The White Paper and the Politics of market-based NHS reforms

Dr Clive PeedellConsultant Clinical Oncologist

JCUH

Conflicts of interest

• Member of BMA Council and BMA Political board

• Member of NHSCA

Outline• Political consensus for market based reforms in

England• Current market policies• Summary of the NHS White Paper• Market failure in healthcare• Politics and Political economy • NHS Market reforms• NHS White Paper in political context• Conclusions

Political consensus and evidence for financing the NHS

• All 3 political parties signed up to a single payer publicly funded system

• Major evidence to support this:Guillebaud report 1951, The Commons Expenditure Committee report 1973, Wanless review 2001

• Wanless - £267 billion underspend 1972-1998“The surprise may be that the gap in many measured outcomes is not bigger, given the size of the cumulative spending gap” Wanless

• No wonder the NHS had problems!

Political consensus in England for market based policies

• All 3 main parties support the use of market based policies in the provision of healthcare

• Conservative party introduced the “internal market” in 1991

• New Labour policies were pro-market from 2002 onwards

• However...devolved nations have abandoned market based policies

What is a market system?

• The essence of a market system is that “free agents” try to maximise their own “utility” or wellbeing by comparing market prices for goods and services with what they are worth to them. Provided prices are free to move, they will adjust to the forces of supply and demand.

• Price signals enable the market wring out the most of an economic situation

• Driven by self-interest and competition, and relies on information symmetry between buyers and sellers

Current English NHS market-based policies

The key levers of the NHS market are the mutually reinforcing policies of:

• Purchaser-Provider split between primary care (PCTs) and secondary care

• Patient choice to promote competition (Choose and Book, Extended Choice Network)

• Plurality of providers - FTs, Private companies (ISTCs, ICATS), “Third sector” non profit organisations

• Payment by Results (PbR) using a tariff system“PbR is the reform which makes everything else possible” Timmins BMJ 2005

• Patient held budgets• New Public Management – to run the NHS along

business lines

Markets in healthcare

Proponents argue that market based policies will lead to:

• Greater efficiency and innovation• Less meddling by Government• Increased responsiveness to patients

White Paper: “Equity and Excellence: Liberating the NHS”

• Published on 12/7/10.• Sets agenda for NHS for the next 5 years.• Associated publications: analytical strategy,

impact assessment, structural reform plan• 4 separate consultation documents • Another White Paper on Public Health due

soon, and a further White Paper on Adult and Social Care in 2011

Core values• A commitment to a comprehensive service,

available to all, free at the point of use, based on need, not ability to pay

• Put patients at the heart of everything the NHS does

• Focus on continuously improving those things that really matter to patients - the outcome of their healthcare

• Empower and liberate clinicians to innovate, with the freedom to focus on improving healthcare services

Key policies (1)

• GP Consortia to take control of commissioning and £80 billion of the £100billion NHS budget. “Localism”

• SHA and PCTs abolished. 45% cut in management costs over 4 years. DH and Quangoes slimmed down

• Increase patient choice – “no decision about me, without me”

• “Any willing provider”, withdrawal of practice boundaries, patient held budgets

• Information revolution

Key Policies (2)• FTs to become “employee owned” Social Enterprises• NHS Commissioning Board• Monitor to be economic regulator• PbR. Best practice tariffs and price competition• NHS Outcomes Framework• NHS held to account against clinically credible and

evidence-based outcome measures, not process targets. Quality standards

• Targets with no clinical justification removed• HealthWatch will be created as a new independent

consumer champion within the CQC

GP Consortia• Responsibility for commissioning and budgets

given to GP consortia on statutory basis• GP Consortia working with other HCPs, local

communities and authorities will commission great majority of NHS care, but not GP provision, dentistry, pharmacy, primary opthalmic services and maternity

• Every GP will be a member of a consortium• Freedom to choose what commissioning activities

they undertake and what support to buy in• Full financial responsibility by 2013

NHS Commissioning Board• Statutory NHS Commissioning board will be created• SpHA from April 2011 and go live in April 2012• Take over CQC responsibility for assessing Commissioners

and hold GP consortia to account• 5 main functions:

1. Provide national leadership on commissioning for quality improvement2. Promote and extend patient choice3. Ensure development of GP commissioning consortia4. Commission some services5. Calculate and allocate budgets to Consortia, and account for NHS resources

Freeing Existing NHS Providers

• All NHS Trusts to become FTs (within 3 years)• All FTs to become employee led Social

Enterprises – “The largest and most vibrant social enterprise sector in the world”.

• FTs/SEs will cease to be public sector organisations and “will be regulated in same way as any other providers”

• Abolition cap on private income. Mergers. Governance tailored to local needs

Monitor

• Role of economic regulator strengthened:Promote competitionPrice regulationSupporting continuity of services

• Monitor will have concurrent powers with the Office of Fair Trading to apply competition law to prevent anti-competitive behaviour e.g discriminating in favour of incumbent providers

Secretary of State

• Hold NHS Commissioning Board to account• Lay out mandate for NHS Commissioning

Board• Arbiter in disputes between Commissioners

and local authorities• Setting legislative and policy framework• Accounting annually to parliament

Education and training

• Less role for DH• Employers will have greater autonomy and

accountability for planning and developing workforce

• Providers will pay to meet costs• Centre for Workforce Intelligence will act as

source of information and analysis• Further consultation document later

Pay and Pensions

• Pay decisions will be led by healthcare employers rather than government

• All individual employers will have right to determine pay for their own staff

• Hutton review on Pensions

Proposals for legislation

Significant opposition from NHS stakeholders

• Unite• Unison – judicial review• BMA – “critical engagement”. Opposes market based

policies• NHSCA - oppose• RCN –"The scale and speed of reforms pose a significant

risk to the future of the NHS in England“• RCGP – Concern that proposed scale, pace and cost of

change will prove disruptive• NHS Confederation – 40 suggestions to improve WP• King’s Fund – Reform is too fast

Democratic legitimacy?• 2010 Conservative Election Manifesto: “More than three years ago, David

Cameron spelled out his priorities in three letters – NHS”This refers to the document: “NHS Autonomy and Accountablility. Proposals for legislation” (2007)

• The introduction was written by Cameron and Lansley :“Improving the NHS is the Conservative Party’s number one priority....this requires an end to the pointless upheavals, politically-motivated cuts, increased bureaucracy and greater centralisation that have taken place under Labour..”

• David Cameron’s speech at the 2006 Conservative party conference:“no more pointless and disruptive reorganisations”. Instead, change would be “driven by the wishes and needs of NHS professionals and patients”.

• The 2007 WP says:• 4.25 “As part of our commitment to avoid organisational upheaval, we will

retain England’s ten SHAs, which will report to the NHS Board.”• 4.28 “PCTs will remain local commissioning bodies.”

• Walshe (BMJ) highlighted the fact that the Coalition agreement had specifically pledged to "stop the top-down reorganisations of the NHS that have got in the way of patient care“ (HM Government. The coalition: our programme for government. Cabinet Office, 2010.)

Estimated costs of reorganisation - £3 billion• Liberal Democrat MP, Andrew George, of the Health Select

Committee, said that Lansley had "Torn up the agreement to resist imposing a top-down re-organisation"

• Zack Cooper from the LSE: “The new health secretary campaigned on a pledge to eliminate top-down shakeups of the health service. This white paper contradicts his campaign promise”

• The rapidity of the publication of the White Paper and the above statements suggest that that the Liberal Democrat side of the coalition have had little or no influence of the planning of the WP.

Why oppose market based policies?

“The White Paper’s proposals are ideological with little evidential foundation. They represent a decisive step towards privatisation that risks undermining the fundamental equity and efficiency objectives of the NHS. Rather than “liberating the NHS”, these proposals seem to be an exercise in liberating the NHS’s £100 billion budget to commercial enterprises”Whitehead, Hanratty, Popay. Lancet. 6th Oct 2010Dept of Health Inequalities and Social Determinants of Health, University of Liverpool.

Purpose of the NHS• NHS Pre 1948 – market system. Fragmented care.

“Pain and discomfort were accepted as part of life to be endured with stoicism” Geoffrey Rivett

• Central feature of the Welfare State (Beveridge/Bevan)• To sweep away the failed “market” of voluntary sector,

private and municipal hospitals, through nationalisation• Pooling of risks. Everyone covered - “Universality” by a “Single

payer” system• Based on importance of healthy society, social solidarity and

social contract between doctors and patients• “A unique example of the collectivist provision of healthcare

in a market society” Rudolph Klein

Founding Principles of the• Universal• Free at point of delivery• Equitable• Paid for by central funding – “Single Payer”• The NHS: “Labour’s greatest achievement. It is a working

example of the best interests of the people in this country. It is the most popular institution in Britain” (Dobson)

• “Sacred Cow” status

Market failure in healthcare

Market Failure in healthcare - TheoryMarket failure in healthcare is a well recognised problem in theory and practice (Arrow, Brown)

1. “Information asymmetry”. Patients are not well enough informed to make choices. Patient vulnerability. Need for “Choice advisors”. Also primary and secondary care2. Healthcare is difficult to commodify. Contracts are complex. Contracts are based on mistrust3. Risk of supplier induced demand4. Excess capacity is needed for market choice to work i.e a plurality of providers5. Exit is very difficult ie Hospital closures are a political hot potato6. Expensive to enter market – e.g ISTCs (given 11% extra tariff) 7. Insurance systems will give the cheapest and best coverage to the well, and the most expensive and least coverage to the sick8. Doctors control access to the healthcare market. Professionalism is a problem9. Markets provide for wants rather than needs.10. Price signals don't work. Payment occurs after care. Healthcare costs are prohibitive. Pooling of risks11. Need for specialty clusters and high volume workload12. First duty of investor owned firms is to their shareholders, not patients – “cream skimming”13. The market is a blind power without any social orientation: it cannot solve social problems14. Need to plan for local population needs

Speech by the Chancellor of the Exchequer, Gordon Brown, to the Social Market Foundation at the Cass Business School on Monday 3 February 2003

“Indeed, the case I have made and experience elsewhere leads us to conclude that if we were to go down the road of introducing markets wholesale into British health care we would be paying a very heavy price in efficiency and equity and be unable to deliver a Britain of opportunity and security for all”

“The very same reasoning which leads us tothe case for the public funding of health careon efficiency as well as equity grounds alsoleads us to the case for public provision ofhealthcare”.

Market failure in practice: USA“Evidence from the US is remarkably consistent: Public funding of private care yield poor results” Woolhandler, Himmelstein, BMJ 2007

• Market failure is recognised - US system is not a free market (Medicare/Medicaid)

• $2.3 trillion dollar system - “Medical Industrial Complex”• 50 million uninsured. ?millions underinsured• Massive costs to employers e.g GM• 62% of all personal bankruptcies (900,000/year) due to medical

expenses. 78% had “insurance” (User fees/Top ups)• 30% budget on transaction costs. (40% in for profit sector)• Massive CEO pay. Healthcare fraud• Poorer outcomes for life expectancy and infant/maternal mortality

rates• Plagued by undertreatment and overtreatment – “islands of

excellence in a sea of misery”

CEO pay in the USA

HumanaCurrent CEO: Michael.B.MccallisterCompensation 2009: $5 million and has $50 million stock options

UnitedHealthCEO: Stephen J HelmsleyCompensation 2009: $3 million and stock options worth $660 million n.b previous CEO, Bill McGuire involved in $1.5 billion stock options scandal

AetnaCEO: Ronald A WilliamsCompensation 2009: $24 million and stock options worth $170 millionn.b Former Aetna CEO John Rowe earned $175 million in 65 months ($225,000

per day!!)

Source: Forbes website

Market Failure in practice: England

“All evidence and analysis shows that the actually existing market created by New Labour is likely to exacerbate the terrible social injustices of unequal access to healthcare and unequal health outcomes”Raine, McIvor, Lancet 2006

“On public services, the Government talked a technocratic language, using words like “contestability”, and seemed sometimes to suggest that private sector solutions were always better – when public services users just wanted guarantees of good schools, hospitals and policing”Ed Balls, candidacy statement for Labour Party Leadership 2010

Evidence for market failure:• Quasi-market and recognised need for regulation• Transaction costs: University of York study - 15% NHS budget

versus 5% prior to the PP splitCommissioning contracts, commodification (HRG coding), Managerialism (91% increase in NHS managers, consulting), NHS IT system to provide information for “consumers”, marketing

• Costs associated with excess capacity – e.g ISTCs, Polyclinics, Third sector

• Regulatory costs – CQC, CCP, Monitor • Complexity of Commissioning• 15 major NHS reorganisations in the last 20 years• Attack on professionalism and public service ethos• .............And I’ve not even mentioned the PFI!

NHS Confederation report on NHS restructuring

Deprofessionalisation

• Market systems reject medical professionalism and the public service ethos

Doctors and NHS market reforms

• Doctors control access the healthcare system• Paul Starr defined “medical sovereignty” as a combination of

economic power (control over the market), exerted mainly through a “cultural authority” on patients, and political influence (control over policy making). Starr, P. The social transformation of medicine. 1982

“Public service professionals are in a profound sense not just non-market, but anti-market” Professor David Marquand, Decline of the Public

• The medical profession is therefore an obstacle to market reforms• Attack on medical professionalism since the Griffiths report, 1983• Working for Patients white paper, 1989. This led to the “End of the

Double Bed” of policy making. Rudolph Klein, BMJ 1990

• BMA has not been involved in policy making ever since

“Knights, Knaves, Pawns and Queens”• Public Choice Theory. A concept in economic theory that

suggests public servants are “self interested rent-seekers” – “knaves” rather than “knights”.“Public policy should be designed so as to empower individuals: turn pawns into queens” Julian Le Grand

Thus, public services are best delivered through consumer choice and the market.

• Rejection of the “Trust” model of healthcare delivery• Gave rise to New Public Management (performance

management and market discipline)• Paradoxically, this view of medical professionals as “knavish”

self interested agents of business, feeds on itself. American medical profession has lost public support faster than any other professional group. Blendon. JAMA 1989

PMETB

• Government took control of training through PMETB• British Journal of General Practice editorial described how the proposals for the

establishment of the Medical Education Standards Board (which later became PMETB):“…. are clearly intended to enable the Secretary of State of the day to direct that standards can be lowered to meet the manpower demands of the NHS

• President of the RCA, Peter Hutton, pointed out:“For a Government dedicated to a quality service, I found it surprising to see the statement: ‘The competent authorities (e.g the STA) typically apply considerably higher standards than the minima specified by law’. Quite frankly, thank goodness they do”.

• Clear agenda for a drive towards minimal standards rather than excellence

MMC

• Competency based training - CBT originated in the 1980s and was a politically driven movement with the aim of making national workforces more competitive in the global economy by focusing on discrete technical skills with an emphasis on outputs, performance assessment, and value for money.

• MMC – competency based, minimal standards, tick box culture. Tooke report: “Aspiring to excellence” cited MMC for aspiring to mediocrity.

• MMC designed to produce a “fit for purpose” medical workforce :“...most importantly, (MMC) will deliver a modern training scheme and career structure that will allow clinical professionals to support real patient choice” (DH Website)

• Recent briefing from NHS Employers stated:“The future NHS will not require all doctors to progress to the current role of consultant. New roles and structures must be developed that will meet the needs of employers....”

Lansley has a problem….

• “Without doctors, attempts at radical large-scale change were doomed to fail.” Ham/Dickinson. Engaging Doctors in Leadership: A review of the literature 2007

• Clinical leadership is well recognised to be crucial to health reforms.

• Strong “Clinical Leadership” drive in Darzi reforms. “Change Agents” to deliver market based reforms e.g “Service Line Management” (business units)

• Market reforms need doctors to become more entrepreneurial – “Doctorpreneurs”

• Virtually no mention of the role of consultants in the White Paper

“Only a dunce could believe that market based reform will improve efficiency or effectiveness”

Woolhandler/Himmelstein BMJ 2007

So why have so many countries, including England, gone down this route?

It’s the economy, stupid!(And some politics and philosophy)

Global neoliberalism and the consequences for healthcare policy in the English NHS

(Presented at IAHPE 2009)

The main principles of neoliberalismThe dominant political, economic and philosophical doctrine of the last 30 years. (Harvey. A Brief history of neoliberalism. OUP)

• Liberalisation and deregulation of trade and finance. Maximum market freedom with minimal Government intervention

• Economic stability for the private sector’s planning environment. “Integrity of money”. Defeat of inflation. Low taxation

• Privatising state-owned enterprises, premises and public services• Remodelling the state’s internal operations along business lines (New

Public Management)• Encouraging individual entrepreneurial freedoms. • Public choice theory• Encouragement of voluntary sector as a source of welfare - “Social

Capital”• Protection of private property rights• Variants of neoliberalism – Thatcherism, Reaganomics, Blair’s “Third Way”

The rise of neoliberalism• Mont Pelerin Society (Hayek, Friedman, Stigler etc)• Came to global prominence in the 1970 and 80s

following major worldwide economic crises, oil shocks, stagflation and collapse of Soviet Union/socialism.

• Demise of Keynesian demand management economic model

• Chicago School of Economics• South America – “Chicago Boys” e.g Chile, Argentina• Reaganomics, Thatcherism• Promoted by World Bank, WTO, IMF, Central Banks .

Media (Murdoch), Universities, Management consultancy industry

1948 (Acts 1946-47)

1947

Margaret Thatcher, 1975: “This is what we believe”

Conservatives and the NHS• NHS underfunded• 1983 – Griffiths report. Sainsbury’s chairman.

“Improving efficiency”. Managerialism. Public services to be run along business lines.

• 1989 – Working for Patients. Purchaser provider split. Internal market – “Quasi-market”End of consensus policy making (corporatism) - “double bed” (Klein, R. BMJ 1990;301:700-702)

• Alain Enthoven – American neo-liberal economist was influential. Chief architect of “managed care/competition” in USA

However.... “Sacred Cow” status of NHS

• There was actually fairly minimal privatisation/marketisation of the NHS

• PFI introduced, but negligible• Founding NHS Principles remained intact

The demands of global financial markets on nation states

• Global financialisation has eroded the sovereignty of nation states

• Investors and bond markets demand:Prudent fiscal policy e.g “Golden Rules”, low taxation, low inflationMarketisation and privatisation of public services, property, PFI/PPPs – “roll back the state”Use of private sector management practices

• “TINA” because of risk of “capital flight”

New Labour‘Every day about $1 trillion moves across the foreign exchanges, most of it in London. Any government that thinks it can go it alone is wrong. If the markets don’t like your polices, they will punish you.’ Tony Blair

• 4 successive election defeats (‘79, ’83, ‘87, ‘92)• “New reality” – Governments must retain the confidence of the global financial

markets by whatever policy modification is necessary• Abolition of Clause IV of Labour party constitution – denouncing nationalisation,

emasculating unions and policy making power of Party Conference. “Old Labour” became “New Labour”

• “Prawn cocktail offensive” (1992-97) to reduce Labour’s “political risk premium”• “In economic management, we accept the global economy as a reality and reject

the isolationism and ‘go-it-alone’ policies of the past” Labour Election Manifesto 1997

• Social democratic model abandoned in favour of a variant of neoliberal Thatcherism. Eric Shaw. Losing Labour’s Soul. 2007

• “We are all Thatcherites, now” Peter Mandelson, The Guardian 2001

A succinct summary of New Labour’s political position by 2 Labour MPs

• “After years in opposition and with the political and economic dominance of neoliberalism, New Labour essentially raised the white flag and inverted the principle of social democracy. Society was no longer to be master of the market, but its servant. Labour was to offer a more humane version of Thatcherism, in that the state would be actively used to help people survive as individuals in the global economy - but economic interests would always call all the shots”(John Cruddas MP and Jon Tricket MP – New Statesman, 2007)

Opening up public services• “Services are coming to dominate the economic activities of countries at virtually every stage

of development, making services trade liberalisation a necessity for the integration of the World economy” International Chamber of Commerce

• “Unless Labour made public services more like the market first, the Tories would just do it on their own terms” Alan Milburn, quoted in the Guardian

• “The commodification of public space has now become an aggressive Blairite objective”Roy Hattersley, Labour MP quoted in the Guardian, 7th November 2005

• Gordon Brown leaked letter to CBI in response to one of it’s documents;“A reform agenda of choice and the use of competition and greater contestability , involving the independent sector, must be driven forward for public services” Timmins BMJ 2007

• “All public services have to be based on a diversity of independent providers who compete for

business in a market governed by Consumer choice. All across Whitehall, any policy option now has to be dressed up as “choice”, “diversity”, and “contestablity”. These are the hallmarks of the “new model public service”John Denham MP, former Health Minister quoted in the Chartist 2006

New Labour and the NHS 1997-2010

• 3 main periods of NHS policy discourse Greener, I. Policy and Politics 2004

• 1997-2000 – Fabian (Social Democratic)• 2000-2002 – Third Way• 2002-2010 – “Garbage can” (Neoliberal

variant)

Period 1: 1997-2000• "Our fundamental purpose is simple but hugely important:

to restore the NHS as a public service working co-operatively for patients, not a commercial business driven by competition“ Labour Party Election Manifesto 1997

• First few years were about continuity and incremental changes, not radical reform - “Fabian” approach. Trust in frontline staff. “The NHS: Modern, Dependable”

• Kept to Conservative spending plans• No significant role for markets….• “We are not prepared to trade off being free and fair, for

efficiency and responsiveness to the demands of patients” Milburn, 2000

• However, aggressive use of PFI/PPPs

PFI• Designed to allow massive increase in infrastructure

with new schools and hospitals etc• Kept off public sector borrowing balance sheets• This prevented Brown from breaking his “Golden

Rule” of keeping HMG debt <40%GDP• This allowed taxation to be kept low and offered

investment opportunities for the private sector i.e to suit the needs of the international financial markets

• We now have perverse situation of the public paying the RBS for PFI repayments, when we own RBS!

• But….Introduction of International Financial Reporting Standards (IFRS)….but….

• PFI “saved” by bank bailouts!

Period 2: 2000-2002• Winter NHS crisis in 2000• “Most expensive breakfast in history” - BBC• Blair promised UK health spending would match EU

average within 5 years• Wanless report - £267 billion underspend 1972-1998.

NHS should remain publicly funded• NHS Plan - “A Plan for Investment, a Plan for Reform”

- 10 year reform plan• Performance driven managerialist framework,

“target culture”, ratings systems for NHS Trusts• “Target Mad” – (The Economist 2000)

Period 3: 2002-2010The healthcare market

• Introduction of a market based system driven by purchaser-provider split, Patient Choice, Payment by Results (PbR) and competition between a plurality of providers

• Patients become consumers• Outsourcing of commissioning through FESC:

“If this is not privatisation of the Health Service, then I don’t know what is” Frank Dobson, MP

FESC approved firms• Aetna Health Services (UK) Ltd• AXA PPP Healthcare Administration Services Ltd• BUPA Membership Commissioning Ltd - (Patricia Hewitt advisor to Cinven)• Partners In Commissioning• Dr Foster Intelligence• Health Dialog Services Corporation - (Phylis Shelton, former DH lead for measurement of the

integrated care programme)• Humana Europe Ltd• KPMG LLP – (Mark Britnell head of Global Health, formerly DH, WCC) • McKesson Information Solutions UK Ltd- (Chair, Lord Carter of Coles, Chair CCP)• McKinsey & Co, IncUK - (Partner, Dr Penny Dash, former DH head of strategy)• Navigant Consulting, Inc• Tribal Consulting Ltd – (Director of health division, Matthew Swindells, former chief Information

officer at DH)• UnitedHealth Europe Ltd – (Head of European arm, Simon Stevens, former advisor to Tony Blair)• WG Consulting

Period 3 continued:

• NHS Improvement Plan 2004. Prompted Professor Chris Ham, former DH policy advisor to state:

• “The foundations have been laid for the complete transformation of health care delivery. We are shifting away from an integrated system, in which the National Health Service provided virtually all care, to a much more mixed one, in which the private sector will play an increasingly major part. The government has started down a road which will see the NHS increasingly become a health insurer” FT interview with NickTimmins

“In this environment of greater choice, increased contestability and competition driving improvements in services, there is a greater need to ensure rules and guidance exist to encourage competition and the effective operation of markets.”

Professor Chris Ham stated that the CCP rules were written by a “Neoliberal economist on speed” Ham, HSJ 2009

The White Paper in political context

• “This is a new neo-liberalism for the 21st century – a merger of Thatcherite neo-Conservatism and Orange Book Liberals which believes that getting the state out of the way is the road to a stronger economy and fairer society” Ed Balls, Labour leadership candidacy statement

• The White Paper is a blueprint for a competitive healthcare market

• Consistent with the political ideology of the Coalition Government to drive forward market based policies in public services

Consequences for the NHS• Increased use of private sector through the “any willing provider” policy and GP

Consortia buying in commissioning support (e.g FESC)• NHS Commissioning Board and Monitor will stimulate patient choice and the market• £20 billion efficiency savings will place huge pressure on GP Consortia to ration care• FTs/SEs huge financial pressure. “Best practice tariffs” and price competition will lead

to a “race to the bottom”. There is also a policy initiative to drive care out from secondary care to primary care

• FTs/SEs will need to concentrate on the most profitable services. Increased use of skill mix to reduce costs of service lines. Take advantage on abolition of cap on PP income

• FTs will have to crack down on staff T+Cs (end of national pay bargaining)• No bailouts for failing trusts. This could mean mergers, managerial takeovers or exit.

Further opportunity for private sector• Waiting lists may increase - demand for healthcare insurance• Abolition of GP practice boundaries means that patients can effectively choose their

commissioners• The end result could be private commissioning of private companies using public

money• “Managed care” through design of care pathways by GP Consortia.• HMO type system cf Kaiser Permanante

Health Investor

NHS Confederation

Inconsistencies in policy • How can integration of services be compatible with competition?• Patient choice may actually be decreased because of contractual

obligations• Outcome measurements have not been validated in most specialities.

Need support to collect meaningful data• GPs are not best placed to commission secondary care. Working with local

consultants is to build local services is anti-competitive by nature• Stimulating patient choice (consumer demand) is not sensible in a single

payer system • Clinical leadership needed to make reforms work, but markets do not

value medical professional public service ethos

Conclusions• The NHS is the most popular institution in Britain• Little evidence to support market forces in the

organisation and provision of healthcare • The fear of “capital flight” in globalised unregulated

financial markets has eroded sovereignty of nation states• Governments have adopted market policies to deliver

public services• Markets in healthcare increase bureaucracy and costs• Erosion of medical professionalism • The NHS is now open for business with the international

healthcare industry poised to profit• The White Paper is a threat to the fundamental

principles of the NHS

Aneurin “Nye” Bevan on the NHS:

“It will last as long as there are folk left with the faith to fight for it”

Joseph Stiglitz

• “Neo-liberal market fundamentalism was always a political doctrine serving certain interests. It was never supported by economic theory. Nor, it should now be clear, is it supported by historical experience. Learning this lesson may be the silver lining in the cloud now hanging over the global economy.”

Paul Mason

• Paul Mason, the BBC Economics editor of Newsnight wrote:• " A deregulated banking system brought the entire economy

of the world to the brink of collapse. It was the product of giant hubris and the untrammelled power of the financial elite.""Basically neoliberalism is over: as an ideology, as an economic model. Get over it and move on. The task of working out what comes after it is urgent . Those who want to impose social justice and sustainability on globalised capitalism have a once-in-a-century chance". Mason P. Meltdown. The End of the Age of Greed. Verso. 2009