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Forward to a better managed yesterday

March 13th, 2011 Posted in health, Liberal Democrats by

Debates about the organisation of the NHS, much like those about the Church of England, fascinate insiders and leave most people confused, albeit with strong instincts as to which side they’re on.

Most public NHS debates then are emotional spasms in response to beliefs about public and private provision. Saturday’s Liberal Democrat Party conference rebellion against market aspects of the Government reform programme is in that vein.

I find it hard to believe for example that most of those present had strong feelings on demanding  “a much greater degree of co-terminously between local authorities and commissioning areas“, or  “celebrating “the social solidarity of shared access to collective healthcare“, or “requiring GP Commissioning Boards to construct their Annual Plans in conjunction with the HWBs“.

The main debate was about “the complete ruling out of any competition based on price” in order to “ensure that healthcare providers ‘compete’ on quality of care”.

Despite evidence that competition and price signals are essential in driving quality in health the same as any other service, and the slide of UK health provision versus the world over the lifetime of the NHS, it remains the fond hope of the left that they will yet find a perfect planning committee, presumably attached to an infinite budget such that no tough decisions about priorities ever need be made.

The actual consequence of planning without prices is two-fold. First low cost, low quality providers get paid the same as the good, a lemon market. The second related point is reducing incentives to improve. If you can’t charge more for better services, why innovate. That in turn inhibits the good from growing to displace the bad. The reason many NHS services are sub-par is that they are never allowed to exit the market, just linger for years killing and maiming the sick, in order to provide patients with “social solidarity of shared access”.

Commentary today suggests that this vote might force the Conservatives to water down their already not very radical proposals.

I’m not so sure. It will certainly provide some theatre of dissent. When Nick Clegg says “no to privatisation”, that doesn’t means much. Privatisation wasn’t on the table, and many parts of healthcare are already private or third sector. Removing private companies entirely from health provision would require such mad steps as nationalising pharmaceutical companies and banning all agency staff. Too far even for the writers of the motion.

Nick in this instance has just created yet another future rod with which to beat him by ‘disappointed’ activists.

I suspect there will be something as a gesture to the anti-reform sentimentalists, in order to allow our Ministers to say they listened and got concessions. But that in part has already happened. It would also be seen as a fairly normal part of Parliamentary processes under Coalition, if this country had much experience of the same.

Otherwise those of a Liberal Vision point of view are having a good conference. Nick Clegg opened with a call with the party to hold their nerve, much as we suggested last week, and his speech today is about fighting for the centre-ground (not being left-wing), much as we suggested last year. The narrative is going in the right direction, despite the best efforts of some to hold it back.

10 Responses to “Forward to a better managed yesterday”

  1. Saul Says:

    I consider myself on the `left of the orange bookers` and thought that it was healthy for the conference rebels to have held sway.

    That being said there are really only two economic models that work in Europe – Swedish style Social Democracy (the party that could espouse that dares not detail the `downsides`) and in any case the closest we’ve come to it politically is the 1983 Labour and 2005 LD manifestos (yeh, they worked well!) or Germanic style `christian democracy` or in our terms `liberal conservatism` that has boundaries of Cameron and Farron. There’s really only one game in town for anyone with any sense of what the British electorate are willing to put up with or what the trajectory is.

    If we went for the former not only would we have to explain the tax rises, benefit reforms and conformity that would be required (oh and lower house prices!) if the AV vote goes against us there’d be no hiding place except with a morally and intellectually vapid Labour party.

    If we go for the latter we are quids in with AV – if the public vote `No` then we all know what that means – more coalitions if not accommodations of the Cameronites and them of us. If it’s a `yes` then it means that we can keep our identity as well as working with those Conservatives (and Labourites – ie people like both Huttons and Field) to build a strong fair Britain.

  2. Lotus 51 Says:

    You say that Swedish style social democracy has been rejected by the electorate in the form of the Labour 1983 and LD 2005 manifestos, but the reality is the British electorate has never been offered any such thing. Labour has only ever offered higher taxes and higher spending on un-reformed, centrally-planned state monopolies (Academy schools are the timidest of reforms).

    Sweden uses the private sector for the provision of public services which are free at the point of use and funded from taxation. This happens both in health and education. I don’t recall either the 1983 Labour or 2005 LD manifestos offering such reforms. Both manifestos promised more spending but no meaningful reform or greater private sector involvement.

    The LD “rebels” who are against the Coalition’s health and education reforms are against a model that is closer to the Swedish model than it is to the German model. Indeed the Free Schools policy is a copy of the Swedish model, only watered down. Sweden allows private providers of Free Schools to make a profit, Gove’s reforms won’t.

    As a small government, low tax economic and social liberal I would gladly accept higher taxes if the unionised, producer-centered, centrally-planned state monopolies were broken up and the market was allowed to operate in the sphere of taxpayer-funded public services.

    Higher taxes are acceptable to me when the money is spent efficiently and effectively.

    The tools of economical liberalism (free markets, private enterprise) can be used to achieve socially liberal means (universal free access to god quality public services). However you seem to reject these economic tools. Either you don’t believe the means will achieve the ends, in which case why cite Sweden as a desirable model, or you have an ideological objection to markets and the use of the private sector in public servces.

    We all agree that monopolies are bad in the private sector and the state introduces legislation specifically to stop the creation of such monopolies. So why on earth do people think that monopolies are good thing in the provision of public services?

  3. Saul Says:

    @Lotus – since you say that either manifestos didn’t provide room for the reforms that were required both would have been rejected even if they had done. Labour are so cowardly that they’d never put full social democracy to the British people so we can rule that one out and I can’t see the Tories doing so.

    I’m not against free schools or the free market. However, have the Swedish free schools been an unalloyed success. The free schools are such a small part of education policy anyway.

    I too want to break up the vested interests – it’s how the new masters ie the people would be accountable and how the services would be accountable to them.

    I said also that it was good that the conference held sway for political reasons rather than any other.

    You do see though that under Swedish social democracy (now with a lib/con coalition) benefit reform has to be pretty austere as well as personal lending regimes, housing policy and it’s more difficult to do with 60m than with 9m?

  4. Tabman Says:

    The huge problem with the NHS debate is that its almost always going to be impossible to deal with it in intellectual as opposed to emotional terms.

    There is a massive folk memory of the situation pre-1947, when the ability to pay doctors’ bills was a major fear for the less well-off.

    The problem is that the NHS offers the illusion of an unrationed service that’s free at the point of entry. Part of this fiction is maintaining that variation in provision can be fixed by better management and is accidental.

    Understandably, poorly-off people are afraid of any situation that smacks of them having to pay for services, where potential bills for life-threatening or chronic conditions would escalate massively, or leave them unable to access the best treatment.

    This leads to a “better the devil you know” view of the NHS. Any change leads to fears of “privatisation”, which (yes, irrationally) is characterised in the mind of the voters as “having to pay extra for potential health bills”.

    Until this particular nettle is grapsed effectively, change will forever be difficult.

  5. Tabman Says:

    “So why on earth do people think that monopolies are good thing in the provision of public services?”

    Because, quite simply, when it comes to health EVERYONE wants the Rolls-Royce service and no-one wants the Kia service. The NHS allows this fiction to be maintained, even if its not true in practice.

  6. Lotus 51 Says:

    “Because, quite simply, when it comes to health EVERYONE wants the Rolls-Royce service and no-one wants the Kia service” I don’t understand your analogy, neither Rolls-Royce nor Kia operate in a monopoly. They both have to compete in a market; which means they both offer value for a product aimed at different ends of the market.

    State monopolies mean we get Kia quality for Rolls-Royce prices. If we didn’t trust the State to run the manufacture of motor cars why do we think they will be any better at schools and hospitals.

  7. Tabman Says:

    Lotus 51 – but the point is, where they’re even aware of this (which mostly they aren’t), most people don’t want to take the risk of getting the pushbike option even if the kia costs the equivalent of a Rolls Royce.

    I’m not defending the Status Quo, I’m explaining it; and this is a huge problem for anyone trying to change it. You have to understand and address these fears.

  8. Geoffrey Payne Says:

    My grandmother had a brother who in the 1920s had a problem with his leg. They did not take him to the doctors because they could not afford it. After a while they took him to a hospital where he died.
    When the NHS came in it really was a Rolls Royce service as far as my grandmother was concerned, and she became a lifelong socialist.
    It seems to me there are many similar stories still taking place in the US today. No wonder Nick Clegg was keen to reassure us we would not go down that route. If the Lib Dems are seen to be responsible for the privatisation of the NHS they will get slaughtered at the next general election, and they would deserve to as well.

  9. Andy Mayer Says:

    Geoff, I think your political analysis contains a grain of truth, it is extremely difficult to reform public healthcare without summoning the kind of response you’ve made. Consequently I fully expect people in public life who don’t believe the NHS is the world’s best health system, to maintain that fiction to avoid strife.

    The reality though is even the NHS is not a fully public system and never has been. We do not for example have state monopolies on the manufacture and provision of drugs, dentistry or opiticians, agency staff are not state employees, services within hospitals have a range of private and charitable sources.

    To argue then that reform means “privatisation!” and this in turn means the wholesale slaughter of the poor through neglect is crap. If that were true the NHS would be a beacon of performance to which other countires aspired, rather than a middling laggard in most international league tables on clinical outcomes.

    We already have a mixed system, the question on reform is the level of mixing and where and to what end.

    Pro-market and anti-market health campaigners also agree the goal of the system is better quality healthcare for all, even if they disagree about how you achieve that or the importance of the distribution of outcomes.

    Nick Clegg then I think needs to talk more about healthcare and outcomes for patients and professionals and less about the NHS.

    Debating the institution is rather like debating the future of BBC, you end up with an emotional reaction and defence of vested interests not a plan for better healthcare.

  10. Paul Leake Says:

    “We all agree that monopolies are bad in the private sector and the state introduces legislation specifically to stop the creation of such monopolies. So why on earth do people think that monopolies are good thing in the provision of public services?”

    We all agree that monopolies in some parts of the private sector are necessary (it would be grossly inefficient to have multiple national grids, gas networks, water pipelines etc). We therefore have regulation (which is admittedly poor).

    The problem with marketisation in health is that so much of health is intricately linked with other parts of health. An A&E in a hospital without a 24hr paediatrics unit will have much poorer quality for children, and one without a 24 hr trauma & orthopaedics unit will provide a far worse service for car crash victims. You would have an extreme risk if you had obstetrics units delivering complex cases without neonatal care on site. A lot of the fixed costs of orthopaedics wards, paediatrics etc are covered by the elective care and outpatient care that the private sector is keen to cream off. I might like the fact I can get my cataracts seen to at five different places other than my local hospital, but I’ll probably feel worse off it it means the eye infirmary with it’s eye casualty closes as it is no longer economically viable. Outside of the big cities emergency care is a natural monopoly (if it is to be safe) with very high fixed costs. Marketisation (at least under the current system) risks these becoming unviable.

    NHS gooroo ( provides some excellent examples of the interconnectness of acute care.