Targets always tempt statistical massaging, but the extremity of this cheating means no waiting-list figures can be trusted.
Indeed they do. Central setting of targets is always subject to gaming by those at the front end. This is exactly what people are complaining about about the banks. That hitting a short term target boosts the bonus of the banker at risk to the larger company, the bank, and possibly the financial system as a whole.
And this is wat Polly is complaining about in the NHS: that these centrally set targets are subject to such gaming.
What amuses is that Polly then makes the leap to an insistence that central management by targets must be continued.
And as for this:
Just to survive, the NHS always needs 2.5% above inflation,
Yes, we know, Baumol\’s Cost Disease and all that. But that\’s why we\’re trying to change the system from a centrally planned monolith to a market based (even if tax funded and free at the point of use) system., Precisely becuse total factor productivity increases faster in market based rather than planned systems. We\’ve the evidence of the entire 20th century for this.
And yes, higher tfp growth is the solution for a higher inflation rate. They\’re actually the sides of the same coin. A higher inflation rate is evidence that tfp is growing more slowly than elsewhere in the economy. To which, of course, the answer is to try and encourage tfp growth in this sector of the economy as well.
It may well be that Baumol means we\’ll never get tfp in medicine up to hte rate of, say, manufacturing. But this doesn\’t mean that we shouldn\’t at least do the best we can.