April 1 2013 saw the launch of a very different type of NHS in England.\u00a0 The current government has grappled with the same problems as all previous governments, but imposed radical surgery on an ageing patient.<\/p>\n
The previous government struggled with the problem of getting improved productivity and common high standards out of a largely monopoly service.\u00a0 The NHS has always delivered its services through a mixture of employed staff and contracted private sector operators.\u00a0 GP practices have always been private sector businesses that are paid by the NHS for the services they deliver, but without GPs ever being NHS employees.\u00a0 How they swung the right to get NHS pensions is another story but just shows the negotiating brilliance of the BMA.\u00a0 But competition plays only a small part in GP services.\u00a0 There is no active recruitment by one practice of the patients signed up to the practice down the road (although maybe we will see this now).<\/p>\n
The Labour government largely saw waiting list and waiting time targets, a tough and supervision regime inspection and better financial regulation as the way forward, using competition only at the edges.\u00a0 It was partially successful and partially failed spectacularly as we saw with Mid Staffs<\/a>.\u00a0 It\u2019s the age old question for politicians \u2013 how do they make public services perform better?<\/p>\n There are big beasts of influence within the NHS, and the major hospitals are one of the biggest.\u00a0 The issue is often “how to deliver productivity from hospitals.”\u00a0 Hence, for example, Labour brought in the independent treatment centre<\/a> programme, when hospitals more or less told the government that it was impossible to get the waiting lists down for certain operations.\u00a0 The ISTC programme was a waste of money because the patients did not flow to the ISTCs for operations.\u00a0 But the primary reason is that NHS hospitals increased their productivity and hence they did the operations that the ISTCs were supposed to cover.\u00a0 No one mentioned the awkward fact that these same NHS hospitals had taken a “computer says no” approach to this before.\u00a0 But that was competition at the edges of the NHS, not at the centre.<\/p>\n The\u00a0previous government was also inching towards an “Any Qualified Provider<\/a>” scheme.\u00a0 ACQ would have meant, for example, that anyone who was authorised by the regulator, the Care Quality Commission<\/a>,\u00a0could provide hip replacements and was prepared to do the operation at NHS rates could have NHS patients referred to them by a GP.\u00a0 That would have been the equivalent for the NHS of a “vouchers for schools” approach.\u00a0 However, this was also only competition at the edges.<\/p>\n In contrast to the\u00a0previous government, we now have competition right at the centre of the NHS.\u00a0 The model of NHS care that\u00a0is commissioned by NHS bodies and delivered by NHS bodies has come to an end.\u00a0 NHS foundation trusts (including Heart of England NHS Trust<\/a>, where I am proud and delighted to have just been asked to take up an appointment as a director) are increasingly acting as public benefit companies that compete with each other and the private sector to deliver healthcare to the NHS market.\u00a0 They are now \u2013 more or less \u2013 subject to the same competition rules as Sainsburys<\/a>.\u00a0 However unless foundation trusts\u00a0behave like private sector companies expanding into new markets, the tendering process inflicted on the NHS will be a one way road from the public sector to the private sector.<\/p>\n Let me explain why I say that.\u00a0 Surrey Primary Care Trust<\/a> tendered a contract for the delivery of its community services.\u00a0 Virgin Care<\/a> (formerly Assura Medical<\/a>) won the \u00a3500m contract to deliver community services across much of the county from 2012 to 2017.\u00a0 The management and staff of the existing NHS service were transferred to Virgin Care and have continued to deliver services since 2012.\u00a0 It has not been a disaster for NHS patients in Surrey, and most have noticed no difference.\u00a0 But staff are\u00a0now not NHS employees.\u00a0 The services patients\u00a0 get are dictated by the contracts that Virgin have with the PCT.\u00a0 However perhaps this is not that different to the previous approach where service levels were subject to the limits placed on treatment by PCT policies.\u00a0 However, when the contract comes up\u00a0for tender in 2016, the NHS organisation that lost the contract will not exist.<\/p>\n It is possible that another NHS organisation will bid and may be successful.\u00a0\u00a0 But every time an NHS organisation that works under a single contract loses that contract, that NHS organisation will have nothing to do and so will die a death.\u00a0 Thus the future for the NHS is fewer larger (and hence more powerful) NHS organisations, and a multiplicity of smaller and, I suspect, ever changing commercial providers.<\/p>\n The government believes that this type of competition across the whole of the delivery of NHS services will deliver a better deal for the taxpayer and for NHS patients.\u00a0 But this is an ideological belief, a faith in the market.\u00a0 As with all faiths, it lacks evidence.\u00a0 The absence of evidence to support this approach has not restrained the\u00a0current government\u2019s enthusiasm for a market scheme for the NHS.\u00a0 That is consistent with so much policy with this government across many departments.\u00a0 A friend who is involved in an entirely different policy area, explained that the \u201cgovernment is an evidence free zone.”<\/p>\n There are a multitude of voices to explain why the marketisation of the NHS will be a disaster, and they are almost certainly right.\u00a0 But \u2013 I say with my tongue firmly in my cheek \u2013 there is a silver lining to every cloud.\u00a0 It will be a bonanza for lawyers.\u00a0\u00a0 Every contract will be crawled over by lawyers, disputes will be far more common, and m\u2019learned friends will be fully engaged and well rewarded.\u00a0 But all this comes at a cost.\u00a0 The NHS has traditionally spent about 6% of its annual spend on administrating the system.\u00a0 A market system, such as in the US, spends vastly more.\u00a0 A study by Harvard Medical School<\/a> and the Canadian Institute for Health Information<\/a> determined that some 31% of US healthcare dollars went to healthcare administrative costs, nearly double the administrative overhead in Canada, on a percentage basis and vastly more than the NHS\u2019s paltry 6%.<\/p>\n The NHS is now a market, and so the costs of running the system seem certain to rise.\u00a0 The Conservative Party<\/a> went into the last election committed to reducing NHS administration costs. and\u00a0it also signed up to having no \u201ctop down reorganisation\u201d of the NHS in the Coalition Agreement.\u00a0 The international evidence is that introducing a market to the NHS massively drives up administration costs.\u00a0 That means that there have to be even greater productivity increases so that more healthcare is delivered from the diminishing budget available to pay for doctors and nurses to deliver care to patients.\u00a0 Speaking for myself, I just cannot see how it can possibly be done.\u00a0 But the dye is now cast and the NHS is now a very different place.<\/p>\n