The Health Secretary’s career is on life support after a vicious assault in the pages of the Times. Rachel Sylvester (behind the paywall) is the conduit for some pretty incendiary briefing from inside Number 10. According to a Number 10 person, for his botched handling of NHS reforms the health secretary “should be taken out and shot,” apparently. Which is charming.
There are conflicting signals about what the Prime Minister’s intentions really are. Someone well-plugged in told me last week that Lansley was “a dead-man walking,” another a few days later that Cameron would stick with him as he still, after everything, feels loyal towards him. He wouldn’t want to go for a major re-shuffle unless he absolutely had to.
Andrew Lansley must be feeling as though last week’s anti-Goodwin energy is now being channelled in his direction. I am not defending his stewardship of the NHS. I can no longer work out what the government is actually trying to achieve on health, other than aiming to make the subject go away so the voters don’t notice. But the Prime Minister should share any blame.
Something quite basic went wrong with David Cameron’s handling of health reform. He campaigned in the election on leaving the NHS alone (an understandable mistake when he was hunting for votes). The problem is that particularly in a time of scarce resources, marketisation becomes even more important.
I know people don’t want to hear it. But if you want those scarce resources to go further you need to drive productivity improvement. The best motive known to man for doing this is the profit motive. Imploring people to improve and setting targets centrally or locally is not much use. That doesn’t mean dismantling the free at the point of use principle, but it does mean creating diversity of provision and giving purchasers, in this case GPs, incentives. This is what Tony Blair came to understand, but Gordon Brown never did.
I have never seen why wedding oneself to a collectivist model, which has inefficiency inbuilt, makes us more caring. But it is decreed by the British consensus to be so. Continental Europeans, who do things differently, would think we’re mad.
David Cameron – who understands health policy very well and who cares about the NHS – knows all this. It is baffling that he allowed Lansley to get to this point.
After the election the PM sanctioned a bill, despite promising not to introduce more NHS reorganisation. The bill seems to have had very little scrutiny in Number 10, with the rest of the cabinet either busy or bemused. All Lansley knew was that Cameron said he was terrific (his man to reform the NHS) and that he should charge ahead.
Once the bill subsequently got into trouble, Cameron then announced a pause. The Lib Dems – who had signed up to the bill, it seems without reading it – objected to the markestisation. The only important part of the bill, which was the establishment of health regulator Monitor as an economic regulator to enforce competition, was then so watered down that it was all but scrapped.
What is left is a confusing shambles of a bill and a health secretary who has every right to feel abandoned by his boss. More importantly, those who work in and use the NHS are also pretty confused.
What was David Cameron thinking? I pose the question not to be rude, but because I don’t know the answer and wonder if anyone does.
Could you provide links to whatever research papers you are citing when you say that the only way to improve NHS productivity is marketization? I’m sure you wouldn’t make a claim like that without plenty of convincing evidence.
Excellent analysis. This failure started before the election and has been a failure of communication between the different parties all along. Any Brownie NHS points gained have now been lost and a basic tenet of detoxification rendered invalid. I agree that Cameron has to take part of the blame.
James, sorry for delay. Just seen this. Historical evidence that marketisation drives productivity improvement via consumer choice, because the requirement to compete spurs innovation? The food industry, restaurants, shipping, the manufacture and sale of clothing, publishing, newspapers, cars, airlines, the music industry before it got complacent and faced new competition. Oh and Silicon Valley and the birth of Apple, Microsoft and Facebook.
“The best motive known to man for doing this is the profit motive.”
That shows a fundamental ignorance of markets and healthcare. Competition and marketisation will drive down costs when you are talking about consumer items, but there is an important and vital part to this: it has to be easy to enter *and* exit the market. The weaker providers have to fail and be removed. This CANNOT happen in healthcare because continuity of care is vital. When a provider fails their patients suffer, no one who understands healthcare will allow this to happen. Look at Southern Cross. If the market had worked in Southern Cross there should have been 30,000 elderly residents thrown out of care homes. We accept that health and social care is different to consumer markets and quite rightly we regulate and we use risk pooling: all things that are the antithesis of markets.
Sadly, Lansley has learned late that this is the case. Look at the weak way that he tried and failed to persuade the cosmetic surgery clinics to replace substandard PiP implants. We will see lots more of that in the NHS under this Bill. The market leads to quality as low as people will accept it. In healthcare we can never accept falling quality, so markets can never work in healthcare.
Late in the day Lansley has provided a failure regime that will bail out private providers: they will not be allowed to fail. Lansley has even suggested that as a provider starts to fail they can be paid more – this is rewarding failure. The whole thing is a complete mess, and it is a mess because markets do not work in healthcare.
(As to your European comments – a few years back the Norwegians nationalised their healthcare service when they found that marketisation failed, and the Dutch are now having such severe problems with their market that steps are being taken to remove much of the market there too.)
You are worried about scarce resources? Then beef up NICE. NICE is evidence based, it gives dispassionate pronouncements on what works and what doesn’t. It is vital to keep costs down. What was one of the first things Lansley did? He said that GPs decide, not NICE. Fundamental flaw.
Thanks Richard. Quite a claim. Markets do not work in healthcare? You really think greater competition and patient choice don’t work? What about Belgium or France? And you seem to be claiming that risk-pooling is a state concept. That’s nonsense. It’s a pillar of the insurance industry (a market) and of how super-markets and large retailers run their supply-chains.
“Could you provide links to whatever research papers you are citing when you say that the only way to improve NHS productivity is marketization?”
Tim Worstall has a good, short rationale: http://timworstall.com/2012/02/06/err-yes-this-is-the-point/
Actually, Iain Martin’s above is shorter, and quite right. I ought to have said “another good, cogent rationale”.
“The weaker providers have to fail and be removed. This CANNOT happen in healthcare because continuity of care is vital. When a provider fails their patients suffer, no one who understands healthcare will allow this to happen.”
If they are weaker providers, isn’t it in the interests of *the patients* that they be removed from their (failing) care?
Healthcare is emotive because it might involve rapid life and death. Let’s take a less emotive example: schools. (It’s only slightly less emotive.) The Statist argument seems to be that with state monopoly in education, if I just happen to live in the catchment area of a poor, or even failing school (and believe me, parents know these things, through a wonderful gossip network) I *must*, absolutely *must*, keep my children in that school. The fancy is that I can somehow work, lobby or otherwise agitate for that school to become better, thus improving everyone’s lot. Or, I can do what many have done in the past: move house. What I must not do, is simply select the school I think will do best. That’s ridiculous. It’s even sillier when the Internet allows us to exchange information about absolutely everything.
The idea that NICE is “evidence-based” is laughable. It is the sharp end of an inefficient, crippingly expensive, collectivised rationing system called the NHS. If it were such a marvellous model it would have been copied by countries such as France, Germany and Sweden (it hasn’t); and we would have a National Food Service too (we don’t).
Martin, you know how markets work. It is an absolute requirement that there is ease of entry and of exit of providers. Without that, you do not have a market. My claim that “markets do not work in healthcare” is for an equitable, single payer system. If you want a market then you have to drop one or the other of those two aspects (or both). As to bringing up France and Germany, well the French system is bankrupt and the Germany system is not much better (one insurance provider was teetering on bankruptcy last year, I have not kept up to date about it). And, of course, both spend more as a %age of GDP (and per capita) than we do.
Risk pooling is absolutely a state concept. As a diabetic I am excluded from most insurance policies (I know from experience: the policies I have always say “pre-existing conditions are excluded” no risk pooling there). NHS risk pooling covers *everyone*.
CHF “If they are weaker providers, isn’t it in the interests of *the patients* that they be removed from their (failing) care?”
As I mentioned continuity of care is the most important aspect which is why providers cannot be allowed to fail: that is why we have regulation. This is one of the big problems with the Bill. For example the Bill says that failing providers can be paid more than non-failing providers. That is rewarding failure! This is not a market. (And please keep to the subject: I was talking about healthcare; next you’ll argue that competition between arms manufacturers or greengrocers are relevant to the discussion.)
Commentator: yes NICE is evidence based. Their decisions are always backed up with peer reviewed research. This is the only way to provide care – pay for treatments that actually work. So you think that a policy is only good if other countries do it too: will you now argue that we join the Euro, I mean, the majority of Europe has so (according to your logic) it must be good!