Is the coalition focusing too much on market reforms in its health plans? The real problems facing the NHS – improving care for people with chronic conditions, the elderly and those at the end of life – are not going to be solved by hospital competition
Heated debate continues to surround the coalition government’s proposals for reform of the NHS. Despite the ‘pause’ and the government amendments made before the final reading of the Health and Social Care Bill in the Commons, it is likely to have a rough ride through the Lords.
At the Liberal Democrats party conference in Birmingham last week Baroness Williams laid out the thinking behind the opposition to the Bill in the Lords. Meanwhile, Labour leader Ed Milliband and shadow health secretary John Healey in speeches at their party conference in Liverpool have drawn the battle lines on which the next election is likely to get fought – ‘Has David Cameron kept his promises on the NHS?’
The challenge for Labour is that it was their government that introduced the market reforms into the NHS that health secretary Andrew Lansley now seeks to see through to their logical conclusion. The coalition proposals to extend choice to ‘any qualified provider’ and payment by results beyond elective surgery and to set a hard deadline for all trusts to become foundation trusts could be seen as a simple extension of these market reforms.
In Understanding new Labour’s market reforms of the NHS the King’s Fund argues that compared to the previous Conservative government’s internal market, by the end of Labour’s period in office the NHS was operating more like a real market. There was more competition with more patient choice including of private sector providers, stronger financial incentives with hospitals rewarded for activity, and commissioners beginning to use their buying power to competitively let contracts. However, the market share of activity in the private sector was very limited and more than half of NHS trusts had not achieved foundation status.
In practice, the system was still planned and managed through a hierarchy of publicly accountable bodies - primary care trusts and strategic health authorities. Perhaps most importantly the market coexisted with targets and performance management, and for those working in the system these still dominated their decision making. The coalition government’s abolition of SHAs and PCTs, and the handing over of considerable responsibilities to the NHS Commissioning Board, the extension of Monitor’s powers to enforce competition rules and the removal of targets suggest that the government is placing a lot of faith that the market will deliver results.
But is competition the right solution for the challenges facing the NHS today?
The context in which the Labour government’s market reforms were implemented was one of growth; between 1997-2010 there was sustained growth in resources for the NHS (about 5-6% real-terms growth each year). Consequently, new entrants, such as Independent Sector Treatment Centres, did not impact greatly on the demand for NHS trusts. A period of low growth in funding for the NHS over the next decade could mean that competitive pressures are more readily felt.
But the productivity improvements that need to be made are not going to be achieved at the margins by individual organisations doing what they do now, only a little bit better. They are only going to be achieved if the NHS adopts radically different ways of organising clinical services.
Significant improvements in access and waiting times for elective surgery have been achieved over the past decade largely as a result of tightly managed targets. Evidence we reviewed suggests there have been some efficiency gains associated with competition in hospital care, and modest improvements in some quality indicators. The real challenge facing the health and social care system is improving care for people with chronic conditions and frail elders and those at the end of life.
Hospital competition is not going to deliver improvements for these patients when admission to a hospital is often the worst place for them to be. Evidence suggests that coordinated and integrated care, that spans health and social care and physical and mental health needs, delivers better outcomes for these patients.
In order to deliver better care for patients at a time of tighter funding disruptive innovations in health care are needed. These are likely to require our hospital leaders to do themselves out of a job. An environment where the unit of competition is the hospital and the measure of success is increased activity is not conducive to the adoption of radically different models of care. We need different solutions for different times.
Anna Dixon is director of policy at the King’s Fund
