Why Ali Parsa is wrong about healthcare (and the NHS).

In today’s Guardian Ali Parsa (the founder and Chief Executive of Circle, which now runs Hinchingbrooke NHS hospital) has published what looks to me to be fairly bizarre piece about healthcare and the NHS that, for me, seems seriously misinformed, and so in need of considerable correction (you can read it at http://www.guardian.co.uk/commentisfree/2012/feb/08/nhs-professional-service-ripe-reengineering). As Mr. Parsa is responsible for first private company to take over an NHS organisation, it’s important his views aren’t allowed to pass without comment – which is what I’ll do here.

Parsa starts by saying that the Health and Social Care Bill is the subject of heated debate, but suggests that the ‘real healthcare issue’ is less about the NHS landscape in the next three years, and more about the survival of ‘our universal and equitable healthcare system in the next three decades’ – an interesting start.

Parsa then suggests that the NHS is facing a £20bn deficit, and explains that healthcare expenditure in the UK has risen fro £40bn in 2000 to £120bn ten years later, but that clinical results and patient experience have not kept pace. This, he suggests, means that healthcare has become unsustainable because we have blocked barriers to entry, preventing new entrants to come up with new answers, unlike the telecommunication, retail, financial and professional service industries. Manufacturing generally presents us with a lesson where we should not protect old industries, which risks losing them to foreign owners.

Innovation, Parsa, says, leads to insecurity, but we should not fear opening up organisations to new ideas because that is what has made other industrial sectors succeed – he compares British Telecom here with British Leyland. We must free up professionals to create the new, acknowledging that with freedom comes responsibility, and making providers accountable to public scrutiny.

He then takes a different tack – noting that 90% of our productive assets are under the control of the City and Whitehall, and suggesting that this concentration of ownership is unhealthy and has the consequence of making the multiple between the richest and poorest region in Britain being ten times, compared to just two in Germany, four in France, and five in the US.

To avoid this, healthcare professionals, he says, must be empowered to set up their own organisations, with GPs providing the sample of how this can happen. Healthcare, he says, is on an unsustainable trajectory, and needs fundamental innovation, and healthcare to be opened up for charities, private companies and public organisations to participate for us to continue to ‘be a place where the brightest minds can create the boldest solutions’.

Now, I thing there’s so much wrong here it’s hard to know where to start.

First, the NHS is facing an efficiency saving, not a deficit, and this is a political decision, not a shortfall in funds. It is a political decision how much money the NHS gets, not a market-based one. It is seeing just as many patients as ever – it is not short of demand.

Second, the NHS is better funded than it has ever been. But it started from a low base, and is still one of the worst-funded healthcare systems in the developed world. It has been systematically underfunded for much of its existence. To call it unsustainable is plain wrong – it is arguably, in terms of how much it costs and the services it providers, the most efficient healthcare system in the world.

Third, the reason why so much British manufacturing is overseas-owned is because of the openness of our economy, not because we’ve been protecting it. Will Hutton has been making this clear since the mid-1990s (and even before that). Germany and France have protected theirs from hostile overseas bids – he is just plain wrong on this point. The City of London he appears to be castigating for concentrating ownership is a significant beneficial of this, while at the same time also being an example of what he regards as offering examples to us of how great Britain is. There is contradiction after contradiction here.

Fourth, the idea that concentration in ownership leads to inequality is a massive confusion. There is the world of difference between the jobs most public sector organisations provide and those provided by the City of London – to conflate the two is ridiculous. Regional differences in income and wealth are important – but to imagine that breaking up the NHS will make things better is bizarre. The problem is the stupid rewards we allow those working in the City of London, not the ownership of the NHS. The problem is inequalities in income and wealth, not public ownership.

Finally, the free-for-all in healthcare that he suggests follows from his argument is completely misplaced. Healthcare is not unsustainable, and the near public monopoly on it has made it fantastically affordable in the UK. As I’ve said many times in this blog, the entry of providers of others types means we have to keep comprehensive providers open (as Circle have benefited from at Hinchingbrooke), meaning that those providers cannot fail, while at the same time pretending we are introducing competition. There is no real failure if particular providers cannot fail. If there is no competition.

He is right on one point only. We do need greater innovation in our healthcare system. But we need an incremental, evidence-based approach to this, trying out the new and rolling it out where it works, not putting in place a free-for-all in healthcare provision that is likely to be irreversible, and risks undermining the NHS forever.

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7 Responses to “Why Ali Parsa is wrong about healthcare (and the NHS).”

  1. NHS reforms live blog | Politics News and Discussion Says:

    […] in a sharp riposte Ian Greener, professor of social policy at Durham University, writes “Why Ali Parsa is wrong about healthcare (and the NHS)”. He writes, in somewhat more restrained language than some commenters, that: First, the NHS is […]

  2. Celia Kelly (@Scoscarwood) Says:

    Thanks for this. So clear and straightforward. So different from Mr Parsa’s text.

    He obviously doesn’t appreciate just what the NHS means to us, especially to people like me who were born before 1948.
    And he seems to have been mosinformed.
    Thanks again.

  3. Rob B Says:

    Ali is right on another point.

    “In healthcare, the future will be created by people who are delivering the services today. We should therefore spend less energy safeguarding existing structures and institutions and focus more on freeing their participants to create the new.”

    Look – LaLa’s bill started as a sledgehammer to crack a nut, and is now nuts hammers bolts and everything else off the workshop floor. But the idea about reducing the number of overpaid careerist managers was along the right lines. Some are amazing – but babies get thrown out with the bath water all the time with this new government. How far is the current structure we have central to the NHS we all want to protect?

    GPs need to take more ownership of the money they spend. According to the same report that puts the NHS as the most efficient, patient experience is among the worst in the world. Giving the budget to a side of the service (GP) that has huge variability in performance and patient experience is a bit odd. Ali’s point that empowering the all givers of care (except carers or patients themselves of course) to manage and deliver health care is valid. Those are the ones that we should support and protect.

  4. LED Lighting News » Blog Archive » Ministers lose first NHS Lords vote Says:

    […] in a sharp riposte Ian Greener, professor of social policy at Durham University, writes “Why Ali Parsa is wrong about healthcare (and the NHS)”. He writes, in somewhat more restrained language than some commenters, that: First, the NHS is […]

  5. Ministers lose first NHS Lords vote | Web Design Specialists Says:

    […] in a sharp riposte Ian Greener, professor of social policy at Durham University, writes “Why Ali Parsa is wrong about healthcare (and the NHS)”. He writes, in somewhat more restrained language than some commenters, that: First, the NHS is […]

  6. NHS reforms live blog - Wednesday 8 February - Government Tenders, Government News and Information - Government Online Says:

    […] in a sharp riposte Ian Greener, professor of social policy at Durham University, writes “Why Ali Parsa is wrong about healthcare (and the NHS)”. He writes, in somewhat more restrained language than some commenters, […]

  7. Ministers lose first NHS Lords vote - Government Tenders, Government News and Information - Government Online Says:

    […] in a sharp riposte Ian Greener, professor of social policy at Durham University, writes “Why Ali Parsa is wrong about healthcare (and the NHS)”. He writes, in somewhat more restrained language than some commenters, […]

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