Until now care was bought mainly from NHS hospitals, community trusts or independent GPs (not companies running GP services). But the purpose of CCGs is to bring in maximum competition. NHS services will find themselves bidding against the likes of Virgin Care or the American giant United Healthcare, which are likely to cherry-pick easy and profitable services – diagnostics, routine pre-planned surgery and simple treatments – leaving behind A&E, the frail, the old and anything that is unpredictably expensive.
That sounds sensible. Let market competition work where market competition can and not where it cannot.
If they succeed, more hospitals will go bankrupt.
So we are therefore admitting that NHS hospitals are less efficient than the private providers they will be competing against then? After all, you don\’t go bust if you are more efficient, do you?
That\’s scaremongering, the government protests, and yet the government\’s own figures show what\’s already happening: NHS Financial Information 2013 reports that private patient income earned by UK NHS trusts rose by 5.3%, and London specialist hospitals\’ private business rose by 15%. On a different ideological path, Scottish NHS private practice fell by 18%, and Welsh by 8%.
Market segmentation through product differentiation. Standard business practice. You make sure that you\’re offering more than just one level of service. Thus you can shake more money out of those willing to pay while keeping the custom of those not willing to pay extra. VW does it by building the VW Touareg, the Audi whatever and the Porsche Cayene on the same basic platform. Starbucks, famously, did by offering for the barista to stir your sugar into your iced tea for an extra 50 cents. You get more cash out of those willing to pay more cash by offering them something perceived as being different.
So, NHS England is managing to squeeze extra cash out of the rich for exactly the same health care (even if a better bed or nicer food) that the poor are getting. This is good isn\’t it? More cash for the NHS? As opposed to that different ideological path where all must be equal therefore there is less total cash to pay for health care?
What works has been integration and co-operation across silos, as in cancer or coronary care. What works is washing hands, bringing cleaners back in house, collecting evidence, sharing best practice, not wasteful turf-war competition.
Health is not a market.
And Polly still doesn\’t get the most basic point about markets. They are a coordination, cooperation, mechanism.
We all actually agree that it would be lovely if you could take 1.4 million people and £100 billion and more a year and just \”make it work\”. But you need a system to do that. Stalinist top down control simply does not work in an organisation of that size. It works just fine in a family of course (although note that it\’s very rarely the paterfamilias who exercises the power. Mater always has much more) but as we scale things up such direct control just does not work. Even voluntary, communal, cooperation (as Elinor Ostrom found out) begins to fail once you go above a few thousand people.
Setting targets leads to those absurdities like ambulances waiting outside emergency rooms so that the 4 hour target is met.
At larger scales you simply have to bring markets in. Their incentives, their prices, become the great calculating engine which informs us about who should be doing what to whom where and when. We humans just have not found anything else that operates at such scale.
It\’s not all about enriching the private sector. Not all about allowing the capitalists to run off with the peoples\’ money. It is simply that we do not know any other method of running such a large \”thing\” with any semblance of efficiency.
Which is, of course, why France, Germany, Sweden, Norway, Denmark and all the rest run their health services on pretty much the model that the Bastard Tories are bringing to the NHS.