What's so special about the NHS?

[El Pibe]

An awful lot could be saved by leveraging the NHS's spectacularly influential market making purchasing power.

Noone seems interested, and the ever more unfathomable structures in place after every reform just make it a more and more distant dream.

I worked on a sytstem for a quango tasked with trying to find out cost discrepaniceis between trusts with an aim to unifying purchasing across the national organisation, and taking advantage of those potential economies of scale.

Coalition axed the quango following the tory's quango axing promise when they got in, saving about a million a year.

Potential saving conservatively in hundreds of millions if not billions.

Just a side point

[hpsaucey]

???? Wrote:

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> hpsaucey Wrote:

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> > rahrahrah Wrote:

> >

> --------------------------------------------------

>

> > -----

> > > indiepanda Wrote:

> > >

> >

> --------------------------------------------------

>

> >

> > > -----

> > > > I am not convinced anyone wants to pay more

> > tax,

> > > so either

> > > > we make deep spending cuts elsewhere, or

> get

> > a

> > > bit

> > > > smarter about how we fund health.

> > >

> > > I would happily pay more tax to ensure that

> the

> > > health service stays free at the point of

> use.

> >

> > You Gov survey a year ago and today say most

> > willing ot pay more for NHS. Nearly half of

> those

> > polled willing to pay more national insurance

> (not

> > income tax) to spend on the NHS. I think there

> is

> > a heightened feel for the 'specialness' of the

> NHS

> > at the minute, given that most people don't

> trust

> > the tories as far as they can throw them with

> > preseving it (again check out You Gov surveys).

> > They'll savage it and tear it to shreds faster

> > than a fox hound on a hunt.

> >

> > HP

>

> *sighs*

>

> I don't think it's that special. I don't thin the

> Tories are planning to destroy it - in reality

> they've pledged more spending. I think it needs

> reform but with propaganda type tosh spouted by

> Labour and the unions and widely accepted ( as

> your post shows) even getting an adult debate is

> nigh on impossible. Ps National Insurance is tax

> in all but name and how did I You GOv get on in

> pre-election polling?

:[ sighs ....

Unless anyone commenting is under 16/18 then I guess this is by definition an 'adult debate'... Re: You gov - election voting habits seems to be a bit of an exception and its more reliable than anecdotal evidence.

Re: my colourful rhetoric - yes over the top perhaps and I'm sorry it evidently pained ???? but the tories will go as far along the privatisation route they feel able to push, until the general public perhaps find they can't stomach it anymore. I am, personally, ideologically opposed to this.

I doubt anyone would deny there are ways to save money within the NHS - bulk purchasing ... reductions in contract staff bills etc.

Second what rahrahrah said...

HP

[Real_Louisa]

.

[DaveR]

The NHS has been trying to take advantage of the 'economies of scale' for at least 20 years - ditto the MoD, and that hasn't gone too well. IMHO it's the wrong target - the likely effect of economies of scale diminishes once you are already a large purchaser, and big NHS hospitals (let alone hospital trusts) are already the biggest players in the market. If you read this BBC story:

http://www.bbc.co.uk/news/health-33071066

what is notable is that even though it comes to same slightly tired conclusions about scale, the results of the enquiry show that there are already enormous gaps in efficiency and spending between hospitals of comparable size. The reasons are not identified but anybody who has worked in large public and private sector organisations will know that it always comes down to leadership and internal culture. And it's difficult to establish a consistent culture in an organisation with over 1 million employees - that's why some NHS hospitals are amazing and others mistreat, abuse and ultimately kill people.

[Earl Aelfheah]

Just to please quids and confirm his suspicion that I?m some kind of Marxist, I will add this - I do also have a moral and philosophical ambivalence with regards private companies having too big a role in a tax funded service.

These are not free markets in the most fundamental sense - 'consumers' are forced to buy these services on threat of legal sanction (via taxation). This is morally acceptable because there is an implicit social contract- certain services, such as education and healthcare are funded collectively and offered to all. We accept this as the cost of living in a civilised, social democracy.

When not all that money is reinvested into improving services however, but is diverted into the hands of shareholders, I do think it disrupts this social contract.

So yes, I do think there is also an ideological tension with regards public money and private profits.

[????]

What about intenal 'market' competition (with or without any private provision) say using say league tables of performance and giving patients more choice in who they use? Where you stand on that Rah?

I've never thought you a Marxist Rah - as a someone more on the left you are inclined to use 'marxist' framing of words sometimes. But you are always up for a decent debate withoput getting shouty. BTW I'm a nearlly a pure marxist in terms of looking at the world we live in based on how the means of production define it, culture, our views etc - I think Marx's insights here are nearly spot on. His analysis and ideology after that are cloud cuckoo of course :)

[????]

PS in the same way that most of the lefty's on here think I'm a Tory

[hpsaucey]

???? Wrote:

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> What about intenal 'market' competition (with or

> without any private provision) say using say

> league tables of performance and giving patients

> more choice in who they use? Where you stand on

> that Rah?

>

> I've never thought you a Marxist Rah - as a

> someone more on the left you are inclined to use

> 'marxist' framing of words sometimes. But you are

> always up for a decent debate withoput getting

> shouty. BTW I'm a nearlly a pure marxist in terms

> of looking at the world we live in based on how

> the means of production define it, culture, our

> views etc - I think Marx's insights here are

> nearly spot on. His analysis and ideology after

> that are cloud cuckoo of course :)

Except that Marx didn't 'do' geography which is where Dave R's points come in quite handy ...

[Jeremy]

???? Wrote:

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> What about intenal 'market' competition (with or

> without any private provision) say using say

> league tables of performance and giving patients

> more choice in who they use?

Might be a fringe benefit to those of us in big cities. Elsewhere, geography is the main consideration when you need medical treatment.

[????]

Specialists/surgery really? (people from Swansea when I was at StTommy's recently)

Gps - except in extreme locations most have choice

A&E maybe

[Jeremy]

Depends on the surgey... but any hospital should be able to handle routine prodcedures with ease. Most will just want to go to their local hospital.

[Loz]

rahrahrah Wrote:

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> The conservatives on the other hand have time and again pursued ideologically driven interventions

> across all manner of state services regardless of value for money or any sense of pragmatism. For

> example, selling state assets at under market value, as well as profit making services (bringing

> money into the exchequer), such as the east cost mainline. These are purely ideological decisions

> based on a belief that the state should only commission services, not run them.

East Coast mainline is a spectacularly bad example. As I posted on another thread...

DOR (the 'nationalised' train operating company) made about ?200m per year for the exchequer. Virrgin are expected to pay ?3.3bn to the treasury over the upcoming eight years of the franchise.

But the main problem was that DOR ran ECML during the "easy" phase of running a railway. There were some big costs coming up, which DOR by itself could not fund. DOR had been allowed to defer a major maintenance programme on it's rolling stock (which could be deferred no longer) and it could not afford to introduce the 65 new trains due in 2018 (replacing the current 39 and adding 50% more capacity).

So, DOR's profits would have plummeted (if not become loss-making) during the upcoming phase and it would have needed an injection of money for investment. Thus the government wanted to get ECML back into private hands to cover those investment costs plus still get money into the exchequer. Labour would have almost certainly done the same thing for the same reasons.

See? Sometimes 'bad looking' privatisations actually have very good financial reasons.

[Earl Aelfheah]

Loz - this ignores the fact that the previous two private operators failed to meet their financial commitments and that over the next eight years there will be on going subsidies.

If you would like another example - the sell off of council housing is probably the most ridiculous - houses disposed off at huge discounts, many of which are then rented back by local authorities at private rates, or by individuals who then claim increased Housing benefit.

Anyway, we could probably debate the rights and wrongs of individual sell off until the cows come home, but I would be interested to know your view on my main contention; The Conservatives fundamentally (and imo doggedly) believe that the state should commission services, not run them.

[Earl Aelfheah]

Loz Wrote:

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> See? Sometimes 'bad looking' privatisations

> actually have very good financial reasons.

Thanks for the patronising tone btw.

[El Pibe]

I believe my mate in the army said they bought cable ties at 3 quid a pop.

Clearly it's benefitting someone, but it ain't the taxpayer.

scale aside, the price differences in purchasing the same product were vast. savings in standardisation, leaving aside leverage would still be massive.

Just because something's not easy or hasn't been managed yet isn't reason enough to sniffily and high handedly dismiss it is it?

[Loz]

rahrahrah Wrote:

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> Loz - this ignores the fact that the previous two private operators failed to meet their financial

> commitments and that over the next eight years there will be on going subsidies.

And you are ignoring there would be exactly the same ongoing subsidies for DOR. You have to compare like with like. In fact, DOR received more, as they paid less for track access from Network Rail than the new operator will. You are also ignoring that Labour would have done exactly the same.

> If you would like another example - the sell off of council housing is probably the most ridiculous

> - houses disposed off at huge discounts, many of which are then rented back by local authorities at

> private rates, or by individuals who then claim increased Housing benefit.

This I agree with. It would have made some sense had the profits been ploughed back into social housing, but it didn't. I think social housing is a very good thing. Housing benefit is a very stupid idea and goes against my basic belief that it is better for governments to provide services than to give out cash.

> Anyway, we could probably debate the rights and wrongs of individual sell off until the cows come

> home, but I would be interested to know your view on my main contention; The Conservatives

> fundamentally (and imo doggedly) believe that the state should commission services, not run them.

I don't think that is a big secret. But the opposing question would be: when privatisation makes perfect sense, like in the East Coast mainline, is it just as short-sighted to ideologically oppose it? See that's the point - some things are better off privatised, some things aren't. The trick is choosing which is which, and neither the left or the right are terribly good at seeing this, as they are both too bogged down in ideology.

[DaveR]

"The Conservatives fundamentally (and imo doggedly) believe that the state should commission services, not run them."

This is overly simplistic, but there is a question of principle involved, and I think it's this; where public money is spent providing services that could be simply bought, why not just give people the money and allow them to buy what they want? After all, that's what happens with benefits and pensions (and it hasn't always been that way - state provision for the poor used to be the workhouse). It obviously doesn't work for police/courts/military etc., but people used to think that it was natural for govt to run the telephone network, whereas you'd have to be very ideologically pure to argue for the nationalisation of BT. Big State fans always decry choice in the context of public services, or at least are dismissive - see above, people "just want to use their local...." but it seems to me the evidence is absolutely clear that when people have a choice they use it and the effect is to make services better. look at all the complaints on here about schools, where what people are really angry about is insufficient choice.

That's why the argument about private sector profits etc is a bit of a red herring - as I've said before, I would always expect 'not-for-profit' entities to dominate an area like healthcare. The real issue is whether healthcare is provided by people independent of politics, where both costs and outcomes are transparent, and with a sufficient element of consumer choice to get some basic market forces in play, or by the NHS.

[Earl Aelfheah]

If you look at Labour's record, they were pretty pragmatic when it came to using private sector providers (whether or not they made the good choices aside). The Conservatives take any opportunity to divest from state run services, regardless of value for money. You couldn't turn that around and accuse Labour of looking to Nationalise at any opportunity. It's too easy to say 'oh they're all ideological' - of course, and that's not a bad thing in itself, but my point is the Conservatives are particularly dogmatic.

[Loz]

I think that is your biased observation. You seem to be saying that when Labour do a bad privatisation it is a 'mistake', but when the Tories do it it is 'dogmatism'? Where is the evidence for that statement?

> You couldn't turn that around and accuse Labour of looking to Nationalise at any opportunity.

I would say there is little, if no difference, between Labour's view on privatisation and Tory. NHS, council housing, utilities have all been privatised, prepared for privatisation or listed for privatisation by Labour and Tory alike. In fact, it's worth noting, since the NHS is such a hot topic, that when Blair took office (i.e. post Thatcher/Major) there was little to no privatisation in the NHS. Yet, by 2008 that had changed markedly, especially though PPI.

Can you list a few areas that Tories have privatised that Labour has refused to or - even better - reversed?

[Henry_17]

Since the introduction by Labour in 2004 of the Payment By Results system private sector outsourcing by the NHS has increased steadily every year. Under the system hospitals may compete for NHS work under regulated tarriffs. The tarriffs are set for various groups of procedures based on average NHS costs to carry them out. They are adjusted annually by NHS staff cost inflation, and crucially are adjusted to require efficiency improvements. Under the Conservative Lib Dem coalition in 2011 this was modified further to benchmark not just to average NHS costs for a particular procedure but to deemed best practice costs. Conceptual debates over whether the private sector can provide better value vs. a theoretical optimally performing NHS are all well and good, but vs. the actual NHS we have the private sector has been winning market share under a regulated system that requires it to offer the service at the same cost and for that cost to inflate at a lower cost than NHS cost inflation given the efficiency requirement.

Also under Labour, healthcare spending as a % of GDP increased steadily every year, however at its peak it was still the lowest in the G7 with outcomes broadly equivalent or only slightly worse depending on who you listen to. This demonstrates both that it must be a relatively efficient service but that also total spending may be lower than desirable.

Under the Conservative Lib Dem coalition, spending as a % of GDP began to contract although still increased moderately in absolute and real terms. The fiscal constraints following the recession that required this would have been faced by any government at that time, and would still be faced by any government now.

In the face of these fiscal constraints, the NHS is set to experience a material uptick in demand for its services due to the UK's demographic profile. Baby Boomers are entering their 70s, and the population of over 75s is expected to increase by 60-70% over the next 20 years. Between the ages of 70-75 the number of times one will require a hospital stay quadruples, the average length of that stay increases by 2.5x, and GP visits double in frequency.

The Office for Bugetary Responsibility estimate that spending will have to increase by 3.6% per annum in real terms in order to meet this expected increase in demand, however given the budgetary contraints, that is not going to happen. This makes continued increases in private sector provision highly likely and it also likely that the rate of increase will accelerate. Aside from existing policy that provides for outsourcing by the NHS, more people, when faced with growing waiting lists or when having been told that a given drug is not available on the NHS, will choose to go private directly where they can afford it. The current population is under saved and under insured for this scenario. Over the shorter term monetisation of unproductive housing equity will fund this increase in demand, while over the medium term employees will increasingly value and demand private medical insurance as an employee benefit.

Unfortunately this is also likely to increase levels of inequality within the healthcare system, although that doesn't preclude that average and minimum standards also continue to improve somewhat.

[Otta]

DaveR's post about letting people make their own choices with a personal budget is very much on line with where social care has been trying to go since about 2008/09.

[uncleglen]

FYI it was in the Labour Party's 1959 (they lost the election though) manifesto to allow council tenants the right to buy but very few took up the option....

[Earl Aelfheah]

Loz Wrote:

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> I think that is your biased observation. You seem

> to be saying that when Labour do a bad

> privatisation it is a 'mistake', but when the

> Tories do it it is 'dogmatism'? Where is the

> evidence for that statement?

>

> > You couldn't turn that around and accuse Labour

> of looking to Nationalise at any opportunity.

>

> I would say there is little, if no difference,

> between Labour's view on privatisation and Tory.

> NHS, council housing, utilities have all been

> privatised, prepared for privatisation or listed

> for privatisation by Labour and Tory alike. In

> fact, it's worth noting, since the NHS is such a

> hot topic, that when Blair took office (i.e. post

> Thatcher/Major) there was little to no

> privatisation in the NHS. Yet, by 2008 that had

> changed markedly, especially though PPI.

>

> Can you list a few areas that Tories have

> privatised that Labour has refused to or - even

> better - reversed?

You miss the point. Labour are willing to use the private sector for service delivery. Whether one agrees with where and how they've chosen to do this is another debate. The point is, they are willing to accept private sector involvement or not, depending on the case. My point was that The Conservatives fundamentally believe that the state should commission services, not run them (a point you already accepted). That is dogma. That is a position which basically says, the state should not be involved in running services regardless of circumstances. It is not pragmatic, it is purely ideological.

[Earl Aelfheah]

Loz Wrote:

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> Can you list a few areas that Tories have

> privatised that Labour has refused to or - even

> better - reversed?

They opposed sell off of Royal Mail and the con policy to force the sell off of housing assoc stock at under market rates. More recently, the sell off of publically owned shares in Lloyds and RBS (again, typically, at a loss to the taxpayer). I'm sure there are plenty of others, but that wasn't really my point. My point was that 'the left' were accused first of being dogmatically opposed to all privatisation, then of being no different in their position to privatisation than the right. I think they believe in a role for the private sector, (but also the state) in running public services. That seems to me a more rational and pragmatic premise.

[Loz]

rahrahrah Wrote:

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> They opposed sell off of Royal Mail and the con policy to force the sell off of housing assoc

> stock at under market rates. More recently, the sell off of publically owned shares in Lloyds and

> RBS (again, typically, at a loss to the taxpayer).

Except Lloyds was sold off for a ?5bn profit and the selloff of Northern Rock/Bradford&Bingley made a further ?7bn profit. RBS will make a ?7bn loss.

Plus Labour set up the Royal Mail for sale when they removed the mail monopoly and then wanted to sell 30% of RM, but didn't follow through with it. And they even tried before that - remember the Consignia shambles? Labour has only 'opposed' the sale of Royal Mail while they've been in opposition and, even then, never actually ruled it out.

> I'm sure there are plenty of others, but that wasn't really my point. My point was that 'the

> left' were accused first of being dogmatically opposed to all privatisation, then of being no

> different in their position to privatisation than the right. I think they believe in a role for the

> private sector, (but also the state) in running public services. That seems to me a more rational

> and pragmatic premise.

'The left' are generally dogmatically opposed to all privatisation. Your mistake is thinking the current Labour party are left wing.