The NHS: Back on the operating table

July 14, 2010


-Laurence Copeland is a professor of finance at Cardiff Business School. The opinions expressed are his own.-

“The NHS – the envy of the world”. This is one of the Great British Myths to rank alongside “A-level standards haven’t fallen”.

It makes you wonder why all those rich well-organised Europeans are looking longingly at Britain – it’s not as though they can’t afford their own NHS. The truth of course is that they take one look and say “thanks, but no thanks”, and you can’t really blame them.

By most indicators, the NHS produces outcomes that are very unimpressive compared to our European neighbours and are in many cases inferior to those achieved in far poorer countries.

The fundamental problems of the NHS can be seen by simply examining the boasts of its defenders. One oft-repeated claim is that it is the second-biggest employer in Europe (or is it the world?), behind only…………….the Red Army! What this tells you loud and clear, apart from plenty about the speaker’s role-models, is that the NHS is simply far too big and far too complex an organisation for anyone to manage properly.

That the problems are managerial is confirmed indirectly by another frequently-heard boast.

The  claim that NHS staff are hard-working and totally devoted to patient welfare is in my own experience largely justified, but the trouble is that it prompts another question: if the staff are so hard working and committed, why are the results so disappointing?

The answer, as far as I can see, is that much of the efforts of doctors, nurses, radiologists etc has to be devoted to beating the system they work for.

Instead of being free to concentrate on the clinical issues involved in patient care, their precious time and energy is wasted on working out how to get the resources they need to do their job, which often means stratagems like keeping patients in hospital because discharging them might mean they go to the back of the queue for the next stage of their treatment.

The problems with the NHS go far too deep to be explained simply by size, centralization and the dead hand of nationalisation, though these are probably the most important factors.

From a broader perspective, we should not underestimate the effect of the congenital British unwillingness to invest in anything other than real estate.

We habitually begrudge spending on any form of productive investment, most of all on human capital – and that includes training doctors.

Any country which only has 2 doctors per thousand population, like the UK, is bound to have longer waiting lists and less access to healthcare than one which has 3 or 4 or more, as do almost all rich countries and some not-so-rich too.

Britain inevitably suffers from a similar disparity in the number of hospital beds per population, since the constraint on the number of beds is usually the personnel to service them, not the space to accommodate them.
For most of the last 50 years, it could be said that we simply didn’t spend as much as other countries on healthcare, but thanks to the previous government’s attempt to solve the problems of the NHS by throwing money at it, the gap is now quite small relative to any other country except the U.S., which as far as I can see manages to be even more wasteful than Britain.

However, the proportion of total healthcare expenditure paid for by taxation is far higher in the UK than almost anywhere else. In most countries, patients are required to contribute far more from their own pockets to the costs of their treatment than in Britain.

For example, the French, who are often said to have the Rolls Royce of healthcare systems, pay for at least half of their prescription costs.

One thing is common to more or less every advanced country. They are all – almost without exception – being bankrupted by the cost of providing up-to-date standards of healthcare for their rapidly aging populations – and that was true even before they were engulfed by the current financial crisis.

In Britain, the effort to contain costs while raising standards goes back at least as far as the Blair government’s attempts to introduce a competitive element into healthcare provision.

This was castigated by left-wingers as privatisation by the backdoor, which in a sense it was. Since opposing the NHS in Britain requires more courage than any British political party (or even individual politician) can muster, all reform proposals amount to attempts to square the circle – to get a nationalised monopoly to behave like a competitive industry.

This week, the new Coalition Government presented a proposal which seems to involve handing over control to GP’s.
As a patient, I am nowadays totally confused about what the role of GP’s is supposed to be.

Being as old (and confused and decrepit) as the NHS, I can still remember a time when we had a family doctor who worked as a sole practitioner and could be relied on to turn up at our house in person to tell my mother whether I had measles or chickenpox.

Although it was superceded twenty or thirty years ago by the modern multipractitioner clinic offering a wide range of ancillary treatments, but with a largely anonymous GP service, this 1950’s model nonetheless seems to live on in the minds of politicians and NHS managers.

What remains untouched, as far as I can see, is the role of the GP as gatekeeper – his or her referral is required for access to any nonemergency NHS treatment and even to private medicine.

Given that they control access, there is some logic in the Coalition proposal to give them control of the money too. But the idea that they have some kind of inside information about what patients want is implausible, to say the least.

It also flies in the face of what seemed to be the consensus of the last decade or two that the NHS needs professional management – GP’s are not trained to handle spreadsheets and cashflow computations, nor do we want them to be.

The likely outcome, as many people have spotted, is that GP practices will simply hand over their budgeting (and probably other services, like appointment scheduling, purchasing and personnel) to facility management companies.

Will this latest attempt to genetically engineer the NHS work? Not impossible, but unlikely. After all, it can’t be easy to make a pig bark like a dog.

Picture credit: The Palace of Westminster is seen overlooking Guy’s and Saint Thomas’ National Health Service (NHS) Hospital in central London August 14, 2009. REUTERS/Dylan Martinez

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