On Politics

Ill-Thought-Out Health Reforms

Health Secretary Andrew Lansley has proposed radical changes to the NHS in a new white paper. All 152 primary care trusts and 10 strategic health authorities are to be replaced by GP commissioning consortia and, for the first time, all NHS contracts will fall under EU competition law. The consortia will seek to find the best and cheapest services in the healthcare market for their patients. This shake-up of the health system is intended to reduce government “bureaucracy” and give GPs more power to decide on the care their parents will receive, as well as increasing the role of the free market in healthcare provision – all very in-keeping with the note struck by Cameron’s pre-election “Big Society” ranting.

However, it is not at all self-evident that creating hundreds of GP consortia will cut NHS “bureaucracy”. Why would staffing these cost less than staffing primary care trusts? Conversely, if there were less consortia they couldn’t claim to be local bodies, and thus the reform wouldn’t fulfil its objective of locally-run healthcare. Rather than saving money, the reforms will mean greater public spending in the short-run; in the British Medical Journal, Professor Walshe estimates that the transitional costs of the NHS reorganisation will be £2-3bn.

Toynbee also highlights the possibility of the free market sabotaging relationships between GPs and local hospitals, as competition law will prohibit the former from favouring the latter if it entails rejecting a cheaper offer from elsewhere. Moreover, imposing a neat divide between GPs purchasing healthcare services and hospitals providing them – to create a market scenario – is a mistake when most patients need a complex network of services, or services that are provided by GPs, nurses and consultants but not hospitals. More worryingly, a free market in healthcare could lead to overprovision of the most profitable services and underprovision of specialist services for which there is little demand – a concern voiced by health service union Unison.

Of course the Government is going to have its ideologically-shaped arguments for reducing the state’s grip on healthcare provision. Yet at a time of financial austerity, practicalities should override ideological concerns. This view is a popular one, with even those on the Right complaining that we simply cannot afford to make changes to the NHS. By preaching deficit reduction while proposing costly and disruptive reforms, the Government is sending out mixed messages regarding where its priorities lie.

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