Inventing a crisis to privatise NZ healthcare

Written By: - Date published: 10:41 am, October 4th, 2024 - 12 comments
Categories: chris bishop, Christopher Luxon, Dirty Politics, health, national, Privatisation, same old national, Shane Reti - Tags: ,

This is a repost of an article from the Mountain Tui substack

Yesterday, there was an excellent interview on 1News Breakfast with Former Health NZ Chair Rob Campbell.

He was being interviewed in response to the government signalling to privatising our hospitals.

Campbell confirmed what this publication and its readers have long talked about.

One: We have the money for Health.

Two: The immediate theme around Health NZ is a “manufactured crisis” to be used as an excuse to privatise health in New Zealand.

Campbell:

“This is not new and it’s not really about money. So let’s be clear about that.

There’s been an army of consultants, investment bankers and other people gathering together to try to get into investing, not just in health, but in other public infrastructure for some years.

Before I joined Te Whatu Ora, PwC was contracted in to do a study on whether there were people who would invest if they could make money with the government backing, and funnily enough there were quite a lot of them…

It’s been built up [here], I think quite deliberately, to create a situation where that seems to be the best alternative.

It’s not.

And the money is available anyway.”

Campbell and former Executive Director of the Association of Salaries Medical Specialists, Ian Powell, talked through significant shortcomings in privatisation, noting among other things:

  • Health NZ has used Australia as an example of widespread privatisation. However, Powell noted that this is simply untrue.

“It’s not widespread in Australia. Where it has happened, though, in many cases, it’s had to return to public sort of management because it’s gotten to financial difficulty. But it is more the exception than the rule in Australia.

  • Privatising health will mean higher costs for Kiwis

“Southern Cross [is] a cooperative, but it’s a private operation in the health sector.

Its costs are going up just the same as everyone else’s costs. Its charges are going up just the same as everyone else’s charges are going up.

There is no easy way out of this for the Minister of Health or for the government.”

i.e. There are significant disadvantages to privatising health, particularly, as Campbell notes, our health system’s issues have been built up over many decades, and privatising it will not resolve that issue for Kiwis.

Private operators in this space [investment banks and consortiums] are highly sophisticated financial players who will ensure maximum profit extraction from Kiwi taxpayers, and privatisation is correlated to worse health outcomes [see Lancelet study below]

As Campbell notes too, the profit extraction motive affects all parts of the health lifecycle from design through to effectiveness through to longevity.

Nevertheless, private companies and hedge funds are already putting up their hand for a piece of the pie:

Private company Vital Healthcare offers to help build Dunedin Hospital

Health Minister Dr Shane Reti visits the new Dunedin Hospital build site.

“We could certainly look at breaking up part of this project, acquiring part of it and leasing that back to the government for a very long term,” one fund manager offered.

“There’d be a whole range of contractual projections for the state, and essentially they would pay us rent.”

Despite all of these developments and conversations, and the 35,000 people protest in Dunedin, the Government’s intentions on privatisation don’t appear dented.

There was more drip feeding to media about the ‘financial crisis’ around Health NZ yesterday, with RNZ parroting the government’s emotive jargons: “Health NZ’s financial deficit blows out to $934m.”

From the report:

Chief executive Margie Apa said the gloomier outlook was partly due to one-off factors including write-offs to surplus Covid-19 stock, Holidays Act remediation, cuts to Hauora Māori funding, unbudgeted staffing costs and “higher outsourcing across all employment groups”.

The unbudgeted staffing costs could relate to Newsroom’s July report that the “deficit” was being driven by factors such as Health NZ’s successful nursing drive to help with wait times.

[Little did the then Health NZ Board know that some would feel it easier to improve waiting times by getting Kiwis off of the public health register altogether]

The RNZ story was placed next to a vision of Lester Levy warning Health NZ could go broke, to which I thought, ‘it’s not even possible’.

The point is Luxon knew about the funding needs of Health NZ in October of last year yet they underfunded Health NZ anyway.

But this myth and conjuring of a financial health crisis persists – even as the government continues to spend on tolled road plans, private charter schools, Wellington tunnel plans, landlords, tobacco companies, and trust holders.

Campbell is right – the issue is not money, and this is a manufactured crisis.

Two months ago, I wrote that the government has pushed itself into a tight (possibly untenable) budget envelope through its 2024 tax cuts and budget choices, and therefore, more pain would come in the form of deeper social and public service cuts.

But the privatisation solution is a very short sighted win for the government’s books, but not for Kiwis. History shows us society and citizens will pay a high price for privatised health.

This year, the highly respected Medical Journal Lancelet issued a study called “The effect of health-care privatisation on the quality of care”.

It concluded:

We found that hospitals converting from public to private ownership status tended to make higher profits than public hospitals that do not convert, primarily through the selective intake of patients and reductions to staff numbers.

We also found that aggregate increases in privatisation frequently corresponded with worse health outcomes for patients….

Our Review … concludes that the scientific support for further privatisation of health-care services is weak.

Folks who are interested can also review the case study of the UK’s NHS, which was once the crown jewel of England i.e. an accessible health service Britain was proud of and which served its people well.

It was systematically broken down under the Tory government’s austerity policies.

Today it is held together on strings by privatised outsourcing companies – which is highly lucrative for private operators but comes at a high cost economically to Britain and socially for its people and health outcomes. It is also, as the Guardian noted, untenable until the funding issue is solved.

Rob Campbell made the exact same point.

____

PS The Atlas Network motto is “Only a crisis - actual or perceived - produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.”

12 comments on “Inventing a crisis to privatise NZ healthcare ”

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  1. Tony Veitch 1
    4 October 2024 at 12:29 pm

    Yes, the long and sticky fingerprints of the Atlas Network are all over this 'crisis!'

    Ultimately, it's all about choices – and I'll bet every one of the CoC have private health insurance, so, frankly, don't give a f*** about what serves bottom-feeders!

  2. SPC 2
    4 October 2024 at 12:30 pm

    The Atlas Network motto is “Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.”

    The practice was to charge the health board a rate of return for any investment in buildings. It was significantly higher than the public debt cost.

    Thus it would attract private investors, this is why ACT's policy of funding hospital buildings was in their coalition agreement with National

    Investigate build and lease-back arrangements for new hospitals

    https://assets.nationbuilder.com/nationalparty/pages/18466/attachments/original/1700778592/National_ACT_Agreement.pdf?1700778592

    They also want to do this with school buildings (who knows, maybe also state houses after that).

    "A key contributor to the deterioration in underlying financial performance is staffing exceeding the 2023/24 budget, accompanied by higher outsourcing across all employment groups," Apa reported.

    Outsourcing demand – transfers to private sector.

    Health NZ cared for more people in the 2023/2024 financial year than ever before, she wrote, and there were increased discharges and complex treatments. She said that was likely in line with population growth.

    The deficit was in part caused by not being fully funded for the work it was doing. In part presumably consequences of long waiting lists consequences and aging of the population.

    As for other stuff on their annual deficit – money to staff underpaid in the past.

    https://www.rnz.co.nz/news/national/529810/health-staff-doubly-punished-over-botched-holiday-pay-union

  3. SPC 3
    4 October 2024 at 12:40 pm

    The risk of an increasingly privatised healthcare system is deeply inequitable care, and some fear we could be moving toward a US model

    One citizenship in the state for the wealthy and well to do and another citizenship for the precariat appears to be the design.

    https://www.rnz.co.nz/news/thedetail/529804/fears-of-privatisation-by-stealth-in-an-overwhelmed-healthcare-system

  4. feijoa 4
    4 October 2024 at 12:49 pm

    Yes, this IS a manufactured crisis.

    No, the Health system isn't broke. It is starved of public money. Labour is right, this is a matter of choice. Out of the 90Bil for infrastructure 2B is for health and 70B is for roads.

    Even householders know we are better off if we own our own assests. Someone who has paid off their debt (mortgage) is better off than a renter. It's the same for public assets.

    The government have no right to sell the commons. Hospitals are owned by the people of NZ

    • tc 4.1
      4 October 2024 at 1:56 pm

      100% manufactured. The continued underinvestment in buildings is out there for everyone to see, Dunedin and Whangarei stood out but that's just the thin end of a larger plant and buildings wedge.

      If you dont spend money keeping the technical debt at bay then service disruption can occur which is a choice Reti and cronies also appear to have made.

      People with work to be completed were given notice months ago folks so its the old do nothing and wait for opportunities to blame other's when the proverbial hits the fan.

  5. Drowsy M. Kram 5
    4 October 2024 at 4:52 pm

    Thanks Mountain Tui for a timely post. NAct continues to lead 'big game' hunting parties for its private capital partners, and our public health services are particularly juicy prey.


    https://natlib.govt.nz/records/22792212

    ACC was also unaffordable – some time ago now, but NAct are still beavering away.


    https://digitalnz.org/records/22707792

    Follow the money – private capital never sleeps.

    Fears of privatisation by stealth in an overwhelmed healthcare system
    [4 Oct 2024; RNZ 'The Detail']
    The risk of an increasingly privatised healthcare system is deeply inequitable care, and some fear we could be moving toward a US model

    One of Tories’ biggest ever donors profited from £135m of NHS contracts
    Exclusive: Frank Hester, who gave Rishi Sunak’s party £5m this summer, is thought to have made huge sums from DHSC deals

    Frank Hester’s company, TPP, paid out more than £20m in dividends over four years between 2019 and 2022, with Hester the only shareholder.

    https://corporatewatch.org/the-national-wealth-service-privatisation-profiteers/

    • tc 5.1
      4 October 2024 at 6:18 pm

      It's a triple play centered on health and well being. Pharmacc, ACC and the Health system all there to be plundered.

      The song remains the same, a relentless focus on essentials services such as Power, water, and health as we move from being owners to customers.

  6. thinker 6
    5 October 2024 at 7:53 pm

    "Proponents of political or religious ideologies will sometimes use false flag tactics. This can be done to discredit or implicate rival groups, create the appearance of enemies when none exist, or create the illusion of organized and directed persecution. This can be used to gain attention and sympathy from outsiders, in particular the media, or to convince others within the group that their beliefs are under attack and in need of protection".

    https://en.wikipedia.org/wiki/False_flag

  7. Jack 7
    6 October 2024 at 8:32 am

    US fraud by private firm involved in their public health sector runs into the millions

  9. EP 9
    7 October 2024 at 4:08 pm

    I really want to know people's opinion on this: Where to Watch – Finding the Money (findingmoneyfilm.com)

    The idea that there's no money seems to be the biggest lie that governments around the world have been telling people.