Steve Field: please, learn some economics!

So, the GP in charge of looking over the NHS reform plans says:

In an interview with the Guardian, Field says Lansley\’s plan to make the NHS regulator Monitor\’s primary duty to enforce competition between healthcare providers should be scrapped. Instead it should be obliged to do the opposite, by promoting co-operation and collaboration and the integration of health services.

Dear God, I thought you had to be bright to become a doctor?

So, how is it that people cooperate and collaborate? Yup, that\’s right, in a market. You grow the apples, I\’ll make the cider and we\’ll get drunk together. That\’s cooperation and collaboration, I think we\’d all agree? It\’s also the division and specialisation of labour and if we\’re sensible about it (like, I\’m actually better at making cider than I am at growing apples, you the obverse) the playing out of comparative advantage.

Excellent, we\’ve now got a market.

You do the hip replacements and I\’ll do the heart bypasses is exactly the same conceptually. This hospital here will do the surgery while that one the maternity is just the same, as is this specialist here will do the Lasik stuff and that the orthopaedics.

This is cooperation, collaboration, and it\’s a market.

Now it is of course possible to whine that we\’re going to be bringing grubby lucre into this: there are some who think that money demeans noble motives and all that guff. But we\’re going to be keeping the government, the taxpayer, as the financier of all of this. So we\’re only using the market, the money, the prices that are generated, to aid us in working out who should be cooperating with whom, how to collaborate. For as we know when we get to complex systems (the cider example, with only two people, is simple enough. But start scaling it up to hundreds of thousands, to the 1.4 million sort of size of the NHS….) we cannot in fact plan that cooperation and collaboration effectively, efficiently. There\’s simply too much information for it to be possible centrally. We need to use that market, those prices, as our calculation engine.

It\’s entirely possible that more integration is the correct answer. Just as less might be. But we don\’t know as yet: and for the more Hayekian of us, we cannot, in principle, know yet. Indeed, for such Hayekians, the correct level of integration is likely to change over time as technology itself changes. Take that Lasik stuff: as it all started out I can imagine that doing it only in full hospitals, with the best opthalmologists in the country guiding it all, would be sensible. Yet there comes a time when, as has actually happened, this is a routine industrialised process, can be done in simple clinics. Indeed, will be better done there, as we havet he playing out of that division and specialisation of labour. The clinical quality goes up as well as the price going down as we have specialists in Lasik, people who don\’t do it two hours a week with the rest of their time devoted to retinoblastomas and the like.

But how can we know when this point is? How can we process the millions upon millions of pieces of information that then allow us to make a decision on what is the correct level of integration, who should be cooperating with whom and upon what?

That\’s why we need markets, for they\’re the only method we actually have of doing this.

As I said, I thought you had to be bright to become a doctor?

Mebbe he is actually, just bright and ignorant?

3 thoughts on “Steve Field: please, learn some economics!”

  1. >>Mebbe he is actually, just bright and ignorant?

    Well, yes. And arrogant, of course. Goes without saying. Same applies to tenured academics: ‘It’s not my field, but I’m sure I can work it out from first principles in half an hour’.

    There’s another name for this: wankers.

  2. give him a break – it is about re-configuring the way you think. Imagine how strange the concept of an assembly-line must have seemed when the first such line was set up. Since your medical training is just about doing things in a mprescribed way, you are unlikely to be able to take that leap and wonder if there are better ways of doing things. It happens all the time in business too.

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