Monday, April 23, 2007

Paying for the NHS

The NHS continues to be a massive fuck-up.
More patients will have to pay 'top-up' fees for private care because of budget cuts in the NHS and long waiting times, a group of doctors say in a report.

Well, let us remind ourselves of what the situation actually is. Yes, operations have been delayed—hospitals have even been fined for working through their waiting lists too swiftly—in order to avoid the budget deficits which would lose Commissar Hewitt her job.

However, let us also remind outselves that funding of the NHS is at about £90 billion this year, up from £37 billion ten years ago. And yet productivity is down; as Wat Tyler points out, we now pay consultants double what we used to and we have seen a 15% drop in productivity.

So when these doctors say that there are budget cuts, this is true in relation to the last year, but it is not true over the last ten years; the budget is actually two and a half times what it was a decade ago.
Doctors for Reform says the idea that health care is free across the UK is now a "political mirage".

It always was: free at the point of use does not mean free.
The group has written to Health Secretary Patricia Hewitt calling for a debate on NHS funding.

A Department of Health spokeswoman said patients had always had the choice of paying for private healthcare.

Yes, this is true. But unlike almost every country in the world, we have discouraged people from taking out health insurance, always assuring the poor bastards that the government-funded NHS would provide for them. Had we said twenty years ago that the NHS might not be free at the point of use (FATPoU) in 30 years' time, we would be in a considerably better position now.

Still, private treatment is becoming more affordable. [Emphasis mine.]
Its report says patients are developing sophisticated approaches to 'topping up' NHS care with private treatments, including in key areas like cancer and heart disease.

It blames patchy provision of NHS services across the UK, long waiting times and varied quality.

The report also pointed to the falling cost of private treatments due to advances in technology and increased competition between firms.

Which brings us neatly onto Dr Rant's plan to save the NHS and, more importantly, Timmy's take on it.
Dr. Rant Saves the NHS

Or at least that's what he wants to do.
I think we need to realise that market mechanisms are anathema to any health service, and increase transaction costs rather than health gain.

Ooops, fallen at the first fence there. Better luck next time, eh?

So, on the one hand, we have incontrovertiable evidence that a state-run NHS has lead to higher costs for lower productivity, "patchy provision", "long waiting times" and "varied quality".

On the other, we have a report by Doctors For Reform that explains that "advances in technology and increased competition between firms"—which are, in fact, exactly the "market mechanisms" that Dr Rant decries—has led to "the falling cost of private treatments".

So, with a state-run NHS we have increasing costs, and then we have, in companies subject to market mechanisms, we have falling costs. And Dr Rant thinks that market mechanisms have failed. Er...

Of course, the NHS isn't merely failing its patients; it's also failing the employees. We have thousands of junior doctors and nurses who cannot find a job—despite the fact that we are, apparently, constantly short-staffed. Many of these workers also cannot really afford to live in the areas where they work. This is what happens, of course, when you have top-down, centrist management of an entity as huge as the NHS.

It's technically known as "a fuck-up".

My dear Dr Rant, the way to save the NHS is to introduce precisely those market forces that you so deplore.

Very long-term readers (are there any left?) might remember that, in late 2005, I put together The DK Party Blogger Cabinet, allocating to the jobs various bloggers whom I respected at the time.

Andrew, of the now-defunt Non-Trivial Solutions, was awarded the Health Portfolio (do read the whole post, as there was an exchange of ideas that I'm not going to post here).
On health, we're going to privatise the NHS, but we're going to do it in such a way that people who have most at stake end up with some ownership. Basically, every NHS trust will be spun off as a Ltd company, with 20% of the shares going to the present employees (to be split according to length of service, I'd imagine...). The other 80% will go to taxpayers living in the local catchment area (to be defined) in proportion to the amount of national insurance they have paid over their working lives.

This will mean that the elderly in particular, end up with a hefty share of the new companies, which they can sell to subsidise their own private healthcare. The idea is that no-one gets too screwed over in the transition, plus it buys up the elderly vote quite nicely. Anyone under retirement age should be able to get health insurance anyway, as we're going to provide a tapered subsidy according to age and means, reducing over time, to 'encourage' the market and keep voters quiet. The new companies will be encouraged to do a certain amount of work pro bono, and the government will pay for all emergency healthcare (A&E, mainly) through general taxation.

We're also going to make unions in healthcare illegal, just for kicks.

My views have developed a little since then, and I think that we should be looking at a multi-payer system, like that of France. In that country's system, the government pays for 70% of medical costs (100% for cancer) and the remaining 30% is paid for by the patient (usually by taking out some kind of insurance).

The important point is that hospitals should be private entities, thus encouraging competition between them. Absolutely essential to this is that all hospitals must provide accurate, publically-available breakdowns of success rates for various operations, etc. that both patients and their GPs can examine (publishing them online would be easiest)*. This means that hospitals can also recruit the best staff and pay them accordingly (instead of through a central pay deal).

The two-payer system ensures that neither the government nor the insurance companies have a monopoly on funding, and I would like to see the proportion altered to more like 50:50. On the whole, I would prefer to see the government involved as little as possible; otherwise, the government will try to politicise the health service for short-term electoral gain.

The fact that people have to pay for at least part of their treatment should ensure that they take more responsibility for their own health. If you are overweight, then you pay more. If you smoke (as I do), then you pay more. In other words, the corollary of people paying for at least part of their treatment is a healthier society: people respond to incentives.

Further, I think that the constrainsts of private capital borrowing will see more, smaller, hospitals springing up in response to need (as used to happen), rather than the unwieldy, hard to clean behemoths that we see today.

There you go, Dr Rant; we provide a decent health service (modelled, essentially, on the consistantly best-rated system in the world) using those very market mechanisms that you despise. We can see that it works in France, there is no reason for it not to work here.

UPDATE: there's a very succinct post from Timmy on this topic.

UPDATE 2: some more excellent thoughts, based on following the Swiss system, from Roger Thornhill here.

* UPDATE 3: I suppose that it shouldn't surprise me, but every time I think, "should I embellish that with a caveat" and don't, someone picks it up.
Absolutely essential to this is that all hospitals must provide accurate, publically-available breakdowns of success rates for various operations, etc. that both patients and their GPs can examine (publishing them online would be easiest).

Some newspapers have been known to publish just such information. However, this information was not risk stratified. Thus a surgeon who operates on 80 year old alcholic, diabetic smokers would appaear to be far less competant than one who operates on twenty one year old fitness fanatics. And a hospital that specialised in same would appear to be a bad hospital. This is the sort of thing that will lead to very defensive surgery possibly with surgeons refusing to work on any patients with a grim outlook, for fear of ending up "on gardening leave".

Just to declare an interest, I work for a company that (amongst other things) does statistical analysis of operations across the UK in various specialties. Naturally, I think the publishing of risk stratified, appropriately weighted data sets for every hospital is a fantastic idea ;-). But publishing the raw data (by itself at least) would do more harm than good.

This is one of those times. Having been an avid reader of Private Eye's medical column for years, I was aware of this issue. However, I didn't really think it worth mentioning, mainly because of the reply here: with the kind of computing power that we have and the statistical and engineering capabilities of various companies, producing properly weighted figures should not be a problem. Hence my not mentioning it.

9 comments:

Alan Douglas said...

DK, I hope Dr Rant responds directly, but when I read his long and generally well thought through piece, I had the strong impression that the "maket forces" which he decries are as specifically applied currently WITHIN THE HEALTH SERVICE by NuLab.

With the uselessness of THOSE I doubt many of us would disagree?

Alan Douglas

Devil's Kitchen said...

Well, possibly, but I'm still not sure that I agree. Nulabour really bollocksed up the health service when they dismantled the internal market that the Tories had set up.

As Dr Crippen often points out, under that system, he could send his patients to any hospital and the money followed the patient (which is what effectively happens in a market).

Despite the paperwork, an internal market in the NHS is not necessarily bad. However, yes, the current system is a total fuck-up.

DK

Roger Thornhill said...

The Swiss have a market for healthcare yet have safety nets for the destitute and a very open and formal way to top-up care if you so wish (IIRC all insurance provision is via the private sector).

The issue is how to get from where we are to such a place. I have laid out some thoughts here. I think it can be done. Mrs T was part the way there with Fundholding, as the system was called.

Killing Fundholding was one of the first actions of the Sociofascists in 1997. Swine.

ChrisM said...

"Absolutely essential to this is that all hospitals must provide accurate, publically-available breakdowns of success rates for various operations, etc. that both patients and their GPs can examine (publishing them online would be easiest)."

Some newspapers have been known to publish just such information. However, this information was not risk stratified. Thus a surgeon who operates on 80 year old alcholic, diabetic smokers would appaear to be far less competant than one who operates on twenty one year old fitness fanatics. And a hospital that specialised in same would appear to be a bad hospital. This is the sort of thing that will lead to very defensive surgery possibly with surgeons refusing to work on any patients with a grim outlook, for fear of ending up "on gardening leave".

Just to declare an interest, I work for a company that (amongst other things) does statistical analysis of operations across the UK in various specialties. Naturally, I think the publishing of risk stratified, appropriately weighted data sets for every hospital is a fantastic idea ;-). But publishing the raw data (by itself at least) would do more harm than good.

Dr Rant said...

As Alan Douglas pointed out, the Dr Rant 'manifesto' is specific to the situation that NuLabour has created. We currently have a situation that combines the worst in public sector bureaucratic idiocy and the worst in private sector opportunistic greed and cronyism (due to ansent or distorted 'competition').

However, we most certainly do not per se have an ideological problem with the private sector. The fear that we have is that a private sector over seen by NuLabour (or any politician really) will be equally as shite, but will also be even less humane and actually cost more.

Also the assertion that recent private sector 'introductions' has improved financial efficiency in the NHS is just plain bollocks! It's all all about 'case mix' and comparing apples with oranges.

Lets be honest - experienced and proactive GPs like us would make more money in a private system because we've been succesfully running our own businesses for years - but would we be any happier?

Finally:

"Absolutely essential to this is that all hospitals must provide accurate, publically-available breakdowns of success rates for various operations, etc. that both patients and their GPs can examine (publishing them online would be easiest)*"

It would appear that fuckwittery is not exclusive to the public sector! ; ) (think 'case mix')

p.s. If the French system is so fucking Brilliant, why does it cost 40% more than ours per capita? It's on the verve of banrupting their economy FFS! That's a strange oversight from you 'economicaly savvy' people.

Unity said...

DK:

The nub of the problem with the NHS stems from both the 'reforms' of the last 10 years and from the introduction of the so-called 'internal market' by the Thatcher government.

In 1979 - management/administration costs in the NHS ran at around 5-6% of its total budget. By the end of Thatcher's 'internal market' reforms these costs had more than doubled to between 12 and 15%, most of which stemmed from the increased bureaucracy necessary to create an artificial internal market in the NHS in the absence of any real market forces.

In short, DK - it is possible to run the NHS efficiently as a purely public service with no artificial internal market OR as a wholly market-driven privatised system - and there is a long, detailed and complex debate to be had about which will deliver the best health care in the long-run.

What screws things up, and deflects considerable sums of money away from front-line services, is the unholy hybrid mess created by successive health service reforms since 1979 in which one has a faux market driven by bureaucracy rather than either a public service or an free market hence we get what Dr Rant describes as the worst in public sector bureaucratic idiocy and the worst in private sector opportunistic greed and cronyism (due to absent or distorted 'competition') all of which stems from putting ideology ahead of common sense.

Some things are best delivered using markets, some by a pure public service ethos, which need not by centrally controlled/driven - if you look back to creation of the NHS you'll find that two different models were proposed at the time, a centralised model favour by Bevan (which is what was set up) and a decentralised model favoured by Gaitskill and his supporters.

What the NHS needs most, is a complete absence of political ideologues of all varieties. I would argue strongly that the basic principle of universal health care - i.e. services provided on the basis of medical need - is only what one might reasonably expect from a civilised society. Elective care is a different matter and can rightly be delivered by the private sector but when it comes to providing healthcare on the basis of genuine clinical need then its the need of the patient that's paramount, not the size of their bank balance.

Given that principle, what needs to be determined is how to deliver that care in most cost-effective and efficient manner, irrespective of whether that involves markets or tax-funded services. Define the objective and then use the best methodology for the job and leave the political ideology out of it as it inevitably fucks things up.

AntiCitizenOne said...

"services provided on the basis of medical need "

You'll be back to subsidising and encouraging harmful health choices again.

The best way to fund health is to subsidise insurance. the best way to harm health is to subsidise treatment.

ACO (because google is shite)

Dr Mustard said...

I'd say the best way to harm health is having 30% of your population uninsured (like the US), or a system that rewards over prescribing doctors (like France) with more business.


No, actually, come to think of it....

The best way to harm 'health' is to treat it like an ideological football and assume that either the 'left' or the 'right' has the answer. Dogma is more dangerous.

Paul said...

"What the NHS needs most, is a complete absence of political ideologues of all varieties. I would argue strongly that the basic principle of universal health care - i.e. services provided on the basis of medical need - is only what one might reasonably expect from a civilised society."

No ideologues here, then.