DO THE NHS REFORMS MAKE SENSE?
Julian Le Grand, London School of Economics Bristol conference 28/1/06
Problems with ‘Old’ NHS:
- Long waiting lists
- Inefficient use of capacity. 98% of pop lives with 1hr travel time of 100 available and unoccupied NHS beds. 76%, within 500.
- Unresponsive to patients’ needs and wants
- Poor on innovation
- Only better off had opportunity if dissatisfied to go elsewhere.
- Inequity within the NHS.
- Monopoly of provision
Unreformed NHS: equity problems
- Unemployed, and individuals with low income and poor educational qualifications use health services less relative to need than the employed, the rich and the better educated.
- Intervention rates of CABG or angiography following heart attack were 30% lower in poorest group than in the richest.
- Hip replacements 20% lower among poorer groups despite 30% higher need.
- A one point move down a seven point deprivation scale resulted in primary care practitioners spending 3.4% less time per consultation





NHS Reforms
- Patient Choice
- Payment-by-results
- New providers (Foundation Trusts and Independent Sector Treatment Centres)
- Practice-based Commissioning
- Direct payments in social care
Logic of Reforms
- Patient choice. Intrinsic and instrumental.
- But, if choice is to provide the right incentives, needs reward for success, penalty for failure. HenceBR – money following choice.
- But also choices must exist. Evidence that new providers offer most effective contestability. Hence Independent Sector Treatment Centres and Foundation Trusts.
- But danger of over-treatment. Hence Practice Based Commisioning.
Reforms: risks
- Failure to deal with failure
- Capacity planning
- Fragmentation
- Payment By Results: getting the price right
- PBC not powerful enough to control supplier and patient-induced demand.
- Inequity. But choice more equitable than voice?
- Phasing
Conclusion
- We are not looking for the best system, but only for the least worst.
- Reformed NHS is likely to be the least worst but there are risks along the way.The challenge is to deal with those risks in the most efficient and equitable way.

