Brown Offered Stark Choice For NHS

Gordon Brown faces a stark choice between deploying market forces to reform the National Health Service or retreating back to central control and performance management, a study published today concludes.

If he fails to set a clear course the NHS faces “the worst of both worlds” – the costs of a more competitive market without the benefits, a result that “could prove disastrous”, one of the study’s authors said.

The finding comes from a two-day exercise in which 70 people in the NHS – managers, policymakers, regulators and the private sector – sketched scenarios over two separate years between now and 2011, using real NHS data. The “war gaming” technique allows both likely behaviour and outcomes to be studied. A similar exercise in 1990, ahead of the Conservatives’ introduction of the internal NHS market, threw up big risks that led the government to modify the blueprint.

The latest experiment has shown that “a clear set of rules for competition within the NHS is urgently needed” if the new market is to work in patients’ interests. The study was sponsored by the King’s Fund health think-tank, Monitor, the foundation trust regulator, and Nuffield Hospitals, the private hospital group and NHS supplier.

Under the current rules – or lack of them – the simulation found some doctors and managers seeking to revert to command and control, the private sector losing interest in doing business with the NHS, and primary care trusts failing to act as “impartial commissioners” for patients. Instead they preferred to defend their current arrangements.

“The current ambiguity over whether market forces or central control are to be the main lever for reform must be resolved,” Laurie McMahon, one of the principal authors, said. “The changes have yet to reach a tipping point … and allowing the two philosophies to run at the same time is one of the greatest dangers facing the NHS in England. It could prove disastrous” – generating costs without bringing benefits.

The study favours pushing ahead, saying the current reforms “were developed because of the failure of past attempts”. Central targets, performance management, “best practice” initiatives and massive investment had left the service “largely unresponsive” to patient needs and innovations, and insufficiently innovative and productive.

Much time and money has been invested in building a managed healthcare market. There are signs that staff are warming to the new regime, and “there is some evidence patients are beginning to see the benefits”.

Alasdair Liddell, a co-author, former senior NHS manager and former director of planning at the Department of Health, said: “Now is not the moment to pull back. It needs to be given more time to see if the anticipated benefits flow.”

For the market to work, however, “a clear, unambiguous commitment” to it is needed, says the report. A transparent set of competition rules is required, along with clear rules for dealing with failing services – deciding who will intervene, and when, if things go wrong.

That involves working out more precisely the role of Monitor, Ofcare – the new health and social care inspectorate – the role of strategic health authorities and that of the Office of Fair Trading.

Without that “the system will stall” with both public and private providers unable to judge the risks and benefits of investment, the report warns.

Mr McMahon summed up the lessons from the study as: “Now is not the time to dither, or have a dab on the breaks.”