Feature

Changes which go to the heart of the NHS

The government must engage in honest and open debate about its long term plans for the health service, says Mark Thomas

The battle in Parliament over the introduction of foundation trusts is over, and by the narrowest of margins the government has succeeded in forcing the measure through. But while it may have won the vote, it has not won the argument. Patients, the public, staff and many in the Labour party are worried that the introduction of foundation trusts will lead to increased inequality and competition in the health service. Their concern is not a matter of vested interest, but of a genuine desire to see the NHS provide the best possible service to all patients.

But foundation trusts are not the whole story. While they have been the focus of debate, the government has been pushing ahead with a number of other reforms which, though not requiring legislation, are part of the same agenda and raise similar issues.

A new financial system is being introduced, in which payment to hospitals will be on a fee-per-case basis. In September, the government announced a new programme of privately run ‘diagnostic and treatment centres’ to provide elective services for the NHS. And from 2005, patients referred by a GP will be able to choose between different hospitals, including privately run hospitals. Viewed as a whole, these changes add up to a significant shift in health care policy, creating a system in which health care is provided through a competitive commercial market.

Much of the political imperative for this new agenda comes from the need for the government to demonstrate progress in driving down waiting lists. It believes that by allowing hospitals to compete against each other for patients, pressure will be exerted on providers that are failing to meet their targets.

In addition, it has allowed itself to be persuaded by arguments that, by using the private sector, the NHS can increase the total available capacity more quickly than it could by relying on the public sector alone – despite extensive evidence that in many cases the private sector actually grows at the expense of the public sector, drawing staff away from existing NHS hospitals.

The trouble with the government’s strategy is that it assumes that by giving individuals greater choice, they will be automatically empowered and standards of service will improve. In fact, as evidence in other parts of public services suggests, the opposite can happen, with choice and competition can leading to lower standards of service, worse access and greater inequality.

Of course, not all choice in the NHS is bad. Few would dispute that giving patients a choice to see a women doctor or to choose a convenient date for their appointment is a good thing. But in viewing each patient as a consumer, and giving them the ability to make choices that will maximise their own individual interests, it is possible to create a situation in which the choices available to others are reduced and in which the best overall outcome is not achieved.

If patients are given a choice of hospital at the point of referral, the natural consequence is that they will want to move away from those hospitals which are seen (for whatever reason) to offer a worse service to those with the best reputation. As a result, some hospitals will become highly oversubscribed, allowing them to select which patients to treat and which services to provide on the basis of what is most profitable.

Meanwhile, hospitals which lose patients will receive less money and may have to withdraw some services. Even where local hospital services are below standard, it is unlikely that alternative providers will come in to establish new services nearby, as the monopoly nature of healthcare provision means that there is a limit to the number of hospitals an area can support. So people will be faced with a choice between declining services locally or competing to be seen at a more successful hospital outside their area.

At the heart of the government’s approach is the belief that if it treats NHS providers as commercial organisations, this will push them to achieve better patient services. The problem with this line of thinking is that it overlooks how difficult it is, in practice, to align commercial incentives with the nature of public services and the need to pursue social goals. No contract can ever encapsulate everything that is required of a public service, and where the commercial interests of public service providers conflict with the public interest, it will be the commercial interests which prevail. One needs only to look to PFI, the closure of private sector care homes and the withdrawal of WS Atkins from Southwark LEA for examples.

The government must now come clean and be much more honest about the important changes it is making to the heart of how the NHS is run, and encourage an open discussion of the possible implications. Too much of the limited debate so far has focused on the short term, and inadequate attention has been given to the longer term risk of perverse incentives, exploitative behaviour and widening inequality.