Health Why I support the National Health Service reforms

Many people believe that the British National Health Service is being destroyed by the 1991 reforms. This belief is wrong but understandable. The reforms are not easy to understand and people do not trust the Con- servatives with the NHS. Previously shortcomings in the health service were blamed on underfunding. Such shortcomings are now blamed on the reforms, whilst the period before 1991 is dimly (and wrongly) remembered as a golden age.

Before 1991 the NHS was a Soviet-style system. At the top there was the Department of Health, which distributed money down to individual hospitals, community care units and general practitioners via a hierarchy of Regional and District Health Authorities. District Health Authorities were responsible for providing health care to their local population (usually about a quarter of a million people). They discharged this responsibility by managing one or two local hospitals and one or two community units. General practitioner services were funded and administered by a parallel hierarchy of health authorities.

There were two big problems with this Soviet system. Both problems stemmed from the relentless flow of money from above into the hospital. Firstly, as the flow wus relentless, there was no incentive to improve services to patients, because the money was still going to come down from above. Indeed, hospitals had good reason to discourage patients. The more patients that attended a hospital, the more the hospital would have to spend on their care (with no increase in income).

The second problem with the Soviet-style NHS was that there were few incentives to be more cost effective. The only way for an individual doctor, a department or a hospital to get more money was to get a larger allocation from above. The way for a doctor to achieve this was to convince the Nomenklatura above that he was underfunded. This was done by a mix- ture of pleading, foot stamping and shroud waving inside committees and by whatever politicking worked outside committees. Attempts to reorganise the service in a department so that fewer resources were consumed ran the risk of leading to smaller allocations of resources in future (because the department had shown that it could manage with less).

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Before 1991 the patient’s voice was rarely heard. Developments in hos- pital were almost entirely driven by what the consultants wanted. If a con- sultant retired, he was replaced, regardless of the need for that speciality relative to other specialities. When a new consultant was appointed he pursued the interests that he felt inclined to pursue. Of course, most consultants are very sensible and they usually pursued interests that matched what was needed. But not always.

The 1991 reforms changed the NHS from this Soviet-style system to one where the money flowed into provider organisations (hospitals and com- munity units) according to negotiated contracts. The old health authorities became purchasers and stopped discharging their responsibility for pro- viding health care by running hospitals and community units and started to do so by contracting with those organisations (providers). Except in rural areas, there is a choice of providers and this means that there can be an in- ternal market, with providers competing with each other to provide what the purchaser wants. Competition can be about either cost or quality (including waiting times), or both.

The first benefit of this purchaserlprovider split is that it is now the purchasers and not the consultants who decide what should happen in hospitals. The purchasers decide how their budget can be best spent by determining what the local population needs and then contracting for it. Thus they can decide, say, to spend more money on gynaecological ser- vices and less on, say, cardiological services. Furthermore, the purchasers specify what proportion of the money spent on, say, cardiological services should be spent on prevention, what on medical care, what on surgical care and what on cardiac rehabilitation. Such decisions are necessary because of the limited amount of money available for health care. Before the reforms, such matters were decided unsystematically by consultants. Of course the purchasers consult the local consultants for their views, but they also listen to the patients and general practitioners, as well as paying attention to the advice of national bodies.

The purchaserlprovider split has led to providers having to become more customer responsive or risk future contracts being moved to a more re- sponsive competitor. A further benefit is that there is more incentive for the provider to become more cost-effective. This stimulates innovation. If a hospital adopts the pre-reform tactic of demanding more money for a service, they risk losing business to a hospital which has managed to reorganise its processes and provide a good quality service cheaper than hitherto.

Certainly at the hospital I work in there has been a huge change in attitude. The hospital now looks outward to what its customers want and

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at the same time tries to devise more efficient ways of providing care. For instance, waiting lists for outpatient appointments in gynaecology, ortho- paedics and ophthalmology before the reforms were between 9 and 15 months long. They are now all less than 12 weeks (and falling). Similarly, from January 1996 no patient waits more than 12 months for a routine oper- ation and this is part of the terms of our contract with the local health authority.

I manage Women‘s and Children’s services. In 1995-6 we opened three Day Units for emergency treatment - one for children, one for women with gynaecological problems and one for women with problems during preg- nancy. These Day Units allow many women and children to be treated and go home the same day. This saves money and is much preferred by patients.

There are problems with the reformed NHS. One is that the contracting has led to a considerable increase in transaction costs. I believe that the improvements in the service justify these costs. I also believe these costs will lessen. A bigger problem is that the purchasing role is difficult and that many purchasers are too cautious and unimaginative. It is reassuring that each year contracts are getting both more specific and more demanding. More GP fundholders means that more and more purchasing is done by general practitioners. This is a good thing.

The debate about the benefits or otherwise of GI’ fundholding continues. Now that roughly half the population is on the list of a fundholder there is less talk of a two-tier service and more recognition of the innovations driven by fundholders demanding a change in the way they work with consultants. There is a lot of scope for improving the quality and cost effectiveness of patient care by improving the historic lack of cooperation between general practitioners and consultants. That is one of the main benefits of fundholding. As more and more general practitioners become fundholders, more and more contracts will be between hospitals and fund- holders. Such contracts are likely to be more specific and imaginative than those between hospitals and health authorities.

At the beginning of the reforms almost all consultants were against them. Although very few consultants would want to go back to 1990, quite a few are unhappy with the way things are now. Their unhappiness is partly due to the reforms and partly due to other important changes within the NHS.

The most important of these changes are the recent dramatic reductions in junior doctors’ hours (from 80-100 hours per week to 50-70) and a greatly increased scrutiny of the quality and quantity of training given to junior doctors by consultants. Both these long-overdue developments

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mean more work and accountability for consultants, most of whom already worked very hard and felt quite accountable enough already.

Much of the current stress for consultants (and all staff in the NHS) comes from the competitive pressures to become more customer respon- sive and to seek more cost effective ways of providing care. These de- velopments are good for the British public but constitute hard work and stress for staff in the NHS. We used to feel that we were public servants struggling under difficult odds to provide better care and if only we were given more money we could do more. Now we must be more imaginative and try harder to deliver better care for less money. When allied with concerns about the sincerity of the government towards the NHS, these increased demands on the staff explain much of the current discontent within the NHS.

The NHS remains very inefficient. Perhaps the greatest inefficiency lies in the generally rudimentary level of cooperation between GPs and con- sultants. The most obvious inefficiencies within hospitals include the wide- spread lack of protocols for the management of common conditions and the lack of supervision of junior doctors. Too many wards are like the one I started my career on - run by sisters and junior doctors with consultants looking in for one or two ward rounds per week. This distant style of work- ing (captured by the word ‘consultant’) means that junior doctors some- times order the wrong tests and prescribe the wrong treatment. This lack of supervision wastes money and jeopardises patient care. I find it hard to accept the general view that the NHS is underfunded when there are so many opportunities for both saving money and providing better care.

The pressure on staff in the NHS to be more imaginative, to exploit the benefits of technological advances and to work better with other health workers in other disciplines and other organisations is no more than most of the world has to cope with. We are used to Apple and Sony giving us more for our money each time we replace our computer or hi-fi system. Similarly, NHS staff should not be surprised that there are calls for us to stop demanding more money and to use our brains and new technology to both improve our product and provide it more cost effectively. The reforms provide the spur of competition that has done so much to improve goods and services outside the health service.

There have been claims that the reforms are leading to a privatisation of the NHS or a US-style health system. I worked for two years in the USA and if I thought these claims were true I would not support the NHS re- forms. Apart from the problems of providing care to the poor, insurance- based private medicine has the major problem that it is almost always provided on a fee-for-service basis. This means that doctors and hospitals

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get paid for everything they do for a patient. Thus doctors have an incen- tive to carry out more tests and give more treatment. Patients are generally too ignorant and vulnerable to realise this is happening.

However health care is arranged, many doctors have a tendency to over- investigate and overtreat. This tendency is encouraged and rewarded in a fee-for-service system. Furthermore, a few doctors are greedy and will exploit the system and become rich. The new NHS provides no such incentives to overinvestigate and overtreat.

Indeed, a further recent advance in the NHS is the way that ’evidence- based’ medicine is being promoted by the Department of Health. Evidence- based medicine is sceptical and requires doctors to study the results of properly conducted research. Doctors should then give only those treat- ments that have been shown to work, and similarly must ensure that any such proven treatments me given to the patient.

Readers may be surprised to learn that evidence-based medicine is new. Of course many doctors in the past applied the results of research to some aspects of their practice. What is different about the new practice of ’evidence-based’ medicine is that it requires the consistent and systematic use of research findings to all areas of clinical practice.

The reformed NHS should encourage evidence-based medicine because purchasers will be able to insist (via contracts) that doctors use effective treatments and abandon ineffective treatments. In the old NHS, doctors could do what they liked. We all did our best, but the rise of evidence- based medicine and the power of the contracting system means that our best is now getting better.

There are problems with the reformed NHS, and the reforms need con- tinuing refinement. Purchasers must become more effective and more competition should be allowed. The Labour Party’s plans show that the key elements of the reforms are here to stay. The existence of the purchaser/ provider split, with competition between providers, ensures that the NHS will become steadily more customer responsive and innovative. This is just as well, because not only is more and more complex and effective care becoming possible, but the public expects all possible interventions to be available to them. There is going to be a lot of pressure on purchasers when people understand the new system better.

BEN LLOYD