In an article in the BMJ in 2011, entitled “How the secretary of state for health proposes to abolish the NHS in England” (BMJ 2011; 342 doi: http://dx.doi.org/10.1136/bmj.d1695 (Published 22 March 2011) by Allyson Pollock and David Price), the authors comment:
“The coalition government’s Health and Social Care Bill 2010-11 heralds the most controversial reform in the history of the NHS in England.The government plans to replace the NHS system of public funding and mainly public provision and public administration with a competitive market of corporate providers in which government finances but does not provide healthcare.”
On the other hand, a radical shift in the culture of the NHS is needed to rid it of outdated working practices, cure it of widespread bullying and heal the damaging rift between managers and clinicians, according to David Prior, chairman of the Care Quality Commission (CQC)
Prior has called for serious “transformational change” of the health service, without which it will “go bust”. That is not the radical change the NHS needs.
We need to abolish the internal market of the NHS.
The most significant piece of evidence that supports that view that market failure is the big problem in healthcare delivery is the widespread recognition that price competition actually worsens healthcare outcomes. Economic theory predicts that price competition is likely to lead to declining quality where (as in healthcare) quality is harder to observe than price. Evidence from price competition in the 1990s internal market and in cost constrained markets in the US confirms this, with falling prices and reduced quality, particularly in harder to observe measures.
The opposition to the Health and Social Care Act (2012) ended up being all over the place due to lack of any meaningful media coverage from the BBC and other media outlets, and a failure of supposedly intelligent people to cut through the crap and spin of what the Act was about. The Act was simply about putting in a competitive market, regulating the market, and finding a preliminary mechanism of winding up the ‘unfittest’ so that they couldn’t survive. The Act was nothing to do with patient safety. And we all know what an unmitigated costly fiasco this has been, and decisions have even be made on the basis of competition law rather than the health of the patient.
It’s been a shocking disaster.
The problems of market failure are already well recognised in the UK. Scotland and Wales have both abandoned the purchaser-provider split. In England, the problem of price competition is well recognised and most hospital tariffs/”prices” are fixed. Thatcher’s purchaser provider split (1989) has been well critiqued in the literature and the recent
A Health Select Committee (HSC) report, commissioned by the Department of Health from York University (Karen Bloor), on the current commissioning model was even more damning.
“If it does not begin to improve soon, after 20 years of costly failure, the purchaser-provider split may need to be abolished.”
The HSC report cited that the administrative costs of the purchaser-provider split to be as high as 14% of total NHS budget compared to 5% prior to the purchaser-provider split.
Other examples of where the market has failed the NHS include the use of the Private Finance Initiative (PFI). The NHS IT disaster is a classic case of market failure.
The Baroness Morgan affair has focused attention on the political nature of our unelected quangocrats are. For those unfamiliar with the story, she claims No 10 is “absolutely determined” to ensure that only Tory supporters are appointed to public bodies.
The idea of the free market being the best way of enabling individuals to plan their lives is nonsense. The free market system also generates huge inequalities between countries and regions. In the free market system, investment tends to go already where it is most profitable. Further, the free market system counts or recognises as important considerations only what can be packaged as commodities for individual consumption. The solution is not of course a bureaucratic manipulation of the economy and bureaucratic nationalisation like that being carried out by Bismarck in Germany. Socialist planning does not mean that we want to do away with free markets straight away. Many reasonable individuals recognise that free markets played a huge role in human development, and cannot be dispensed with overnight. Socialist planning is not primarily about faster economic growth. It is not even primarily about increasing control over the economy. It is primarily about decreasing the control of the economy over human lives. Some highly successful capitalist systems, such as Japan’s or South Korea’s, have had effective government planning of major investment. There is no reason to suppose that democratic planning would be less workable.
The importance of planning by the state, within its proper sphere, is unapologetically acknowledged. A free society needs a strong, confident state capable of carrying out on behalf of its citizens its vital role — including the planning required by that role — effectively and efficiently in a world of unpredictable challenges and threats. Under capitalism, there is always a drive for more profit, for this or that new profitable line of production, for increased pressure on the worker to work more. In fact capitalism does not even satisfy the wants which capitalism creates. Signals are sent through the market only by consumers with money, not by human wants or needs. The whim of the rich is satisfied; the desperate need of the poor is not. The real driving principle of capitalist economics is not consumer demand, but profit.
In Japan, they have the most tremendous technology, and they could produce the basics of life with a relatively small effort. It would be possible for people to have a relatively leisured and dignified life. Despite that, something like 70% of Japanese workers say that they constantly feel physically exhausted and mentally exhausted. Socialist planning is not about state planning of people’s whole lives. And even in the area of basic production, we will not be able to plan social needs straightaway. It will take generations before the level of technology, the degree of information and culture, and the spirit of co-operation have developed enough to make the planning of basic economic essentials just an administrative question. Subsidiarity requires that state planning should be restricted to tasks in relation to which individuals and groups cannot plan for themselves, and which cannot be handled by organisations independent of the state and operating in markets, preferably real markets.
It is a highly significant problem that the great majority of the people, toil only to enrich the top 10 per cent, who in Britain own 53 per cent of all marketable wealth and almost all land and shares. Everyone could have a decent job, and the excess of what the workers produce over their own direct consumption would go to social provision and to socially-controlled investment. We could get rid of the vast waste and duplication arising from capitalist competition. A living wage could go a long way to ensuring people are paid a fair amount for their work, giving employees dignity and security
As Alex Andreou wrote earlier this year,
“The richest 85 people in the world have as much wealth as the poorest 3.5 billion – or half the world’s entire population – put together. This is the stark headline of a report from Oxfam ahead of the World Economic Forum at Davos. Is there a reason why the world’s powerful, gathering at the exclusive resort to sip cognac and eat blinis, should care? Well, yes.
If one subscribes to the charitable view that neoliberal philosophy was simply naive or misguided in thinking that “trickle down” would work infinitely, then evidence that it doesn’t, should be cause for concern. It is a fundamental building block of supply-side economic theory – the tool of choice these past few decades for those in charge to make adjustments. The realisation that governments have been pulling at economic levers which, for some time, have been attached to nothing, should be a wake-up call to the deepest sleepers.”
In the absence of free markets, it is said that prices go up or fail to reduce. The way in which companies can collude with each other in delivering excessive profit and poor value-for-money for the consumer is well known in privatised industries. Books have been written on the subject. There are legitimate questions as to the effectiveness of the EU, but hats off to its commission for exposing the scandal of big oil companies allegedly colluding to rig petrol prices for a decade. Prices have risen 80 per cent, from 75p per litre in 2002 to around £1.40 per litre now.
It is also argued that innovation is blocked through collaboration. This is unmitigated rubbish, as collaboration has been well described as a driver for innovation even in the private sector.
“One of the top priorities of the group is to offer consumers innovative products. The ability of its suppliers to propose new solutions and technology and to develop innovative products and services in partnership with the L’Oréal teams makes a direct contribution to the success of new products. This collaborative process is based on trust in an ever more competitive economic climate. L’Oréal establishes an open dialog that stimulates and accelerates innovation for the benefit of consumers.”
Real capitalist markets do not correspond with the “ideal” of efficient, reliable balancing of supply and demand. At almost all times outside wars, capitalist economies generate vast armies of the marginally employed, people defined by the system as “excess supply” of labour-power. Successful service reconfigurations, such as stroke reorganisation in London, involve complex planning and engagement. Market forces cannot be the right way to drive socially responsible and clinically sustainable, equitably distributed and politically palatable service configurations and integration.
David Prior is right. But he’s like a Doctor who’s produced a correct diagnosis of a heart murmur and advised totally the wrong management plan like total bowel resection. The question now is whether a move towards a “NHS preferred provider” is an incremental step, but not sufficiently radical, to abolish the market. The ultimate way to reconcile this would be to have private providers providing NHS and other care services not on a transactional basis, but the choice, as they say, is theirs.
