Feature 21 July 2008 - Charles Clarke KPMG discussion paper discussed

Rt Hon Charles Clarke MP's report for KPMG – full of shit when it comes to healthcare

by Andy Cowper, editor, Health Policy Insight

I would like to admit to a pair of biases before I write anything about Charles Clarke, the New Labour education minister who oversaw the introduction of tuition fees for university education in England.

My pair of biases are thus. Firstly, there is what I regard as such overwhelming evidence that university graduates are higher earners throughout their careers as taxpayers that the whole argument that they must pay their own tuition fees, because it’s wrong for a non-graduate binman to support the cost of their education via their income tax, is intrinsically stupid and ridiculous.

Secondly, I regard the associated New Labour objective of getting 50% of the eligible sixth-form leavers into higher education as doctrinaire, tokenistic and silly – and guaranteed to lower standards.

Clarke’s enmity for the current PM Gordon Brown, though evident, is a subsidiary argument. Clarke has obeyed Blair’s post-office diktat that ex-Blairites should refrain from public criticism of his successor.

No, while Clarke retains his day job as MP for Norwich South, he has been under a year’s contract with the accountancy firm KPMG (who have had much involvement with NHS management fitness for purpose reviews).

Achieving the potential: how best to pay for ever higher expectations of our public services, his recent ‘discussion paper’ publication for KPMG, should be understood in this light.

So, what does it say?
You will not necessarily be surprised to hear that Clarke’s central message is not about the need to raise a people’s army and seize control of the state.

The a priori assumptions of the discussion paper are that “the demand for high quality services grows rapidly and the scope for comparable public spending increases seems limited … Moreover there are also considerations of equity and economic efficiency which suggest that it might be beneficial to increase the proportion of public service costs paid for by the user of a service, rather than the general taxpayer”. We are already rather back to where we came in (and I didn’t much like the thesis then).

So where is Clarke’s proof of this assertion? It is far from apparent. He does (correctly) state that different countries pay for public services in different ways. So far, so, obvious – yet if this is the level of insight you get for KPMG’s money, would you want them advising your NHS trust?

CC also informs us that “any attempt to change the existing system has the potential to be extremely controversial”. True, Clarke doesn’t quite go as far as to say that ‘it’s nice to be nice’ and ‘if you can’t say anything nice, then don’t say anything at all’, but you get the general level of platitude at which this document is operating. We are unmistakably at the ‘oh, for fuck’s sake’ level’ here.

Barman! Bring us more clichés!
Clarke’s discussion document goes on to assert that “it is doubtful that in Britain the current balance between taxation and payment by the individual is anywhere near optimal in terms of economic efficiency, equity, widened access to public services, or improved quality of services.” And your proof, or even your references? Mais non, monsieur, no references! We remain, of course, in an evidence-free zone here.

But hey! Why worry, when it is making The Rt Hon CC and KPMG feel so good?

We get into the neighbourhood of serious fun when Chuck C tells us that “certain health treatments might become more rapidly and widely accessible to many people if they were not so tightly rationed by the availability of public money, or could operate on the basis of different cost / benefit analyses for particular health treatments”.

Brilliant! Let’s abolish NICE, and any attempt to verify using standardised methodology whether salespeoples’ claims have any clinical merit (and if so, at what price to the tax pound that CC would undoubtedly be the first to tell us that we can’t spend twice - not even on external audit by … who?)

The heart of the matter
No, we reach the point of this rather blunt operation in just a few more paragraphs, when the text states “The purpose of this paper is to explore whether there is a case for extending user charging in Britain in the next few years, and if so in what areas and on what basis”.

Under this text is a picture of a caucasian hand driving a syringe into a jar of something. Is it a vaccine? Or is it a toxin?

By Jove, I think there’s a point here!
Astonishingly, in the next section, the document makes a relatively sensible observation: “the Treasury has always been reluctant to deal with the three more recognised accounting measures – normal GAAP accounting, public sector accounting and budgetary accounting. The eccentricities of current UK public accounting tend to obscure inequity and promote poor or misleading arguments”.

The battle against these strategies was not an evident theme during Clarke’s ministerial tenure in Whitehall, but a sinner come to repentance is better than the available alternative.

Back to black
And then just as quickly, we are back to blackout in terms of insight. Clarke states that “the idea of the health service user making any payment has been politically poisonous” This despite prescription charges; private rooms; TV and phone charges; parking charges; even hospital shops.

No – all of these have facts of life in contemporary NHS healthcare quite passed CC by. Astonishingly, CC claims that “opposition to any change is very understandable … that the introduction of charges could potentially deter, from necessary treatment, those who might not be able to afford to pay the charge”.

Were this not quite crass enough, CC goes on to conclude that “the net effect of this conservatism is the bizarre outcome that there has been no real public acknowledgement of the fact that health services have to be, and are already, rationed, since a combination of the ageing population, the accelerating availability of treatments and health cost inflation mean that taxpayer-provided funds are not sufficient to meet the demand”.

There remains not a cited shred of evidence for CC’s further assertions here. Instead, he segues off into the wholly inaccurate idea that there is a coherent national policy to only fund NICE-approved treatments. His researchers have presumably missed the point about the re-emergent postcode lottery between better-off PCTs and worse-off ones. This dilemma lies at the dark and unexplored heart of commissioning (that it will make some animals more equal than others), but we are not – in Mrs Pat Campbell’s marvellous phrase - frightening the horses with that issue. Not yet.

Splendid isolation
The next unsubstantiated assertion of the document appears in a ‘pull quote’ (a design styling, to break up the look of a page), which states that “private spending (and insurance in particular) cannot efficiently substitute public spending as healthcare costs rise. However, if it is managed efficiently, then private spending, including private health insurance, has a valid secondary role to play in the health system.”

No reference for this. No further explanation. Just bald assertion.

Are you buying this?

Concluding my religion
Under a chapter heading ‘the overall picture’, the publication states that “This short overview of the current position in Britain demonstrates that user charging for public services is widespread, and usually well-accepted”. In healthcare terms, this is blatantly untrue of any of the publication’s arguments up to this point.

On the evidence of this document (which we are entitled to presume that somebody checked before sending it to press), both KPMG the sponsors, and Charles Clarke MP the author, are full of shit when it comes to healthcare. The diagnosis is wrong and without evidence. The prescriptions are thus profoundly suspect.

After presenting a menu of just these three options:
• that certain public services will decline relative to the need for them, leaving gaps in provision which could be serious;
• that public services will fail to meet public demand, so that wholly private alternatives grow to fill the gap for some but not for all; or
• that some systems of extending user charges will have to be developed to ensure that the necessary expansion of public services can be funded, but hopefully in a fair, efficient and satisfactory way which gives every family access to high-quality services

The document states its unsubtle ideological case – that “the insurance principle, dealing with the risks faced by the individual in a climate where public service provision does not effectively meet every need, may well become more significant. The rest of this paper seeks to explore ways in which user charging could be extended to meet this challenge.”

Two-tier services
In the next section of the document, Political, Economic and
Ethical arguments, CC goes on to make such stunning statements as to assert that the private finance initiative is “nothing to do with private payments of any kind, but is about the relationship between current and future funding of public services, with associated considerations of effective management and risk allocation”. A statement which makes it wildly clear that CC has little genuine knowledge of the ongoing travails of the Norfolk and Norwich PFI scheme’s ongoing problems with its PFI deal (see inter alia, this; this and this. The kind of valid concerns with which one would expect a local MP to be au fait – but there is no sign of this at all.

So where do Chuck and KPMG  think we should start paying?
Well, generously, the document states that “Demand management, such as argued by those who propose charging for GP visits, should not be the basis for extending charging”. Huzzah, poor people! You’ve got GP access for a while yet. Party on!

No, for now, the document admits that charging for core healthcare access remains more complex than in education.

So instead, it finds that “there does need to be a ‘core’ series of NHS treatments and activities to which access is based entirely on  medical and health need”. NICE will decide these, the document suggests … but just a minute - didn’t CC say earlier that “certain health treatments might become more rapidly and widely accessible to many people if they were not so tightly rationed by the availability of public money, or could operate on the basis of different cost / benefit analyses for particular health treatments”?

Oh, hush my cynical mouth!

References? Kiss my bibliography
So … there are no references to back the document’s assertion-fest. OK, maybe we could just take it as a particularly elaborate blog become paper, authored by an ex-Government minister – happens all the time, no?

Well … no. This references include the doom-prophesying AT Kearney healthcare report that I have a forthcoming piece to feature in the next issue of  The Guardian Public (www.guardian.co.uk/public/).

It also references Private Spending on Healthcare by Joe Farrington-Douglas and Miguel Castro Coelho (IPPR June 2008), which finds that “Private spending plays a residual role in most international health systems, and cannot efficiently replace public spending … Public spending remains the most efficient and equitable way of funding healthcare and of funding rising costs in the future … Future governments will therefore need to raise increasing sums collectively”.

Farrington-Douglas and Coelho add that there is a valid role for the private sector, but that “the interaction with the publicly-funded system needs to be managed to ensure that the benefits are achieved”.

This isn’t good enough for a policy debate contribution. I have no idea whether Charles Clarke could have done a lot better than this. KPMG certainly could have.