Private obsessions can be bad for our health

One of the more valid criticisms of journalism is that it rarely gives practitioners a voice. This week we plead not guilty, assigning our cover to a junior doctor and her stories of life on the ward. There are wards and there are wards - those run under the old ways of the National Health Service, and the increasing numbers required to conform to the peculiar priorities and habits of the private companies that have built virtually all the new hospitals in recent years.

The private finance initiative was an idea conceived under the Conservatives. The Labour government embraced and expanded it. The motives were ostensibly good - to find a way of injecting billions into a healthcare system that had fallen into disrepair, funding the most ambitious construction programme in the history of the NHS. The money would be repaid to private companies over 20-30 years. The spending would stay off balance sheet, and taxpayers would not have to dig deeper into their pockets. A win-win situation, ministers proclaimed. Only it hasn't quite worked out that way.

For many people, particularly those on the left, the PFI is politically inimical to the ethos of a state-funded, universal health service. The principle should, however, be of secondary importance. What matters, as Tony Blair would say, is what works. The problem is that, particularly in the so-called flagship hospitals, it often doesn't work.

It is not just a question, as Lucy Chapman vividly demonstrates (page 12), of skewed priorities, perverse incentives and dangerous outcomes. There is precious little evidence from research around the world that privately managed health is more efficient and cost-effective, or even that it provides net additional resources. The latest-version NHS is far removed from a genuine market. From privately run independent treatment centres to tenders for super-hospital construction contracts, the system is rigged to protect private entrants against fair competition.

As Niall Dickson of the King's Fund points out (page 16), the financial structure of these PFI contracts is causing even the best-run hospitals to struggle. Health trusts are locked into long mortgages. Current account deficits that were massaged for electoral benefit in 2005 have become unsustainable. Now manager after manager has ordered that non-urgent operations be postponed and that staff recruitment be suspended, the denouement of a perpetual revolution initiated by ministers fearful of simply allowing their generous investment to speak for itself.

Indeed, the most intriguing aspect of the white paper announced on 30 January by Patricia Hewitt, the Health Secretary - which otherwise contains many laudable aspects - is the admission that the days of the gleaming chrome and glass mega-hospital are already numbered. Small might be decreed beautiful in the brave new world of "cottage hos-pitals", but who is going to service the debts of buildings that will soon be unfit for purpose? Furthermore, Hewitt's decision to review the £1.5bn PFI redevelopment of Barts and the Royal London Hospitals amounts to another acknowledgement that the government is losing faith in its grand financing scheme.

Were it not for the curious mix of scant confidence and hubris that has guided so much government thinking, the story of the NHS over the past eight years should have been a happy one. Waiting times down; unprecedented investment; a commitment to universal provision confirmed. Now the largesse seems to be drawing to a close as the Treasury signals that state funding of health will, from 2008, rise roughly in line with inflation - about half the impressive average annual 7 per cent increase since 1999.

There is one consolation, and it comes from an unlikely source. David Cameron's declaration that under his leadership the Conservatives would "never" advocate an insurance-based healthcare system has baffled many in his party. It provides Labour with an opportunity. With a consensus on the future of the NHS re-established, the government has more political room for manoeuvre. It should not feel under pressure to look to private financing as the panacea. Its ideological obsessions have run amok. Blair and his successor might remember: what matters is what works.

From the horse's mouth

Of all the celebrated Grand Nationals, 1967's is surely the most extraordinary. Foinavon, priced at 100-1, was so far behind as the rest of the field piled up at the 23rd fence that he was able to skirt the melee and canter on to victory in splendid solitude. Christopher Huhne, the Liberal Democrats' dark horse, was just a schoolboy at the time, but he finds himself benefiting from a Foinavon effect today.

Unknown to the public, he is in danger, through no particular fault of his own, of having greatness thrust upon him by the calamities of others. But what is this? A cunning speech intended to outflank Menzies Campbell on Iraq? He should not bother. Huhne is a clever fellow with a plausible manner, and he may even cut a dash on Question Time, but that is not the secret of his success. He should keep his head down, maintain a steady pace and give trouble a wide berth. That is how Foinavon won his place in history.