The White Paper and the Politics
of market-based NHS reforms
Dr Clive Peedell
Consultant Clinical Oncologist
JCUH
Conflicts of interest
• Member of BMA Council and BMA Political
board
• Member of NHSCA
Outline
• Political consensus for market based reforms
in England
• Current market policies
• Summary of the NHS White Paper
• Market failure in healthcare
• Politics and Political economy
• NHS Market reforms
• NHS White Paper in political context
• Conclusions
Political consensus and evidence for
financing the NHS
• All 3 political parties signed up to a single payer publicly
funded system
• Major evidence to support this:
Guillebaud report 1951, The Commons Expenditure
Committee report 1973, Wanless review 2001
• Wanless - £267 billion underspend 1972-1998
“The surprise may be that the gap in many measured
outcomes is not bigger, given the size of the cumulative
spending gap” Wanless
• No wonder the NHS had problems!
Political consensus in England for market
based policies
• All 3 main parties support the use of market
based policies in the provision of healthcare
• Conservative party introduced the “internal
market” in 1991
• New Labour policies were pro-market from
2002 onwards
• However...devolved nations have abandoned
market based policies
What is a market system?
• The essence of a market system is that “free agents”
try to maximise their own “utility” or wellbeing by
comparing market prices for goods and services with
what they are worth to them. Provided prices are
free to move, they will adjust to the forces of supply
and demand.
• Price signals enable the market wring out the most
of an economic situation
• Driven by self-interest and competition, and relies on
information symmetry between buyers and sellers
Current English NHS market-based policies
The key levers of the NHS market are the mutually
reinforcing policies of:
• Purchaser-Provider split between primary care (PCTs)
and secondary care
• Patient choice to promote competition (Choose and
Book, Extended Choice Network)
• Plurality of providers - FTs, Private companies (ISTCs,
ICATS), “Third sector” non profit organisations
• Payment by Results (PbR) using a tariff system
“PbR is the reform which makes everything else
possible” Timmins BMJ 2005
• Patient held budgets
• New Public Management – to run the NHS along
business lines
Markets in healthcare
Proponents argue that market based policies
will lead to:
• Greater efficiency and innovation
• Less meddling by Government
• Increased responsiveness to patients
White Paper: “Equity and Excellence:
Liberating the NHS”
• Published on 12/7/10.
• Sets agenda for NHS for the next 5 years.
• Associated publications: analytical strategy,
impact assessment, structural reform plan
• 4 separate consultation documents
• Another White Paper on Public Health due
soon, and a further White Paper on Adult and
Social Care in 2011
Core values
• A commitment to a comprehensive service,
available to all, free at the point of use, based on
need, not ability to pay
• Put patients at the heart of everything the NHS
does
• Focus on continuously improving those things
that really matter to patients - the outcome of
their healthcare
• Empower and liberate clinicians to innovate, with
the freedom to focus on improving healthcare
services
Key policies (1)
• GP Consortia to take control of commissioning
and £80 billion of the £100billion NHS budget.
“Localism”
• SHA and PCTs abolished. 45% cut in
management costs over 4 years. DH and
Quangoes slimmed down
• Increase patient choice – “no decision about
me, without me”
• “Any willing provider”, withdrawal of practice
boundaries, patient held budgets
• Information revolution
Key Policies (2)
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FTs to become “employee owned” Social Enterprises
NHS Commissioning Board
Monitor to be economic regulator
PbR. Best practice tariffs and price competition
NHS Outcomes Framework
NHS held to account against clinically credible and
evidence-based outcome measures, not process
targets. Quality standards
• Targets with no clinical justification removed
• HealthWatch will be created as a new independent
consumer champion within the CQC
GP Consortia
• Responsibility for commissioning and budgets
given to GP consortia on statutory basis
• GP Consortia working with other HCPs, local
communities and authorities will commission
great majority of NHS care, but not GP provision,
dentistry, pharmacy, primary opthalmic services
and maternity
• Every GP will be a member of a consortium
• Freedom to choose what commissioning activities
they undertake and what support to buy in
• Full financial responsibility by 2013
NHS Commissioning Board
• Statutory NHS Commissioning board will be created
• SpHA from April 2011 and go live in April 2012
• Take over CQC responsibility for assessing Commissioners
and hold GP consortia to account
• 5 main functions:
1. Provide national leadership on commissioning for quality
improvement
2. Promote and extend patient choice
3. Ensure development of GP commissioning consortia
4. Commission some services
5. Calculate and allocate budgets to Consortia, and account
for NHS resources
Freeing Existing NHS Providers
• All NHS Trusts to become FTs (within 3 years)
• All FTs to become employee led Social
Enterprises – “The largest and most vibrant
social enterprise sector in the world”.
• FTs/SEs will cease to be public sector
organisations and “will be regulated in same
way as any other providers”
• Abolition cap on private income. Mergers.
Governance tailored to local needs
Monitor
• Role of economic regulator strengthened:
Promote competition
Price regulation
Supporting continuity of services
• Monitor will have concurrent powers with the
Office of Fair Trading to apply competition
law to prevent anti-competitive behaviour e.g
discriminating in favour of incumbent
providers
Secretary of State
• Hold NHS Commissioning Board to account
• Lay out mandate for NHS Commissioning
Board
• Arbiter in disputes between Commissioners
and local authorities
• Setting legislative and policy framework
• Accounting annually to parliament
Education and training
• Less role for DH
• Employers will have greater autonomy and
accountability for planning and developing
workforce
• Providers will pay to meet costs
• Centre for Workforce Intelligence will act as
source of information and analysis
• Further consultation document later
Pay and Pensions
• Pay decisions will be led by healthcare
employers rather than government
• All individual employers will have right to
determine pay for their own staff
• Hutton review on Pensions
Proposals for legislation
Significant opposition from NHS
stakeholders
• Unite
• Unison – judicial review
• BMA – “critical engagement”. Opposes market based
policies
• NHSCA - oppose
• RCN –"The scale and speed of reforms pose a
significant risk to the future of the NHS in England“
• RCGP – Concern that proposed scale, pace and cost
of change will prove disruptive
• NHS Confederation – 40 suggestions to improve WP
• King’s Fund – Reform is too fast
Democratic legitimacy?
• 2010 Conservative Election Manifesto: “More than three years ago, David
Cameron spelled out his priorities in three letters – NHS”
This refers to the document: “NHS Autonomy and Accountablility.
Proposals for legislation” (2007)
• The introduction was written by Cameron and Lansley :
“Improving the NHS is the Conservative Party’s number one priority....this
requires an end to the pointless upheavals, politically-motivated cuts,
increased bureaucracy and greater centralisation that have taken place
under Labour..”
• David Cameron’s speech at the 2006 Conservative party conference:
“no more pointless and disruptive reorganisations”. Instead, change
would be “driven by the wishes and needs of NHS professionals and
patients”.
• The 2007 WP says:
• 4.25 “As part of our commitment to avoid organisational upheaval, we will
retain England’s ten SHAs, which will report to the NHS Board.”
• 4.28 “PCTs will remain local commissioning bodies.”
• Walshe (BMJ) highlighted the fact that the Coalition agreement had
specifically pledged to "stop the top-down reorganisations of the
NHS that have got in the way of patient care“ (HM Government. The coalition: our
programme for government. Cabinet Office, 2010.)
Estimated costs of reorganisation - £3 billion
• Liberal Democrat MP, Andrew George, of the Health Select
Committee, said that Lansley had "Torn up the agreement to resist
imposing a top-down re-organisation"
• Zack Cooper from the LSE: “The new health secretary campaigned
on a pledge to eliminate top-down shakeups of the health
service. This white paper contradicts his campaign promise”
• The rapidity of the publication of the White Paper and the above
statements suggest that that the Liberal Democrat side of the
coalition have had little or no influence of the planning of the WP.
Why oppose market based
policies?
“The White Paper’s proposals are ideological with
little evidential foundation. They represent a
decisive step towards privatisation that risks
undermining the fundamental equity and
efficiency objectives of the NHS. Rather than
“liberating the NHS”, these proposals seem to be
an exercise in liberating the NHS’s £100 billion
budget to commercial enterprises”
Whitehead, Hanratty, Popay. Lancet. 6th Oct 2010
Dept of Health Inequalities and Social Determinants of Health, University of
Liverpool.
Purpose of the NHS
• NHS Pre 1948 – market system. Fragmented care.
“Pain and discomfort were accepted as part of life to be
endured with stoicism” Geoffrey Rivett
• Central feature of the Welfare State (Beveridge/Bevan)
• To sweep away the failed “market” of voluntary sector, private
and municipal hospitals, through nationalisation
• Pooling of risks. Everyone covered - “Universality” by a “Single
payer” system
• Based on importance of healthy society, social solidarity and
social contract between doctors and patients
• “A unique example of the collectivist provision of healthcare
in a market society” Rudolph Klein
Founding Principles of the
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Universal
Free at point of delivery
Equitable
Paid for by central funding – “Single Payer”
The NHS: “Labour’s greatest achievement. It is a working
example of the best interests of the people in this country. It
is the most popular institution in Britain” (Dobson)
• “Sacred Cow” status
Market failure in healthcare
Market Failure in healthcare - Theory
Market failure in healthcare is a well recognised problem in theory and practice (Arrow, Brown)
1. “Information asymmetry”. Patients are not well enough informed to make choices. Patient
vulnerability. Need for “Choice advisors”. Also primary and secondary care
2. Healthcare is difficult to commodify. Contracts are complex. Contracts are based on mistrust
3. Risk of supplier induced demand
4. Excess capacity is needed for market choice to work i.e a plurality of providers
5. Exit is very difficult ie Hospital closures are a political hot potato
6. Expensive to enter market – e.g ISTCs (given 11% extra tariff)
7. Insurance systems will give the cheapest and best coverage to the well, and the most expensive
and least coverage to the sick
8. Doctors control access to the healthcare market. Professionalism is a problem
9. Markets provide for wants rather than needs.
10. Price signals don't work. Payment occurs after care. Healthcare costs are prohibitive. Pooling of
risks
11. Need for specialty clusters and high volume workload
12. First duty of investor owned firms is to their shareholders, not patients – “cream skimming”
13. The market is a blind power without any social orientation: it cannot solve social problems
14. Need to plan for local population needs
Speech by the Chancellor of the
Exchequer, Gordon Brown, to the
Social Market Foundation at the Cass
Business School on Monday 3
February 2003
“Indeed, the case I have made and experience
elsewhere leads us to conclude that if we were to
go down the road of introducing markets wholesale
into British health care we would be paying a very
heavy price in efficiency and equity and be unable
to deliver a Britain of opportunity and security for
all”
“The very same reasoning which leads us to
the case for the public funding of health care
on efficiency as well as equity grounds also
leads us to the case for public provision of
healthcare”.
Market failure in practice: USA
“Evidence from the US is remarkably consistent: Public funding of
private care yield poor results” Woolhandler, Himmelstein, BMJ 2007
• Market failure is recognised - US system is not a free market
(Medicare/Medicaid)
• $2.3 trillion dollar system - “Medical Industrial Complex”
• 50 million uninsured. ?millions underinsured
• Massive costs to employers e.g GM
• 62% of all personal bankruptcies (900,000/year) due to medical
expenses. 78% had “insurance” (User fees/Top ups)
• 30% budget on transaction costs. (40% in for profit sector)
• Massive CEO pay. Healthcare fraud
• Poorer outcomes for life expectancy and infant/maternal mortality
rates
• Plagued by undertreatment and overtreatment – “islands of
excellence in a sea of misery”
CEO pay in the USA
Humana
Current CEO: Michael.B.Mccallister
Compensation 2009: $5 million and has $50 million stock options
UnitedHealth
CEO: Stephen J Helmsley
Compensation 2009: $3 million and stock options worth $660 million
n.b previous CEO, Bill McGuire involved in $1.5 billion stock options scandal
Aetna
CEO: Ronald A Williams
Compensation 2009: $24 million and stock options worth $170 million
n.b Former Aetna CEO John Rowe earned $175 million in 65 months ($225,000
per day!!)
Source: Forbes website
Market Failure in practice:
England
“All evidence and analysis shows that the actually existing market created
by New Labour is likely to exacerbate the terrible social injustices of
unequal access to healthcare and unequal health outcomes”
Raine, McIvor, Lancet 2006
“On public services, the Government talked a technocratic language, using
words like “contestability”, and seemed sometimes to suggest that private
sector solutions were always better – when public services users just
wanted guarantees of good schools, hospitals and policing”
Ed Balls, candidacy statement for Labour Party Leadership 2010
Evidence for market failure:
• Quasi-market and recognised need for regulation
• Transaction costs: University of York study - 15% NHS budget versus
5% prior to the PP split
Commissioning contracts, commodification (HRG coding),
Managerialism (91% increase in NHS managers, consulting), NHS IT
system to provide information for “consumers”, marketing
• Costs associated with excess capacity – e.g ISTCs, Polyclinics, Third
sector
• Regulatory costs – CQC, CCP, Monitor
• Complexity of Commissioning
• 15 major NHS reorganisations in the last 20 years
• Attack on professionalism and public service ethos
• .............And I’ve not even mentioned the PFI!
NHS Confederation report on NHS
restructuring
Deprofessionalisation
• Market systems reject medical professionalism
and the public service ethos
Doctors and NHS market reforms
• Doctors control access the healthcare system
• Paul Starr defined “medical sovereignty” as a combination of
economic power (control over the market), exerted mainly through
a “cultural authority” on patients, and political influence (control
over policy making). Starr, P. The social transformation of medicine. 1982
“Public service professionals are in a profound sense not just nonmarket, but anti-market” Professor David Marquand, Decline of the Public
• The medical profession is therefore an obstacle to market reforms
• Attack on medical professionalism since the Griffiths report, 1983
• Working for Patients white paper, 1989. This led to the “End of the
Double Bed” of policy making. Rudolph Klein, BMJ 1990
• BMA has not been involved in policy making ever since
“Knights, Knaves, Pawns and Queens”
• Public Choice Theory. A concept in economic theory that
suggests public servants are “self interested rent-seekers” –
“knaves” rather than “knights”.
“Public policy should be designed so as to empower
individuals: turn pawns into queens” Julian Le Grand
Thus, public services are best delivered through consumer
choice and the market.
• Rejection of the “Trust” model of healthcare delivery
• Gave rise to New Public Management (performance
management and market discipline)
• Paradoxically, this view of medical professionals as “knavish”
self interested agents of business, feeds on itself. American
medical profession has lost public support faster than any
other professional group. Blendon. JAMA 1989
PMETB
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Government took control of training through PMETB
British Journal of General Practice editorial described how the proposals for the
establishment of the Medical Education Standards Board (which later became
PMETB):
“…. are clearly intended to enable the Secretary of State of the day to direct that
standards can be lowered to meet the manpower demands of the NHS
President of the RCA, Peter Hutton, pointed out:
“For a Government dedicated to a quality service, I found it surprising to see the
statement: ‘The competent authorities (e.g the STA) typically apply considerably
higher standards than the minima specified by law’. Quite frankly, thank
goodness they do”.
Clear agenda for a drive towards minimal standards rather than excellence
MMC
• Competency based training - CBT originated in the 1980s and was a
politically driven movement with the aim of making national workforces
more competitive in the global economy by focusing on discrete technical
skills with an emphasis on outputs, performance assessment, and value
for money.
• MMC – competency based, minimal standards, tick box culture. Tooke
report: “Aspiring to excellence” cited MMC for aspiring to mediocrity.
• MMC designed to produce a “fit for purpose” medical workforce :
“...most importantly, (MMC) will deliver a modern training scheme and
career structure that will allow clinical professionals to support real patient
choice” (DH Website)
• Recent briefing from NHS Employers stated:
“The future NHS will not require all doctors to progress to the current role
of consultant. New roles and structures must be developed that will meet
the needs of employers....”
Lansley has a problem….
• “Without doctors, attempts at radical large-scale change were
doomed to fail.” Ham/Dickinson. Engaging Doctors in Leadership: A review of the literature
2007
• Clinical leadership is well recognised to be crucial to health
reforms.
• Strong “Clinical Leadership” drive in Darzi reforms. “Change
Agents” to deliver market based reforms e.g “Service Line
Management” (business units)
• Market reforms need doctors to become more
entrepreneurial – “Doctorpreneurs”
• Virtually no mention of the role of consultants in the White
Paper
“Only a dunce could believe that market based reform will
improve efficiency or effectiveness”
Woolhandler/Himmelstein BMJ 2007
So why have so many countries, including England, gone
down this route?
It’s the economy, stupid!
(And some politics and philosophy)
Global neoliberalism and the consequences
for healthcare policy in the English NHS
(Presented at IAHPE 2009)
The main principles of neoliberalism
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The dominant political, economic and philosophical doctrine of the last 30
years. (Harvey. A Brief history of neoliberalism. OUP)
Liberalisation and deregulation of trade and finance. Maximum market
freedom with minimal Government intervention
Economic stability for the private sector’s planning environment. “Integrity
of money”. Defeat of inflation. Low taxation
Privatising state-owned enterprises, premises and public services
Remodelling the state’s internal operations along business lines (New
Public Management)
Encouraging individual entrepreneurial freedoms.
Public choice theory
Encouragement of voluntary sector as a source of welfare - “Social
Capital”
Protection of private property rights
Variants of neoliberalism – Thatcherism, Reaganomics, Blair’s “Third Way”
The rise of neoliberalism
• Mont Pelerin Society (Hayek, Friedman, Stigler etc)
• Came to global prominence in the 1970 and 80s
following major worldwide economic crises, oil shocks,
stagflation and collapse of Soviet Union/socialism.
• Demise of Keynesian demand management economic
model
• Chicago School of Economics
• South America – “Chicago Boys” e.g Chile, Argentina
• Reaganomics, Thatcherism
• Promoted by World Bank, WTO, IMF, Central Banks .
Media (Murdoch), Universities, Management
consultancy industry
1948 (Acts 1946-47)
1947
Margaret Thatcher, 1975:
“This is what we believe”
Conservatives and the NHS
• NHS underfunded
• 1983 – Griffiths report. Sainsbury’s chairman.
“Improving efficiency”. Managerialism. Public
services to be run along business lines.
• 1989 – Working for Patients. Purchaser provider
split. Internal market – “Quasi-market”
End of consensus policy making (corporatism) “double bed” (Klein, R. BMJ 1990;301:700-702)
• Alain Enthoven – American neo-liberal economist
was influential. Chief architect of “managed
care/competition” in USA
However.... “Sacred Cow” status of
NHS
• There was actually fairly minimal
privatisation/marketisation of the NHS
• PFI introduced, but negligible
• Founding NHS Principles remained intact
The demands of global financial markets on
nation states
• Global financialisation has eroded the
sovereignty of nation states
• Investors and bond markets demand:
Prudent fiscal policy e.g “Golden Rules”, low
taxation, low inflation
Marketisation and privatisation of public
services, property, PFI/PPPs – “roll back the
state”
Use of private sector management practices
• “TINA” because of risk of “capital flight”
New Labour
‘Every day about $1 trillion moves across the foreign exchanges, most of it in
London. Any government that thinks it can go it alone is wrong. If the markets
don’t like your polices, they will punish you.’ Tony Blair
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4 successive election defeats (‘79, ’83, ‘87, ‘92)
“New reality” – Governments must retain the confidence of the global financial
markets by whatever policy modification is necessary
Abolition of Clause IV of Labour party constitution – denouncing nationalisation,
emasculating unions and policy making power of Party Conference. “Old Labour”
became “New Labour”
“Prawn cocktail offensive” (1992-97) to reduce Labour’s “political risk premium”
“In economic management, we accept the global economy as a reality and reject
the isolationism and ‘go-it-alone’ policies of the past” Labour Election Manifesto 1997
Social democratic model abandoned in favour of a variant of neoliberal
Thatcherism. Eric Shaw. Losing Labour’s Soul. 2007
“We are all Thatcherites, now” Peter Mandelson, The Guardian 2001
A succinct summary of New Labour’s political
position by 2 Labour MPs
• “After years in opposition and
with the political and economic
dominance of neoliberalism, New
Labour essentially raised the
white flag and inverted the
principle of social democracy.
Society was no longer to be
master of the market, but its
servant. Labour was to offer a
more humane version of
Thatcherism, in that the state
would be actively used to help
people survive as individuals in
the global economy - but
economic interests would always
call all the shots”
(John Cruddas MP and Jon Tricket MP – New
Statesman, 2007)
Opening up public services
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“Services are coming to dominate the economic activities of countries at virtually every stage
of development, making services trade liberalisation a necessity for the integration of the
World economy” International Chamber of Commerce
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“Unless Labour made public services more like the market first, the Tories would just do it on
their own terms” Alan Milburn, quoted in the Guardian
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“The commodification of public space has now become an aggressive Blairite objective”
Roy Hattersley, Labour MP quoted in the Guardian, 7th November 2005
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Gordon Brown leaked letter to CBI in response to one of it’s documents;
“A reform agenda of choice and the use of competition and greater contestability , involving
the independent sector, must be driven forward for public services” Timmins BMJ 2007
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“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”
John Denham MP, former Health Minister quoted in the Chartist 2006
New Labour and the NHS 1997-2010
• 3 main periods of NHS policy discourse Greener, I. Policy
and Politics 2004
• 1997-2000 – Fabian (Social Democratic)
• 2000-2002 – Third Way
• 2002-2010 – “Garbage can” (Neoliberal
variant)
Period 1: 1997-2000
• "Our fundamental purpose is simple but hugely important:
to restore the NHS as a public service working co-operatively
for patients, not a commercial business driven by
competition“ Labour Party Election Manifesto 1997
• First few years were about continuity and incremental
changes, not radical reform - “Fabian” approach. Trust in
frontline staff. “The NHS: Modern, Dependable”
• Kept to Conservative spending plans
• No significant role for markets….
• “We are not prepared to trade off being free and fair, for
efficiency and responsiveness to the demands of patients”
Milburn, 2000
• However, aggressive use of PFI/PPPs
PFI
• Designed to allow massive increase in infrastructure
with new schools and hospitals etc
• Kept off public sector borrowing balance sheets
• This prevented Brown from breaking his “Golden
Rule” of keeping HMG debt <40%GDP
• This allowed taxation to be kept low and offered
investment opportunities for the private sector i.e to
suit the needs of the international financial markets
• We now have perverse situation of the public paying
the RBS for PFI repayments, when we own RBS!
• But….Introduction of International Financial
Reporting Standards (IFRS)….but….
• PFI “saved” by bank bailouts!
Period 2: 2000-2002
• Winter NHS crisis in 2000
• “Most expensive breakfast in history” - BBC
• Blair promised UK health spending would match EU
average within 5 years
• Wanless report - £267 billion underspend 1972-1998.
NHS should remain publicly funded
• NHS Plan - “A Plan for Investment, a Plan for Reform”
- 10 year reform plan
• Performance driven managerialist framework,
“target culture”, ratings systems for NHS Trusts
• “Target Mad” – (The Economist 2000)
Period 3: 2002-2010
The healthcare market
• Introduction of a market based system driven by
purchaser-provider split, Patient Choice, Payment by
Results (PbR) and competition between a plurality of
providers
• Patients become consumers
• Outsourcing of commissioning through FESC:
“If this is not privatisation of the Health Service, then
I don’t know what is” Frank Dobson, MP
FESC approved firms
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Aetna Health Services (UK) Ltd
AXA PPP Healthcare Administration Services Ltd
BUPA Membership Commissioning Ltd - (Patricia Hewitt advisor to Cinven)
Partners In Commissioning
Dr Foster Intelligence
Health Dialog Services Corporation - (Phylis Shelton, former DH lead for
measurement of the integrated care programme)
Humana Europe Ltd
KPMG LLP – (Mark Britnell head of Global Health, formerly DH, WCC)
McKesson Information Solutions UK Ltd- (Chair, Lord Carter of Coles, Chair CCP)
McKinsey & Co, IncUK - (Partner, Dr Penny Dash, former DH head of strategy)
Navigant Consulting, Inc
Tribal Consulting Ltd – (Director of health division, Matthew Swindells, former
chief Information officer at DH)
UnitedHealth Europe Ltd – (Head of European arm, Simon Stevens, former
advisor to Tony Blair)
WG Consulting
Period 3 continued:
• NHS Improvement Plan 2004. Prompted Professor
Chris Ham, former DH policy advisor to state:
• “The foundations have been laid for the complete
transformation of health care delivery. We are
shifting away from an integrated system, in which the
National Health Service provided virtually all care, to
a much more mixed one, in which the private sector
will play an increasingly major part. The government
has started down a road which will see the NHS
increasingly become a health insurer” FT interview with NickTimmins
“In this environment of greater choice, increased
contestability and competition driving improvements in
services, there is a greater need to ensure rules and
guidance exist to encourage competition and the effective
operation of markets.”
Professor Chris Ham stated that the CCP rules were written
by a “Neoliberal economist on speed” Ham, HSJ 2009
The White Paper in political context
• “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
• The White Paper is a blueprint for a competitive healthcare
market
• Consistent with the political ideology of the Coalition
Government to drive forward market based policies in public
services
Consequences for the NHS
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Increased use of private sector through the “any willing provider” policy and GP
Consortia buying in commissioning support (e.g FESC)
NHS Commissioning Board and Monitor will stimulate patient choice and the market
£20 billion efficiency savings will place huge pressure on GP Consortia to ration care
FTs/SEs huge financial pressure. “Best practice tariffs” and price competition will lead to
a “race to the bottom”. There is also a policy initiative to drive care out from secondary
care to primary care
FTs/SEs will need to concentrate on the most profitable services. Increased use of skill
mix to reduce costs of service lines. Take advantage on abolition of cap on PP income
FTs will have to crack down on staff T+Cs (end of national pay bargaining)
No bailouts for failing trusts. This could mean mergers, managerial takeovers or exit.
Further opportunity for private sector
Waiting lists may increase - demand for healthcare insurance
Abolition of GP practice boundaries means that patients can effectively choose their
commissioners
The end result could be private commissioning of private companies using public money
“Managed care” through design of care pathways by GP Consortia.
HMO type system cf Kaiser Permanante
Health Investor
NHS Confederation
Inconsistencies in policy
• How can integration of services be compatible with competition?
• Patient choice may actually be decreased because of contractual
obligations
• Outcome measurements have not been validated in most specialities.
Need support to collect meaningful data
• GPs are not best placed to commission secondary care. Working with local
consultants is to build local services is anti-competitive by nature
• Stimulating patient choice (consumer demand) is not sensible in a single
payer system
• Clinical leadership needed to make reforms work, but markets do not
value medical professional public service ethos
Conclusions
• The NHS is the most popular institution in Britain
• Little evidence to support market forces in the
organisation and provision of healthcare
• The fear of “capital flight” in globalised unregulated
financial markets has eroded sovereignty of nation states
• Governments have adopted market policies to deliver
public services
• Markets in healthcare increase bureaucracy and costs
• Erosion of medical professionalism
• The NHS is now open for business with the international
healthcare industry poised to profit
• The White Paper is a threat to the fundamental principles
of the NHS
Aneurin “Nye” Bevan on the NHS:
“It will last as
long as there
are folk left
with the faith
to fight for it”
Joseph Stiglitz
• “Neo-liberal market fundamentalism was
always a political doctrine serving certain
interests. It was never supported by economic
theory. Nor, it should now be clear, is it
supported by historical experience.
Learning this lesson may be the silver lining in
the cloud now hanging over the global
economy.”
Paul Mason
• Paul Mason, the BBC Economics editor of Newsnight wrote:
• " A deregulated banking system brought the entire economy
of the world to the brink of collapse. It was the product of
giant hubris and the untrammelled power of the financial
elite."
"Basically neoliberalism is over: as an ideology, as an
economic model. Get over it and move on. The task of working
out what comes after it is urgent . Those who want to impose
social justice and sustainability on globalised capitalism have
a once-in-a-century chance". Mason P. Meltdown. The End of the Age of Greed.
Verso. 2009