The Maynard Doctrine: Religion and the privates

Health economist Professor Alan Maynard explores the connections between religion and the privates

Competing religions
The Conservative-Liberal Democrat Coalition believes in small government, and has hacked public sector budgets in order to make the poor poorer and to undermine the social infrastructure.

Their actions are a product of an ideology espoused by Thatcher and implemented by Cameron. In cutting the public sector, the Government has triggered appeals for increased funding - which has been denied, except for security, which is needed to protect the status quo in terms of income, wealth and power from over-hyped threats such as 'terrorists' (ahem).

And evidence came there none
There is no evidence that a small public sector is superior in producing income growth and social well-being, but there is much pious assertion that it does amongst the religious of this neo-liberal tribe. Their incantation is that citizens should be freed from onerous taxation and be left to spend their own money as they like.

Freedom from government interference and free choice is the libertarians’ path to their idea of heaven.  Interpreted for we peasants, this heaven means leaving the rich and powerful to avoid redistributive taxation and keeping the undeserving poor in their place with a poor quality of life and premature mortality. It's also all about being able to discern the difference between the deserving poor and the undeserving poor.

The alternative ideology is that collective action is needed to enable citizens to exploit their potential. For these ideologues of the left, equality of opportunity for rich and poor is their mantra.

Equality is seen as the extension to the many, of the freedom actually enjoyed by the few. Egalitarians wish to exploit public sector interventions (and taxation) to erode growing and large inequalities in income, wealth and power.

The Labour Party grew up on this religion, and Attlee’s government implemented many reforms which affected the relative power of UK citizens. The current Labour Party is yet to reinvigorate itself along these lines, preferring to twitch to the tune of public opinion polls.

Like all modern political parties, their mantra appears to be 'to hell with principles, let’s focus on the votes'! An interpretation of this religion is that you should pay your taxes and proudly expect to see the mitigation of inequality as the rich lose their tax havens and some of their benefits of entrepreneurship, luck and deviance.

As in all religious debates, people differ: Catholics from Protestants; Shia from Sunni; Hindus from Buddists; and libertarians from collectivists. Citizens have to make choices about their real religious beliefs and their political religions.

The poorly evidenced rise of privatisation
The erosion of public expenditure in the NHS by the Coalition has involved flat-rate real funding and an efficiency drive. The latter has involved wage freezes; in common with the rest of the public sector.

There are few signs that NHS productivity has increased, in part due to poor data and inadequate management use of available data (although Andrew Street and colleagues have produced some interesting work in this area).

Hovering above the NHS is privatisation: a policy over 30 years old and much-loved in the rhetoric of Conservative and Labour politicians. These folk are looking for quick fixes to ill -defined problems.

These privatisation reforms are introduced by po-faced politicians arguing that they have the permanent solutions to the woes of the world. These approaches are usually evidence-free, unevaluated and changed quickly.

The track record of privatisation is less than appealing. Take for instance the railways, where privatisation has augmented the profits of entrepreneurs such as Branson and Souter, without emhancing the commuter's experience much. Branson is the epitome of modern-day capitalism which involves getting yourself into a regulated market sheltered from competition by daft and restrictive public sector tendering rules, and making money for your off-shore trust funds.

When times get difficult (that is, when profits do not materialise), you break your contract. Thus National Express could not make money on the East Coast rail line and quit. The line was nationalised, and the state owned company has made hundreds of millions of profits for the taxpayer.

The Coalition now wants to privatise these profits. Sadly, public sector tenders are not to be admitted. I wonder why? Couldn’t result in more money for Branson’s and others off shore trust funds could it? Perish the thought!

The nice thing about privatisation of former public goods and assets is that there is usually little competition in the market place, and where it exists it is regulated by the state. As Nobel Laureate George Stigler noted some decades ago, “regulation favours the regulated” by restricting entry to markets by competitors.

Once you have got your rail, public utility or health service in your grasp, you can make hay for your foreign and offshore owners.

However, if the hay does not materialise, you can (unlike a public provider) cut and run. As in the rail industry, so it is in healthcare. Providers of elective surgical care may offer excellent hotel accommodation and good clinical care provided you have no complications. However if you have a heart attack or need a blood transfusion, you are deposited into the NHS, with an ambulance taking you to A&E! Costs can be shifted to protect your bottom line.

Private entrepreneurs such as Serco have recently quit the NHS, finding their contracts expensive loss-leaders.

The evidence base about privatisation in the NHS is poor. In part, this is because of commercial confidentiality issues. When using taxpayers' money, this is clearly unacceptable.

Another lacuna: the integration of NHS and private sector clinical data has been advocated and ignored for over a decade. Surely clinical governance and GMC accreditation should have integrated activity, complication and mortality data for all the work of a consultant working across the public-private interface? Sadly, this remains elusive.

All private sector activity funded by the NHS should be transparent, with publicly-accessible performance indicator data. The conditions under which private suppliers withdraw from contracts, as Serco have done, should be clear, with generous compensation for disappointed NHS commissioners and local patients.

The general impression of NHS privatisation is that it is no universal panacea. Private suppliers are finding health and social care quite complicated, particularly because of the NHS and local government “tradition” of fragmented and poor data and service systems.

Commissioners may get useful comparative information from potential competing providers, but the real issue remains continuity of high-quality service provision. Where existing public sector/NHS contracts have been sloppy and vague in terms of quality control and costing, competitive tendering whilst expensive, has the potential to bring greater clarity to commissioning and potential resource savings.

The challenge is for the private sector to show it can do better that the NHS is an open and accountable manner.

The problems of private sector provision in the NHS is epitomised by primary care. Bevan sadly failed to introduce a nationalised salaried system of care in 1948. The impish behaviour of BMA negotiators over the last 60 years has generally protected GP incomes to good effect; occasionally soaking them in new money, as with the Quality and Outcomes Framework.

However the service model is now clearly redundant - yet seemingly impossible to reform due to government inertia and BMA and RCGP muddle-headedness. The public-private sector protagonists seem incapable of improving primary care for patients and taxpayers.

Conclusion
Privatisation in the NHS has been tried and has only very modest success, even then without proper accountability e.g. Milburn/Blair's (and Simon Stevens') independent sector treatment centres (ISTCs).

Other universal healthcare systems, such as the Netherlands, have a public- private mix in provision, albeit with much tighter regulation than evidenced in England - and are still plagued with similar unwarranted clinical practice variations.

Universal healthcare, free at the point of delivery, could in principle be provided by an enhanced public-private mix in England. However, this potential would need a marked if not staggering improvement in NHS contracting and private sector management and accountability if waste and patient harm are to be avoided.