Payment by results

Competition and markets

George Duoblys thought provoking essay,  One, Two, Three, Eyes on Me! in the current edition of the London Review of Books describes the application of new public management techniques and competitive markets in education.  The teaching he describes appears to be entirely teacher centred.  It may be successful in getting more pupils into universities, but what does it offer to those who fail to do that? We have tried payment by results before in education, but abandoned the idea in 1892, something this government never mentions, presumeably because it was not included in Mr Gove’s history syllabus. What he describes appears similar to reports of the Japanese education system, also seen as successful in getting students into universities.  But the Japanese approach leads to high levels of suicide.  In this country mental health problems in children  appear to be rising as a result of the relentless focus on testing. This approach may be efficient in turning children into well behaved automata, but it’s cheaper and more effective to create electronic versions.  Getting pupils into a university is an easily measured output for a school, but what is the outcome for the pupil?  Can we also publish the number of pupils from each school who end up in prision, or in mental health services?

These market focussed ideas in the English NHS are now being quietly abandoned.  Paying hospitals to perform more operations and more tests is not actually an efficient way of running a health system.  Trying to measure the performance of individual organisations doesn’t get you very far.  The important question is how the system performs as a whole.  The NHS is returning to managed systems, with local government involvement. This government still seems to think that education should be run as a competitive market between autonomous institutions.  The notion that only what can be measured counts leads, as it did in health, to a focus on short term institutional outputs, and ignores the real long term outcomes for people.  Important outcomes in health and education can only be measured over the long term, and some cannot easily be measured at all.

If we move in health to paying for the outcomes which really matter for people – longer happier lives, rather than more medical procedures – we will quickly realise that for most healthcare’s contribution to such an outcome is pretty marginal.