The argument for a publicly-funded and (mostly) provided healthcare system not based on competition

This piece argues for a publicly-funded healthcare system that is also mostly provided by the public sector as well. It suggests that competition in provision is wasteful and unlikely to work to improve the system, and alternatives to drive the system to get better have to be sought instead. In short, that the reforms proposed at present are wrong for all manner of reasons.

To understand this argument, I think coming up with a list of propositions that I believe in (and which seem to me to be logical) need to be made clear first, in order to show that the conclusion above logically follows from it.

Proposition one: That access to healthcare is a social issue, and access to it should be based on need rather than ability to pay.

The vast majority of industrialised nations have universal access to healthcare in some form or another, and ruling out citizens from accessing healthcare because they cannot afford it seems inhumane. This leads on to:

Proposition two: That it will always be necessary to have public provision in healthcare, and so imagining that private medicine can replace it is foolish.

To guarantee all citizens access to healthcare in all areas (both geographically and treatment), public provision is necessary. To imagine that private provision can swoop in and plug gaps where set-up costs are so high, and the need to guarantee standards is so important, is delusional. Public provision is necessary in order to achieve guaranteed provision. This need for public provision also leads logically to the idea that the Secretary of State for Health should ultimately be responsible for the NHS, but does not mean that all private provision be removed – it can be a supplement to public healthcare, and even provision healthcare to the NHS to reduce waiting times or provide excess capacity (but not without difficult questions about why public provision is not covering this being asked).

Proposition three: That funding healthcare from the public purse, through general taxation, is desirable because it is both efficient and redistributive.

It is efficient to pay for public healthcare from general taxation because it gives the government considerably leverage in keeping costs down (as well as economies of scale in purchasing). Even senior Conservatives (for example Nigel Lawson) have come around to this viewpoint. I would also regard funding healthcare through taxation being distributive as being desirable because of the increased sense of societal solidarity it will hopefully lead to – and goodness knows we need this at the moment.

Proposition four: That healthcare provision is often complex in terms of both organisation and treatment, and it is therefore difficult for patients to make judgements about how to access services that are based on clinical considerations.

Healthcare provision is complex both organisationally and in terms of the treatments on offer. Expecting patients to navigate their way through local health provision is silly – it needs someone clinically competent who understands local provision and can find the best care for their needs. Where patients are forced to make decisions they are likely to engage in what Daniel Kahneman calls ‘substitution’ and choose on the basis of a factor that won’t lead to clinical improvement – such as car parking spaces. This won’t drive up clinical quality, but might lead to some perverse effects (the logical thing for hospitals to do would be to build multi-story car parks instead of providing better services).

Proposition five: That there are no simple organisational fixes to providing healthcare, and politicians, management consultants or policy wonks who suggest otherwise are ideologues

We have had sixty-five years of the NHS. It’s a big, complex system that is hugely difficult to organise and manage. We’ve tried all manner of fixes in the past – it’s about time we realised that there is no optimal size for commissioning, and that more bureaucracy or more market mechanisms are not going to work. Improvements are going to be a long slog, and depend most of all on clinicians and managers working hard locally to make things better. Imagining there is an organisational panacea to resolve all the competing demands on healthcare systems is never going to work. It’s much harder work than that.

Proposition six: That trying to get healthcare providers to compete with one another will not work as public provision is necessary, because patients cannot make clinically-informed choices, usually do not want to travel, and duplicating provision in clinical specialties is wasteful. We therefore need alternatives to improving healthcare.

If patients usually can’t choose the services they need, how about getting someone else like GPs to do it? This is unlikely to work either because it implies that there is duplication of provision (and so waste), and is hugely wasteful for GPs as well as it asks them to stop looking after people and commission services instead. Most patients want to be treated locally, so trying to get competition between localities is unlikely to work.

We therefore need alternative ways of driving improvements in healthcare. In any case it’s going to be hard work. Professional bodies need to step up to the mark and do rather more than they have in the past to scrutinise clinical data and improve practice. Managers need to ask harder questions about outcomes as well. Imagining there is an organisational fix that will somehow magically make it work isn’t going to work.

In all then, improving healthcare is a difficult business. Public provision, in my view, is a crucial and necessary component of a strong healthcare system, and assuming private provision can replace it unproblematically is unrealistic. Funding healthcare is both more efficient and more equitable than any other system. Improvements can’t come through market mechanisms as patients can’t make informed choices, and it is surely wasting the time of clinicians to ask them to commission services. Making improvements to services needs to be more robustly dealt with by both clinicians and managers than it often has done in the past, but will be hard work. However, imagining that there are simple organisational fixes is just about delusional. NHS reform based on ideology, as I would suggest the present reforms represent, simply won’t work.


6 Responses to “The argument for a publicly-funded and (mostly) provided healthcare system not based on competition”

  1. Patricia Farrington Says:

    An excellent article. All very logical and accepting that change is necessary; but not the way Lansley plans. I’m not sure how to get this message across to MPs. We are the already “converted” but this message needs to be spread to non-believers too.
    Can you send it to Lansley, Osborne & Cameron? Can you spread the word more widely? I hope so.
    Thanks again for well researched information.

  2. Richard Blogger (@richardblogger) Says:

    Very interesting, thank you.

    Another issue is what I think is called, complimentarity. That is, an effective healthcare system improves productivity of the rest of the economy. On a simple level this is quite obvious: if people are treated quickly and effectively they spend less time off work. Sadly, the private sector increase in productivity due to the NHS is not included in the productivity figures often ascribed to the NHS. It actually has a detrimental effect because the rise in private sector productivity is often used by the Conservatives as “proof” that the public sector should be privatised (cf the graph on p26 of the Tory 2010 manifesto). In fact, part of that rise should be given to the public sector.

    However, there are other issues. I know from friends in the US (particularly those with children or older) that if their employer gives them a good healthcare package they are reluctant to change jobs, for fear of moving to another employer with a less good package. This is regardless of the pay or how much they hate their job. When your family’s healthcare depends on your job, you won’t do anything to put that healthcare at risk. So this means that the jobs market is constrained, and it also makes the workforce more compliant. Neither of these result in an effective economy.

  3. tummymouse624 Says:

    Great piece thanks I’m recommending it as reading on my MSc Leadership for Health and Social Care programme.

    My comments link I think to proposition two. Our contact with a large number of NHS managers in provider trusts identifies a very current and practical problem that even the early commissioning groups are struggling to commission services effectively because they lack the experience and insight to understand the fine detail that needs to go into the contract and are asking the providers to do this for them especially in the technical contracts such as echocardiography.

  4. Argument for a publicly funded health system | Imperial Healthcare Manager Award Says:

    […]… Share this:TwitterFacebookLike this:LikeBe the first to like this post. This entry was posted in Uncategorized by tummymouse624. Bookmark the permalink. […]

  5. Robert Says:

    I think that Mr Lansley would agree with all of your propositions and would believe that his proposal strengthens the delivery against these. The choice decisions will largely be made by the GPC’s but patients can have a view if they choose to. There is an element of competition but only on service not on price so to the consumer it is really what is known as a ‘perfect monopoly’. The competition is raised with respect to the private sector but I think this is a good thing – some hospitals, notable Frimley Park and Guys/St Thomas have separate private facilities which make profits which are ploughed back into the NHS.
    Regarding proposition 5 I agree that the NHS provides a decent service today and could be exceptional if we could replicate best practice consistently. However with two expensive layers of management bureaucracy it is top heavy and needs to be re-structured. Not many will regret the passing of the SHA’s in particular.

  6. what to expect from Cameron and Clegg’s NHS « theputneydebates Says:

    […] Ian Greener, a Professor of Social Policy, has set out his personal understanding of these principles in a recent blog. […]

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