This analysis makes some interesting observations and suggestions but
is seriously weakened by a failure to address some of the more fundamental
political issues surrounding the NHS reforms.
Firstly, the authors have taken the Government's stated objectives at
face value, with no attempt to acknowledge and put into context the
political ideology underpinning these reforms. The coalition Government
has a clear agenda to replace a significant chunk of the public sector
with the private and third sectors. "Rolling back the state" through
privatisation and a reduction in the public sector workforce and national
pay bargaining and pension rights, is one of the key supply side economic
policies, which this Government thinks is necessary address our dire
economic situation. A low tax, low inflation, entrepreneurial environment
is seen as vital to securing the confidence of international investors and
the international bonds markets in the City of London.
This neoliberal approach to public sector reform builds on the previous
policies of the Thatcher and Blair Governments. This approach was well
summed up by the former New Labour cabinet Minister John Denham in an
article in the Chartist in 2006:
"All public services have to be based on a diversity of independent
providers who compete for business in a market governed by Consumer
choice. All across Whitehall, any policy option now has to be dressed up
as "choice", "diversity", and "contestablity". These are the hallmarks of
the new model public service"[1]
Thus, the political and economic reality is that public services need
to be privatised and marketised and the Health and Social Care Bill has
been designed to do exactly that to the NHS. The key market levers
contained within the Bill that will drive this process are the mutually
reinforcing policies of patient/consumer choice, competition between a
plurality of any willing providers, payment by results, the purchaser
provider split, increased freedom for foundation trusts, the pro-
competition nature of Monitor and the NHS Commissioning board, and an
information revolution.
Lansley sees competition as the key and stated this in a speech to the NHS
Confederation: "So the first guiding principle is this: maximise
competition......which is the primary objective"
In same speech, he alluded to the importance of not only increasing the
number of providers to stimulate competition, but also the number of
consumers. He stated that:
"The statutory formula should make clear that choice should be exercised
by patients, or as close to the patient as possible, thereby maximising
the number of purchasers and enhancing the prospects of competition,
innovation and responsiveness to patients." [2]
This explains the rationale for the increased use of patient held
budgets, but more importantly explains why GPs are being given ?80 billion
of the NHS budget - they are closest to patients. Hence the transformation
from a Consultant led NHS to a GP led NHS.
However, simply leaving the budget in the hands of GPs is problematic
because most GPs and their patients want to be referred to a good local
hospital and this is fundamentally anti-market. Thus the Bill will use
Monitor, the NHS CB and EU Competition law to prevent GP Consortia from
favouring incumbent providers. In addition, the private takeover of
commissioning through FESC will further stimulate this process.
Since these mutually reinforcing polices are so crucial to the
political and economic objectives of this Government, any attempts to
seriously water them down will be met with significant opposition, despite
the very difficult and politically unpopular situation the Government
finds itself in. Thus any Government concessions that result in amendments
to these policies must be forensically examined for loopholes. There is
already concern that the widely publicised U-turn on price competition has
not gone far enough for example. [3]
As for some of the authors suggestions for making the Bill more
palatable, I fully support their views on public accountability, but many
of the other suggestions are flawed or too weak. I would make the
following points
1. The idea of a graduated and phased approach to authorising
consortiums has rather been offset by the disintegration of PCTs all over
the country, which has left a black hole in NHS management that needs to
be filled quickly. Pathfinder consortia already cover over 2/3 of the
population and the legislation hasn't even been passed yet!
2. No attempt is made to describe "robust" mechanisms to avoid potential
conflicts of intersest. It has been reported in the BMJ that 1/10th of
consortium board GPs have roles in private companies for example. [4]
3. Watering down the competition agenda makes the market even more
inefficient. Lansley is driven by competition ideology and has already U-
turned on price competition, so further concessions are unlikely. What is
the point of taking such a political risk is the end product is nothing
like what was intended.
4. "Assessing the any willing provider" approach has already been done. I
refer the authors to the work of Colin Leys and Stewart Player. [5]
5. The idea of giving Consortia greater autonomy could have negative
impacts on the market and is not likely to be tolerated
In summary, the authors seem to have missed the point of these
reforms by focusing on the technical aspects of the reforms rather than
addressing the underlying political ideology of this coalition Government.
Their well meaning suggestions to reform the Bill will only serve to
provide Mr Lansley with some useful rhetoric take the sting out of the
opposition.
"This is a new neo-liberalism for the 21st century - a merger of
Thatcherite neo-Conservatism and Orange Book Liberals which believes that
getting the state out of the way is the road to a stronger economy and
fairer society"
Ed Balls, Labour leadership candidacy statement 2010
Rapid Response:
What about the politics of the reforms?
This analysis makes some interesting observations and suggestions but
is seriously weakened by a failure to address some of the more fundamental
political issues surrounding the NHS reforms.
Firstly, the authors have taken the Government's stated objectives at
face value, with no attempt to acknowledge and put into context the
political ideology underpinning these reforms. The coalition Government
has a clear agenda to replace a significant chunk of the public sector
with the private and third sectors. "Rolling back the state" through
privatisation and a reduction in the public sector workforce and national
pay bargaining and pension rights, is one of the key supply side economic
policies, which this Government thinks is necessary address our dire
economic situation. A low tax, low inflation, entrepreneurial environment
is seen as vital to securing the confidence of international investors and
the international bonds markets in the City of London.
This neoliberal approach to public sector reform builds on the previous
policies of the Thatcher and Blair Governments. This approach was well
summed up by the former New Labour cabinet Minister John Denham in an
article in the Chartist in 2006:
"All public services have to be based on a diversity of independent
providers who compete for business in a market governed by Consumer
choice. All across Whitehall, any policy option now has to be dressed up
as "choice", "diversity", and "contestablity". These are the hallmarks of
the new model public service"[1]
Thus, the political and economic reality is that public services need
to be privatised and marketised and the Health and Social Care Bill has
been designed to do exactly that to the NHS. The key market levers
contained within the Bill that will drive this process are the mutually
reinforcing policies of patient/consumer choice, competition between a
plurality of any willing providers, payment by results, the purchaser
provider split, increased freedom for foundation trusts, the pro-
competition nature of Monitor and the NHS Commissioning board, and an
information revolution.
Lansley sees competition as the key and stated this in a speech to the NHS
Confederation: "So the first guiding principle is this: maximise
competition......which is the primary objective"
In same speech, he alluded to the importance of not only increasing the
number of providers to stimulate competition, but also the number of
consumers. He stated that:
"The statutory formula should make clear that choice should be exercised
by patients, or as close to the patient as possible, thereby maximising
the number of purchasers and enhancing the prospects of competition,
innovation and responsiveness to patients." [2]
This explains the rationale for the increased use of patient held
budgets, but more importantly explains why GPs are being given ?80 billion
of the NHS budget - they are closest to patients. Hence the transformation
from a Consultant led NHS to a GP led NHS.
However, simply leaving the budget in the hands of GPs is problematic
because most GPs and their patients want to be referred to a good local
hospital and this is fundamentally anti-market. Thus the Bill will use
Monitor, the NHS CB and EU Competition law to prevent GP Consortia from
favouring incumbent providers. In addition, the private takeover of
commissioning through FESC will further stimulate this process.
Since these mutually reinforcing polices are so crucial to the
political and economic objectives of this Government, any attempts to
seriously water them down will be met with significant opposition, despite
the very difficult and politically unpopular situation the Government
finds itself in. Thus any Government concessions that result in amendments
to these policies must be forensically examined for loopholes. There is
already concern that the widely publicised U-turn on price competition has
not gone far enough for example. [3]
As for some of the authors suggestions for making the Bill more
palatable, I fully support their views on public accountability, but many
of the other suggestions are flawed or too weak. I would make the
following points
1. The idea of a graduated and phased approach to authorising
consortiums has rather been offset by the disintegration of PCTs all over
the country, which has left a black hole in NHS management that needs to
be filled quickly. Pathfinder consortia already cover over 2/3 of the
population and the legislation hasn't even been passed yet!
2. No attempt is made to describe "robust" mechanisms to avoid potential
conflicts of intersest. It has been reported in the BMJ that 1/10th of
consortium board GPs have roles in private companies for example. [4]
3. Watering down the competition agenda makes the market even more
inefficient. Lansley is driven by competition ideology and has already U-
turned on price competition, so further concessions are unlikely. What is
the point of taking such a political risk is the end product is nothing
like what was intended.
4. "Assessing the any willing provider" approach has already been done. I
refer the authors to the work of Colin Leys and Stewart Player. [5]
5. The idea of giving Consortia greater autonomy could have negative
impacts on the market and is not likely to be tolerated
In summary, the authors seem to have missed the point of these
reforms by focusing on the technical aspects of the reforms rather than
addressing the underlying political ideology of this coalition Government.
Their well meaning suggestions to reform the Bill will only serve to
provide Mr Lansley with some useful rhetoric take the sting out of the
opposition.
"This is a new neo-liberalism for the 21st century - a merger of
Thatcherite neo-Conservatism and Orange Book Liberals which believes that
getting the state out of the way is the road to a stronger economy and
fairer society"
Ed Balls, Labour leadership candidacy statement 2010
References:
[1] http://www.chartist.org.uk/articles/labourmove/march06denham.htm
[2] http://www.andrewlansley.co.uk/newsevent.php?newseventid=21
[3] Government has not done enough to prevent price competition.
http://www.hsj.co.uk/news/policy/government-has-not-done-enough-to-prevent
-price-competition-confed/5027839.article
[4] A 1/10th of consortium board GPs have a role in private firms. BMJ
2011;342:d2013 http://www.bmj.com/content/342/bmj.d2013.short?rss=1
[5] Confuse and Conceal: The NHS and Independent Sector Treatment Centres.
Player, Leys. Merlin Press 2008
Competing interests: Co-chair NHS Consultants' Association.BMA Council.BMA Political Board.