Lansley slips one under.

Regular readers of our blog will know that we have featured the PFI initiative a few times in the past. This is part of the Tripartite policy on healthcare that NHS bad, private good.

This indeed is the crux of the Health and Social Care Bill which is not about health or social care only the denial of both unless provided for by the private sector which is perceived to be more efficient except that cost is not negotiable only quality. And you only need to think breast implants to see how cost is fixed and quality service is dumped in favour of profit only, care not, by some private providers. So look what Andrew is trying to slip one under the radar, always a good game at an English public school on a naïve new boy or members of the public.

A £ 1.5 billion PFI rescue fund. Who could have thought that the super efficient private sector modeled NHS foundation trust or a world class commissioning PCT which funds them would need a rescue fund? After all if you have PIP breast implants the private or any willing providers are queuing up to help you after they have relieved your wallets dearly and you have paid tax too for an NHS that won’t deliver?

Now this £ 1.5 billion is for seven trusts only and there are 103 PFIs. Here are some statistics.

£ 1.5 billion shared by 7 averages £ 214 million per trust. Sounds a lot but this is to be spread over 25 years.

Each PFI agreement will have been negotiated by a few senior NHS managers overseen possibly by a Chief Executive and maybe some at the Department of Health some of whom might be able to read or count and may just have been in the bottom third of a Northernshire comprehensive school when younger.

NHS management attracts the rejects of the UK comprehensive school system while the private sector does slightly better. So it is not surprising that some parts of the NHS are needing a bailout. Looks like some NHS managers are doing a banker and getting a stealth bailout for their and the politicians’ cock ups.

Given that there is a need for £ 20 billion savings in the NHS is there any reason why £ 1.5 billion is being paid to bail out NHS management incompetence? At an average of £ 214 million for each NHS PFI contract failure that is a hell of a reward for a few individuals’ failings.

Remind us Dr Andrew private good NHS bad? Oh yes and don’t forget to blame Labour but who invented PFI? See second paragraph of history here together with some interesting quotes from some of those involved over the years.

Praise be to the Party for ensuring that only in NHS management and banking is incompetence rewarded with government bailouts to the tune of billions and no doubt with promotion as well.

The ever rising costs of PFI?

For most of our patients and indeed ourselves being all multi millionaire GPs the biggest investment we make is buying a house. Most people in order to do this, unless you have oodles of cash stuffed away in your mattress, use a loan to finance this purchase usually called a mortgage.

To keep the maths simple let us say you borrow £ 100,000 over 25 years at a fixed annual rate of 5% interest. How much would you end up paying in total?

We think the answer is about £ 175,000. So that is the total cost of loan and interest to buy something worth £ 100,000.

During the second world war Britain borrowed money from the USA and Canada and finally paid this off in 2006. According to this article the USA loaned the UK £ 2.2bn and the UK paid back a total of £ 3.8bn over 61 years at 2% interest per year. Granted these were desperate times but the figure repaid is about three quarters of that borrowed similar to the house mortgage.

So how much does it take to repay the loan taken out to build a new hospital? A trip to another part of Northernshire gave us an idea. A news item on a local TV station lead us to this programme and if you have 5 or so minutes then watch from 36.37 onwards. We have touched on this topic not too long ago as well.

So to build a hospital costing £ 65 million using the examples above you might think the total cost would be around £ 114 million if you say three quarters is the amount paid back on top of that borrowed.

According to the programme the ANNUAL repayment figure is £ 16 million pounds a year (about 14.5 fully staffed 7 doctor practices) so perhaps the total capital will be paid back in just over 4 years then a few more repayments and the interest would be covered too?

Well no according to the programme the total cost will be £ 570 million when the bill is finally paid in 2045 - 45 years, £ 570 million in total for £ 65 million of hospital.

This is the cost of the first PFI hospital - there are over a hundred NHS hospitals financed in this way - introduced not in war time but in relatively affluent times which is going to make a small number of people very happy and rich and make a lot more much poorer.

It seems that PFI doesn’t just take the people’s money it also takes something far more basic in terms of an excretory function. For once the two major Parties are to blame for one created the concept and the other exploited it so we all have been shafted equally by both.

Praise be to the Party for its fiscal prudence not just then but for many more years to come. The zeros coming out of local healthcare budgets will continue to rise for years to come. As someone said pay for almost 2 houses to buy one with a mortgage but with PFI pay for 8.77 hospitals and get just one.

Pure world-class prudence.

Some ghastly reading about the past and perhaps a ghastly glimpse into the future?

While thrashing our Ferraris into work one morning this week one of us was listening to the news and heard the newscaster say that the PFI (Private Finance Initiative) used by the previous Party to build new hospitals is going to land up costing 6 times more than if the same hospitals had been built directly by the State. Even the Daily Mail have noticed this one.

No surprise there as if you have the money to build a house you do not usually take out a very expensive loan for the same amount to build something and then pay interest on it for years to come.

Unfortunately political dogma is usually not very intelligent, has badly impaired tunnel vision and if you are the Party in charge always wins over reason and rational argument until you lose power.

Nothing new here for this triumph of dogma over reason and logic has been going on for centuries just think of Galileo and the Catholic Church as an example.

Another piece of news that is hardly surprising is the frontpage article on the front of the GP magazine Pulse which we can link to but you now have to register to read it in full.

Local commissioning has cost practices thousands being paid to local consortiums which have produced no savings, no redesigned services and are effectively lapdogs to the local Soviets (PCTs) who block everything as they strive to cling onto power as the axe hangs over their heads.

We suspect that this loss of funds from frontline general practice, with few exceptions, will be the case in most places that practices are paying out money but getting nothing back for themselves and more importantly diverting money from patient care for the purpose of political dogma.

And what of the future? Well, unless someone pulls an all mighty great surprise of a white rabbit of healthcare Utopia out of a hat, we suspect that in 5 to 10 years time similar articles will be being read on the news and being read by a new generation of GPs.

People forget that in order for “markets” to work people have to make profits and customers have to pay for services.

A state run scheme one would hope will break even but, to do the same job and make a profit, will always cost more unless, of course, the state run scheme is such an incredibly inefficient dinosaur of an organization, in which case efficiency savings, sorry comrade reader, efficiency gains, would yield massive profits to the private sector.

Unfortunately the involvement of the private sector inevitably increases cost. If it costs £ 100 to break even then it will cost £ 125 to run privately as Joe Privates needs something for his or her dangling their bits into NHS business.

So are PFI and commissioning, sorry, “world-class” commissioning, two examples of the old Party’s dogmatic successes and financial Prudence? Is the New Party any different?

Praise be to the Party for the reason and logic of dogma which will cost all of us so dear for years to come. And please remember the old Party did all of this dogma in times of plenty . . .

Plus ca change plus c'est la meme chose?