Reform of the NHS:

Choice, Markets, Competition in the NHS – What do they mean for health inequality?

Steve Harrison University of Manchester 2006

What are the reforms?

  • Demand-side reforms: eg separation of commissioning/ provision via quasi-market, patient choice, direct payments (social care), easier access to GP lists
  • Supply-side reforms: eg pluralisation of providers inc independent sector in both primary & secondary care, NHS Direct etc
  • Transaction reforms: eg QoF, payment-by-results, national casemix-based tariffs
  • Regulatory reforms: eg government targets, NICE, Healthcare Commission, stronger PCT role

What are quasi-markets?

  • In common with other markets, there are independent competitive producers on the provider side but, unlike classical markets, some or all of the following characteristics may be present (LeGrand 1991; LeGrand and Bartlett 1994):
  • producers cannot be assumed to be profit maximisers;
  • consumer purchasing power is confined to a specific range of goods or services, so that the purchaser cannot decide to spend the resources thus ‘earmarked’ on anything else (in effect, the purchasing power is a ‘voucher’, whether or not so labelled);
  • purchasing decisions are made by an agent rather than by the prospective consumer of the goods or services;
  • payment for the goods or services is made by a ‘third party payer’ rather than by the prospective consumer.

Pursuing equity & equality

  • Not clear how on theoretical grounds the demand-side & supply-side reforms (except possibly direct payments & easier access to GP lists) would be expected to enhance equity or equality
  • Essentially, therefore, we would look to transaction & regulatory reforms to do this, eg QoF might be expected to equalise treatment of chronic conditions
  • Most NICE appraisal decisions are legal requirements on NHS, so reduced ‘postcode rationing’
  • Proposed new PCT role in attracting primary care services to under-doctored areas

Optimisms & pessimisms of an empirical researcher… (personal views)

Optimistic that

  • PCTs can increase equality of primary care provision
  • Access to GP lists & GP services can become easier
  • Practice-based commissioning can improve some secondary care services (provided PCTs not too heavy-handed)

Pessimistic about

  • Consequences of assuming that all health care processes can be defined as sets of protocols & all outputs as casemix
  • Consequences of assuming that material incentives are sole/ prime drivers of organisational/ individual behaviour
  • Possible destabilisation of secondary care provider cost structures by PBR & national tariff