Sunday, June 12, 2011
Dangers of Making NHS a hoistage to Shameless Face of Capitalism
Lib Dem spokesman John Pugh told the Observer he believed there was considerable doubt over whether Sir Stephen Bubb, the expert responsible for the body's conclusions on competition, was sufficiently neutral over the issue. Bubb leads the Adventure Capital Fund, which provides finance for "third-sector" organisations for a return on its investments. Its highest-paid director receives £140,000 a year, according to Companies House, and its clients would stand to benefit from further competition between health care providers.
I can sense a full scale row over this breaking out with rightwing Tories gnashing their teeth in frustration at their 'yellow bastard' partners. Personally, I was very concerned after reading Peter Wilby on the Southern Cross debacle. Wilby explains how private equity buyouts, a feature of the noughties, took advantage of the unregulated 'private' status of companies compared with public ones. He explains how a US private equity firm bought up Southern Cross and then 'did the business':
Care homes were attractive because they seemed to offer a guaranteed cashflow and an expanding market. Blackstone, a US private equity firm, bought Southern Cross for £162m in 2004, offered shares on the stock market at a total valuation of £423m in 2006, and sold its last stake in 2007, when the value was £770m. Now Southern Cross is worth barely £10m. Blackstone's trick was to sell some of the homes to property firms, raising oodles of money, and lease them back. Now Southern Cross can't afford the rent, while councils can't pay higher fees and would prefer to keep more old people in their homes. This week, Southern Cross announced 3,000 job losses, arguing implausibly that care standards.
Other countries- France, Germany, Ireland- involve private sector provision in their health systems but I suspect their involvement is carefully regulated. This is very necessary as Southern Cross, letters writ hugely large- illustrates the awful vulnerability of a health service to the shameful get mega-rich quick financiers when they see an opportunity. Thousands of old people are now thrown into limbo as a result and I who do you think will end up paying the bill run up to make odious people very rich? The state, the taxpayer of course.
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