The document discusses the problems with the old NHS system and the rationale for recent NHS reforms in the UK. It outlines issues like long waiting lists, inefficient capacity use, unresponsiveness, and inequity under the old system. The reforms aim to address these through increased patient choice, payment-by-results to incentivize success, introducing new providers for more competition, and practice-based commissioning to control costs. However, it notes risks like failure to deal with provider failure, capacity planning challenges, fragmentation, pricing complexities, and inequity issues that still need addressing to ensure the reformed system works as intended.

1. DO THE NHS REFORMS MAKE
SENSE?
Julian Le Grand
London School of Economics

2. Problems with ‘Old’ NHS
• Long waiting lists
• Inefficient use of capacity. 98% of pop lives with
1hr travel time of 100 available and unoccupied
NHS beds. 76%, 500.
• Unresponsive to patients’ needs and wants
• Poor on innovation
• Only better off had opportunity if dissatisfied to
go elsewhere.
• Inequity within the NHS.
• Monopoly of provision

3. Unreformed NHS: equity problems
• Unemployed, and individuals with low income and poor
educational qualifications use health services less relative
to need than the employed, the rich and the better educated
• Intervention rates of CABG or angiography following
heart attack were 30% lower in poorest group than in the
richest.
• Hip replacements 20% lower among poorer groups despite
30% higher need.
• A one point move down a seven point deprivation scale
resulted in primary care practitioners spending 3.4% less
time per consultation

4. Targets: Impact
% patients waiting for
hospital admission > 12 months
30
25
20
15 England
10
5
0
2000 2001 2002 2003
Source: National Health Service hospital waiting lists by region: Regional Trends
35, 36, 37 & 38

5. Targets: Impact
% patients waiting for
hospital admission > 12 months
30
25
20
England
15
Scotland
10
5
0
2000 2001 2002 2003
Source: National Health Service hospital waiting lists by region: Regional Trends
35, 36, 37 & 38

6. Targets: Impact
% patients waiting for
hospital admission > 12 months
30
25
20
England
15 Wales
Scotland
10
5
0
2000 2001 2002 2003
Source: National Health Service hospital waiting lists by region: Regional Trends
35, 36, 37 & 38

7. Targets: Impact
% patients waiting for
hospital admission > 12 months
30
25
20
England
Wales
15
Scotland
10 Northern Ireland
5
0
2000 2001 2002 2003
Source: National Health Service hospital waiting lists by region: Regional Trends
35, 36, 37 & 38

8. A&E Target: % seen within 4
hours
100
80
60
40
20
0
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2002-03 2003-04 2004-05
& a 20% increase in numbers in A&E

9. NHS Reforms
• Patient Choice
• Payment-by-results
• New providers (Foundation Trusts and
Independent Sector Treatment Centres)
• Practice-based Commissioning
• Direct payments in social care

10. Logic of Reforms
1. Patient choice. Intrinsic and instrumental.
2. But, if choice is to provide the right incentives,
needs reward for success, penalty for failure.
Hence PBR – money following choice.
3. But also choices must exist. Evidence that new
providers offer most effective contestability.
Hence ISTCs and FTs.
4. But danger of over-treatment. Hence PBC.

11. Reforms: risks
• Failure to deal with failure
• Capacity planning
• Fragmentation
• PBR: getting the price right
• PBC not powerful enough to control
supplier and patient-induced demand.
• Inequity

12. Reforms: risks
• Failure to deal with failure
• Capacity planning
• Fragmentation
• PBR: getting the price right
• PBC not powerful enough to control supplier and
patient-induced demand.
• Inequity. But choice more equitable than voice?
• Phasing

13. Conclusion
• We are not looking for the best system, but
only for the least worst.
• Reformed NHS is likely to be the least
worst but there are risks along the way.The
challenge is to deal with those risks in the
most efficient and equitable way.