GE Healthcare: US healthcare giant makes fortune from NHS but pays hardly a penny in tax

GE division makes millions in sales to health service, and is net beneficiary from UK Exchequer

There have been calls to ban NHS providers who are not paying tax Rex

One of the biggest suppliers of equipment and testing services to the NHS pays barely any corporate tax in the UK, despite receiving hundreds of millions of pounds a year from medical sales to British clinics and hospitals.

A study of GE Healthcare’s accounts by The Independent suggests it has received more money back in tax benefits over the past 12 years than it has paid in, with the taxpayer appearing to be missing out on millions of pounds a year in lost revenues.

The company has been headquartered in Buckinghamshire since 2003 when its vast US owner, General Electric, bought the British multinational medical firm Nycomed Amersham. It makes scanners and other equipment used in areas such as oncology and heart disease.

Nycomed Amersham typically used to pay up to £8m in corporation tax to the Exchequer every year, plus £50m to £90m more abroad. But in the 12 years since its takeover by GE, the UK divisions examined by The Independent made a total net gain of £1.6m in benefits from the taxman.

GE is notorious in the US for avoiding taxes. News of its tax situation here will inevitably lead to questions about its success in winning contracts from the publicly funded NHS, which is struggling to find savings of £22bn. 

Gail Cartmail, the assistant general secretary of the union Unite, said: “The NHS is under massive financial strain: the tax contribution we all make is vital to the health of the nation. It’s a national disgrace that private companies which profit from our health service can get away with having tax avoidance structures in place.”

The straitened state of the NHS has clearly not been lost on GE. In its most recent set of accounts, its GE Medical Systems division noted “the general economic and political conditions in the UK continue to make it challenging to increase the present level of trading activity”.

That statement was made alongside accounts which showed the division paid zero corporate tax.

Since buying Nycomed Amersham, GE appears to have put much of the British operation into an interlinked web of UK companies all ultimately owned by a holding company in the low-tax Netherlands. Over the years, big dividends and loans have been paid from one GE Healthcare company to another, which may have reduced its tax bill.

In the most recent accounts, only one of the seven GE Healthcare companies in the UK scrutinised by The Independent paid any corporation tax – a tiny £250,000, or 1.7 per cent of its £14.3m profit.

The full tax affairs of GE Healthcare’s global business since it bought Nycomed Amersham are impossible to gauge due to the way the group’s various companies’ accounts are filed. On 22 January, GE’s full-year accounts showed healthcare profits globally were $2.8bn (£2bn) in 2015. The parent company GE, whose businesses range from lightbulbs to wind turbines, has been widely criticised in the US for its aggressive tax avoidance. One of the world’s biggest companies, it structures itself to maximise the amount of money it makes and holds in lower-tax overseas countries.

It was notorious for tax avoidance long before the spotlight fell on Apple, Starbucks and Amazon. A New York Times investigation in 2011 revealed how, through a mixture of aggressive tax structures and lobbying for tax breaks, GE was paying hardly any tax in the US. That year, far from paying tax on the $5.1bn in profit it made, it received a tax benefit of $3.2bn.

This month it announced it was moving its global HQ from its Connecticut home of more than 40 years to Boston after cash-strapped Connecticut closed corporate tax loopholes in the state. GE said it had been considering the move before the tax rise but the state’s clampdown is reported to have hastened its departure.

Its UK healthcare division carries out large numbers of contracts for the NHS, and in 2012 was criticised after accidentally sending personal medical files on 600,000 patients to the US, in breach of data protection laws.

Dave Prentis, the general secretary of the union Unison, said: “Companies that make healthy profits from selling to the NHS, yet pay minuscule amounts of tax, ought to hang their heads in shame. Nurses, midwives and other healthcare workers struggling to make ends meet would probably like to have years where they could pay zero tax, but that’s not a choice open to them.

“NHS staff are angry at companies that would rather pay profits to shareholders than the right level of taxes.”

He called for NHS providers to be excluded if they appear to be avoiding UK taxes.

In a statement, GE said: “GE Healthcare pays the taxes it owes in every country where we operate.” It added that it had invested more than £500m in research and development in the UK in the past 10 years and had recently opened a multi-million pound “innovation village” in Cardiff to support life sciences businesses. The GE group as a whole employs 22,000 people in the UK.

The Independent was prompted to look at GE’s UK-based healthcare taxes after it announced plans this month to move its global base from Amersham to the US. Although this is not expected to lead to substantial job losses, it will be mourned locally. 

The company has been based in Amersham since the 1940s and was built to process radium confiscated from a German shipment. The lab’s radioactive expertise has made it a world-leader in creating markers used in medical scanning. 

NHS contracts won last year include a £30m deal to supply X-ray archives to medics using cloud computing.In a statement, GE said: “GE Healthcare pays the taxes it owes in every country where we operate.” It added that it had invested more than £500m in research and development in the UK in the past 10 years and had recently opened a multi-million pound “innovation village” in Cardiff to support life sciences businesses. The GE group as a whole employs 22,000 people in the UK.

The Independent was prompted to look at GE’s UK-based healthcare taxes after it announced plans this month to move its global base from Amersham to the US. Although this is not expected to lead to substantial job losses, it will be mourned locally. 

The company has been based in Amersham since the 1940s and was built to process radium confiscated from a German shipment. The lab’s radioactive expertise has made it a world-leader in creating markers used in medical scanning. 

NHS contracts won last year include a £30m deal to supply X-ray archives to medics using cloud computing.

• Jim Armitage City Editor 
• @ArmitageJim 
• 
  

http://www.independent.co.uk/life-style/health-and-families/health-news/ge-healthcare-us-healthcare-giant-makes-fortune-from-nhs-but-pays-hardly-a-penny-in-tax-a6828446.html

Walk out by Junior Doctors at Charing Cross Hospital

Check the Fulham Chronicle link here:

http://www.fulham-chronicle.co.uk/article.cfm?id=100360&headline=FULHAM:%20Junior%20doctors%27%20walk%20out&sectionIs=news&searchyear=2016

NHS funding is falling behind European neighbours' average, research finds

King’s Fund study ranks UK 13th out of 15 original EU members and casts doubt on ministers’ claims they are giving the NHS generous cash settlements.

NHS workers protesting at the Conservative party conference in Manchester last October. Photograph: Christopher Furlong/Getty Images

Britain’s spending on its health service is falling by international standards and, by 2020, will be £43bn less a year than the average spent by its European neighbours, according to research by the King’s Fund.

The UK is devoting a diminishing proportion of GDP in health and is now a lowly 13th out of the original 15 EU members in terms of investment, an analysis for the Guardian by the thinktank’s chief economist shows.

Prof John Appleby also found that the government’s decision to increase the NHS’s budget by far less than the anticipated growth in GDP meant the service would miss out on what would have been an extra £16bn by 2020.

Ministers highlight that they are giving the NHS in England an increasing share of overall government spending, ringfencing its budget and handing it annual increases totalling £8.4bn in real terms by 2020-21, despite very tight public finances.

But the King’s Fund figures have cast doubt on ministers’ repeated claims that they are giving the NHS generous cash settlements. Critics argue that Britain is becoming “the sick person of Europe” in terms of health spending because the sector receives one of the lowest levels of investment compared with many European countries, such as France and Germany.

Appleby warns that Britain’s status as an increasingly “low spender” might mean the NHS cannot deliver improvements in the quality of care and outcomes from treatment that patients want.

“No amount of spin from ministers can disguise the fact that this decade is set to be marked by the longest and deepest squeeze on NHS finances in a generation. Our country is increasingly looking like the sick person of Europe, with spending on health falling far behind other neighbouring countries,” said Heidi Alexander, the shadow health secretary.

“This squeeze on health spending is bad for the NHS and it is bad for patients. It is clear that our health service is going to need much more money than this government is prepared to spend.” 

That health spending as a proportion of GDP has been “slipping backwards” means Britain is now behind Finland and Slovenia on that measure, according to a league table of the Organisation for Economic Cooperation and Development’s 34 member countries, Appleby added.

“This is equivalent to around £7bn in real terms, increasing from £135bn in 2014-15 to £142bn in 2020-21. But if spending kept pace with growth in the economy, by 2020-21 the UK NHS would be spending around £158bn at today’s prices – £16bn more than planned.”In an article for the King’s Fund detailing his findings, Appleby writes: “UK GDP is forecast to grow in real terms by around 15.2% between 2014-15 and 2020-21. But on current plans, UK NHS spending will grow by much less – 5.2%.

“This is equivalent to around £7bn in real terms, increasing from £135bn in 2014-15 to £142bn in 2020-21. But if spending kept pace with growth in the economy, by 2020-21 the UK NHS would be spending around £158bn at today’s prices – £16bn more than planned.”

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The latest OECD data shows that the UK spent 8.5% of its total GDP on healthcare in 2013, though that includes a small amount of private spending, such as private medical insurance. “This placed the UK 13th out of the original 15 countries of the EU and 1.7 percentage points lower than the EU-14’s level,” Appleby said, referring to the EU 15 without the UK.

“If we were to close this gap solely by increasing NHS spending, and assuming that health spending in other UK countries was in line with the 2015 spending review plans for England, by 2020-21 it would take an increase of 30% – £43bn – in real terms to match the EU-14’s level of spend in 2013, taking total NHS spending to £185bn.”

The result of failing to keep pace with international health spending is that the gap has started to widen between Britain and many of its neighbours.

“Whatever the flaws of international comparisons, it’s clear that the UK is currently a relatively low spender on healthcare, with a prospect of sinking further down the international league tables,” Appleby said.

When he was prime minister in 2000, Tony Blair promised to increase health spending to the then EU average of 8.5% of GDP, a pledge Labour fulfilled under Gordon Brown in 2009.

However, given the huge sums thrown up by both Appleby’s calculations, Alexander refused to say whether Labour would commit to increasing health spending to either the EU average, which is now 10.1%, or as a proportionate share of rising GDP.

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Norman Lamb, a Liberal Democrat health minister in the coalition until last May, said the Office for Budget Responsibility had recently acknowledged that the NHS in England would receive a falling percentage of national income until 2020.

Lamb said: “These new figure show why we can’t just keep sleepwalking into a disaster. The NHS and care systems will crash if we carry on as we are because the current amount [going into the NHS] is not enough and everyone in the NHS knows it.”

Stephen Dorrell, the ex-Conservative health secretary who is now the chair of the NHS Confederation, said he suspected ministers would give the NHS in England more than the promised £10bn before 2020 and that funding would grow again, by somewhere between £16bn and £43bn, soon after 2020.He called for political parties and others to join in a “national conversation” on how much money the health and social care systems would need in coming years, given the ageing population, and how it should be paid for.

Ministers declined to comment on Appleby’s figures. The Department of Health said it was giving the NHS the extra money that its chief executive, Simon Stevens, had said it needed by 2020 in order to keep providing good care while also changing how services operate.

“Rather than there being a political decision about levels of spending on healthcare, for the first time ever, the NHS said collectively in the Five Year Forward View what it needed for the future to transform services for patients,” a spokesman said.

“We’re meeting our side of the bargain, with £10bn more from a strong economy, raising the NHS budget to the highest level in its history and increasing spending every year. We will also ensure the NHS gives good value for taxpayers.”

Denis Campbell Health policy editor

Wednesday 20 January 2016 22.00 GMT                                                                                     http://www.theguardian.com/society/2016/jan/20/nhs-funding-falling-behind-european-neighbours-kings-fund-research

Striking for patient safety and 'survival of the NHS'

Check the link here:

http://www.getwestlondon.co.uk/news/west-london-news/junior-doctors-strike-choir-joins-10722563

Medics & Mansfield - Fighting to keep us safe

​SOH Supporter and striking junior doctors outside CX. Massive support from public who know this is about patient safety.  Next planned strike days 26th - 28th January.

First SOH stall of the year Sat 16th Jan 2 - 4pm Lyric Square  King St

We'll have a new leaflet updating people on the doctors and nurses' disputes locally and the findings of the  Mansfield  Commission into Shaping a Healthier Future's cuts and closures programme. Join us for an hour or two if you can - hot chocolate afterwards.

Scrutiny of the Mansfield  Report Tues 19th Jan 7pm Courtyard Room Hammersmith Town Hall

The Policy and Accountability Committee may not sound fascinating (& that's the short title) but it's where NHS bosses will be questioned about the closures plans in the light of Mansfield. Public are welcome!

HealthWatch Forum on the Community Independence Service Wed 20^th Jan 2 - 4.30pm Monk's Room, St James the Less Church Moreton SW1V 2PS  Register here

SOH Stall outside CX Hospital Thurs 21st Jan 12 - 2 

We'll be leafleting CX with our new leaflet updating patients, staff and visitors on Mansfield and the doctors and nurses disputes. Come if you can.

Mayoral Hustings Wed 3rd Feb 6.30pm Royal Geographic Society Exhibition Rd

The election for London's mayor is a golden opportunity to build support for the campaign to save CX Hospital and push candidates to take a clear policy opposing the closure. We want lots of questions about CX at the hustings in Kensington so please submit some and attend if you can. 
LONDON MAYORAL HUSTINGS - London Evening Standard.

Regards,

Anne Drinkell(SOH secretary)

How YOU can support the junior doctors

As the BMA announce the first 'emergency care only' doctors strike in the NHS's history - your junior doctors need YOU.

Image: Flickr/Garry Knight

Junior Doctors across England are set to commence industrial action on Tuesday 12th January. We are opposing this government’s attempt to impose an unsafe new contract on the medical profession. It is our view that the proposed contract represents an existential danger to the NHS as an institution.

You may be aware that the BMA had initially suspended its planned industrial action at the start of December and returned to talks with the Department of Health. That decision was made in good faith. However, over the last few weeks, in the course of negotiations with Government we have encountered only intransigence. It is clear that the government perceives our contract issue as pivotal for its attempt to “reform” the NHS towards a neoliberal, commercialised system.

It is therefore evident to us that we have no choice but to transform our 98% ballot mandate into action.

The developments of the next few months will have consequences stretching far into the future. This government is wilfully putting at risk our patients' safety, the tolerability of our working lives as NHS workers and the very viability of the NHS as a publicly-funded, publicly-provided service.

Why we need YOU 

The coming period will be the ultimate test of the BMA’s resolve as a Union. However, we remain mindful of the fact that the BMA is not an abstract entity operating in isolation from wider political developments. There is no way that we can win this on our own. We need all concerned citizens, activists and trade unionists to stand alongside us in this fight.

Over the last few months we have been in dialogue with many trade unionists throughout the country and we have been enormously grateful for their support both at a local and national level. The public messages of support from our allied health worker colleagues, the firefighters, the teaching unions and the TUC and TUCG unions have galvanised junior doctors.

We are therefore well aware that all eyes are upon us and that the institutions which represent the wider working class stand with us in solidarity.

We are in no doubt that Osborne, Cameron and Hunt will use the proposed doctor’s contract as a tool for achieving the destruction of safe terms and conditions throughout the NHS and throughout the public sector. The Conservative Party is attempting to stretch the NHS into an ostensibly 7-day elective service whilst simultaneously launching the biggest assault on NHS resources in its history. The politics of austerity represents a clear and present danger to the nation’s health.

A victory for the Junior Doctors would signify the first real crack in the entire edifice of austerity in the UK.

Please stand with us. And when you need us, ask us. We will stand by you.

Invitation to attend our pickets

On behalf of the entire BMA we thank you all for your incredible support so far. Many of you will have seen the details with regards to the planned action and I will reiterate them below. We invite you to come out and display your visible support for us on the days of action.

·        The action will begin with an emergency care-only model, which would see junior doctors provide the same level of service that happens in their given specialty, hospital or GP practice on Christmas Day. It will then escalate to full walk-outs. The action as proposed is:

Emergency care only — 24 hrs from 8am Tuesday 12 January to 8am Wednesday 13 January

Emergency care only — 48 hrs from 8am Tuesday 26th January to 8am Thursday 28 January

Full withdrawal of labour — from 8am to 5pm Wednesday 10th February

·        The aim is to picket all major hospitals in England on all three days of proposed action. Pickets will be in the vicinity of the main entrances and will start at 8am, continuing until at least 12.30pm (see map of already planned pickets here). However, many picket sites will continue into the evening, especially at the larger hospitals.

·        Along with the pickets there will be parallel “Meet the Doctors” events at nearby transport stops or public spaces. We will direct you to these events from the picket.

·        Please turn up on the days of action, and give us your support. We will then inform you if other local events are planned on the day. If you are an allied health worker, trade unionist or campaigner please do consider bringing along the banner representing your organisation, your working uniform or similar. We would appreciate it however if banners in explicit endorsement of specific political parties are not displayed and that any selling of campaign literature such as newspapers is relatively discreet.

·        On the days of action, please do debate us, educate us and invite us to address your colleagues in your workplace or trade union branch.

Not just doctors

I would also like to take this opportunity to remind you of another important upcoming date. On Saturday 9th January student nurses, midwives and allied health workers will be marching in opposition to Government plans to scrap the NHS student bursary. The protest will assemble outside St Thomas’s hospital at midday and proceed to Downing St. The BMA will be marching alongside the nursing students and we hope to see you there!

Just as the social democratic consensus in this country began with the inception of the NHS in 1948 so too will the NHS be the site of Britain’s last stand against the all-consuming forces of austerity.

Solidarity is the antidote to the cynicism of those in power. Now is the time to stand together in a common defence of the NHS. If not now, when?

Dr Yiannis Gourtsoyannis is a member of the BMA Junior Doctors Committee Executive, and a doctor of infectious medicine at a major London teaching hospital.

DR YANNIS GOURTSOYANNIS 5 January 2016

https://www.opendemocracy.net/ournhs/dr-yannis-gourtsoyannis/your-junior-doctors-need-you#.Vow5-vn5yo0.email

NHS hospital bosses given pay rises worth more than a nurse's annual salary

Some hospital chief executives have been given pay rises of up to £35,000

NHS hospital chief executives have been handed pay rises of up to £35,000, with the highest annual earnings reaching a record £340,000, a Daily Telegraph investigation has found.

Despite government pledges that the most senior NHS managers would have their pay frozen, 40 per cent of trusts increased executives’ wages by at least £5,000 during 2014-15.

Some managers’ earnings rose by almost a quarter, the findings from more than 200 NHS trust boards show. Patients’ groups accused the NHS of “scandalous excesses” at a time when the health service is facing the greatest financial crisis in its history.

“Nursing staff have been repeatedly told that there isn’t enough money to improve their pay, even after years of pay restraint. To learn that many senior NHS staff are enjoying pay rises and bonuses while nurses struggle to make ends meet is immensely demoralising.”

Janet Davies, chief executive of the Royal College of Nursing

The head of the Royal College of Nursing said it was “immensely demoralising” to find that some executives had been awarded rises larger than a full year’s salary for the average nurse.

The highest individual increase of £35,000 went to Sir Andrew Morris, at Frimley Health NHS Foundation Trust in Surrey, taking his earnings to £215,000. The 19 per cent rise followed a takeover of another nearby NHS trust. The finance director, Martin Sykes, also received a 19 per cent, or £25,000, increase in his earnings taking them to £155,000. Nicola Ranger, the director of nursing, enjoyed a 23 per cent boost, taking her earnings to £135,000.

Simon Barber, chief executive of 5 Boroughs Partnership trust in the North West, was paid £200,000 during 2014-15 – a rise of £25,000 thanks to a pay bonus.

David Sloman, chief executive of the Royal Free London Foundation Trust received a £20,000 rise, taking his earnings to £240,000. And Lewisham and Greenwich trust in south-east London awarded £20,000 pay rises to its chief executive, Tim Higgingson, whose salary rose to £195,000, and to its director of nursing, Claire Champion, boosting her earnings to £150,000.

In total, 40 per cent of boards made at least one pay rise of between £5,000 and £15,000.

At least 10 senior managers received rises of at least £20,000, according to the analysis by the Telegraph.

Because trust boards do not publish precise pay figures, the lowest point of published ranges was used for all calculations, leaving a £5,000 margin.

Dr Tracey Batten

The highest overall package went to Dr Tracey Batten, the chief executive of Imperial College Healthcare, who was paid £290,000 plus a £50,000 relocation payment to move from Australia.

Several of those with the highest earnings left the NHS in recent months. The second highest earner overall was Peter Morris, the chief executive of Barts Health trust, on £275,000 until he resigned in February amid a growing financial crisis. The trust is now facing a deficit of £135 million, the largest any trust has ever had.

Another of the highest earners, Dr Keith McNichol, who came from Australia to run Addenbrooke’s Hospital, resigned in September — just before a damning inspection report saw the trust plunged into special measures. A salary of at least £260,000 made him the fourth best paid chief executive.

Tim Smart, who earned £255,000 a year as chief executive of Kings College Hospital Foundation Trust, announced his retirement in April, just after an inspection which later saw the trust rated as “requiring improvement”.

Katherine Murphy, the chief executive of the Patients Association, said she was concerned that the NHS had developed a culture of “rewards for failure” with many of the highest salaries paid to chief executives who had left as serious problems emerged.

In March 2014, the Treasury promised most public sector workers a rise of one per cent in 2014-15, but said the most senior managers would see pay frozen, amid efforts to put the nation’s finances on a sustainable footing.

The NHS is facing the worst financial crisis in its history, with three quarters of trusts forecasting deficits, which are expected to reach £2.2  billion across the service by March.

The vast majority of overspending has been fuelled by a reliance on agency doctors and nurses, some on rates of more than £3,500 a day. Hospitals are also struggling to cope with rising demand from an ageing population.

Janet Davies, chief executive of the Royal College of Nursing, said: “Nursing staff have been repeatedly told that there isn’t enough money to improve their pay, even after years of pay restraint. To learn that many senior NHS staff are enjoying pay rises and bonuses while nurses struggle to make ends meet is immensely demoralising.”

The trusts with the most highly paid chief executives defended the sums paid, saying they were among the largest trusts in the country, with rates in line with those for similar roles in other NHS organisations.

A spokesman for Frimley Health said: “Recent salary adjustments in executive pay at Frimley Health were a reflection of the added responsibility associated with the acquisition of Heatherwood and Wexham Park Hospitals NHS Foundation Trust. These were independently assessed by the Hay Group and set by a committee of non-executive directors.”

When Frimley Park took over Heatherwood and Wexham Park Hospitals the trust doubled in terms of staff, infrastructure, and patient numbers.

The 5 Boroughs Partnership NHS Foundation Trust said its chief executive had received a 1 per cent pay increase, plus a performance-related bonus which recognised that the trust had achieved quality and financial targets.

A spokesman for the Royal Free said it became one of the largest trusts in the country after taking over Barnet and Chase Farm hospitals in July 2014.

It said pay was agreed by a committee of non-executive directors based on value for money.

Lewisham and Greenwich trust said salaries were reviewed after a hospital merger, with the director of nursing taking on added responsibility as deputy executive.

By Laura Donnelly, Health Editor

12:42AM GMT 02 Jan 2016

http://www.telegraph.co.uk/news/health/12077917/NHS-hospital-bosses-given-pay-rises-worth-more-than-a-nurses-annual-salary.html?utm_content=buffer91aca&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer