If markets aren’t the answer to NHS reform, what is?

I’ve been very critical of attempts to introduce competition and markets into the NHS. I don’t think competition can work, and I’m not sure we should be treating healthcare as just another thing for sale. But if we aren’t going to use competition to improve healthcare, then what should we do instead?

In the academic world we tend to talk about markets, hierarchies and networks as if they are the only three possibilities. Strictly speaking, none of them are even possible as they are meant to be ideal types rather than describing anything in reality. It is perhaps more sensible to talk about ‘top-down’ ways of improving healthcare, versus ‘bottom-up’.

Top-down reforms are attempts by some central body to impose an idea of how healthcare should work. In the whole history of the NHS there has been surprisingly little of this type of reform as, frankly, the Department of Health or government had very little idea what was going on in local health systems – we had no information, no computers, very little comparison – if anyone tells you, as policymakers often try to, that the NHS used to be ‘command and control’, they are talking nonsense. There was simply no way of issuing commands and no way of achieving control because we had very little idea of what was going on.

Top-down reforms reached their peak in the 2000s. We had performance management systems introduced and far strong means of measuring and trying to control what went on in the NHS. The problem with this approach though, is that it tends to lead to a great deal of ‘gaming’ – or organising provision not so it leads to improvement, but rather so it meets targets. Now it might well be that by meeting targets, improvement does occur, but it isn’t always that case – hence all the stories about managerial priorities conflicting with clinical ones. Christopher Hood wrote what is perhaps the best account of the problems his leads to in a piece call ‘Gaming in Targetworld’.

Bottom-up reforms attempt to reform by creating self-improvement systems. Rather than central authorities telling health providers how to get better, you create mechanisms so that they do it for themselves. Competition is meant to be the main means by which this happens in the present NHS reforms, but I really don’t think there is much chance of it happening – as I’ve explained in other entries, there is such as simplistic notion of how competition works embedded in the reforms that improvements seem unlikely.

So that does mean the only answer is top-down reform? No, I don’t think so. To see why this is the case we need to think about what is arguably the most successful reform (in its own terms) in the history of the NHS – the QOF.

The QOF (quality and outcomes framework) is really interesting because it is a combination of top-down and bottom-up reform. It imposed a framework on GPs by which they would be awarded points, and financial awards, for a range of activities designed to improve their patients’ health. Whether these activities are evidence-based is something of a contentious issue – but the important thing is that GPs appear to believe that they are, and so were far more accepting of the targets than were hospital consultants. And let’s be honest – it helped that the targets came with incentives to comply with them (even if GPs tend to suggest it is teaching the targets themselves that is most important).

But the key thing about the QOF is that GP practices were largely left to their own devices as to how exactly they achieved the QOF goals. GPs could try and do them all themselves, or (more likely) practice nurses could take additional roles on. It acted as a stimulus for GP practices rethinking the way they delivered care to hit their targets – and GPs were extremely good at hitting the targets.

We all want the NHS to get better, and what the QOF suggests is that it is possible to generate bottom-up improvement by giving clinicians and managers discretion in how they achieve them. I think this is translatable, through good management into hospital settings. Clinical teams can be given targets to achieve, even if they are locally set, but decide together how they are going to achieve them. In the 1950s Drucker called this ‘Management by objectives’ – there’s nothing new in it. It offers a means of securing improvements by driving forward improvements locally, through good management, and clinical teams working better together.

Better still, how about we achieve a far closer democratic link between our health organisations and our local communities, who they are meant to be serving? Goals and targets can be agreed in collaboration with local people, and be made accountable to them.

The danger of all of this is that it will lead to different NHS organisations doing things differently. But that’s the price we have to pay for trying to make things better. Higher level NHS bodies can be looking for providers that are doing extremely well (and badly) and taking action to spread best practice or intervene where it is too low. But improvement can only really come through local innovations – we have to be grown-up enough to ignore shouts of ‘postcode lottery’ as the only way to achieve identical care everywhere is for it all to be poor.

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