MARKETISATION – A DANGEROUS FETISHA VIEW FROM THE SOCIALIST HEALTH ASSOCIATION

The failure of markets has ransacked the world. Regulation of markets fails spectacularly. Yet, here in England, we are spending billions trying to turn the NHS into a regulated market based on the model used for privatising utilities. The requirement to have a “proper” market for healthcare flows from the belief that competition, especially when private sector organisations can participate, is the driving force to “reform” our NHS.

For the SHA our health is not a commodity, patients are not customers, and choices about our care are not a form of shopping. Some forms of competition, for example between clinicians to attain good outcomes, can be beneficial. Rigging an entire health system so private providers can be allowed to compete for our NHS £billions, is not supported by any reliable evidence and is not wanted by citizens.

The SHA wants to see a coherent care system based around cooperation and collaboration, not a fragmented market system connected through a plethora of legally enforceable contracts, with a pro competition regulator ready to police any anti-competitive behaviour. We support the preferred provider approach, with the NHS itself remaining as the dominant provider of NHS (clinical) services.

We want to distinguish between privatisation and marketisation.

PRIVATISATION – PRIVATE COMPANIES DOING NHS WORKPrivate companies are an integral part of the NHS and always have been. You can’t build a hospital, offer a medication nor use an NHS instrument without them. Some NHS services (especially some in metal health) are only available through private providers. However, the Socialist Health Association (SHA) is clear that using private companies to deliver clinical care brings much more risks than benefits.

As private entities they have a different value set and may legitimately focus on profits, for example by cutting staff benefits or using dangerous financing techniques. Their reaction to inevitable periods of difficulty is to protect profits not patients, leaving the NHS when finances dictate. Private owners are not likely to have the same interests as the aims of the NHS. They may even have an interest in the opposite, for example by promoting co-payments, and they can develop political influence to argue against NHS core aims. “Good” companies with a strong track record can be bought out by less attractive owners. Commercial confidentiality can be a device for hiding poor performance or poor value for money.

Private companies should be invited into the NHS if standards by an NHS provider cannot be improved; or if they offer innovation that cannot be copied in the NHS: NHS IT would be one example. Many NHS providers may also, on occasion, wish to sub contract services to another provider to help manage demand or even for efficiency reasons.

So, beware of private companies – but they can be really useful. Like vultures. At the very least the additional risks in using non NHS providers should be factored into any procurement process.

MARKETISATION – RUNNING TE NHS THROUGH THE PROFIT MOTIVERunning alongside the drive to get more private provision of NHS services is the dogma of marketization. By marketisation, we mean designing a system so that relationships and behaviours are driven by competition and the profit motive. We have many suppliers, some of which are semi-autonomous parts of the NHS behaving like businesses, competing to provide services. Customers choose which provider to go to, money flows with the customer, and so some providers do well and prosper while others fail and disappear.

Our view in the SHA is that there is ample evidence that this provider competition model of marketization is almost universally dangerous in health care. Various studies looking back over many years of the commissioner/provider split have found no evidence of any real benefits to patients to offset the considerable transaction costs involved.

And the edifice rests on claims that completion between providers driven by consumer choice works, despite the many tomes on health economics warning of how it doesn’t! The often cited quantitative evidence on the impact on health outcomes of competition rests largely on just two published studies in the hospital sector. Both studies concluded that competition under fixed prices in the NHS in recent years appears to be associated with beneficial changes in the quality of hospital services. Both studies have been criticised most recently in a comprehensive study from Leeds University. Other studies do not find this beneficial effect.

What little empirical evidence there is about the effect of competition based on price and quality flexibility in the UK internal market of the 1990s suggests that it had no impact on productivity, and hence costs, but may have led to lower quality

To add another dimension to our SHA reservations, Michael Sandel offers abundant evidence that marketisation has a damaging effect on our ethics and our approach to each other. In essence, he argues that marketisation makes society more unequal – and that it corrupts. The things that matter in life should not be bought and sold as commodities. We drift from having a market economy to being a market society. “A market economy is a tool for organising productive activity. A market society is a way of life in which market values seep into every aspect of human endeavour; where social relations are made over in the image of the market.”

Not what we want for our care system.