BMA ARM debate“Market forces are good for the NHS” The case against Dr Clive Peedell Consultant Clinical Oncologist James Cook University Hospital BMA Council/BMA Political Board
Before the NHS• NHS Pre 1948 – market system. Fragmented care. (see Geoffrey Rivett nhshistory.net) “People did not trouble GPs without good cause. Most had to pay for the doctor and the medicines.” “Pain and discomfort were accepted as part of life to be endured with stoicism”
Purpose of the NHS• Central part 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)
Political consensus 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• £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”• No wonder that 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• Greater efficiency and innovation• Less meddling by Government• Increased responsiveness to patients
What are the English NHS market policies?• Purchaser-Provider split between primary (PCTs) and secondary care (FTs)• “Commissioning” of care by PCTs, GPs and private sector• Patient Choice to promote competition (Choose and Book, Extended Choice Network)• Pleurality of providers (FTs, Private companies, “Third sector”)• Payment by Results (PbR) using a tariff system (e.g HRG4)• Patient held budgets
Market Failure in healthcare - Theory• Market failure in healthcare is a well recognised problem in theory and practice (Arrow, Brown)• 1. Patients are not well enough informed to make choices (“Information Asymmetry”) 2. Healthcare is difficult to commodify. Contracts are complex. 3. Risk of supplier induced demand 4. Excess capacity is needed for market choice to work i.e a plurality of providers 5. Exit is very difficult ie Hospital closures are a political hot potato 6. Expensive to enter market – e.g ISTCs 7. Insurance systems will give the cheapest and best coverage to the well, and the most expensive and least coverage to the sick 8. Doctors control access to the healthcare market. Professionalism is a problem 9. Markets provide for wants rather than needs. 10. Price signals dont work. 11. Need for specialty clusters and high volume workload 12. First duty of investor owned firms is to their shareholders, not patients – “cream skimming”
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 experienceelsewhere leads us to conclude that if we wereto go down the road of introducing marketswholesale into British health care we would bepaying a very heavy price in efficiency andequity and be unable to deliver a Britain ofopportunity 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• $2.3 trillion dollar system - “Medical Industrial Complex”• 50 million uninsured. Upto 100million 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• 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 USAHumanaCurrent CEO: Michael.B.MccallisterCompensation 2009: $5 million and has $50 million stock optionsUnitedHealthCEO: Stephen J HelmsleyCompensation 2009: $3 million and stock options worth $660 millionn.b previous CEO, Bill McGuire involved in $1.5 billion stock options scandalAetnaCEO: 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!!) (Forbes)
Why do insurance systems fail patients?• Poorest have greatest burden of ill health• Insurance premiums highest for the least well• Human genome project
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)• Ed Balls: “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”
Evidence for market failure:• Transaction costs: University of York (15% NHS budget versus 5%) Commissioning contracts, Commodification (HRG coding), Managerialism (91% increase in NHS managers, consulting), NHS IT system to provide information for “consumers”• Excess capacity – e.g ISTCs, Polyclinics, CATS, Third sector• High regulatory costs – CQC, CCP, Monitor• Primary care versus secondary care• Marketing costs - branding• Attack on professionalism and public service ethos• .............And I’ve not even mentioned the PFI!
Deprofessionalisation• Market systems reject medical professionalism and the public service ethos• BMA Campaign!
Doctors and NHS market reforms• Doctors control access the healthcare system – an obstacle to the market “Professionals are in a profound sense not just non-market, but antimarket” (Professor David Marquand, Decline of the Public)• Hence the BMA LAON campaign!• Attack on the medical profession ever since the Griffiths report,1983 – managerialism (NPM)• Working for Patients white paper - End of the “Double Bed” of policy making (Klein, BMJ)
“Knights and Knaves”• Le Grand’s “Knights and Knaves” metaphor. Public Choice Theory. Public servants are “self interested rent-seekers”. He argued that “public policy should be designed so as to empower individuals: turn pawns into queens”.• Public Services are best delivered through consumer choice and the market. Rejection of “Trust” model• “American medical profession has lost public support faster than any other professional group”. (Blendon. JAMA 1989)• Knights become Knaves - “Le Grand Paradox” (Peedell. BMA ARM 2010)
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• 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....”
Academia• Cuts in University funding• Academic redundancy• Tick box culture• SPA time• Bureaucracy• “Spirit of inquiry”
Clinical leadership in the NHS market• “Without doctors, attempts at radical large- scale change were doomed to fail.” (Ham/Dickinson. Engaging Doctors in Leadership: A review of the literature 2007).• Strong “Clinical Leadership” (Darzi reforms).• “Service Line Management” (business units) - Doctors to become more entrepreneurial• “Change Agents” to deliver market based reforms
If market failure is such aproblem in healthcare then why have so many countries, including England, gone down this route? It’s the economy, stupid! (And some politics and philosophy)
Global neoliberalism and theconsequences for healthcare policy in the English NHS (Presented at IAHPE 2009)
Neoliberalism in a nutshell (see Steger and Roy)• The dominant political, economic and philosophical doctrine of the past 30 years• Liberalisation and deregulation of trade and finance. Maximum market freedom with minimal Government intervention• “Efficient market hypothesis” - Self correcting• Markets and market practices are the solution to all our problems!• “No more boom and bust”, “The end of history”• Basis of Thatcherism, Reaganomics, Blairism, Brownism and CamCleggism
Margaret Thatcher, 1975:“This is what we believe”
The demands of markets on nation states• Prudent fiscal policy• Low taxation• Low inflation• Marketisation and privatisation of public services, property, PFI/PPPs• Use of private sector management practices• “TINA” because of risk of “capital flight”• Erosion of sovereignty of nation states
“New Labour”• 4 successive election defeats (‘79, ’83, ‘87, ‘92)• “In economic management, we accept the global economy as a reality and reject the isolationism and ‘go-it-alone’ policies of the past” (Labour Party Election Manifesto 1997)• In his Mansion House Speech in 1997, Gordon Brown said that for a government to succeed it has no option but to, “convince the markets that they have the policies in place for long term stability.”• Blair’s Chicago Speech 2004: ‘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.’ “New Reality”• 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 2006
• “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)
Conclusions• The NHS is the most popular institution in Britain• Little evidence to support market forces in the organisation and provision of healthcare• Market in a single payer system makes no sense• Erosion of professionalism• The fear of “capital flight” in globalised unregulated financial markets has eroded sovereignty of nation states.• The NHS is now open for business with the international healthcare industry poised to profit• The BMA should be proud of the LAON campaign.• What is best for patients also is best for doctors