In defence of pluralism
Civitas, 4 June 2009
The Economist carries an article this week that the NHS – and not least the new Competition and Cooperation Panel – would do well to look at. ‘Innovation through regulation’, ‘America’s stunning success in information technology was not the free market but government regulation’ punches a strange headline.
Well, yes, isn’t that what the NHS has become all about? Monitor, the Care Quality Commission, the Council for Healthcare Regulatory Excellence et cetera, et cetera. No problem either, then, with David Nicholson’s ‘all bets are off’; that the Department of Health will ‘really squeeze’ the NHS as soon as 2010-11 setting the task of ‘doing four or five things everywhere in the same way, at the same kind of time [through] regional support teams’. Heh, maybe even NPfIT will work?
Actually, the NHS has got it all wrong. What the Economist – reporting on a book recently published by US academics Peter Cowhey and Jonathan Aronson – actually goes on to say is that it was regulation that encouraged pluralism, broke up emerging monopolies and thereby unleashed innovation that was behind the ‘regulation’s success’. It was certainly not regulation, a la the DH and others, that encourages uniformity and doing things ‘the same way’ that did it:
‘[For example] federal trustbusters made AT&T lease its lines to others and eventually broke up the giant telephone company. Later they forced IBM to separate its hardware and software businesses. These actions opened the door to competition and lower prices. More important, they changed the industry’s structure, replacing monoliths with smaller, specialised companies which have to work with others with complementary skills. The result has been tremendous innovation.’
Are there not a fair few of such monoliths floating around the NHS (aside from the £100bn system as a whole that the government, DH and NHS Executive remain set on directing from the centre) at the moment?
Yes, we want integrated care – and, yes, there are exemplars of what vertically integrated health systems in the US can do in terms of driving quality – but another interesting point from the study is that, somewhat counter-intuitively, fragmenting high tech industries (the ‘great regulatory splintering’) actually helped drive the innovation by allowing common standards to emerge and ‘modularising’ businesses.
Contrast this with high tech firms in other countries that have been allowed to remain ‘trapped in a mid-20th-century form, characterised by domineering, vertically integrated firms, which try to do everything in-house or at least keep it within their family of closely related companies’. ‘Customers’, the authors say, ‘are left beholden to suppliers, and innovations go under-exploited’.
Now, I’m not saying that health care isn’t somehow different, but it is, nonetheless, high tech. Nor am I saying we should go on a wanton mission to fragment and already fragmented system. Nor should PCTs ever be faced into a corner of having to tender at all costs; relationships between purchasers and providers should be far more relationship-based than adversarial. But, with hefty cutbacks in spending looming, the empire is striking back.
The FT Network’s criticism of the guidance for the Competition and Cooperation Panel (unsurprising… why would big monopoly secondary providers want competition), coupled with Chris Ham’s comments that it seems to have been written by a ‘neoliberal on speed’, has shaken the DH and led by the Health Secretary Alan Johnson into a ‘major review’ of its emphasis.
And Ben Bradshaw, the Health Minister, is bearing down on the quasi-independence of foundation trusts, saying the government may legislate so it can direct them to act (i.e. take them back under state control), and de-authorise them. All the while, of course, we have also the NHS Executive’s latest grand design.
The Competition and Cooperation Panel should hold its nerve. Perhaps, also, a look at Michael White’s very balanced assessment of the performance and ‘benefit’ of Independent Sector Treatment Centres would be worthwhile. It is pluralism and competition, rather than central direction and monopoly, that best drives performance.