Who cares? Market forces, social care and the NHS By Marianna Fotaki

2 December 2013 — Our NHS

It’s the competitive market in social care that has hammered down standards. The NHS must not follow care homes down the route of privatised provision.

With the Care Bill back in the House of Commons, social care provision is rising to the top of the political agenda. Even the current Care Minister Norman Lamb recognises that the current system ‘incentivises poor care, low wages and neglect, often acting with little regard for the people it is supposed to be looking after’.

The 1.4 million social care workers in England who look after older people and those with disabilities are often paid below the minimum wage, have few or no qualifications, and are often expected to undertake increasingly complex medical tasks – and 60% of them providing care to people in their own homes are on ‘zero hours contracts’

Over 70% of home care visits to older people paid for by local authorities are for periods of 30 minutes or shorter, with 10% lasting 15 minutes or shorter. The government also currently estimates that due to the structure of the current market 6 large providers of care homes will go bust in the next 10 years, potentially threatening some 19,000 people with the closure of their homes, as happened in 2011 to the 30,000 residents of the care homes belonging to Southern Cross.

What explains the emergence of this dysfunctional system? A report by the Centre for Health and the Public Interest, ‘The future of the NHS? Lessons from the market in social care in England’ finds that the best available explanation is the introduction of competitive markets in care services in the 1990s, which were then used by successive governments to keep the costs of state funded social care down as low as possible. 

The poor rates of pay and training for care workers, the high probability of a care home going bust, and the substandard quality of the care provided – all these can be attributed to the competitive market pressures which cash-strapped local authorities have exerted in order to try to keep providing a basic service to the increasing number of people who need care.

These lessons from the operation of social care markets in England are highly relevant to the new markets which are being created in state-funded NHS care following the implementation of the Health and Social Care Act, particularly as this is happening in circumstances of increasingly severe resource constraints. As happened in social care, NHS-funded care is being delivered by more and more private providers who are competing with one another and NHS hospitals to win business from Clinical Commissioning Groups –an estimated 10% of all spending on NHS care by CCGs is already going to private providers.

The government was keen to stress during the debate on the Act that competition between providers for NHS business would take place on quality, not price. they promised that a national tariff would be used to fix the prices paid to providers delivering NHS care. But Monitor has recently publishedresearch showing that up to £40 billions’ worth of NHS care is not covered by the tariff, providing room for local price ‘variations’ when services are put out to tender.

And these markets are being introduced at a time when the NHS is being required to make ‘unprecedented’ efficiency savings of 4% and so it is not surprising that the process of de-professionalising the NHS workforce is also taking place to reduce costs. The recent review by Camilla Cavendish of healthcare support workers found that un-regulated healthcare support workers are now routinely taking on tasks formerly carried out by trained nurses.

Policy makers should pause and reflect on the current state of social care before further unleashing market forces on the NHS

About the author

Marianna is on the management team of the Centre for Health and the Public Interest and a Professor of health policy at Manchester Business School, The University of Manchester. She previously worked as a medical doctor for Médecins du Monde and Médecins sans Frontiers and as a senior adviser for the EU. 

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