MARKETISATION A DANGEROUS FETISH

A 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 WORK
Private companies are an integral part of the NHS and always have been. You cant
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 MOTIVE

Running 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 doesnt! 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.