This week a merger between two hospitals in Dorset was blocked by the competition commission, on the grounds that the move would be anti-competitive (http://www.bbc.co.uk/news/uk-england-dorset-24559766). The two hospitals aren’t happy, especially Poole hospital which is apparently in a pretty bad financial state, and was depending upon the merger acting as a kind of financial bail-out for it. What are we to make of this? What can it tell us about the emergent NHS market?
Well, as I keep on complaining, the NHS is not a market. Using the term ‘market’ suggests that we are talking about something like perfect competition, a theoretical model never observed in the real world, in which there are lots of small purchasers, lots of small providers, freedom of entry and exit from the market from both purchasers and providers, and it is cheap and easy to get in and out. There is also perfect information about what is going on, and participants that make highly rational decisions.
Now others (Alan Maynard especially) like to remind me that expecting the world to be this way is unrealistic. And that’s right. But in talking about ‘markets’ we are using the legitimacy of an idea (the perfect market) to underwrite a bunch of arrangements that are nothing like this.
Because over here in the real world, the NHS isn’t like this. We have large providers (both public and private) where we can’t let the public providers exit or go bust (although we might let private managers or even private providers take them over). We have private providers who can duck out, but we’ve still got to provide care so public providers will end up having to take their place (breast implants, for example). We have lots of small purchasers, but when they are up against big providers they will appear weak and disjointed and have little power. And where we have to pay for something complicated, like care, we may need planning and co-ordination – whether it is long-term care for the elderly (which is especially worrying given this (http://www.bbc.co.uk/news/uk-england-sussex-24579496)) or for cancer care.
Now look, I like competition in markets where I think I can make sensible choices. I like it that Samsung and Apple are driving each other on to make me better gadgets. But I still have no idea how I’m supposed to make choices in the healthcare market, and I don’t think my GP does either (and s/he is meant to be doing the commissioning on my behalf). We have put in place a system of buying and selling care that labels some providers as being effectively bankrupt when they may actually be providing really good care, and little or no sensible evidence showing all the effort and expense of having the market mechanism in place actually justified its costs.
So – back to Dorset. Should the merger have been blocked? Well, there’s very little evidence showing that mergers work, anytime, ever. They take years to get over, and just about never live up to the claims made to justify them. Mergers are generally a bad idea. But equally it is ridiculous to force hospitals to merge because they are in financial trouble. Surely the question we should be asking is whether they are providing a good service to their local people? Are they providing high standards of treatment? Are they giving good care? If they are, shouldn’t we be paying for their services rather than forcing them into dubious merger manoeuvres on the grounds of market legitimacies that are based on a theoretical model rather than anything in the real world? And if they aren’t, shouldn’t we be finding ways of driving up their standards rather than assuming somehow that better management can fix it?
The NHS ‘market’ isn’t a market in any kind of sense by which we usually use the term. To use the term market is to confer dynamism and innovation upon institutional arrangements that run directly contrary to providing the long-term, stable, and open-ended care that we need. More importantly, pretending the NHS is a market conceals the need to think very differently about how we can support care by organising things differently, and how we can arrange finances to support good care, rather than forcing hospitals to try and merge to avoid running out of money and being forced into private hands. That way madness lies.