Home » Competition and markets » The “Everyday” “stack-em-high” approach may not work for all parts of the NHS

The “Everyday” “stack-em-high” approach may not work for all parts of the NHS

By shibleyrahman in Competition and markets, NHS on January 20, 2013.

Tesco everyday burgers

Right-wing commentators always attack the NHS by saying that it mustn’t be treated as a “sacred cow”, like a “national religion”. The public don’t wish to see it as a business either. I have no idea what the majority of members of the Royal College of Surgeons think.

So, if it’s not a business, why are they such pains to keep the NHS branding and logo then? The lettering (even the font, size, colour and slant) is known on the national trademarks register, so is the exact Pantone colour. Why are Virgin and Circle not keen to get rid of the NHS branding and do all their NHS services in their own brand? This is simple. It’s because the NHS brand is incredibly strong, so much so that successive governments have wished to export it.

Tesco everyday burgers contain “no artificial preservatives, flavours or colours”, except some contained horsemeat apparently. Not being able to see inside the box with the benefit of a DNA reader is possibly to blame, but which corporate supplier is providing your hernia operation in future may not be so easy to tell in future either.

One thing is absolutely certain about the NHS “reforms”. It is most definitely a “top-down reorganisation”, it will not address the numerous concerns of the Francis Report, and it gives a clear green light to outsourcing a far greater number of contracts to private sector suppliers who are very slick at producing bids. Even the most unintelligent of spokespeople for the Conservatives’ policy, both official and unofficial, openly concede that it is hard to provide a service that is comprehensive and bitty through this route.

That’s why it best for the profitability of shareholders that the product is delivered in a short-sharp-shock, like an abdominal hernia repair, or a Tesco “everyday burger” containing horsemeat. They choose what offerings they wish to produce. Whilst the Ed Miliband conference speech on ‘predators and producers’ was on-the-whole “panned”, the new healthcare market is perfect for private equity investors. Their freedom to operate in a “liberalised market” is only constrained by the legal and regulatory constraints placed upon them. You can argue “til the cows come” home whether the abolition of the Foods Standards Authority created a climate for such cutting corners to occur – or maybe that should be “til the horses come home”.

While it’s well known that some high street firms have struggled, it’s noticeable that “value brands”, including Tesco everyday value items and Aldi, and “luxury” brands have withstood the recession quite well. There is of course no real market in healthcare, of people “shopping around”, with a customer not paying directly to the supplier of the healthcare product, the supplier using the NHS branding away, dodgy metrics to judge the ‘quality’ of a healthcare intervention largely dreamt up by a busybody who has never set foot on a busy NHS ward.

However, that the NHS could offer its equivalent of “value” products, but not to enhance shareholder dividend, but for the benefit of treating as many people as possible efficiently to the highest of rigorous medical and nursing standards is a worthy cause. An unfortunate effect of the reaction to the Tesco “horsemeat” saga is that rather demeaning judgements about people who buy “everyday” products have entered through the back door. However, many people are desperately keen to avoid an emergence of a “two tier” service in healthcare where access-to-medical-treatment becomes dependent upon an ability-to-pay.

It’s possible that at the “everyday” end of the NHS, it might be possible to go for the “stack them high” approach which is pervading education and healthcare, which is perfect for private equity investors. However, this system is clearly not ideal for all, and this is clear not a market led by the “end-consumer”. Characteristics of markets where there is poor competition due to lack of participants include an inability of customers to lower prices and an ability for suppliers to increase prices, while providing the essentially the same product. This is what has happened in a whole string of privatised industries, including gas, electricity, water and railfare, and the (relatively) “simple” hernia operation is going to be no different. Whose going to benefit from offering a contracted core NHS service? Of course, the corporates whom I don’t dare to name because of their legal teams. Will the patient benefit compared to a NHS ideal of “comprehensive” and “free-at-the-point-of-use”? Absolutely not.

Simon Kirk

Isn’t part of the problem for the defence of the NHS that NHS-provided services are sometimes similarly united only by the brand though? Unexplained and indeed undisclosed variation in quality (experience, effectiveness, efficiency) between individual practitioners and hospitals (let alone between Trusts) makes it difficult to sustain a solely public good v. private bad argument. Competition has arguably been one of the means (alongside other elements of the new public management style of performance indicators etc) of creating an incentive/disincentive system for improvement within the NHS. Exhortation alone never worked. More money helped though and under the Blair/Milburn regime in particular the two were eventually coupled together. I’d like to chose which surgeon I see and where (as the best of each might not be united by an institutional setting). I wonder whether we can begin to talk about decoupling our understanding of services from their bricks and mortar homes – we might then be able to work through and offer a more sophisticated argument?

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