Refusing Treatment 

Refusing treatment: the NHS and market reforms

Civitas, 4 October 2010

This blog entry considers the key issues from the latest health report by the centre-right think tank Civitas, which examined the efficacy of the market mechanism within the NHS.  The authors argue that market reforms have “been stifled and not allowed to take hold”, notwithstanding that the majority of interviewees for the research acknowledged “the benefit of the basis of the market.” Other main findings highlighted in the report include the following:

• It is asserted that there is a “structural imbalance of power” tilted in favour of providers.
• PCTs are having to deal with a range of “severe constraints” when they attempt to tender for services effectively. These include: barriers to entry for providers from independent and voluntary sectors; inadequate quality of data; and “bullying and predatory pricing” by acute trusts.
• The payment by results system for non-elective treatment is felt to drive up superfluous utilisation of health services.
• It is contended that PCT management and commissioning skills in areas such as strategy and performance are “weak.”
• The embedding of a market model is being held back by a “deep cultural reverence for the NHS as something more than a health system.”

Among the recommendations proposed by Civitas are those discussed below:

• The Government is urged to make a “sustained commitment” to a healthcare market, with particular emphasis upon a consistent policy approach (to aid sustainable investment) and a strong narrative around the benefits to be gained from a plurality of providers.
• The authors advocate the establishment of separate provider and commissioning arms at the Department of Health, with the former only required until all acute trusts have attained foundation status. The NHS Commissioning Board is given a diverse range of objectives, including: an effective regulatory framework; simplification of standard contracts; and an integrated payment system for non-elective services.
• The report does not endorse the establishment of GP consortia, because they believe that this reform fails to address “the root causes of the market’s underperformance.” Nevertheless they envision the consortia as local health insurers.
• Finally the authors call for greater competition for providers, which should entail “meaningful competition law” and a “proper failure regime.”