Since the inception of the NHS, there has existed loud opposition to privatisation, which has nonetheless taken place incrementally and, for the most part, behind closed doors, with no explicit democratic mandate.
A 2017 Ipsos MORI survey for the King’s Fund found that 77% of the English public agreed with the statement, “the NHS is crucial to British society and we must do everything to maintain it”. These results were consistent with polling conducted between 2000 and 2007.
The survey results indicated that support for the statement, “the NHS was a great project but we probably can’t maintain it in its current form” never grew to more than 25% over the same period. In 2017, support for this statement was at 23%.
With such strong opposition to privatisation, successive governments have realised that small alterations must be made over the course of decades in order to disguise the true nature of these reforms.
It shouldn’t be forgotten that the NHS was created as a response to the British public’s experiences living through two World Wars, a pandemic, and a global economic crash. Many people are watching the situation unfold in Ukraine, wondering if we are witnessing the beginning of another world war.
“Legally abolishing the NHS”
It is important in times like these to consider the past. Let’s look back to December 2021. Before the Russian invasion dominated the headlines, before ‘partygate’ was all anyone could talk about, the big story was the Health and Care Bill passing through Parliament. The Bill has since passed on to the House of Lords for debate and is currently in the report stage before its final reading.
The health secretary, Sajid Javid, claimed that the aim of the bill “is to put into statute the requests the NHS made of government in 2019”, while criticism of the bill has focussed on alleged efforts to privatise the NHS. Critics have suggested that this bill gives private companies further access to England’s NHS.
Dr Bob Gill, a Kent-based GP and NHS campaigner, said that Javid’s reference to requests from the NHS relate to changes introduced in the Health and Social Care Act 2012, which he claims, “made the NHS into a quango, it made it an arm’s length entity, it repealed the duty of the secretary of state to provide healthcare, in essence legally abolishing the NHS”.
Dr Gill, interviewed on the eve of the bill’s first debate in November last year, went on to accuse NHS leadership of being too closely associated with leaders of the private health industry. Gill cites as an example Sir Simon Stevens, a former senior executive at the United States’ largest private healthcare insurer, UnitedHealth, who was Chief Executive of NHS England between 2014 and 2021.
If you’ve read this far, you may be wondering why we’re publishing an article about NHS privatisation. Given that the whole focus of the Key to the Future (KTTF) investment strategy is investment in publicly listed equities and bonds, one might also be forgiven for asking how privatisation of the NHS could possibly affect the portfolio.
It is our view that future-focused investment themes that add value, and help to create a better world for everyone, can drive returns and create outperformance when compared with more traditional investment models. But we also know that this approach can be derailed by negative impacts obscured by greenwashing and wokewashing, whether intentional or otherwise.
We analyse the individual companies held by the funds that comprise the KTTF model portfolio to uncover any discrepancies which may stand in contrast to our commitment to invest our clients’ money responsibly and in line with the United Nations’ Sustainable Development Goals and the ten principles of the UN Global Compact, which in turn leads to the sustainable and impactful investment performance that we seek.
Making profits by cutting costs
Through our analysis, we have identified that the KTTF model investment portfolio contains a US-based healthcare company called Centene, which stands to benefit directly from the privatisation of the NHS through one of its UK subsidiaries.
Centene’s subsidiary is Operose Health (Operose), which recently took over AT Medics, one of the largest GP practice operators in the UK, running 37 GP practices. This has raised serious concerns about Centene’s role in the increasing privatisation of the NHS.
Dr Jackie Applebee, a London GP and campaigner against NHS privatisation, has noted that “commercial organisations generally do have shareholders who expect dividends to be paid”, requiring them to make a profit. Due to the nature of GP funding in the UK, this can only be done by cutting costs, whether that means reductions to staff, access, services, or quality of care.
This is far from being a worst-case projection of what could happen, with Operose already involved in the closure of GP surgeries through the exiting of contracts. There is significant evidence which suggests that profit motive was the justification for exiting at least one of these contracts.
Centene has also been criticised for cutting costs in its US healthcare operations. According to healthcare policy analyst, Stewart Player, Centene has been able to drive its profits up by reducing the quality of care, failing to obey regulations, reducing payments to providers, “reducing and/or denying care,” and exerting influence over the “regulatory environment” by lobbying, donating, and though exploiting “the revolving door of state and corporate actors”.
Tragically, Centene’s cost-cutting measures have even been linked to the severe brain damage of a toddler, D’ashon Morris, in Texas. D’ashon and his twin sister were born with severe health complications and were placed into foster care, placing them under the responsibility of one of Centene’s subsidiaries, Superior Healthplan (Superior).
D’ashon required a tracheostomy tube to allow ventilation and to ensure his windpipe was kept open. In 2018, the Dallas Morning News reported that this required “constant upkeep” even before the toddler developed the dangerous habit of removing the tube. Each time this happened, the “hole in his throat would collapse and he’d begin to suffocate” which required a nurse to reinsert it.
Superior chose to cut the provisions in place, assigning one nurse between D’ashon and his twin sister. Reportedly, this saved the company “as much as $500 a day”. This was opposed by D’ashon’s foster (later adoptive) mother and nurses. After Superior refused to change their decision, the nurses quit.
“Tethered to machines the rest of his life”
Soon after, one of his doctors recommended that “going back to a 1:1 nurse ratio, and increasing the care to 24 hours a day, was a matter of life or death” but Superior again refused to change their decision. This decision was appealed to the state, and Superior proposed physically restraining D’ashon, despite state regulations banning the use of such restraints on foster children.
Eventually, D’ashon pulled out his tracheostomy tube whilst his nurse was not on shift. Nobody trained to deal with such a situation was present, and D’ashon’s heart stopped. CPR was performed on him for 40 minutes and the toddler’s heart was restarted in hospital. However, deprived of oxygen for too long, he was severely brain damaged and will need to “be tethered to machines the rest of his life”.
Only after this did Superior agree to give D’ashon round-the-clock nursing. All to save a few hundred dollars a day. This is not an isolated incident, with the Centene subsidiary repeatedly cutting costs to the detriment of their patients. More information can be found in a KTTF research project report, outlining the problematic activities of Centene and its subsidiaries in the US and UK. This report is available upon request.
Ell Welsford, author of the KTTF research project’s report on Centene’s operations, said this about the holding:
“Centene’s activities appear to run contrary to the internationally proclaimed human right to health. They do this by offering a substandard quality of care to many of their service users in the USA, often the most vulnerable members of society, and by engaging in a process of privatisation that seems set to erode both the quality and economic accessibility of healthcare in the UK.”
Earlier this year, we surveyed our clients to determine how best to represent them in our engagement with the fund regarding Centene. The results of our survey were overwhelmingly in favour of the NHS and its founding principles.
When asked how comfortable our clients were with their investments going into companies involved in NHS privatisation, 71% of respondents felt uncomfortable, with 51% answering ‘very uncomfortable’. 29% of respondents felt comfortable, but interestingly nobody answered, ‘very comfortable’.
In January this year, we presented all our findings to the fund which is holding Centene. The fund managers initially appeared to suggest a very positive impact from their decision to own the shares, but we saw things differently and laid out the argument for divestment.
“What we presented was news to the fund managers”
After we engaged with the fund holding Centene, they told us that – while they haven’t reached a decision regarding the company’s position in their portfolio – “the company is under review in the portfolio” and the issues we raised have been brought directly to the chairman and CEO of Centene.
We have been assured that the fund managers “have specifically asked for them to respond to the criticism that their activity in the UK market has led to a reduction in the level of care for communities that rely on their GP networks”.
Chris Welsford, managing director of Ayres Punchard, had this to say regarding the issue:
“The majority of our clients are in favour of an NHS free at the point of delivery and are opposed to privatisation, in much the same proportions as the general public. Overwhelmingly, our clients do not want to be invested in a company that is actively involved in NHS privatisation or human rights abuses.
Our engagement with the fund manager has been extremely positive and they fully understand our clients’ position on this. Much of what we presented was news to the fund managers, and perhaps the unpopularity and level of risk Centene presents on many levels wasn’t fully appreciated until after our engagement.
In any event I think the engagement process has been worthwhile and I hope the holding will be sold. Sustainability demands it. Impact demands it.”
