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David Prior is right, but his solution is wrong. Radical change is needed to abolish the NHS’ internal market.
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On the other hand, a radical shift in the culture of the NHS is needed to rid it of outdated working practices, cure it of widespread bullying and heal the damaging rift between managers and clinicians, according to David Prior, chairman of the Care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.
To turn the CQC into a “NHS disaster” story is for some hitting a target but totally missing the point
Hitting the target, but missing the point?
Some very well known people have totally missed the point. They are supposed to be professional commentators or editors. What happened yesterday, with the publication of the long-awaited report by CQC, was not another NHS “disaster story”. Such a story is intended to make you want to go #facepalm at the thought of needing to go into a NHS Trust. It may even be a story to tell you that the NHS is not a “national religion“, and is a ‘sacred cow’ which ought to be sacrificed on the Hayek Altar of Privatisation.
No, I’m being very ironic.
The CQC was set up to expose problems in hospitals and care homes. It had far-reaching powers of inspection which allow it to order reforms or even close health services which put patients at risk. The interviews between James Titcombe and John Humphrys and David Prior, this morning, on the BBC Radio 4 programme are here. The CQC has been found, however, wanting in a drastic way yet again. The BBC TV programme Panorama broadcast evidence of mistreatment on residents of a Castlebeck hospital on May 31, 2011. Despite evidence concerning the same institution having previously been given to the Care Quality Commission, the body failed to act and has since admitted “an unforgivable error of judgment”. Major changes unsurprisingly have been made in the upper echelons of the Care Quality Commission, with a number of senior people leaving the organisation. According to “Caring Times”, its Director of finance and corporate services John Lappin announced he had a new post last year but agreed to stay on to finalise CQC’s budget for 2013/14 and deputy chief executive Jill Finney left CQC in February to take up a senior role in the private sector. Louise Guss, director of governance and legal services, was reported to be set to leave at the end of May, as was director of operations delivery Amanda Sherlock. Director of human resources Allison Beale will apparently leave in September. David Prior is now the Chairman of CQC; his biography is here.
In future, CQC hospital inspections will include 15-20 experienced people for a month, according to David Prior this morning. However, the report published this morning winded an already beleaguered NHS. Regulators apparently deleted the review of their failure to act on concerns about University Hospitals of Morecambe Bay NHS Trust, where police are investigating the deaths of at least eight mothers and babies. James Titcombe (@JamesTitcombe) and his wife, Hoa, arrived at the Furness General Hospital at Morecambe Bay, Cumbria, on 27 October 2008. Their son, Joshua, was born that morning. Nine days later, James Titcombe, a nuclear engineer from Barrow-in-Furness, tragically witnessed his son die. Midwives and medical staff at Furness General had failed to detect and monitor an infection, which became so serious that Joshua had to be transferred for intensive care at two different hospitals. Joshua died on 5 November. James has led a very public campaign for a public inquiry into “serious systemic failures” at the University Hospitals of Morecambe Bay Trust which manages Furness General. The horrific story is laid bare by James in this account here.
Kay Sheldon (@kayfsheldon), a director of the Care Quality Commission, also accused its senior managers of “deceit and evasion” in refusing to be straightforward about its failings. Kay sits on the CQC’s board as a non-executive director, and her role is to hold it to account. She has now spoken out, having refused to sign a wide-ranging gagging order in the wake of attempts to have her removed by the former chairman after she gave evidence about its failings to the Mid Staffs inquiry. James was asked about the situation now.
“… One of the key things is… One of the things I need to say John [Humphrys] is how amazingly grateful I am to Kay Sheldon as a non-executive Director. This report would not have come out if it were not for Kay. She was very courageous, and she faced what whistleblowers often face in the NHS, which is a vilification of their actions, ..in quite an appalling way. This report vindicates those concerns, and I think CQC – and David Prior to whom you’re talking afterwards – could demonstrate a commitment to the kind of the culture people want to see. David Prior could publicly reinstate Kay Sheldon and will remain on the board of CQC. That would go a long way. Other than that, I will judge the CQC how it will react in the next few weeks, and lays out its proposals how nothing like this can ever happen again.”
The chairman of the CQC, David Prior, who has been in the post for four months, said he was “desperately sorry” that the situation had arisen.
Particularly in the aftermath of the global financial crisis, all the international financial regulators have reciprocal relationships to help them conduct their duties of public protection by sharing information. Any lack of sharing of information in a facilitatory way may be a fundamental barrier to effective regulation in healthcare, and time will tell. Prior said that,
“Unbeknown to us there was an investigation being held by Pauline Fielding which had been going on for four months, and found the maternity service was dysfunctional and unsafe. Her report was not finished at the time. We were not set up then and we are now set down to inspect hospitals…Our job is to inspect hospitals. We sent people in who had not worked in a hospital before. How could they do a proper job? We have been in the job of giving reassurances to the public.”
Among the various findings, the CQC was “accused of quashing an internal review that uncovered weaknesses in its processes“. David Prior was asked this morning by John Humphrys why one person in the CQC was asked to “destroy” evidence, to which Prior said that the “management board was dysfunctional.”
“I had known for a few months that we were not ‘fit for purpose’ as far as hospital inspections are concerned.”
Humphrys asked repeatedly if anybody who had left CQC were “punished”, and Prior said no. This issue of people moving on from failures in one job in NHS management to get a highly paid job elsewhere continues to haunt the NHS. Caroline Molloy very recently on the ‘Our NHS’ blog has described how this phenomenon has gathered momentum pursuant to the Health and Social Care Act (2012):
“In an increasingly marketised system, the opportunities for financial conflicts of interests are clear. It is curious that the media has chosen to focus on the conflicts of commissioning GPs. Whilst problematic, the sums involved are dwarfed by the huge fortunes to be made by the corporate clients of the big four currently embedding themselves at the heart of policy making.”
In August 2012 David Behan, chief executive of CQC, commissioned a report by management consultants, Grant Thornton. Names of those accused of a cover-up within the CQC were removed from this report. Humphrys explictly asked why the names in this Report had been redacted. Prior answered, “We had to make the decision on Friday to not publish the Report or publish the Report with the names, but we would have been breaching the Health Protection Act.” However, @dbanksy later on Twitter reported that:
Anyone who knows how English law works will know that the English law is there for all parties to interpret freely. A person will pay for legal advice, instruct the lawyer according to what result he or she wants. If a party were to instruct a lawyer to protect the identities of certain individuals, rather than to disclose a narrative which is clearly in the ‘public interest’, that would be perfectly possible. It would also be perfectly possible to instruct a different lawyer with different instructions. Get this – Hunt can sue the CQC if he wants. The NHS and CQC are not the same thing, shock horror!
Incredibly, some accounts failed to mention even Kay Sheldon, a key member of all this. James Titcombe was incredibly impressive as ever, in articulating what is clearly not a vendetta against the NHS, but an earnest desire for everyone in the NHS to learn from its mistakes. There are issues about what happened to Kay’s opinions, why healthcare regulators appear to coordinate poorly their regulatory inquiries, and the concerns of Kay Sheldon and a similar band of people Dr Heather Wood, David Drew, Dr Kim Holt, who have become sacrificial lambs in the whole cathartic process. People who whistleblow tend never to work again in the #NHS, and, for all the heroism, their opinions are marginalised at best, at worst ridiculed and humiliated. This episode is very clearly a debate about the efficacy of healthcare regulation. There is an urgent question to be had about the efficacy of the CQC’s regulation: why does England persist with a non-specialist “one size fits all” generic method of regulation in some parts? To have turned this into a privatisers’ charter was perhaps hitting the target for some, but missing the point, I feel.
