This forms part of a growing trend in which bankers and central bankers are taking up positions of influence within government beyond their traditional bailiwicks.
The Boris Johnson government is on the verge of appointing senior banker Richard Meddings as the new chair of NHS England, with a brief to push through changes in the way the service operates as well as reduce surging waiting lists. Meddings’ appointment means that two of the top roles in the UK’s public health service are now occupied by former bankers: Meddings as the head of NHS England and Savid Javid as Secretary of State for Health and Social Care.
Javid made a name for himself structuring emerging market synthetic CDOs for JP Morgan Chase and later Deutsche Bank. His deputy in the Department of Health and Social Care is Edward Argar, who previously worked as head of public affairs for Europe at outsourcing giant Serco, which has benefited hugely from COVID-related contracts awarded by the current government.
Meddings’ appointment to the helm of NHS England forms part of a disturbing new trend in which senior bankers and central bankers are taking up positions of influence within government beyond their traditional bailiwicks of banking, finance and economics. It was bad enough when Wall Street and City of London financiers would seamlessly flit from the C-suites of global banks to the top jobs in central banking and national treasury departments; now they’re taking up senior roles in health, culture and other areas.
The current chairman of the British Broadcasting Corporation is Richard Sharp, a former Goldman Sachs banker. Sharp’s predecessor in the role was David Celementi, a former deputy governor of the Bank of England. Before joining the BBC, Sharp had served as an advisor to the UK’s Treasury Secretary Rishi Sunak, another former Goldman banker who is now strongly tipped to replace Boris Johnson as prime minister.
In Italy, the government is already being led by a Goldman alum, Mario Draghi, who was chosen as prime minister in early 2021 despite the fact he has never been elected to public office in his life. Draghi is now being floated as the frontrunner to succeed Sergio Mattarella as Italy’s president early next year, a role the former ECB chairman appears to be happy to fill.
“My personal destiny is of no importance,” Draghi said at his end-of-year press conference. “I have no particular ambitions. I am, if you like, a grandfather in the service of the institutions.” The question is: which institutions?
No Previous Experience Required
Unlike his predecessor in the top job at NHS England, Lord David Prior, a Conservative peer who had previously served as a health minister and chaired two NHS hospital trusts, Meddings does not appear to have any previous experience in the health service at all. He is not a complete stranger to government, however, having served as a non-executive director of the Treasury. But Meddings’ most prominent roles are in the private sector, including as non-executive director at Credit Suisse, where he chaired the bank’s Audit and Risk Committees in the lead up to the Archegos Scandal; and as chairman of mid-sized lender TSB.
Meddings “has unrivalled business experience and will bring an outsider’s eye to the NHS”, an unnamed source told the Daily Telegraph, adding: “We can’t have business as usual when it comes to the health service. Reform is needed to deliver an NHS that serves patients for years to come.” The government is apparently also anxious to identify a “heavyweight” from the private sector with experience in digital and data, in order to help the NHS make better use of technologies.
As I reported in my August 20 article, “Going, Going, Almost Gone: UK Government Speeds Up Privatisation of National Health System,” the NHS recently found itself in hot water due to its misuse of patient data:
Managers at NHS Digital came up with an ingenious plan to digitise and share up to 55 million patients’ private heath data with just about anyone who is willing to pay for it. That data includes sensitive information on physical, mental and sexual health, as well as gender, ethnicity, criminal records and history of abuse. It could even include a patient’s drug or alcohol history. The NHS Digital managers kindly allowed patients to opt out of the scheme; they just didn’t bother telling them about it until weeks before the deadline, presumably because millions of patients opting out of the scheme would have meant less money for the NHS.
When the FT finally broke the story, a scandal erupted. NHS Digital officials have since scrapped the scheme, saying they now want to focus on reaching out to patients and reassuring them their data is safe. That may be easier said that done given recent revelations that more than 40 pharmaceutical, consultancy and data companies worldwide have already had access to UK hospital data and medical records for years. Those companies include McKinsey & Company, KPMG, Novavax, AstraZeneca, marketing firm Experian and a data company co-founded by the Sackler family, who made billions of dollars selling OxyContin, an opiate painkiller stronger than morphine.
The Right Man for the Job?
In September, NHS Digital courted further controversy when it emerged that the division had been using undisclosed companies to analyse facial data for the NHS App, which has become the easiest means of accessing the NHS certificate proving an individual’s Covid-19 vaccination status. NHS- digital arm has refused to publish the contracts it has signed with private companies subcontracted to manage the application and the data it generates. The NHS also appears to be sharing some of the facial recognition data it collects with law enforcement bodies.
Clearly, there is ample room for improvement in the way the NHS manages the data of its 55 million patients. The question is whether or not Richard Meddings is the right man to lead the way, given his previous role as former Chairman of the British midsized lender TSB. In that role he helped oversee the bank’s bungled effort to transfer all of its users’ data to a new computer system, which caused weeks of chaos for hundreds of thousands of customers, some of whom were exposed to fraud attacks, and ended up being branded as the “biggest IT disaster in UK banking history.”
In his defence, Meddings didn’t join the bank’s board until September 2017, by which point most of the groundwork for the botched system upgrade had already been laid. It is also true that much of the blame for the botched migration of customer data lay with TSB’s parent company, Spanish lender Banco Sabadell, whose IT arm Sabis had not been ready to operate the new platform and had failed to test one of two data centers it relied on prior to the launch.
That said, a report by law firm Slaughter & May in 2019 concluded that TSB’s board had failed “to fully understand the scope and complexity” of the new system prior to its failure. And Meddings was chairman of that board, so he at least bore some of the responsibility for the hugely costly debacle.
Conflicts of Interest
Serious questions are also being asked about the Health and Social Care Minister Savid Javid’s cosy ties with JP Morgan Chase, a bank with significant — and growing — interests in the rapidly growing digital health sector.of con
“Sajid Javid has a background in international banking, and after resigning as chancellor became a senior advisor to JP Morgan.” says Dr John Puntis, co-chair of Keep Our NHS Public.
On his return to the backbenches (in a Freudian slip, I began this sentence by typing “bankbenches”), Javid was offered an advisory role by his former employer worth £150,000 per year, for just 80 to 96 hours of work a year. This has led to allegations of potential conflicts of interest. JP Morgan Chase provides funding and financial management to firms looking to run NHS services. Together with its three largest US competitors, Morgan Stanley, Goldman Sachs Group Inc., and Citibank, JP Morgan Chase commands the highest share of fees and deals when it comes to mergers and acquisitions in the global healthcare sector.
“It is heavily into digital health care, a key theme of NHS England’s plans for the NHS,” says Puntis. “This raises the possibility of the new Secretary of State for Health and Care providing a very useful conduit for his previous employer into the NHS.”
And Javid is likely to wield more power than his predecessors. The government, through its proposed Health and Social Care Bill, plans to grant more authority to the Health and Social Care Secretary, including the right to approve the chair of the new integrated care boards (ICBs), who in turn can choose to appoint representatives from private companies to their boards.
NHS’ Biggest Crisis Ever
This is all happening as the NHS faces its biggest crisis ever. Staffing, not physical capacity, is now the main limiting factor for the NHS this winter. The organization is the world’s fourth largest employer but it has a “very, very depleted workforce” that is facing a worse Christmas than even 2020, according to Pat Cullen, head of the Royal College of Nursing. On December 17 the FT’s Camilla Cavendish reported that three senior people in the NHS had told her that the fear of the growing staff exodus is “keeping them awake at night”:
There are 93,000 vacancies across the NHS, and shortages in every major speciality… You might have thought those in charge would have spent the past 18 months building up critical care capacity, improving recruitment and retention, and creating a dedicated vaccination service of volunteers and new trainees. But none of that has happened.”
It is hardly surprise that the number of people awaiting hospital treatment hit an all-time high of 5.98 million in October, more than a million of whom are now waiting more than six months for treatment. The longer the list grows, the more outsourcing opportunities open up for private healthcare providers looking to offer routine treatments such as cataract operations or joint replacements.
This is the culmination of “three decades of incremental chipping away by successive governments at the founding principles of the NHS as a universal and comprehensive service based on public funding, accountability and ownership,” write Allison Pollock, a clinical professor of public health and author of NHS plc: The Privatisation of Our Health Care, and research associate Peter Roderick in their must-read op-ed in The Guardian,
“If You Believe in a Public NHS, the New Health and Care Bill Should Set Off Alarm Bells”:
In the Wake of the pandemic, the public is being softened up to expect fewer NHS-funded services and to be pushed into paying for them. Already, the NHS-partnered patient access website for GP appointments, repeat prescriptions and “discovering local health services” is reportedly offering mostly private healthcare with lists of tests and treatments to be paid for.
There also appears to be a growing exodus of patients toward the private sector, as a recent article in the New Statesman reported.
More than one in five (21 per cent) say they have already gone private recently because they simply couldn’t get the treatment they urgently need, according to a July poll of over 4,000 people by Populus for the charity Engage Britain. A decade ago, just 13 per cent of all non-emergency surgery on UK residents was privately funded. (For context, roughly 13 per cent of people in the UK have some kind of private health insurance.)
Demand for private health policies rose 46 per cent in the first eight months of 2021 compared with the same period pre-pandemic in 2019, according to the health insurance comparison website, Quotezone.
A look into the 2021 half-year results of a publicly-listed healthcare company called Spire shows 46.7 per cent revenue growth on the first half of 2019 for “self-pay” patients – those who pay for private treatment themselves rather than claiming on insurance. That’s a “record” performance.
Industry insiders say the single biggest reason for this change is people stuck on NHS waiting lists and unable to access the treatment they need.
The government denies allegations it is planning to privatise the NHS, citing as evidence its recent decision to raise national insurance payments to help pay to clear the NHS waiting list. Yet the fact it has appointed not one but two former senior bankers to run the institution, one of whom at least (Javid) is ideologically committed to privatisation of public institutions as well as an investor in U.S. private healthcare, hardly inspires confidence.