Reform of the NHS: Choice, Markets, Competition in the NHS - What do they mean for health inequality?

Steve Harrison University of Manchester

What are the reforms?

Demand-side reforms: eg separation of commissioning/ provision via quasi-market, patient choice, direct payments (social care), easier access to GP lists
Supply-side reforms: eg pluralisation of providers inc independent sector in both primary & secondary care, NHS Direct etc
Transaction reforms: eg QoF, payment-by-results, national casemix-based tariffs
Regulatory reforms: eg government targets, NICE, Healthcare Commission, stronger PCT role

In common with other markets, there are independent competitive producers on the provider side but, unlike classical markets, some or all of the following characteristics may be present (LeGrand 1991; LeGrand and Bartlett 1994):
producers cannot be assumed to be profit maximisers;
consumer purchasing power is confined to a specific range of goods or services, so that the purchaser cannot decide to spend the resources thus ‘earmarked’ on anything else (in effect, the purchasing power is a ‘voucher’, whether or not so labelled);
purchasing decisions are made by an agent rather than by the prospective consumer of the goods or services;
payment for the goods or services is made by a ‘third party payer’ rather than by the prospective consumer.

Not clear how on theoretical grounds the demand-side & supply-side reforms (except possibly direct payments & easier access to GP lists) would be expected to enhance equity or equality
Essentially, therefore, we would look to transaction & regulatory reforms to do this, eg QoF might be expected to equalise treatment of chronic conditions
Most NICE appraisal decisions are legal requirements on NHS, so reduced ‘postcode rationing’
Proposed new PCT role in attracting primary care services to under-doctored areas

Optimistic that

PCTs can increase equality of primary care provision
Access to GP lists & GP services can become easier
Practice-based commissioning can improve some secondary care services (provided PCTs not too heavy-handed)

Pessimistic about

Consequences of assuming that all health care processes can be defined as sets of protocols & all outputs as casemix
Consequences of assuming that material incentives are sole/ prime drivers of organisational/ individual behaviour
Possible destabilisation of secondary care provider cost structures by PBR & national tariff

last updated 25/02/06