Raising the Stakes- Getting a Deal on Refinancing

It's the words that make the lawyers groan, and the private sector rub their hands.

Voluntary code. It's that grey middle ground when a government knows that it should make a definite law about something, but doesn't, because it is afraid of the consequences. So it puts down what someone should do, thus taking the side of the angels, but makes sure that the government does not have to act if big business walks all over the code with tackety boots. It's a wimp's charter.

So it happened with the re-financing of PFI deals. Just to explain exactly what re-financing is, it works like this;

In a PFI contract, you have a consortia, or a number of players. The banks are the lenders. The contractors building the project are the borrowers. And the public bodies are the payers in the form of a rent paid to the contractor who owns the building. Are you still with me?

The public body doesn't have a direct relationship with the lender. They pay the rent that the borrower charges, and the borrower uses this money to pay the loan that the bank gave them. At the start of a project, the risk is higher, so the bank charges a higher rate of interest on the loan. When the project is completed, there is a lower risk, so the borrower can negotiate for a lower rate of interest. This is known as re-financing of the loan. Now when the borrower does this, they have a choice. They can go on charging the payer the original rent, or they can pass on part of the saving to the payer. Guess what route the borrowers took? Yep, they kept all that lovely money to themselves. And why did this happen? The Treasury had 'negotiated a voluntary code' that they should pass on 30% of refinancing profits to the payer, but they didn't. It was voluntary. It was assumed they would do the honorable thing, but hey, they never claimed that they were gentlemen. And rack up some more profits by charging outrageous costs on maintenance contracts, like £400 for changing a light switch and you've got yourself a nice cash cow, backed up by a sound investor that ain't ever going to go bust, because the government can't allow NHS trusts and local councils to go bust.And there was very little the Treasury could do about it, because there was no law against it, you couldn't change a commercial contract and they had little or no leverage with the banks; the banks had control of the Treasury. Until now, that is.

Over the past few months, the government has been nationalising our high street banks, by becoming the majority share holder. This is particularly significant in Scotland, where Westminster has taken a 70% majority stake in the Royal Bank of Scotland. RBS is one of the biggest players in PFI in Britain and so the government has effectively taken control of all the contracts that RBS owns. Jamie Hepburn, an SNP MSP has realised this and wrote to the Treasury asking if they could not get the public a better deal on PFI. The Treasury neatly dodged the question by saying that it couldn't re-negotiate PFI contracts and it would be detrimental to the banks interests and ultimately to the public purse to do so.

Now this is just codswallop. Think about it for a minute. The government owns a 70% stake in RBS which makes it both lender, shareholder and payer. Any money the government makes as a shareholder, is going to be lost at the other end as NHS trusts and local authorities struggle with payments. But if it leans on the likes of Laing, Serco and Balfour Beattie to be more generous on its re-financing profits, then it will mean that NHS trusts and local authorities can share in the profits and the government will get more bang for its buck. It is all public money, but it means that more of it will stay in public hands, instead of being poured down a black hole of rack renting on the part of the private sector. The government won't get a better opportunity to sort PFI out. It should take it.

Jamie, you're right about this.Find yourself a friendly MP down in Westminster and keep pressing. It could save us and the government an awful lot of money.

Ageing with Grace - The Nun Study

One of the main health stories today, was an appeal for people to donate their brains to science to help with the study of diseases like Alzheimers and Parkinsons. Brain donation is relatively rare and there are various theories as to why this is the case. Some think that because it is so tied up with personality that there is a reluctance to do so; others that it is because people get donation of organs and donation to medical science mixed up. But maybe it's the simplest reason of all; that the scientists didn't think to ask. This story reminded me of a scientist who did ask, and who now conducts one of the most comprehensive longitudinal studies of ageing; the nun study.

In 1986, Dr David Snowdon, an assistant professor in epidemiology at the University of Minnesota, was looking for a research project to consolidate his position at the university. He happened to get into a conversation with a graduate who was also a nun, and she suggested that he do a research project involving the nuns at her convent in Munkato, Minn. He was reluctant at first, but was persuaded and the project that he chose was to study Alzheimers and the effects of ageing on the brain. There was only one problem; studying Alzheimers meant studying brains, which meant the participants would have to agree to donate their brains after death to the project. On the day that he went up to the convent he was very nervous, but he explained what he was doing and the possible benefits it could have. The ice was broken when one nun piped up, 'Well, he can have my brain! I won't need it when I'm six feet under!' In total, 678 nuns from seven Notre Dame convents signed up for the project. Information about keeping your brain active, the risk factor involving head injury and stroke in precipitating Alzheimers, the function of folic acid and spotting a risk before the disease starts, all come from this study.

Research into disease requires money, but it also requires the good will and generosity of research volunteers. If there is ever a cure for this wretched disease, it will be because of the goodwill of people like the Notre Dame nuns. Maybe it's time we followed their example. After all, are you going to need your brain when you're six feet under?

It's the Bed Numbers, Stupid

At the moment, I am enjoying a quiet holiday somewhere in the north of Norway. Wine is plentiful, there is snow on the ground and I have just sampled smoked lamb ribs, which is a traditional dish here at New Year. I did not intend to begin blogging again until I got back to Scotland. Then I saw this article in the Herald about an exchange between Labour and the SNP about people getting turned away from Hairmyres and Wishaw A&E. It's all the fault of the Scottish Government apparently for not putting in a £100m investment package that was planned for them under Labour's brillant plans to downgrade Monklands.

I know I shouldn't reply to this. I know I should sit back, have an extra sip of the 10 year Rioja that we're drinking just now, and let it roll over me. But it's a bit like a car crash. You know that you shouldn't slow down to look at it..but you ..just do. And this kind of blatant politicing is like an itch I can't scratch. So let's start off with an unbiased considered statment.

Labour, you are talking absolute tosh on health. You have been talking absolute tosh for the past few years on health and you have not stopped, even when everyone from Allyson Pollock to John Lister have told you so. You have been found wanting and put out of government, but like a whining child, you have always got to be right, you have always got to have the last word and the last word has always got to be abusive. You should be ashamed of yourself and you should grow up.

Now to this issue. I find it very hard to believe that Labour do not already know the answer to the question that they put to Nicola Sturgeon over A&E refusals but let me sum it up; it's the bed numbers, stupid.

When Hairmyres was rebuilt on its original site and Wishaw General was built as a new hospital, they were built under PFI. PFI is prohibitively expensive, so one of the ways of saving money is to build the hospitals smaller. This means physically less space to put beds in. Which means a reduction in beds. NHS Lanarkshire lost 300 acute beds in total across the authority. Hairmyres has been running at 99% capacity since day one (85% occupancy is considered the safe rate for turnaround to control infection) and Wishaw has had similar problems. Now, where do they send these patients when they can't admit them? Guess what, they send them to Monklands. Yes, the hospital whose A&E Labour wanted to shut. Just as well that didn't go ahead, isn't it?
We are not the only people plagued with this problem. Reduced bed numbers are a common feature of PFI hospitals, as detailed in the excellent report, 'The PFI Experience' and bednumbers have been reduced across Scotland as a whole. This makes keeping a rein on infection very difficult and it means longer waiting lists for non emergency surgery. That is the problem.

Now to this £100 million nonsense. This was money that was promised for the upgrading of primary services in Lanarkshire, for health centres, the non-existent cancer centre at Monklands and the provision of 'community casualty units in rural areas to make up for an A&E being shut. This amount went up to £300 million at one point, as protests about Monklands grew more vociferous. The trouble with the money was that it was a promise, not a reality. And long before the SNP came to power, the plans for the new mental health services and the cancer centre at Monklands were being kicked into the long grass. I doubt that there was any real intention to enact the initial plans and as the money was not ring-fenced, it would probably all have gone to the rack renting racket that is PFI. It's swallowed everything else here.

I am someone who is political. I am not usually party political; I judge policies on their merits and statements on their truthfullness. But as it is New Year I have a suggestion for a New Year resolution for Labour.

You have lost the argument on health. You have been proved wrong by the chaos that has resulted, whether that is the white elephant of Stracathro, the crippling debt of PFI, the medical training applications shambles or the IT project which has cost a fortune and doesn't work. Stop opening your mouth to let your belly rumble. Use your period in the wilderness to reflect on what you have done and show some humility. Maybe, maybe just then, you will have a useful part to play with the rest of us in picking up the pieces of the NHS, and maybe we might still have a public health service in ten years time. Indulge in the kind of sour grapes politics that this argument represents and you will stay exactly where you are and what you are; a party full of sound and fury, signifying nothing.

Right, where's the Laphroig? I need a double..`

Measles, MMR and the Wrong Denominator

It is ten years since Andrew Wakefield had his now-discredited paper on the MMR jab, published in the Lancet. This paper sparked off a scare that the vaccine caused autism in children and many parents opted out of the jab, going for single vaccines instead, or not having their children vaccinated at all. The scare reached its peak in 2002 and it was two more years before it was thoroughly debunked by Brian Deer, a Sunday Times reporter. But the damage had been done and now unfortunate parents and their children are rediscovering that measles cause corneal scarring,deafness, croup and encephalitis(inflammation of the brain).It is one nasty disease and Andrew Wakefield bears a heavy responsibility for the new outbreaks of measles that have been recently reported.

However, there may be another element to this rise in measles, and that is the way in which data collection for communicable diseases changed in 2002. Before 2002, COVER statistics (Cover of Vaccination Evaluated Rapidly)were collected from computerised child health systems, which record what a child has been vaccinated against. These figures were then compared to the size of the health authority or trust population. This told the health authority how many children had been vaccinated, and vitally, how many had been missed or had gone unregistered. In 2002, when primary care trusts were introduced, the same method of collection was used, but the denominator changed from the size of the trust population, to the size of the population registered with a GP practice and residence for unregistered patients. This resulted in a near 100% vaccination record for measles and other diseases. However, when a researcher called Julia Granerod compared the vaccination statistics with population figures from the Office of National Statistics, she found that there was a discrepancy. She estimated that for 1998 - 2001, 10-20 000 children per annum had gone unregistered; in 2002, between 20 -40 000 children had gone unregistered and in 2003, the figures had dropped back to 2- 8000 children unregistered. This is vital information that is missing from the main statistics, and at a time when outbreaks of measles are happening, it is very worrying. Particularly worrying is the 2002 statistic. In the Granerod paper it was assumed that this blip was due to the re organisation of the trust areas, and a delay in registering people with the appropriate trust. But 2002 was the year that the MMR scare was at its height; it may be that these children were actually not vaccinated as opposed to being simply unregistered. These figures need analysed as a matter of urgency, and the Department of Health needs to re-consider how it is measuring vaccination uptake. Otherwise it could find itself in the middle of a major outbreak without the essential data to counter it.

Suffer Little Children

It has been a pretty grim week in the news as far as children are concerned. Firstly, the case of baby P is about as shocking as it gets, even for hard boiled reporters and social workers. The scenes in Parliament this afternoon at Question Time have been denounced as disrespectful to the dead child, but really the politicians could be forgiven for this; it was quite obvious that they, like us, are in shock.
The second case this week was that of Shannon Matthews, who was kidnapped, drugged and tethered to a roof beam, so that her mother could claim money from the Madeleine McCann fund to find her. She was kept at her uncle's house for three weeks,until the police tracked her down.
The third case this week,(please bear with me, because it will become clear why I'm including this), is the case of Hannah Jones who has refused heart transplant treatment, so that she can spend her remaining days at home. The local Primary Care Trust were going to raise a High Court action to force the operation, but they dropped it.

What has struck me about all these cases, is the immediate pinning of blame onto professionals and the reluctance of the media to consider the role of the parents in these cases.

In the case of baby P, the blame has been put squarely on social workers and doctors. Now, something has gone seriously wrong here and it needs to be sorted, but let's be clear about this; it was baby P's parents who killed her. No one else. We are having a discussion about the failings of the system; we are not discussing the fact that her parents killed her. Compare that with the Vicky Hamilton case, where Peter Tobin, who is a stranger, has had the blame of Vicky's murder laid squarely at his door (and rightly so.)

Next is the case of Shannon Matthews. When this case first occured and the police did what they always do; that is they checked family, relatives and friends for clues as to what had happened, they were denounced in the press for this. They were told that they should be looking further afield, that the case was not getting the publicity that the McCanns got and in some sections of the press, it was alleged that there was snobbery involved; because Shannon Matthews' parents were working class, they were not taking it so seriously. When Shannon Matthews was found, all the critisism disappeared like snow off a dyke.

The third case, which is different, is that of Hannah Jones. Now, I think the decision that this girl has taken is reasonable. The operation she would have had, would have perhaps prolonged her life, but that was the best outcome. There was a risk that the leukaemia that she had had, would come back, and she would have been on heavy medication to prevent transplant rejection. She also would have been in and out of hospital at a time when she wanted to be with family. But I do not agree with the pasting that the Trust has taken over this. This girl is twelve years old. She is very sick and looking after someone sick is very wearing. It is entirely possible, (although I don't think it has happened here) that her parents might have encouraged her in this decision, because they are worn out caring for her. It happens, as I said in this post. But the media have panned the trust for being 'interfering.' As if that isn't bad enough, some are using this as an argument for assisted suicide, whereas this is a very clear cut case of refusal of futile medical treatment.

The common thread running through all of this, is our reluctance to accept a very grim fact of life; parents hurt their children. We have not learned to accept and deal with this as a society, and so whenever a case of child abuse comes up, it's always someone else who is responsible. So we profoundly resent 'interfering' when the health care trust goes through all the proper checks as to the actual wishes of the child and her set up at home, but we bay for blood and sackings when a case of child abuse is missed as in the case of baby P. We are perfectly comfortable with a stranger like Peter Tobin being caught and convicted; we accuse the police of harassment, when they go through the proper procedure of search for someone like Shannon Matthews. We are reverting to the primal instinct of blaming the stranger.

Parents hurting their children is the ultimate nightmare. Who do you trust, if you cannot trust your parents? But we cannot turn away from it. We can't pretend that it doesn't exist. And it is not right that professionals doing their job, should become a media punchbag because we are unable to face this very ugly reality.Let us be grateful instead that they deal with child abuse day in, day out, so that we don't have to.

Your Good Health- Obama's Proposals for the American Health Service

Adulation today, a nightmare of an inbox tomorrow. Barack Obama doesn't have his troubles to seek, what with a global financial crisis and Iraq and Afghanistan to deal with. Yet there is one issue that may prove to be an even bigger challenge than these; and that is his proposals for American health care.

American health care, quite frankly, is a disgrace. America has the biggest GDP in the world, yet it is 41st in life expectancy, behind nearly all its Western European neighbours (Portugal is 42nd). Americans spend 15% of their GDP on healthcare and yet there are 67 million Americans uninsured. Drugs are prohibitively expensive, as I commented on in this post. Although there is a loose federal structure to healthcare in America, and Medicaid,(the state medical system)caters for the poorest, standards and access vary wildly.

Well, it won't be for much longer, if Obama gets his way. Here are his main proposals;

1.) Mandatory health insurance for children.
2.) Mandatory health insurance to be offered by employers to their workers. Small businesses will be exempt.
3. A set of national standards for medical insurance companies. At the moment, states have minimum requirements, but this varies a lot.
4.)Insurance companies will not be allowed to turn away people who are sick or old.
5.) The set up of a National Insurance Exchange, which will allow people on low incomes or who work for a small business, to purchase an individual plan, complete with tax credits to help them purchase the plan.

Now this looks like la-la land at first glance, doesn't it? Especially when the federal cost of this has been estimated at $1300 billion over the next ten years. But let's look at it another way.

America's GDP is $12,417 billion. 15% of that goes on health, which is $1,861 billion. But only half of that money is paid out by the government; the other half is what individual Americans pay. So the Treasury are in fact paying out $921 billion, or 7.5% of GDP, equivalent to the lowest percentage contributions in Europe. Barack Obama's plan is estimated to cost an extra $1300 billion over ten years, or $130 billion per year. So add that on and that takes you to $1061 billion per annum or just over 9% of the GDP. For that investment, the government will be able to add an extra 34 million Americans to the insurance books.

Next question; how are the insurance companies going to take all this? I think in the present climate, that they will actually take it quite well. Standardisation of rules will not go down well; neither will the insistance that they have to take on the old and chronically ill, thus increasing the risk. But in return, what they are going to get is far more customers and a captive market, at a time when many Americans will be opting out of medical insurance. The risk pool will be spread by the use of a National Exchange, which means that they can take on less profitable customers without too much loss.

How will Americans take it? In the land of the free market, spongeing off the state is seen as un-American. But the folk who would normally take this attitude, are struggling themselves just now, and will fall into the category of lower income earners who are eligible for tax credits. The ideal of pooling resources in a difficult time to create a public health service, will seem very attractive just now.

One group who will really like standardisation, will be public health officials. Standardisation at central government level will mean health data collection at central level. At present, this doesn't happen in America; there is no overall governmental body responsible for data collection and it makes it very difficult to plan for disease management. Do you remember how Annabel Goldie kept asking the government to establish a national methadone register? This was so that it was known how many people were on methadone, how many people had a drug problem, and therefore how important it was to set up drug rehab centres, instead of handing out methadone like sweeties. That is how important data collection is.

There are two groups that will not like these plans; employers and pharmaceutical companies. Many big employers do contribute to health plans for their employees at present, but Obama is planning to classify the employers' contributions as taxable income. This is a flaw in his plan, and it will arouse resentment. I think he should leave the contributions tax free, and take a lesson from what happened to pension plans in Britain when Gordon Brown decided to tax them at source and on maturity.

Pharmaceutical companies are really, really, really going to hate these proposals. Standardisation of insurance companies and the cost of premiums means more government involvement. More government involvement means more accountability for prices charged. More accountability for prices charged, means lower prices for drugs, and no more carte blanche. They are the group most likely to try and put a spoke in the wheel of these proposals; when Hilary Clinton tried to introduce health care reforms in 1993, they fiercely opposed her and succeeded in sinking them.

These reforms are a gamble. They are audacious, to coin Obama's phrase. But I think that if the insurance companies and pharmaceutical companies end up in opposing corners, instead of banding together, then he could get it through. And if he does, he could do more to combat inequality in America than all the civil rights movements before him. I wish him the best of luck and the American people the very best of health.

Brave New World

In the early nineties, genetically modified crops swam into the public ken. These were crops which were more resistant to disease and had a higher yield than normal crops and at first it seemed like they were ‘a good thing.’ However, as the details of the complicated technology were discussed, doubts arose. These were;

1. The DNA modification of crops, which was equivalent to several generations of the normal breeding process and the possible consequences;

2. The ‘genie in the bottle’; GM crops would cross-pollinate with non-gm crops, so if something went wrong with the gm crop, there would be no way of containing it or going back;

3. Companies claiming intellectual property rights over crops that they had developed and charging for them;

4. Companies developing crops that did not produce seed fit for sowing, so that customers esp in the third world, would have to go back to them to buy more seed;

5. People being unable to choose whether or not they could eat gm food or not.

The media did a blinder on what was a very complex subject, broke it down into simple layman’s terms and forced the issue with governments. The result was that we proceeded a lot more cautiously and hemmed in these companies on selling non-seeding crops to the third world.

How I wish, how I really wish that in the embryology debate that finished on Wednesday night in the Lords, that the media had done the same thing.

I did a post on this subject some months back, but to re-cap, stem cell research holds the ‘golden key’ to curing disease. Stem cells are the cells in the body that repair and replace diseased tissue. A number of these cells (called ‘pluripotent’ cells) can adapt to any area of the body and regrow for example, heart muscle damaged in a heart attack. It is the most promising area for finding cures to such horrors as Parkinsons’, Alzheimers and MS. There are a number of sources for these stem cells, but the two basic groups are embryonic stem cells, which come from foetuses, and adult stem cells, which are present in all of us and can be harvested and grown, (usually from bone marrow). Scientists have been using left-over eggs from IVF clinics for their research, but there are not enough eggs for their research, so the point of this bill is to allow them to create 'hybrid' embryos, using eggs from animals (cows,rabbits and pigs) and human cells. Here are the big issues surrounding the technology.


1.The effiacy (or lack of it) of embryonic technology

All the cures that have come from stem cell research, have come from the adult stem cells, not from embryonic ones. It is looking increasingly likely that things will stay this way. There are three major problems with embryonic stem cells;
1. They are not a perfect match to the patient so the patients body rejects them
2. They are cloned and have genetic defects in them from the cloning process;
3 Embryonic stem cells are not biologically compatible with adult tissue; they produce tumours when they are injected.


2. Intellectual property rights

The big brother of embryonic stem cell research, adult stem cell research, is the area that has actually produced all the wonder cures. Embryonic research has produced none. But the reason that companies want to persist with it , is that with embryonic technology, they can claim patent rights on a medicine developed from it. With adult stem cell cures they cannot, because the stem cells are taken from the patient and therefore belong to the patient.

3. ‘Therapeutic’ cloning

'Therapeutic' is used here, because the stated aim of the research is to grow stem cell lines that can be used to treat people for various diseases, not to actually clone a human being. But it is exactly the same technology and it means that we are building up a bank of experience which could very easily be switched to this use.

4. Crossing the species barrier
In this cloning process, the egg that is being used is from an animal, usually cows, rabbits or pigs, and the cells inserted into the egg are human. This bill allows the creation of cybrids, which is 99% human, to hybrids, which are 50% human. This crossing of the species barrier raises questions about the crossing over of animal diseases to humans, if medicines developed from these stem cell lines are created. At the moment, people who receive neural transplants from medicines developed from pigs have a whole set of restrictions on them; they are past child bearing age, are not allowed to give blood and have to use a condom when they are having sex. Not a whisper of this reached this debate on hybrid embryos.

5.Possible malicious use of embryonic technology

The possibility of full blown cloning and bringing a human embryo to full term, was the spectre that hung over this debate. This was supposedly dealt with in the bill, which forbids the implantation ‘in utero’; into a living being. But there was a flaw in this. The bill did not forbid the implantation of an embryo into an artificial womb. It couldn’t, because the stem cells are obtained by growing them in a laboratory. Scientists in America are developing artificial wombs that are in a different league from a petri dish, and again, this was not mentioned in the debate. And nobody picked up on the fact that doing away with the child’s need for a father, could apply to cloning.

Some might think this wouldn’t happen, but when you have a falling population and a dwindling economy to match like Britain has, or you are short of women as China is, there is certainly a possibility that someone might suggest this as a solution.

So there it is. The debate that never happened, or not in public anyway. Pandora’s Box was opened on Wednesday night, and none of us knew; we were too busy wondering if two clowns on Radio 2 were going to be sacked for making obscene phone calls. I predict that this bill in future will be seen the turning point of the 21st century and we didn't even debate it properly. Now all we can do, is deal with the consequences.