Notwithstanding their superficially opposed raisons d’être, the armed forces, also known as ‘the Services’, and the National Health Service, are remarkably similar. Both are huge and complex organisations, charged with providing services vital to our well-being. Yet, for some reason or other, the NHS in England is run on market principles, making use of the so-called purchaser provider split. The armed services have no such split.
NHS Scotland and NHS England are both national health services that provide health care to their respective peoples. NHS England is run on market principles, making use of the so-called purchaser provider split; NHS Scotland has no such split. Indeed, prior to the Hacksaw years, NHS England had no such split.
Clearly, there is nothing sacred, let alone essential, about the use of market forces in the provision national services, be they military or health services. Nor, for that matter, does the Police service have a purchaser-provider split. Meanwhile, in health, there is ample evidence from America, the world leader in market driven health care, that the market system costs more, and delivers less. Those of our public services – notably transport and the utilities – that have seen radical marketisation over recent decades have enjoyed, shall we say, mixed fortunes.
Why, then, have all recent Westminster governments been obsessed with, and enforced, a market system on NHS England? Why is the current Westminster government determined to force through, on top of these existing pro-market changes, a radical bill that will expand existing market molehills into mountainous commerce?
The stock answers are that it is all about choice, no change is not an option, and efficiency. Yet each of these answers is baloney. The ‘choice’ is of the ‘any colour you like, so long as it is black’ variety. NCINAO makes about as much real world sense as its acronym. And efficiency – well, we only have to look at America to see market ‘efficiencies’ in full force.
So it is all a bit odd. There is no need for the reforms, compelling or otherwise. The majority of professional opinion, and much public opinion, are against the reforms. Yet the Tories are determined to force them through. Why?
I like the idea of the split between provider and commissioner in the services. Could we have the various services putting in bids to see who could guard Buck House cheapest? They could do a two-for-one deal. Currently guards regiments alternate between guarding and fighting with a bit of leave and training in between. Maybe the RAF could offer to do it cheaper by contracting out the job to civvies without pensions and without married quarters etc., thus doubling their numbers and being able to guard the queen and fight pointless wars at the same time. By making the maximum number of private troops temps on fixed term contracts, they could do away with R&R in the rear echelons and they could also demand of these temps that they take up post ready-trained at their own expense.
Purchaser Provider Split
my sense is that we have put too much stock on the PP split – it drives up transaction costs and creates perverse incentives. I think we should have an objective analysis of this policy and be brave enough to remove if we can not find evidence for effectiveness.
I prefer to think of a future of intergrated services- with shared budget and activity not based on cost per case. I prefer to think of a situation where we are all responsible for a geographical population – so that GPs, hospitals and community services all work to deliver effective care to their local community – with SHA’s for specialist stuff. Should i dream on?
Clare
There is much hush hush about Southern Cross as it is really the wrong time.
There are people I have talked to that did not want to believe that there is any plot at all. If there is no profit or big salary for the CEOs of private companies, why should they want to bother: kindness or brotherly love (ooops)?
Who is heading for BUPA, UnitedHealth, Circle, Serco…….
Or like William Hague: Abdelbaset al-Megrahi’s release from a Scottish prison almost two years ago on compassionate grounds was “absolutely the wrong thing to do”.
Remember Karol Sikora?
Didn’t many of us say so at the time?
An interesting analogy. Perhaps an extension of this is which army fights better? A volunteer army, a conscripted army or one provided by mercenaries? Commitment to a cause or a belief, forced to fight or fighting for whoever pays best regardless of principle?
If the market idea is so good should we not disband the current volunteer army and just place ads in Soldier of Fortune magazine and thus improve the armed services (and NHS) in one fell swoop?
Clare Gerada is, of course, correct and the Health Committee even agreed with her:
“If reliable figures for the costs of commissioning prove that it is uneconomic and if it does not begin to improve soon, after 20 years of costly failure, the purchaser/provider split may need to be abolished.”
Put the government out to private tender!!!
Yoav – you may be more right than we know. If the Tories, and indeed the other parties are in thrall to big business (think Murdoch for starters) then to the extent that they are in thrall, they are big business. In the same way, opening up the NHS internal market to the wider external market plays to the same tune.
Dr No’s primary concern over recent months has been to oppose what he sees as the NHS (Wrecking) Bill, chiefly with the aim of getting it not amended, but scrapped. He was in the ‘no bill is better than a bad bill’ camp.
He was also mindful of the need to provide ‘an alternative’, if only to satisfy the political urge to do, and to be seen to be doing, something. But despite long hours of contemplation he kept on drawing blanks…
Until recently, when he realised he had not allowed himself to think outside the internal market box, which he had unthinkingly assumed was a given. But of course it is not: we are surrounded by many services that are effectively provided without any market games at all. If they can work, as they do, without a purchaser provider split, why can’t NHS England?
The answer is it could – given the political will. Dr No doesn’t for a moment expect the Tories to abandon their fundamental belief in the power of markets, but he does think there are powerful and coherent arguments (beyond the ‘others can do it so why can’t we’ one) to be levelled against the market system.
The first and perhaps most obvious one is the oft-quoted problem of transaction costs: if they exceed the savings, then the market idea is dead in the water: it fails by its own efficiency criteria. Then there are problems with perverse incentives (Payment by Results encouraging futile activity simply because ‘it pays’), equity (cream-skimming, two-tier systems) – the list is long (even if the evidence, surprisingly, is on the short side: what there is tends to show that the gunpowder of the market is rather damper than its proponents claim).
These arguments are largely economic in nature, and so inevitably tend to ignore other factors beyond the reach of the economist’s callipers. Chief among these other factors is the motivation, the driving force, behind those who work in the NHS. Dr No thinks that, in the main, it is fair to say that most NHS staff are more vocationally than financially motivated (which is not to say they don’t care about decent pay – of course they do, but it is not their primary driver): they do what they do because they believe in what they do: it is their calling, even their duty, so to do.
The trouble with markets is that grubby commerce soon rides rough-shod over notions of calling and duty. The natural good will and intent of the people is subjugated, dismissed and trampled under the accountant’s boot. And so it is that the market drives away one of the, if not the most potent forces for the betterment of the NHS. The cost to the NHS, and to all of us as patients, is beyond any economist’s or accountant’s measure.
Nelson knew how to get the best out of his people. He talked of his officers as his band of brothers, and as he sailed towards the Combined Fleet at Trafalgar, it was not to the crude lure of prize money that he appealed, but to a higher confidence that every man would do his duty. That is how you win battles; and it is how we could set about bettering the NHS – if only we could get rid of the wasteful distraction of the internal market.
Expertly worded as always Dr no. If I had your power of expression I think I might have got the message across 2 years ago when I started trying to explain the absurdity of the PPS. Hopefully you’ll raise awareness enough to shake a few people out of their stupor. Part of the problem is that the dominant culture is one of markets and consumerism which means imagining an alternitive is a considerable conceptual leap, like trying to imagine living in monochrome or without government or linear time, it’s a step too far for the average political brain, softened by real-politics and too long on the greasy pole.
The economic arguments are good, while medicos say “it’s care that’s important” ultimately politicos look at how much it costs. Prove to them that their daft idea is not saving then they will listen to the other arguments. But, there are some flies in this gooey ointment…
The first is soc ents. The whole “flog off the NHS” ideology is more to do with government washing its hands off of the responsibility than anything else. face it, we always elect lazy good-for-nothings that simply do not want to run the country. The current lot are particularly lazy with Lansley wanting to hand 97% of his job over to the National Commissioning Board. He doesn’t want to privatise the NHS because he thinks he can get something for it, it is because he wants someone else to have the problem of the system that he is showing he’s incapable of running.
Those nice cuddly, sweater and sandal wearing voluntary groups would do just as good as private companies to get the responsibility of the NHS away from government, and better, when they fail, who will notice when they’re gone? The AQP policy is littered with talk of soc ents and mutuals. So is the open public services white paper (sorry, I have to do that on the mention of *that* white paper, for superstitious reasons).
With soc ents you lose part of the argument: you cannot argue that funds that should go into healthcare is going into the pockets of shareholders. People *like* soc ents; they make coffee and dangley earrings. Ed Miliband likes soc ents: he was the first minister of the third sector and created much of the legislation. Good luck in changing his mind. If private companies are smart they can partner with a soc ent so that it appears that the service is being delivered by the soc ent but potloads of cash still go into the pockets of shareholders.
The other issue is co-pay whether overt or by proxy. If someone uses the private sector (or a charity paid by the charity funds) then they are no longer part of the economics of the NHS. It is vital, therefore, that any economic argument keeps in mind the relative amounts of healthcare paid for by the NHS, privately, or through charity. Similarly, the economic arguments start to be pointless if we get overt co-pay for GP visits, a nicer bed in the hospital, or that other chemo drug that won’t make you feel quite so sick.
So I am all for using economic arguments against Lansley’s nasty policies, but they have to take into account all of the issues.
My crafted humorous comment got removed by the server. Here it is again:
“The AQP policy is littered with talk of soc ents and mutuals. So is the open public services white paper **spit** (sorry, I have to do that on the mention of *that* white paper, for superstitious reasons).”
THe language of health care will not be a about patients and caring but about customers, aquisiitions, mergers, risk pooling, stop-loss insurance and the like. There will be a need for actuaries and accountants rather than health service managers and clinicians. Or am i being too pessimistic?
This is interesting.The ‘Services’ are literally providing a great service to the country. We must encourage and support these sorts of groups and communities in all possible ways. The growth of communities like these will assure the development and progress of the country.
~~~~~~~~~~~~~~~
Outlook Settings
~~~~~~~~~~~~~~~