Musgrave

It all started with the Birmingham Children’s Hospital.

The late-eighties.

It emerged that heart operations for children were being delayed and postponed for lack of funding.

Through the ’80s the NHS had lurched from crisis to crisis and eventually HMG were forced to come up with £100m bail out.

On a BBC Panorama the prime minister, Margaret Thatcher announced a review of the NHS. It took a year and in 1990 the NHS and Community Care Act ended up on the statute books.

The aim of part of the legislation was based on the theory that competition would lever-up quality and get a handle on costs. In the real world that is undoubtedly true but we know the NHS isn’t the real world.

At least, we do now.

I, for one, who had struggled with the lumbering bureaucracy of district health authorities, trying to run services at arms-length, was easily persuaded by the other aim of the Act, that operational independence for ‘providers’ would be a good thing.

Everything in my business background told me competition really did leverage quality and drive down costs and letting good people get on and do great things, was a good idea.

All that was over thirty years ago and we are older and wiser… at least, I like to think I am.

We’ve learned internal markets put up costs and have very little impact on quality.

We’ve learned that external markets escalate costs and very likely cut quality corners in pursuit of cutting escalating costs.

We’ve also learned that patients are unlikely to shop around for healthcare because they have little meaningful data upon which to base a choice and outside major cities the local hospital is the Local Hospital and Hobson’s choice.

Try and relocate a service and you’ll soon discover, local trumps everything.

The five dimensions of accessibility:

Approachability
Acceptability
Availability
Affordability
Appropriateness

And, some more learning…

… companies that can’t make money out of healthcare, walk away… Circle, Virgin disappeared in 2021, Centine and all the rest…

No margin… no point.

Despite successive governments trying to amplify choice and crank-up competition, to mix a metaphor, the wheels-came-off and turned-full-circle.

Following health services removal from the scope of the Public Contracts Regulations 2015, guidance and obligations for health managers to tender for everything from operations for bunions to supplies of bog-rolls has settled on a greater sanity.

Too late now but we should have thought about Richard Musgrave…

… in the 1950’s, he defined ‘merit-goods and services’, that;

‘…the social benefits of consumption outweigh private benefits, as they are beneficial to both individuals and society as a whole.’

Access to healthcare services is an investment that can improve the overall health of a population, leading to increased productivity because healthy individuals are better able to participate in the workforce and contribute to the economy…

… as we are discovering, today.

The community also benefits as people are less likely to spread diseases. The benefits to society outweigh the individual benefits… think immunisation.

That’s why when Jeremy Corbyn’s election manifesto said he would create a public-good of broadband connection… it wasn’t so daft.

That’s not the end of it.

There’s still a remnant of the Thatcher reforms that’s causing problems. Highlighted in a news report from Nick Carding in the HSJ;

‘A&E problem trusts targeted for tech investment…’

Eight trusts are awaiting funding from NHS England to implement electronic bed and capacity management systems, which enable trusts to get better oversight of their wards and capacity management.

It’s hard to imagine that the nation’s hosptials don’t have bed management systems that can be interrogated locally and nationally.

Indeed, four of the eight have no system at all!

It’s hard to imagine but in our National health services, there are over 20 Trusts that don’t have electronic patient record systems.

It’s a fact, the NHS is like a charity shop jig-saw puzzle… bits are missing and we can’t piece together the full picture.

Hospitals continue to enjoy a level of post-Thatcher operational independence.

They can choose to invest in IT, or not. From whom they want.

Yes, there are complications with capital allocations but there is the real prospect that even after substantial investment and the modest changes to national procurement…

… one half of the ‘national’ service isn’t guaranteed to be able to speak to the other half.

Neither across the borders into Wales or Scotland, nor the no-mans’ land of community, social and primary care.

After 30 years, it’s time for NHSE to forget about Thatcher and start thinking like Musgrave.

News and Comment from Roy Lilley
Contact Roy – please use this e-address roy.lilley@nhsmanagers.net
Reproduced at thetrainingnet.com by kind permission of Roy Lilley.