their view saying, “Basically, it’s a trade union monopoly thing.”

The BMA campaign he was referring to is called Look after our NHS (Keep Our NHS Public is the organisation you should join). Dr Julian Tudor Hart, no friend of the BMA and critical observer for 60 years pointed out that ‘Look after our NHS’ was the first campaign in the history of the BMA for the rights of patients rather than doctors.

The attitude of many on the right, quoted in Total Politics, sums up the depth of their thinking,

“You just want to tell the trade unions to piss off”


Update April 2013

Conflicts of Interest GPs’ Main Concern with CCGs. Commissioning GP website

March 2013

Doctors Hurry to Join NHS Gold Rush Sunday Times March 31st A third of GPs on CCG boards has financial interests in private providers

As New NHS reforms turn GPs into businessmen, one doctor asks, “Do you really want them to profit from the pills they prescribe?” Ben Goldacre Daily Mail

More than a third of GPs on the boards of CCGs has potential conflict of interest BMJ

List of MPs and Lords with interests in NHS privatisation. Social Investigations

Update December 2012

One in five CCG members has potential conflict of interest. Pulse Magazine 21.12.2012

Update 04.10.2011

The Haxby Group.

Picked up by Roy Lilley and followed up by the newspapers including the Guardian, this was the story of a GP practice who started advertising to their NHS patients a private minor surgery service for warts, cysts, ingrowing toenails etc. claiming these procedures were no longer available on the NHS. Here is the Haxby letter

In general the principles are that we are trained as providers of care, and furthermore we are generalists and enormously adaptable.

The consequence is that we ought to be designing and providing services rather than administrating a healthcare market. I accept that there are services that we will not be able or willing to design and/ or provide ourselves, but lines between primary care, secondary care and social care are indistinct and changing. For example in the last 20 years, the vast bulk of chronic disease management has moved out of hospitals, into GP surgeries. Out of almost 400 patients registered with type 2 diabetes only a handful are seen in hospital. More recently, blood tests, respiratory and cardiology investigations, specialist nurses, psychologists and physiotherapists have all started working within GP surgeries. As practices invest in larger premises and better trained staff, they will be in the ideal position to provide the services that GPs will be commissioning. The King’s Fund think that this COI can be avoided:

Where GPs want to provide a wider range of services that involve other staff or organisations, practices (or practice consortia) should be commissioned as principal contractors – rather than as commissioners in their own right. This would still allow GPs to innovate, and they would be free either to provide additional services themselves or to contract services from others. But such arrangements would be part of the contract and thus transparent. That would avoid the conflict of interest inherent in hidden ‘selfcommissioning’.
It should be the normal means of commissioning
practice-based services. The creation of the competition panel offers an appeal mechanism when a PCT rejects a good business
case unreasonably.

King Fund, Making it Happen, Next steps in NHS reform 2008 (page 16)

I don’t get this myself. I don’t see how transparency makes it different, is COI not COI if it’s transparent? (see pages 13-16) I have asked the King’s Fund to explain and am awaiting their response.

The consequence is that faced with a patient who needs referral to a physiotherapist for their back pain, a podiatrist for their bunion, a diabetic specialist nurse and a psychotherapist, we will be unable to avoid being in the position of profiting for doing what we already do. That commissioning might incentive GPs to provide more services for their patients is no bad thing, though as Prof Alan Maynard keeps repeating, we stand accused of being paid extra for what we already do with QoF.

Update: 06.11.2011 McKinsey and the NHS.

This relationship is worthy of a blog-post of its own. But here are a couple of links for starters: Guardian. NHS reforms: American company McKinsey in conflicts of interest row, “McKinsey has long been a controversial figure in the health world, and has made millions of pounds as one of the key private providers of management and advisory services. A conglomerate including McKinsey, KPMG and PricewaterhouseCoopers last week sealed a £7.1m contract with 31 groups of GPs looking for advice on how to manage budgets under the system being introduced by the Lansley reforms” Guardian 06.11.2011

How the Dept Health, McKinsey and Dr Foster intelligence are linked by the govt’s new ‘Transparency Tsar Tim Kelsey. Tumbled logic.

Update 21.10.2011

Nurses raise concerns about commissioners private company links (HSJ)

Update 08.02.2012

A personal smear piece on Clare Gerada, the head of the Royal College of GPs by Oliver Wright, the Independent’s Whitehall Correspondent, claiming she stands to gain from halting the Health Bill. Rebuttal from Bengoldacre

In brief, Wright claims in the title of his article that Dr Gerada has a lot to lose if the Health bill goes ahead and then by the fourth sentance he says, There is no suggestion that the Hurley Group would lose NHS contracts in the face of greater competition, or that they do not provide effective and reasonably priced services. But senior Government sources have been keen to point out what they say is the irony of Dr Gerada’s position. Later on twitter he said, What were your objections to the piece exactly? For the record the Tories had nothing to do with it.

If the Tories had nothing to do with it, I asked, who were the senior Government sources? Of course he didn’t respond. I also directed him to this blog post.

More fundamentally, high quality general practices like Dr Gerada’s and my own could profit considerably from the Health Bill, as GP practice boundaries are abolished and we are able to attract patients from wherever we like. My own practice, a 20 minute walk (5min taxi ride) from Liverpool street has capacity for another 3000 patients, so we could easily set ourselves up to cater for commuters. But our priority, as I have explained throughout this blog, is to provide care for our local community, especially those who are least able to care for themselves. The Healthbill threatens the people who most need care, by allowing cherry-picking by GPs and commissioning groups. This is unacceptable.

Update 09.02.2012

Care home resident challenges PCT right to hand over services to a social enterprise without tendering. BMJ

Update 12.02.2012

McKinsey and the NHS. Amazing expose in the Mail on Sunday about ‘The firm that hijacked the NHS’ uncovered by Spinwatch. Here is a summary of the politics by Health Policy Insight.

Lord Carter of Coles. Chair of the government’s controversial Competition and Cooperation Panel urged to resign over £799 000 payment for US health insurance giant Mckesson. Mail on Sunday 04.03.2012 John Hammergren, the Chief Exec of the US parent company McKesson earned 145.3 million dollars last year. He was the US’s highest paid Chief Exec. Ref:$145-million/

Update 25.3.2012

How GPs are set to make a killing out of NHS reform. Independent.


GP leaders demand right to charge for non-NHS services Pulse, “LMC leaders have called on the GPC to pave the way for a vast expansion in the private services that GPs are allowed to provide to their patients, by renegotiating the GMS contract to allow practices to charge for treatment not funded by the NHS”

Drug companies and GPs to work together on case-finding and care pathways. Pulse, “GPs will be expected to work with drug companies on commissioning screening services and designing care pathways, under a Government-backed plan to promote partnerships between CCGs and the pharmaceutical industry”

Further reading/watching:

Conflict of interest fears. Bureau of Investigative Journalism

Channel 4 news mini documentary (10mins)

Conflicts of interests and doctors:

Conflicts of interests and the government:

No Free Lunch: Healthcare providers who believe that pharmaceutical promotion should not guide clinical practice

Ray Moynihan: Campaignign journalist showing how doctors and the phamaceutical industry create diseases to make money

Too much medicine: Special edition of the BMJ from 2002

The Inverse Care Law: Essay on the evidence and the history of the Inverse Care Law

6 responses to “Conflicts of interest and NHS reform

  1. alienfromzog

    Thank you again for an excellent article.


  2. What needs to happen is to abolish the commissioner/provider split and let GPs get on with being doctors which is what the vast majority want to do.

  3. Main conflict of interest that I have observed for hospital employed staff is between following the instructions of your employer that you feel is not in patients best interests or risking your career progression.

    One of the current challenges is being able to speak openly when mistakes are made or system errors lead to mistakes. With increasing competition between providers the tendency can surely only be for this to increase pressure to stay quiet?

    • This is an important point and one on which I’m unclear as to the implications. Clearly a lot of NHS staff at all grades are afraid of whistleblowing/ speaking out. I’m in a fortunate situation being both self-employed and lacking any political ambition. I don’t know how to assess the evidence about whether whistleblowing/ speaking out is more or less likely once a range or willing (private) providers are providing services to the NHS. I was told by a colleague who worked for United Health that she had a ‘gagging clause’ and she complained to the BMA who were not very helpful. I’d be very interested in following this up if you have ideas, Jonathon

      • Sir Peter Bottomley has called on health select committee to look into this issue. Our campaign is to get gagging clauses banned. In our terms and conditions we are able to talk about matters of public interest and that overrides duty to employer. Whistleblowing legislation and policy states that you must have raised these matters with employers first where possible. What employers do is use NHS money to try and find another legal argument to dismiss those concerned about patients. We want to campaign to stop that misuse of Nhs money.

  4. Pingback: The Big Bolton NHS Lie |

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