DO THE NHS REFORMS MAKE SENSE?

Julian Le Grand, London School of Economics
Bristol 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

1. Patient choice. Intrinsic and instrumental.
2. But, if choice is to provide the right incentives, needs reward for success, penalty for failure. HenceBR – money following choice.
3. But also choices must exist. Evidence that new providers offer most effective contestability. Hence Independent Sector Treatment Centres and Foundation Trusts.
4. 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.
  
  

last updated 6/02/06