Parallel universe

21 Oct 05
DAVID LIPSEY | Are the health service reforms sinking into chaos?

Are the health service reforms sinking into chaos?

Certainly that is what you would believe from the newspapers. Scarcely a day goes by without some ghastly story about the alleged state of national health finances; the deficits being run by many trusts; the chaotic commissioning of hospital services; and the mess in the primary care trusts, already faced with yet another reorganisation.

When even the Audit Commission weighs in, with its account of the problems with the government’s new ‘payment by results’ system for hospitals, you might think it high time that the government took note.

But the prime minister does not. He poses the choice before us as either pushing ahead faster with public service reform or going back to the failings of command public services.

This is transparently a false dichotomy. The real choice is whether improvements are now most likely to be delivered by accelerated reform, or by consolidating the programme of change already in place. The answer is not obvious; but no favours are done to what should be a genuine debate by trying to stigmatise as reactionaries those who lean to consolidation.

Of course, publicly the government claims all is on course: ‘Chaos, what chaos?’ The Audit Commission report has been misreported, so its spokespeople say, and so on. But some privy to Number 10’s thinking are propagating a different line. Yes, there is chaos. But there’s nothing wrong with that. Chaos is how markets work. Closures and openings, decline of some products, rise of others, sackings and promotions: capitalism teaches us that these are all part of the creative process through which the economic world regenerates itself.

The chaos in the health service is analogous to a forest fire, they say. It might look like a disaster but it is in fact clearing the ground for new and more vibrant growth.

Certainly, one should never underestimate the capacity of even complex systems to cope with chaos. When you talk to those who know what is happening to the NHS on the ground, you hear intriguing stories about how it is surviving. The system as it is officially meant to function is accompanied by a parallel system of how it actually functions. Amid the chaos, there are energetic and dedicated managers somehow abrogating to themselves powers they might not really have to keep the health service up and running.

The comparison with the workings of the capitalist system is, however, flawed in one crucial regard. The process of change under capitalism is often sad. Firms go bust. Workers lose their jobs. Customers can no longer buy products they want because too few other customers want them. However, there is very little danger that, in the process, society will be long deprived of anything essential.

The closure of a hospital is not like that. First, there is the political response to consider. The MP for Wyre Forest sits in the House of Commons today precisely because the government sought to close his local hospital and the sitting Labour member was thrown out in consequence. Hospitals, unlike most factories, have deep social roots, roots grown through the lives they have saved, the comfort they have given, the sense of security they project. If chaos equates to closure, stand by for the political backlash.

Secondly, whereas no more supermarket might not matter, no more hospital does. People don’t die for lack of a particular brand of groceries. They do die for lack of a local hospital. It won’t take many newspaper stories of patient suffering attributable to government-induced chaos before the government is lost.

Moreover, things might soon get more difficult. The reform agenda so far has been lubricated by a Niagara of public money, which has increased health spending by more than 7% per annum in real terms. Doctors’ palms have been greased. Managers have been distributing increments rather than rationing.

Even in these circumstances, something like turmoil has prevailed. But these increases cannot go on forever. If they did, health spending would account for perhaps two-thirds of Britain’s national income by 2050, which is clearly impossible.

It remains to be seen what happens when the brakes go on. Optimists will say that with funding at its new high level, the transition will be harmless. Pessimists will believe that a system dependent on fast-rising cash transfusions will swiftly become anaemic once those are denied.

So far the government’s health reforms must be accounted on balance a success story. The statistics from waiting lists to cancer survival rates bear that out. But just how much chaos can the NHS survive once the lubricating taps of taxpayers’ money are turned off?

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