Editor's blog Monday 1 March 2010: Civitas report on markets in healthcare

I like Civitas: they’re a pretty intellectually honest think-tank. Not all are.

Today, they’ve published The impact of the NHS market: An overview of the literature - the latest instalment leading up to their main report on markets in the NHS (due out in April).

You may have seen their initial paper on markets published last December, which I unfortunately wasn’t able to write about at the time.

In Markets in healthcare: the theory behind the policy, James Gubb and Oliver Meller-Herbert produced a very thorough document, examining philosophical, political and practical tensions between monopoly (or monopsony) and markets; market driving forces; and the state of markets in the NHS after a decade of pro-market policies, which started in 2000 with the private sector ‘concordat’ and The NHS Plan – a plan for investment, a plan for reform. It is a long, but very good document, which repays in spades the time taken to read it.

Market downsides without the upsides
The latest piece, is a review of the literature by Laura Brereton and Vilashiny Vasoodaven. The authors suggest that market forces have contributed to: improved access for patients; reduced waiting times and increased efficiency; and improved financial management in providers.

Yet they argue that these benefits are not widespread, suggesting rather that “'While there have been improvements, they are not clearly attributable to market-based reforms. the NHS appears to be in the unfortunate position of taking on the extra costs of competition without realising the benefits”.

Uncontroversially, they point out that the power remains very much on the provider side, with weak PCT commissioning and PBC an enthusiasts-only affair. Innovation remains a rarity; payment mechanisms encourage average performance; and collaboration between professionals and organisations has been made harder.

These criticisms come all the harder since Civitas have no fear of markets in the abstract: director of health James Gubb recently slapped down the BMA’s latest anti-markets rhetoric for its ‘Look After Our NHS’ campaign in this piece for The Guardian, based on a recent Civitas briefing.

How much is that dogmatist in the window?
The dogmatists on both sides of the markets in healthcare argument seem ill-advised. The NHS was created in response to need that arose from market failure.

Healthcare is different from many other market-friendly industries, for many reasons - including the hobbling of meaningful choice due to asymmetries of information between individual users and providers; prohibitive costs of market entry (financially) and exit (politically and socially); problems with supplier-induced demand; difficulty in writing appropriate contracts; management and transaction costs.

Countries with more marketised healthcare systems have proven slightly better on quality and outcomes (in part, due to historically higher spending levels), but no better on containing healthcare cost-inflation.

Equally, just as there can be market failure, there can be public sector failure. The NHS can have a dangerously closed culture. ‘Not invented here’ syndrome still too often prevents the fast and dynamic spread of good changes to working practice. A monopsony such as the NHS is far from immune to provider capture.

And the idea that marketisation is at the root of all the NHS’s problems is absurd. There were instances of very bad-quality clinical care and serious waste (such as the Wessex and London Ambulance Service IT programmes) that long predated the greater introduction of such market forces as have been seen so far.

Markets have many virtues, and not a few vices. Fetishising either their virtues or vices to the exclusion of reasonable thought is folly.

Markets ought properly to be the servants of a civilised society. Too often, they appear to be the masters - you know, the ones who "you can't beat".

Elsewhere online today
What legacy did Matt Tee leave to traumatise his staff so?The Express reports …

The Independent (having a really good few weeks on health coverage – well done, Jeremy Laurance) reports on a study of mental health homicides. Caveat – by far the highest risk posed by most people with mental health problems is to themselves.