Refusing Treatment: The NHS and Market-Based Reform

For the past 20 years, the healthcare policies of successive governments have focused to a large extent on developing a market within the NHS in England. The reasoning behind these moves primarily centred on the hypothesis that if competition, in theory and in practice, has proved to be the greatest single spur to efficiency, quality and innovation in other industries, could it not have the same effect in the NHS? Refusing Treatment: the NHS and market-based reform presents the findings of a year-long, in-depth study into whether and why the NHS market has achieved such results. The study is based on 46 interviews with executives at NHS (foundation) trusts, PCTs, practice-based commissioners and private sector providers, across three health economies in England. Isolated examples of the market having significant positive effects were found. However, by and large, the market is yet to have its intended impact on providers and bring about the anticipated benefits on any meaningful and systematic scale. This is less because the concept of a market is flawed when it comes to the NHS, and more because the market is being distorted and stifled; in particular, by the closed culture of the NHS and powerful, emotive notion of the 'NHS family'. In unprecedentedly tight financial times for the NHS, these findings carry policy implications that should not be ignored.

Table of Contents:
Preface Executive Summary CHAPTER ONE: Introduction CHAPTER TWO: Background 2.1 Benefits and pitfalls in the use of markets 2.2 The switch to a market in the NHS 2.3 The way the NHS market operates today 2.4 The rationale for introducing a market in the NHS 2.5 The productivity imperative facing the NHS 2.6 The evidence on the market in the NHS to date CHAPTER THREE: Methodology 3.1 Concepts and scope 3.2 Design and sample 3.3 Analysis 3.4 Limitations 3 PART 1: Is the market working? CHAPTER FOUR: Core Findings 4.1 Changes in responsiveness and customer service 4.2 No clear impact on equity 4.3 Isolated examples of the market driving innovation 4.4 Little evidence linking the market to quality improvement 4.5 Organisational efficiency up but questionable effects across the system 4.6 Discussion PART 2: Why isn't the market delivering greater benefits? CHAPTER FIVE: Is the concept of a market in the NHS flawed? 5.1 The market is considered less effective than other means of driving performance in providers a. Targets, quality initiatives and the open publication of information b. 'Preferred' providers, PCT self-provision and integrated care organisations 5.2 Wider problems stemming from markets in health care a. Collaboration undermined b. Wasted resources c. Uninformed and ineffective consumers d. Profits before patients 5.3 Political and centralised nature of the NHS may forever quash market incentives a. Constantly changing policy b. Government targets c. Unwillingness to accept hospital closures 5.4 Discussion a. What market? b. Market mechanisms, even in their current form, have still had impact c. Support for the market structure CHAPTER SIX: Is the market being stifled and distorted? PART A: Distortions in the market 6A.1 Structural imbalance of power between purchasers and providers a. PCTs are too small relative to providers b. Acute trusts are more established in the health system c. Practice-based commissioners are underpowered 6A.2 Uneven playing field 6A.3 Problems with payment-by-results 6A.4 The role of GPs 6A.5 Discussion PART B. Stifling influences in the market 6B.1 Practical obstacles to tendering a. Lack of alternative options b. Time consuming tendering processes c. Bullying from NHS trusts d. Quality of data questionable e. PCTs feel locked into relationships with providers 6B.2 Underdeveloped skills on the part of purchasers and providers PCTs a. Weak management b. Underdeveloped commissioning skills Providers a. 'Classic monopolists' b. Cost control in NHS providers 6B.3 Stifling political and cultural environment a. Command and control b. An attachment to the 'comfortable life' c . Reluctant consumers d. The 'NHS family' 6B.4 Discussion CHAPTER SEVEN: What should be done? Annex A: Department of Health guidance on PCT procurement and tendering Annex B: Different strategies for procurement and contract management Annex C: The NHS in England: The operating framework for 2008/9 - Principles and rules for co-operation and competition Notes

About the Author :
Laura Brereton holds an MSc in public health/health services management from the London School of Hygiene and Tropical Medicine and a BSc from Boston University (US). She has worked extensively on the impact of ongoing market reforms in the English NHS. Laura is currently a health policy researcher at RAND Europe, where she focuses on health system comparison and chronic disease management. She worked previously in public affairs for health and medical associations in the US and UK. James Gubb is Director of the Health Unit at Civitas, a post he has held since 2007. His previous publications on health include Checking up on Doctors: a review of the Quality and Outcomes Framework and Putting Patients Last: How the NHS keeps the ten commandments for business failure (with Peter Davies). James also sits on the steering committee of Young Civitas for Medics, a new society set up to involve medical students in health policy discussions, and is a partner in Streetscape, a landscape gardening business that strives to take unemployed young people back into work. He is a regular contributor to print, broadcast and healthcare media on issues concerning the NHS.