Virgin Healthcare - the thin end of a very big wedge?

On Thursday night I attended a presentation to GPs by the Virgin Healthcare group - a new company set up by Branson's money-making empire to seek out ways of exploiting the NHS for profit. Before going in, I met up with members of Keep Our NHS Public and the local UNISON branch, who were protesting outside (see picture).

The Virgin Healthcare proposals sound a lot like Lord Darzi's polyclinics - lots of different 'services' under one roof, centred around a GP surgery (or several GP surgeries combined together in some unspecified way). In the Virgin Healthcare model, the additional services would include things like laser eye surgery, dentistry (only private dentists, though, it was made very clear) and pharmacy.

The business plan seemed surprisingly modest, I thought. The first Virgin Healthcare centre is planned to be open this year, with Virgin claiming that they aim to have a total of 19 centres established by 2013. Even allowing for the estimated half-million-a-year income allegedly generated by laser eye clinics, this hardly seemed likely to generate much of a return for a company which has already got impressive overheads - a full national team of executives and directors, who've been on the payroll since last year.

The prize for Virgin is not current expenditure, of course, but future. Two income streams seem possible. The first is that whoever controls primary care in the UK controls the secondary care budget too, and Virgin could presumably hope to profit from directing or encouraging referrals in particular directions. More fundamentally, the Virgin execs clearly believe that the NHS is facing financial meltdown. A detailed chart of predicted healthcare expenditure was presented to the audience, suggesting that while public expenditure on healthcare in the UK could only afford to grow at, or slightly above, the rate of GNP, the total cost of healthcare would rocket over the next forty years, thanks to rising pharmaceutical costs, and an aging population.

The obvious solution, nationalising the pharmaceutical industry, had slipped the minds of the Virgin CEO for some reason, so we were left with the assertion that by 2050 approximately two-thirds of healthcare expenditure in the UK would be funded through the private sector. The data came from Investec Investment Banking, a company that exists to smooth the way to huge profits for companies seeking to exploit the "healthcare market" as these parasites now routinely refer to the sick and dying amongst us. So perhaps it's not surprising that it painted such a rosy future for the profiteers, but there is no doubt that some of the underlying facts are sound - there will be a crisis in healthcare funding within the next generation, and if it's not resolved with a radical shift back to the idea of progressive taxation to fund equal access to state of the art healthcare for everyone, then a private, market-driven, survival of the richest scenario is not impossible.

The problem for the likes of Virgin is that those of us most in need of such healthcare are unlikely to actually have the £900billion that they anticipate being the annual private health expenditure in 2050. Hence the desire amongst many politicians and pro-business health economists to look at US-style health insurance schemes, whereby we can be forced into paying for private healthcare.

So if there's going to be a wholesale shift in the UK from public expenditure on healthcare to private, how will that be managed? Crucial in the whole process will be the GPs, whose role as gatekeepers to the NHS makes them a prime target for anyone with ambitions to create an HMO-style health economy in the UK. Virgin clearly hope that by being the first brand to associate itself with GPs in a systematic way, they'll be in at the ground floor of the eventual wholesale privatisation of primary care. That, rather than 19 showpiece health centres, seems to be the real business model.

The immediate impact of the Virgin proposals would be to take existing GP practices and move them into new premises - larger, shinier, and packed with 'additional services' for people to buy. All the non-clinical staff would be transferred to work for Virgin, losing their NHS pay, terms and conditions and - most crucially - their pension rights. They'll be offered a Virgin pension instead, apparently, but we were clearly told that this wouldn't be a recklessly unaffordable final salary scheme like the NHS one. Won't pay enough to live on, then, will it?

The GPs would continue to be self-employed independent contractors (which is part of Virgin's sales pitch, at a time when many GPs fear that Primary Care Trust provider arms would now like to move faster towards a salaried GP model) and would employ their own clinical staff. But they would have to agree to be part of a Virgin 'peer review' quality system, because Virgin are determined not to let any sub-standard GP or practice nurse damage their reputation. One GP quite astutely pointed out that given the reputation of Virgin Atlantic for price-fixing and Virgin Trains for failing to turn up on time, perhaps it was the GPs who stood to lose most from the association with Virgin, rather than the other way around. GP's relationships with their communities and their patients is a precious thing, and it is certainly something that Virgin is seeking to exploit in a very obvious way. In return, the GPs in the health centre would be sharing 10% of the centre's profit. Not for referring people to the private dentist or physiotherapist, you understand, since that would be immoral, but just for being there - being part of the Virgin brand. Yeah, right.

Some of the other impact, if the Virgin model goes ahead, will be caused by the fact that they also want to offer local diagnostics, pathology and possibly imaging - hardly economic compared to the big NHS hospital down the road, but it might be difficult for the GP to insist on referring a patient to the hospital for an X-ray if there's a sign outside the door saying they can have it right there and then. If this takes off then there's more work, and jobs, drained out of the NHS.

The presentation was pitched to be non-threatening, with Virgin's bosses working hard to be uncontroversial, seeking to present themselves as a friendly support to GPs in a time of difficult changes. In a strange echo of fundholding, they acknowledged that their proposals would not be right for every GP practice, but that they hoped to attract those with whom they could "share a vision". What say the patients of those GPs would get in this was not mentioned by anyone.

Will it work? In many ways, Virgin are a little late - many GP practices, certainly in Leicester, have already moved into new premises, either through LIFT schemes, or following judicious spending of savings accrued from GP fundholding. Some GPs might see the extra money as attractive, though, and others will view a business venture with Virgin as less threatening than salaried status in the NHS. The twin demons of the NHS dentistry contract and new APMS pracitce models were invoked several times to scare the GPs into seeing Virgin's proposals as some kind of leser evil, and the chances are that there will be enough GPs prepared to give it a go for Virgin to meet their target of 19 health centres in the next five years. After that, it will all depend on whether we've won the wider battle to save the NHS. If we have, then Virgin will be left with a very expensive primary care white elephant. If we haven't they could well be sitting on a goldmine.