Graham Winyard: Moving away from the competitive market in the NHS

The Health Select Committee last week supported legislative changes requested by NHS England to promote the delivery of integrated healthcare. Giving evidence at one of their enquiry sessions I was struck by how little the problems being grappled with had to do with the actual delivery of health and care and everything to do with how successive Governments have chosen to run the NHS since 1990. The “unreformed” NHS of the 80s certainly had shortcomings, but the competitive market introduced to tackle them is now creating far more problems than it ever solved. I offer some wider reflections on three issues that were central to the committee’s discussions, based on personal experience of the pre-market NHS and close involvement in the development of “Working for Patients” the Thatcher market reform White Paper.

Firstly, what organisational arrangements will best support the provision of integrated patient care? The new proposal is for commissioners to develop a detailed Integrated Care Provider Contract to be delivered by a single provider organization, possibly a new integrated care trust, which would “have a contractual duty to deliver and improve health and care for a defined population; with the freedom to organize resources across a range of health and care services, working in conjunction with other local partners.”  In the 1980s a single statutory authority, the District Health Authority, with a membership that included local authority councillors and representative health professionals, was similarly accountable, (without the need for any contractual duty spelling this out), and was directly responsible for all the health services on its patch. Such simplicity had many virtues, not least low transaction costs, clear accountability, and negligible need for lawyers and specialist consultants.

Secondly, might the proposed restrictions on competitive procurement harm patients’ interests by reducing competition and choice? This question only has meaning if we can be confident that competition improves service quality. However, evidence is woefully inconclusive after nearly 30 years of experience with NHS markets. For example, one recent study showed that emergency readmissions following elective hip and knee replacements increased with the introduction of competition into the NHS in England, concluding that “the English choice reforms had either negative or no effects on hospital quality for three important elective treatments”. Markets are not an essential feature of health services and the English NHS used to run smoothly without them, as does the NHS in Scotland and Wales. Yet we persist in diverting an estimated £5-10bn a year from patient care to support market bureaucracy and transaction costs. (The full costs remain undocumented in spite of the Health Select Committee’s plea to do this ten years ago.) The use of resources on this scale without evidence of effectiveness would never be tolerated in clinical services.

Finally, how can independent health trusts be induced to work together for the overall benefit of patients and not their separate organisational interests? Enabling cost effective high quality healthcare has always required flexibility to deploy scarce staff and resources across different institutions and settings, with technological advances often driving change to established patterns of provision. Yet independent NHS trusts with statutory stewardship focused on their individual wellbeing is an organisational approach that might have been specifically designed to resist such flexibility. A complex raft of solutions is now proposed, including joint boards and committees with new shared duties, and NHS Improvement given last resort powers over capital and mergers. All this is in addition to current multiple, sometimes conflicting, guidance streams from NHSE, NHSI, the CQC and commissioners.

This is a huge organisational price to be paying to preserve the sanctity of statutory trust independence, now apparently an NHS article of faith. What is wrong, in a national health service, with being able to direct individual parts of it when their preferences do not match what is necessary for wider patient good? In the 1980s, Regional Health Authorities sometimes told us what to do, and very irritating that could be. But they were not always wrong, just taking a broader perspective, and their ability to control a small number of issues was matched by much greater local freedom from inspection and monitoring. The net result was more management effort focused service improvement, as opposed to satisfying the requirements of multiple external agencies.

The evidence base for the 1990 NHS reforms was pretty flimsy, yet its basic concepts still dominate the present organisational landscape, and may be at the heart of many current difficulties. Further pragmatic complexity, however ingenious, cannot be the definitive answer. Dismantling the internal market would generate huge savings and release managers to refocus on patient care not bureaucratic transactions.

Graham Winyard retired in May 2007 from a career in public health and medical management that included six years as medical director of the NHS in England. 

Competing interests: None further declared.