Show me the money!

James Gubb, 22 November 2007

Despite Alan Johnson’s protestations in the FT that the newspaper is ‘wrong to suggest the government is reversing the NHS reforms’, few are that inclined to believe him. As Blair’s former health advisor, Julian Le Grand, has said: the government no longer seems to believe in, or at least wants to pay for, the idea of using competition to drive up standards in the NHS, following its decision to slash the second wave of the ISTC programme last week. But then along comes what might possibly more than a glimmer of light at the end of the tunnel.

The HSJ today reports an event at the King’s Fund in which David Nicholson, the Chief Executive of the NHS, talked not only of handing patients responsibility for commissioning their own care through individual budgets – and fairly soon it seems in the case of long-term conditions – but also ‘sent out a signal that choice could eventually be expanded to allow patients to choose their commissioner or PCT’. There was a caveat: “I don’t think we will see that in a big scale in the foreseeable future – and by that I mean the next three or four years”. But still, the fact it’s even on the radar is of vital importance. This is surely the way things should be going.
As will be argued in a book to be published by Civitas next week, the NHS has only had a half-hearted stab at competition at best. The government has attempted to break the monopolistic structures of the NHS to drive up standards, but it’s been hurried, piecemeal and largely ineffective – with only limited plurality of provision, limited choice and false replications of market mechanisms.
The root of the problem is that all the money is still cascading from the top, distributed according to the allocations the government deems fit. The NHS is an upward looking service and will remain so until patients really feel in control of their health spending. Individual budgets could do this and, more importantly, competition between PCTs and commissioners will ensure patients have options over how they spend them. Commissioners will have to take account of what the patient wants and act as real drivers of performance, in a way they simply don’t have to at the moment. There’s no better accountability than the patient (customer), quite literally, being able to vote with their feet and take their business elsewhere if their PCT isn’t good enough.
What’s more, this ability will remove one of the biggest pangs for the government – that of postcode lotteries. They won’t exist, because, if done properly, there won’t be geographical divisions; the big PCTs and commissioners will work across the country. The best quality care would be open to all. And it’s not true to say this choice will only benefit the rich. The experience of the Netherlands – where 30% of people switched health insurance package after the first year of their new health system – shows otherwise, as does the London Patient Choice Pilot, where the poor and disadvantaged used choice the most. Mr Nicholson is onto something – but why not set the wheels in motion sooner rather than later?