Competition is critical for NHS reform
13 February 2012With a world gripped by an immediate and pressing financial crisis, it is easy to lose sight of the longer term challenges faced both here at home and around the world. But without health we have nothing, so there is no long term challenge more pressing than how countries meet the rising health needs of their populations. Both in the developed world, and the developing, national governments are examining how to cope with the rising tide of demand for healthcare in the context of what is for all a difficult fiscal environment.
There are a number of challenges we face in healthcare – some of which exist across every part of the public sector, including how we harness the power of the information revolution and how we keep up with ever-rising public expectations. But what makes healthcare so unique are the developments of new treatments and technologies. Although technological advance is not solely restricted to the health sector, in healthcare new technologies do not simply create additional demand, but they change the nature of that demand. Over the last 20 years, for example, new treatments have converted what were once severe, acute illnesses into long term, manageable conditions. People now diagnosed with many cancers can expect to survive for many years, whereas once those diagnoses were a death sentence. People with once severely disabling conditions like rheumatoid arthritis now find that they can enjoy a much improved quality of life. So new treatments are not only demanded to help manage conditions; they actually change the symptoms of those conditions and the outlook for those people living with them.
In understanding the nature of this change and how to cope with it, there is little that we can learn from examining the past. The NHS – and, indeed, every healthcare system – has for the greatest part of its history existed almost solely to respond to an acute need for treatment. It is only in the last 20 years that medical advances have truly begun to shift the focus of healthcare systems towards the management of long and healthy lives.
This changing pattern of healthcare delivery has an important implication for the approach societies should take to health service funding. Whereas once the
job of healthcare systems was to manage the decline and death of patients suffering short-term illness from which there could be no recovery, the job of healthcare systems today is increasingly to keep those patients fit and healthy. An individual with cystic fibrosis, for example, could not have expected to live longer than five years in the 1950s. Now, life expectancy for that condition is almost 40.
This is a critical change. Because, as the focus of healthcare systems shifts towards keeping people productive – and potentially in work – it becomes in a country’s best interests to provide health care comprehensively to boost economic growth. In economics terminology, extra investment in healthcare confers supply- side benefits.
It is partly because of this that we witness around the world countries gravitating towards a model of healthcare provision we are fortunate to possess already in this country. Countries such as the USA have only just begun to appreciate the opportunity cost of failing to insure the tens of millions of potentially productive workers who are left without comprehensive healthcare. The next generation of economic powers – like China, India and Brazil – already recognise the importance of doing so, and are building comprehensive health services based on the experience we have of the NHS.
The continuing development of new treatments and technologies has been a welcome feature of healthcare in the past, and will continue to be in the future. It will mean that life expectancy continues to lengthen, quality of life continues to improve, and that previously terminal conditions are brought into the realm of the illnesses we have conquered through cure.
But to be truly effective, the key task of any healthcare system in the future is to ensure that those innovative new treatments and technologies get to the right patients, in the most efficient way. In achieving this aim, the challenges which are putting pressure on public sector services over the world – meeting the rising expectations of a public which is becoming better informed – can be turned to our advantage. Because if we allow more informed and more demanding patients and health professionals to agitate for these new treatments and technologies to be made available – rather than accepting the misplaced belief that a centrally-planned system based on past patterns of delivery can do it better – then the NHS will find itself facilitating rather than frustrating innovative care. After all, in any other sector, it is the thousands of individual decisions to adopt a new technology – from, say, cassettes to compact discs to mp3 players – which combine to sweep away less effective services.
And this individual creativity and innovation is best supported by competition. This word is used sparingly in healthcare because it is seen as a loaded term. But it has never been, nor should it be seen as, an alien concept in healthcare. It means simply that those who strive to innovate to provide the best possible care should find their efforts supported rather than stymied – supported through, for example, clear freedoms for any qualified provider to deliver NHS services to patients if they meet NHS standards and NHS costs, and through funding systems which are flexible enough to support the changes which health professionals want to lead. It also means giving patients more control over the care they receive, sharing in the decisions made about their treatment. These aims have been viewed as desirable characteristics of healthcare reforms for the past 20 years, and the next decade will see them further realised.
In healthcare, the term “competition” is often used pejoratively by vested interests with something to fear from change. But the vast majority of the NHS – including the many world-beating services we have which already compete with other health providers on a global scale – recognise that there is nothing to fear from competition. As the former Labour health minister Lord Darzi has commented, the NHS is up for competition. Competition between organisations facilitates the adoption of new treatments and technologies, and allows innovative individuals within those organisations to flourish. It is a critical element of healthcare system reform.
It is, though, not the only element. New treatments and technologies come at a cost – and although reform is needed to ensure those new treatments and technologies are used in a way which improve productivity (both in the NHS and in the wider economy) – the need for further investment in the NHS, albeit modest by historical standards, will continue. The government will safeguard a comprehensive health service both through our investment and our reform – both of which will help to drive further improvements in quality.
So in healthcare the aim of the next decade is a simple one: it is to ensure that the new treatments and technologies on which our own individual health depends are adopted quickly, efficiently, and in the best interests of patients for whom health systems care. And the reason for this is equally simple, driven by the changes in healthcare which those technologies have brought about: it is to ensure that, through delivering the very best healthcare, we live longer, remain happier, and stay more productive for longer.
Rt Hon Andrew Lansley MP, Health Secretary, in Health Service Journal - 13 February 2012. This essay is taken from a Reform's upcoming book, The next ten years, published on 1 March 2012. The original article can be found here.
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