'Peter Thiel, the billionaire founder of PayPal and US IT giant Palantir' (Alex Wong/Getty Images)

October 27, 2023   8 mins

Everyone has said things that, in hindsight, they regret. For Peter Thiel, the billionaire founder of PayPal and US IT giant Palantir, it might have been his claim this year that the NHS makes people sick. Or that the British people’s love for it is a manifestation of Stockholm syndrome. In Thiel’s case, however, there is no evidence that he regrets what he said, or that there will be consequences for saying it. Because, in spite of his apparent disdain for the NHS, Palantir looks set to win a half-billion pound contract to process our health records.

That a private American company should gain such a foothold in the NHS would normally cause concern among privacy and health service advocates. And that it could be Palantir — part-funded in its early days by the CIA and with Western armies among its clients — is causing high anxiety. “Is Palantir really the kind of company we want at the very heart of the National Health Service?” asks Cori Crider, director of Foxglove, a campaign group dedicated to challenging the excesses of tech giants. “This is a company who, at the start of the pandemic, had no track record of working with healthcare staff. They’re not a healthcare company. They weren’t a health data company. They were essentially a tech company who supported spies, police, the military and border forces.”

Palantir, in partnership with Accenture, is in the running with Quantexa, a British company partnered with IBM, and Oracle Cerner to build the “Federated Data Platform” (FDP), described by the NHS as a system “which will enable NHS organisations to bring together operational data – currently stored in separate systems – to support staff to access the information they need in one safe and secure environment”. NHS England says there are currently no plans to include GP records in the FDP, but privacy campaigners fear that that could change with mission creep, and if it did, Palantir could gain access to them. The winner of the FDP contract was supposed to have been named in September, an announcement then delayed to the middle of this month, and now said to be imminent — but few in the NHS believe it will be anyone but Palantir.

The NHS — budget this year £182 billion — has the largest repository of health data in the world. It services around a million GP appointments a day, and over a quarter of a million hospital appointments. According to consultants Ernst and Young, the information gleaned from NHS activities could be worth £9.6 billion a year. With the advent of AI, mining this treasure trove of data could mean the discovery of better medicines and treatments, improved patient care and vast savings. But in the wrong hands, it could see the NHS being used as a cash-cow, and it could mean a loss of privacy, the end of patient trust, and the slow death of the NHS as we know it.

So, how did Palantir get in the running — and why are they being hotly tipped as a shoo-in for the FDP contract, worth £480m over seven years? The company, named after the crystal “seeing stones” in J.R.R Tolkien’s Lord of the Rings, was founded by Thiel, a Stanford law graduate, in 2003 with the intention in his words of adapting PayPal’s anti-fraud software in order to “reduce terrorism while preserving civil liberties” (he had sold PayPal to eBay for $1.5 billion in October 2002). Before the 9/11 attack on New York, the US intelligence agencies had been blind-sided; Thiel was convinced his seeing stones would give them better vision in the future.

An early investor in Palantir was the CIA, through a venture capital arm named In-Q-Tel. The first of four iterations of Thiel’s data systems — Palantir Gotham — is used by the US National Security Agency, the FBI, the Western military, police, US immigration services and fraud investigators. It is capable of pulling together vast amounts of data and making connections that could solve problems insoluble to mere humans. It is currently being used by the Ukrainian army in its war with Russia.

There have been reports — neither confirmed nor denied by Palantir — that its software helped to locate Osama bin Laden. Former CIA director George Tenet once said he wished the agency had had Gotham before 9/11, the suggestion being that it might have pulled together disparate dots into one large picture of terror plot planning. Another iteration, called Metropolis, is a finance analytics platform widely used by hedge funds and banks. In March 2020, at the onset of the pandemic, executives from major tech companies, including Palantir, Google, Meta and Amazon, were asked by the UK government whether they could help with the planning and implementation of its responses to Covid-19. Palantir immediately stepped in, offering the use of another of its systems, Foundry… for just £1. Its offer was accepted by beleaguered health officials.

Palantir advisers were embedded in the NHS while Foundry was used in planning to effectively distribute medicines, ventilators and vaccines, monitor staff levels and intensive care bed availability — creating the kind of joined-up health response that would not have been previously possible with the UK’s fragmented network of trusts and care providers. Once a vaccine became available, it was involved in its rollout. By the end of the pandemic, Palantir’s £1 punt had paid off.

“A £1 contract seemed odd at the time, but it obviously gave them a foot in the door,” says Dr David Wrigley, digital lead on the BMA’s GP Committee, which has expressed concerns over the use of patients’ data on the FDP. “They will have learned about NHS systems and contracts, seen how the system operates and how best to bid for other contracts going forward.” Palantir’s next move to curry favour with the UK government was to offer its services again, for six months, to help with the logistics of housing Ukrainian refugees following the Russian invasion. But this time it charged nothing whatsoever. The company says it is proud of the role that it played at a time of great suffering for Ukrainian families. But this move did its relationship with the UK, and its long-term income, no harm at all.

Since then, Palantir has been awarded several other NHS contracts worth £60 million, with none going out to tender. Last month, it was awarded £5.5million to continue running Homes for Ukraine over the next 12 months for the Department for Levelling Up, Housing and Communities (DLUHC) — again with no tendering process. The probity of this deal was questioned by the National Audit Office (NAO) in a report published last week. It pointed out that: “In February 2023, the Government’s Chief Commercial Officer, wrote to Palantir noting his concern about the practice of offering services to public sector customers for a zero or nominal cost to gain a commercial foothold, contrary to the principles of public procurement which usually require open competition.” Asked about this criticism, Palantir said there was: “nothing unusual in a business offering a prospective customer the opportunity to trial before purchase. Indeed the Government’s own guidance states that ‘where a service is being outsourced for the first time, a pilot should be run’ and that ‘if you’re buying a product, consider asking for a demonstration or trial on a smaller scale’.”

But a more polemical vision of how Thiel sees British people’s relationship with the NHS was revealed in January when he made some unguarded comments during a Q&A session at the Oxford Union debating society. He said they were suffering from “Stockholm syndrome”, held ideologically captive by their healthcare system, and that the NHS needed “market mechanisms” to improve, adding that: “In theory, you just rip the whole thing from the ground and start over… In practice, you have to somehow make it all backwards compatible in all these ridiculous British ways.” He said British people needed to stop thinking the NHS was “the most wonderful thing in the world” and accept that it is an “iatrogenic” institution. An iatrogenic illness is a malady caused by the treatment itself. “Highways create traffic jams, welfare creates poverty, schools make people dumb, and the NHS makes people sick,” he said.

Palantir quickly distanced itself from his comments. Joanna Peller, the company’s UK health lead, said: “Peter Thiel made these comments as a private individual and our CEO [Alex Karp, at Palantir since 2004] has made it clear he firmly disagrees with them and that he wishes ‘we had a health care system in the US that served the poor and underserved as well as I perceive the British system does’.” Few people in the NHS would argue that its countrywide IT systems couldn’t be improved, but many billions of pounds have been wasted in previous unsuccessful attempts to merge them. At the moment, there are 42 administered by “Integrated Care Systems” comprising hospital trusts, local authorities and care providers.

The first attempt at digitising and uniting records held by GPs and hospital trusts was launched in 2002 and called the National Programme for IT. It began with a budget of £6.2 billion but was mired in technical difficulties and a lack of trust among health staff. It was scrapped in 2011 after racking up £12 billion in costs. One of the private contractors who pulled out of the scheme before it was junked was Accenture, Palantir’s current bidding partner. In 2021 the government launched the General Practice Data for Planning and Research system, designed to enable records to be used for more than simple personal care. Advances in technology meant that the data in them could be used for the same purposes envisaged for the FDP — better care, medicines and healthcare planning.

However, patients were advised that where their data was to be shared for anything beyond care — for research or planning — they had the right to withhold their data under an NHS “National Data Opt-Out”, and they did in their droves. “More than a million people opted out because there was a lack of trust in the system,” says Foxglove’s Crider. “And each time someone opts out, the data set gets smaller and so its usefulness for research is diminished.” Sam Smith, policy lead at medConfidential, which campaigns for patient privacy, says he believes even more people will want to opt-out if Palantir wins the FDP contract. But there is confusion over whether they will be able to. Smith explains:

“The NHS England website says people will not be able to opt out, but this is contradictory because we all have the right to opt out of sharing our personal data if it is to be used for anything other than patient care, for purposes such as research and planning — but that is exactly what FDP is supposed to be used for… Last month, Sir Chris Whitty [chief medical officer for England] urged people not to opt out precisely because their information could help with research and planning. So what is it to be? Can people opt out, or can’t they?”

In a letter to the Health and Social Care Committee in August, Lord Markham, under-secretary of state for health, said the government was considering reforming the National Data Opt-Out. I asked NHS England whether these reforms would make it easier or harder for patients to opt out, but it did not answer the question. On the subject of Palantir and the FDP, a spokesperson said:

“The NHS is conducting a fair and transparent procurement process for a supplier of the federated data platform, in line with public contracts regulations, and this process has not yet concluded… Better use of data brings huge benefits for patients — a federated data platform will ensure more joined-up care and better use of resources, connecting existing NHS data in one secure environment to help speed up diagnosis and reduce waiting times and hospital stays.”

Palantir’s Peller emphasises that patients’ data is safe with the company. “Unlike many other technology companies, we’re not in the business of collecting, mining or selling data,” she says. “What we do is provide tools that help customers understand and organise the information that they hold, along with training and support in using those tools. We are legally defined as the ‘data processor’ while the customer is the ‘data controller’. Customers retain full ownership of their data. Palantir is granted no rights to such data and can only carry out that processing which it is instructed to do by the customer, while UK government customer data is only hosted in the UK.” She says Palantir is “now helping to reduce the care backlog and ensure patients receive vital treatment sooner in 36 NHS Trusts across England”. These are trusts invited (some say pressured) by NHS England to run trials of Foundry, and this is the reason Palantir is considered a shoo-in for the FDP contract — it is too embedded to get out.

However, in response to a written Parliamentary question in March, health minister Will Quince said nine of these had been “paused” while two had been suspended. A variety of reasons were later given, ranging from a lack of funds to administrative delays, and assurances were made in August that some of the paused pilots were up and running again. But at least two — Liverpool Heart & Chest Hospital, and Milton Keynes University Hospital — have indicated that the system wasn’t right for them. I asked NHS England how many of the 36 pilots were currently operational, but received no answer. This only confuses the picture, as Palantir insists they all are.

Whichever company is announced as the provider of the FDP, its success will not only be judged on whether the NHS is finally blessed with the joined-up digital wizardry it so badly needs, but also on whether it manages to provide that and retain the trust of patients. “If a person goes to see their GP and holds back important or embarrassing information because they’re afraid it will be shared with a private company, then that is not only dangerous for the patient, but also very sad,” says the BMA’s Wrigley. “Because that could mean the end of the doctor-patient relationship as we know it.”

Steve Boggan is an investigative journalist and former Chief Reporter at The Independent. He is also the author of Follow the Money and Gold Fever.