Lansley writes price competition out of the health billBMJ 2011; 342 doi: https://doi.org/10.1136/bmj.d1481 (Published 07 March 2011) Cite this as: BMJ 2011;342:d1481
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Re:How will GP Consortia be able to assess the quality of service when hospitals compete on quality alone?
"stopping hospitals offering to deliver a service at lower costs
reduces the incentive for hospitals to examine more efficient ways of
providing a service."
I think, or rather, I hope, David misunderstands the proposal.
Hospitals are entirely free to offer a service at lower cost ( to
themselves), but they will have the right to claim the full tariff price.
This would mean that hospitals which could not deliver the quality at the
tariff price would sensibly either leave that market, or subsidise it from
This was exactly what I had in mind when 15 years ago I proposed
"Universal GP-Fundholding-Commissioning" to substitute for the piecemeal
disaster we then had. I based my concept on the contemporaneous GP model
which had worked well since 1949 - ie: Patients could register with any
practice according to their own assessment of convenience and quality,
whilst GPs could claim national tariff prices for services rendered. Thus
there was competition on quality, and not price. GPs were both public NHS,
and 'private sub-contractor' businesses, at one and the same instant. The
money flowed entirely from taxes, free to the patient at the point of use.
I proposed that all secondary and tertiary providers should be
offering services at National Tariff Prices, and that all GPs would become
the 'customers' as 'patient advocates', organised in localities of
sufficient size to have buyer-power.
Since I first published this "Universal GP-commissioning" principle
in Medeconomics, and submitted it to all political parties ( and Chris
Ham), a painfully slow process of PCT, Tariff, and GP-commissioning has
developed, constrained in my view by a burgeoning managerial bureaucracy
with a vested interest. Another parallel process was the separation of
the NHS into 4 national devolved bodies.
As a Socialist, I am mightily impressed by Lansley's boldness. It is
in my own view necessary, especially because of the economic crisis. It
is best developed in England first, because they have the greatest
opportunities and providers. We can easily compare its success against
the more traditionally 'NHS' Scotland or Wales models, year by year, in a
natural controlled experiment.
Competing interests: I am a GP in Wales
How will GP Consortia be able to assess the quality of service when hospitals compete on quality alone?
Mr Lansley's announcement that the "modernisation" can not be based
on hospitals competing with each other on price illustrates another
weakness of his proposal to give GP consortia control of the NHS budget.
Mr Lansley is proposing that prices should be the same for any given
type of care and hospitals should compete on quality alone. It is argued,
that hospitals should not compete on price because price competition would
reduce the quality of service. But is a cheaper service at a lower quality
It is certainly possible to improve quality at a given price and that
would be beneficial to the NHS, but stopping hospitals offering to
deliver a service at lower costs reduces the incentive for hospitals to
examine more efficient ways of providing a service.
Say a hospital decides to implement a programme of running operating
theatres in parallel working (1). This could lead to reduced costs.
Assuming (for the moment) the quality of service was not reduced, surely
such a change would be beneficial to the Health Service and so should be
allowed? The money saved could be used to provide more service.
However, say the quality of the parallel service was not quite so
"good" as other services. So we have two services; one (A) which (is not
perfect) but is "good", another (B) which is not quite so good as A, but
cheaper. Then we have a problem of deciding whether service A or more of
service B is better for patients. There is a trade-off between one level
of service and another service which is greater but of a poorer quality.
The problem is measuring (or even understanding) quality. There are some
dimensions of quality (infection rates, waiting times, etc) which are
measurable and useful, but the problem is that all the measures put
together (and how do you do that?) are unable to grasp the full complexity
of measuring the quality of service provided.
However, if Mr Lansley does not trust the consortia to be able to
assess quality when hospitals compete on price, how does he justify his
confidence that the Consortia will be able to assess quality when
hospitals compete on quality alone?
(see Geoff Watts. Brainwave to brilliant innovation. BMJ Career,
2007 http://careers.bmj.com/careers/advice/view-article.html?id=2638 ).
Competing interests: No competing interests