Editor's blog Wednesday 6 April 2011: Times moots the Cable guy as next Health Secretary

Today's Times editorial moots the possibility of Lib Dem MP Dr Vincent Cable as the next Secretary Of State For Health.

It is a very interesting possibility. The Lib Dems will need a 'win' such as heading up a big, spending department if they get hammered in the local elections and lose the AV referendum, which opinion polls currently think likely.

Cable also brings a human hinterland to the world of front-line politics. He is liked across party political divisions. He had no expenses issues.

Not only that, he has appeared on the Strictly Come Dancing Christmas Special and waltzed with Alesha Dixon.

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Click here for details of 'Andrew Lansley's Millwall Tendency', via subscription-based Health Policy Intelligence.

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He also has a background as an economist for Shell; famously predicted the recession; and was first off the block to publicly state that Northern Rock must be nationalised. (In the slightly unkind jibe of the infamous right-libertarian blogger Guido Fawkes, Cable is the man who "predicted eighteen of the last two recessions").

He is witty (his line on Gordon Brown's "transformation from Stalin to Mr Bean" was magnificent), as well as thoughtful. The NHS will badly need someone with those qualities.

Cable would also have a head-start to the job, having written a very impressive chapter of the Institute for Public Policy Research's 2007 book 'Beyond Liberty: Is The Future Of Liberalism Progressive?'.

A few key extracts appear below:

On markets
"There should be a pragmatic approach to ‘markets’. An obsession with introducing markets or quasi-markets into each and every institution has sometimes been pursued to the exclusion of common sense and the neglect of transaction costs. ...

"But there are many contexts in which public services can benefit from markets: when the ‘product’ is complex, they enable consumers to make well-informed and safe choices, and transaction costs remain low.

"The trickiest area of getting policy into practice has been the move to create decentralised, semi-autonomous, public sector bodies like foundation hospitals. Decentralisation makes a lot of sense if it helps public service providers escape the suffocating embrace of central government. But this dimension of pluralism will only work if there is effective accountability and audit. It is not clear how these bodies can be externally accountable in any meaningful way, unless their governance is subject to the elected local or regional government.

"Principles of customer care, flexibility, reassurance and tailoring services to individuals can apply to the public sector no less than they can to good companies.".

On competition
"A degree of competition can be a useful stimulus even when a full competitive market is inappropriate because of natural monopoly or network externalities. The objections that are, rightly, being made to independent treatment centres should be based not on generalised, ideological prejudices, but on the usually favourable terms on which they are allowed to compete."

"Competition ... works in complex ways, and may undermine choice; not generate it. Ideologically-driven, artificial introduction of competitors to local public service health or education suppliers may, without careful thought about the nature of the market, (end up) driving out locally based suppliers, rather than provide choice and variety".

On choice
"Choice must be at the centre of a liberal approach to public services (Cable 2004, 2005). Philosophically, choice is what free societies are about and it is why western countries have succeeded. Command economies have consistently failed, other than in exceptional circumstances like times of war.

"In the narrower area of UK public services, there is a constantly shifting balance between personal choice expressed through competitive markets or otherwise; state rationing and command and control; and allocation by professionals. A liberal approach emphasises the first. Where choice has been denied, people have voted for public services with their feet when they have been able to afford it.

"This said, choice is often not feasible in the case of public goods. Insistence on choice as some form of ideological imperative has produced some foolish and welfare-reducing innovations. The market itself often produces degrees of choice that are absurd – ‘hyperchoice’ – and have the effect of discouraging consumption (Schwartz 2003). And attempts to impose choice in the provision of utility products – like electricity and gas – has led to abusive mis-selling, considerable confusion and little actual change in provider.

"The many practical and theoretical problems in introducing choice into public services can, however, easily become an excuse for laziness. The mantra that people ‘just want high quality services from their local school / hospital’ can represent a positive commitment to local services - but it can also be an excuse to avoid dealing with the uncomfortable fact that quality varies greatly and some local providers remain of poor quality indefinitely, even when well financed. John Kay has also made the valuable point that ‘the choice between Tweedledum and Tweedledee may not matter to the chooser, but it matters a lot to Tweedledum and Tweedledee’.

"If healthcare managers are made aware that their users would really prefer to be somewhere else they are more likely to respond to users than if they sail along blissfully unaware of their reputation for poor quality. There is considerable merit, therefore, in extending choice where it is possible and meaningful, even if choice is necessarily restricted and imperfect".

On public goods, trade-offs and targets
"Health has some of the characteristics of classic public goods, but the commitment is not sufficient to stop the exercise of choice and ‘opting out’. If sufficient numbers of people choose to opt out of using a local hospital, to the extent of making an accident and emergency unit in the hospital unviable (because, for example, clinicians do not carry out enough training or work to obtain or retain professional accreditation), then the rest of the local population may be put at risk through losing the choice of having a local facility. There are no simple solutions to such dilemmas other than to try to create conditions under which individuals do not wish to exercise choice at the expense of the common good.

"Even where professionals clearly have superior knowledge and information to most individuals, they may not, collectively, produce satisfactory outcomes since they are having to ration scarce time and resources and may do so on no more rational a basis than ‘first come, first served’.

"That is why centralised targets were introduced, though these may well have had negative consequences in terms of undermining professionalism, and causing inflexibility and widespread ‘cheating’. There are numerous and now notorious examples in the NHS of clinical priorities being distorted to help meet targets".