WHAT WILL THE NEW MARKET IN HEALTH CARE MEAN FOR THE PROFESSIONALS WE
EDUCATE?Sally Ruane
Context: two political choices
• Tackle the deficit primarily through public spending cuts
• Undertake complex top-down reorganisation in this context
Financial environment
• Promise of real terms increase plus protected funding
• 0.1% p.a. real terms rise• £15-20bn ‘efficiency savings’ (5% p.a.)• Reorganisation costing £2-3bn• Transfer of £1bn out of NHS to LAs for
social care (not ring-fenced)
Implications
• ‘Increase’ experienced as a cut
• Cuts to services
• Job insecurity
• ‘Back office’, ‘front-line’, ‘management’
Financial aspects of GPCCa
• GP Commissioning Consortia (GPCCa) must bear financial risk
• But patient populations are small and funding formula may not work
• General financial squeeze
Financial aspects of GPCCa (cont.)
• High admin costs of health systems run as markets:
• 6% budget (‘70s); 14% (2003); 15-20%?? 2010;
• Proliferation of 500+ consortia – even higher admin costs?
Implications
• Financial viability of some consortia at risk
• Pressure of financial risk and constraints will ripple out to staff in primary care and in other sectors of health contracting with GPCCa
• Mergers?
Quality
• Financial squeeze
• New market will re-introduce price competition
• Economic theory and empirical evidence
• Safeguarding quality nationally?
• NICE Quality Standards not mandatory
Quality (cont.)
• Licensing arrangements for providers – ex ante regulation
• Care Quality Commission – weak?
• Locally set quality standards but with financial constraints
• Performance management of contract - inadequate
Implications
• Pressure on staff to reduce costs to compete on price
• Accommodating a decline in standards?
Commercialism
• GPCCa – a misnomer?
• Commissioning is a largely commercial activity
• Involvement of ex PCT staff; out of hours provider companies; large insurance companies operating under FESC (Framework for the procurement of External Support for Commissioning, 2007)
Commercialism (cont.)
• So commissioning will involve commercial actors and will be a culturally more commercial activity
Commercialism (cont.)
• Provider side of market:• Tilt market towards more commercial and non
NHS providers• Regulator will prioritise rules of competition• ISTCs; private hospitals in Extended Choice
Network; take-over of NHS hospitals
Commercialism (cont.)
• Commercial providers will:• Seek profitable activity• Jealously guard innovations and slow
dissemination of good practice• Seek to reduce costs – staff numbers; staff skill
mix; staff autonomy• Perform to contract (and no more)• Prioritise the interests of shareholders
Implications
• skill-mix;
• autonomy;
• ability to share good practice and utilise professional networks to the best
• Denial of treatment?
• ‘Over-treatment’?
Market
• Will the rules of competition become paramount?
• Dynamic or instability? • Failure regime for NHS hospitals etc which
cannot remain financially solvent• Hollowing out of NHS• FTs allowed to charge for health care
Implications of market
• Job insecurity and prospect of transfer to non NHS employers
• Triple tier workforce• How much professional energy and
resources diverted to profitable activity with paying patients?
• Organisational fragmentation will vitiate professional networks
Conclusion
• Professionalism in UK health care has developed for over half century in a context of public service and divorced from the profit motive
• Emergent commercialism will more significantly shape the professionalism of the future
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