The NHS – it’s a system, stupid!

The NHS risk register, or at least the version of it that has made it into the public domain, doesn’t tell us anything we didn’t already know. I’ve discussed many of the risks at length here and Father Dougal spotted most of them the day after the white paper was announced. There are dire warnings in the risk register but all that proves is that the civil servants have been doing their jobs. Like all radical reform, these proposals are a leap in the dark. No-one knows quite what the future NHS will look like. It is inevitably fraught with risk.

Most of the discussion on here has covered the implementation challenges – restructuring the entire service while simultaneously making 4 percent efficiency savings annually. But the risk register highlights a further potential problem. The model itself may not deliver efficiency savings at all. Even if, by some miracle, GP commissioning and the massive restructure that goes with it could be implemented without affecting the performance of the service, the new way of working could still turn out to be more expensive.

The register specifically warns that GP consortiums may overuse expensive private sector provision, that those with neither the will nor the ability to manage commissioning could add costs to the system by greater use of private sector support and that the overall fragmentation of the system could lead to a loss of financial control. The HSJ’s Sally Gainsbury spotted this nearly two years ago. Given the tendency of GPs to blow their budgets, she estimated that GP commissioning could add another £1.2 billion to the cost of the NHS.

Hang on, though, wasn’t GP commissioning supposed to make hospitals more efficient? Indeed so and there is some evidence to suggest that increased competition does improve hospital efficiency. But, although most of the debate about NHS productivity tends to focus on the running of hospitals, they are only part of a much wider system. It is quite possible that the efficiency of hospitals might improve while the efficiency of the system as a whole nosedives.

Healthcare in the US provides a useful case study. According to the World Management Survey, hospitals in America are the best managed in the world. Yet study after study has concluded that the US health system is one of the least efficient. It has been rated as the least cost-effective in the developed world by just about everyone, including the World Health Organisation, the OECDPriceWaterhouseCoopers, the Royal Society of Medicine and America’s own Commonwealth Fund which produced the ranking below.

These studies conclude not that American hospitals are badly managed but that the system as a whole is so fragmented that it produces highly inefficient outcomes. Americans get a lot less for their healthcare dollars, whether public or private, than anyone else. They may have great hospitals but their system produces poor results for the amount of money spent.

Could something like that happen here? Could we end up with shiny new foundation trusts pushing up hospital efficiency levels while the rest of the system collapses? Critics of the US system say its fragmentation and complexity drive up costs. Given that fragmentation and complexity are just what the government is adding to the mix, it would not be very surprising if we ended up with similar results.

Update: Paul Corrigan this morning:

Just because you were good at providing health care, it doesn’t mean that you will be any good at commissioning it.

Indeed!

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4 Responses to The NHS – it’s a system, stupid!

  1. Pingback: The NHS – it’s a system, stupid! - Rick - Member Blogs - HR Blogs - HR Space from Personnel Today and Xpert HR

  2. The independent provider Care UK expressed similar concerns in their response to the White Paper, although they were generally in favour of it (as you would expect): http://www.careuk.com/content/response_to_health_white_paper

  3. Bina says:

    Eh? According to the table patient-centred care turns out not to be the most effective? (cf New Zealand vs UK) So, what exactly are these GP commissioning changes going to do for us?

  4. a word of caution regarding the studies that claim greater efficiency/better outcomes at even the hospital level… the studies are largely un-published, non-peer reviewed discussion papers that have significant empirical flaws – and although there’s little doubt that something caused hospital performance to improve it’s not necessarily the case that competition was that something.

    So even the claim that competition improves things at the hospital level is rightly disputed (although not settled), meaning that tinkering with parts of systems is even less likely to improve system-wide results!

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