THE CHANGING FACE OF THE NHS: MARKETS AND MORALITY. Dr Lucy Frith
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1 THE CHANGING FACE OF THE NHS: MARKETS AND MORALITY Dr Lucy Frith
2 Overview This talk will look at the debates over the current shape of the NHS The trend towards increasing marketization of the NHS The possible ethical issues with this development And (possible) ways forward
3 CHALLENGES FACING SYSTEMS
4 Current debates The debate over health care funding in England is changing and the founding principles of the NHS (a free at the point of delivery, universal health service for all provided out of taxation) are being questioned Professional bodies are voting on whether patients should be charged for GP visits The Nuffield Trust commented: it is difficult to see how the NHS as we know it can be sustained without significant change in public spending policy or the approach to its financing.
5 Crisis NHS The media headlines suggest the NHS is in crisis This promotes the idea that something dramatic has to be done That significant change is required
6 There are well known drivers for why modern healthcare systems are finding it hard to cope: 1. Increasing demand for health care arising from technological developments demographic changes rising expectations chronic disease 2. Demographic developments will also mean that health care systems are competing for a dwindling working-age population This is a global problem
7 Along-side these health trends there is the financial context, the last two governments have sought to reduce the budget deficit And a clear philosophy of decreasing the role of the public sector in all its forms and seeing an increasing role for private provision What energises many markets are new insurgent companies, who break monopolies and bring in new ways of doing things. We can apply this thinking to government. David Cameron September 2015
8 So is the NHS in crisis? The coalition government met its commitment to increase NHS funding in real terms over the course of the parliament, although this was less than the growth required to meet demand. Combined with significant cuts in social care services (real terms 12%), sustained financial constraints have meant that services have come under growing pressure, and increasing numbers of NHS providers are in deficit. Under the Coalition spending increased by 0.8% but growth in demand 3-4% so a shortfall 88% of Trusts are forecasting deficits this winter
9 RESPONSES
10 So how should this be dealt with? Levers such as reductions in the tariff that providers receive for some services, a pay freeze and cuts in management costs efficiency savings have worked in the short term, but: The NHS is working at or very close to its limits and patient care will suffer unless more resources are found. Kings Fund
11 Solutions within systems Need for better integration of care both within the health sector and with other sectors, most notably social care Providing more patient-centred care Improving quality of care Improving the efficiency and productivity of health systems Demand management and cost containment HSR-Europe. Health Services Research into European Policy and Practice. Final report of the HSREPP project. Utrecht: NIVEL, 2011
12 This approach is set out in the Five Year Forward View The health and wellbeing gap The care and quality gap The funding and efficiency gap (NHS England, 2014)
13 NEW MODELS OF DELIVERY
14 Change the system? One approach is to reconsider who provides healthcare The NHS has changed considerably in the last 30 years. This is a policy that has developed over successive governments With the Conservative s internal markets The Labour Government s any willing provider and initiatives to open the NHS up to other providers, establishing the Office for the Third Sector in 2006 to actively encouraged third sector providers in health care Policy documents, such as Our health our say (DH, 2006) encouraged NHS staff to set up their own businesses in the form of social enterprises to provide services
15 From a near state monopoly of health care provision we now have a health service characterised by a wider diversity of providers. For example, in ,000 operations were provided to NHS patients by independent providers There are, currently, almost 2,500 independent hospitals and clinics offering a wide variety of services At current figures there are approximately 40 social enterprises operating that have been created under the Right to Request (Cabinet Office, 2012).
16 The justifications for this creation of a more competitive market in health care have been set out in policy documents spanning 30 years and can be summarised as: a belief that the private sector is better managed; market forces will encourage leaner more efficient service provision and help contain costs; competition and patient choice will drive quality and innovation; a decentralised health service will be more responsive to local needs and encourage citizen participation.
17 This was a key aspect of the Coalitions reforms that became the Health and Social Care Act 2012 The White Paper Liberating the NHS The forthcoming Health Bill will give the NHS greater freedoms and help prevent political micromanagement. Monitor will become an economic regulator, to promote effective and efficient providers of health and care, to promote competition.
18 The Health and Social Care Act The central aim of this legislation was to extend market forces into the NHS to a much greater degree than before Clinical Commissioning Groups - The aim of these consortiums is to give more local control and be more sensitive to market mechanisms. The Act has accelerated moves to encourage other organisations outside the NHS to bid for services previously offered by the NHS. The any qualified provider initiative (building on any willing provider) will enable patients to choose from a range of providers from different sectors: commercial, third sector and the NHS.
19 The central aim of this diversification is to increase patient choice and stimulate competition between these different providers Section 75 has been described as the "engine of privatisation" as it ensures that NHS contracts are opened up to the market. The regulations within it state that CCGs must put all services out to tender unless they can prove the service could only be provided by one particular provider. This has created many more opportunities for the private sector and charities to bid to run NHS services.
20 Since the Health and Social Care legislation came into effect in April 2013 the amount of NHS care that is planned and delivered through the market (eg competitive tendering) has multiplied. In Apr , 9.6bn worth of NHS contract awards were made through competition. This figure has risen from 1.2bn in the year before the NHS changes came into effect (Apr ) and is up from 291m in the year after the last election (April ). Overall, since the Health and Social Care legislation (Apr 2013) over 10bn worth of NHS contracts have been awarded through the market. So far 21bn worth of contract opportunities, containing over 1000 contracts to provide and plan NHS care have been advertised.
21 In July 2013 the Government sold an 80% stake in the state-owned blood products business Plasma Resources to Bain Capital for 200 million (NHSforsale.com) The newest and biggest area of outsourcing is in relation to those services which the NHS, until very recently, used to provide directly: community health services and secondary care. (CPHI, 2015)
22 Responsibly to provide health care The 2012 Act abolished the Secretary of States for Health s duty to provide comprehensive health services throughout England and Wales, replacing it with a duty to exercise other functions to secure provision. This is a key part, of the 2012 Act that could have profound implications for all aspects of the NHS.
23 The effect was to transform the English NHS from a nationally-mandated public service required of the government under primary legislation, into a service based on commercial contracting, underpinned by ministerial and local discretion and secondary legislation, and exacerbated by non-accountability to Parliament of commissioners and providers. Abolition of the duty of the Secretary of State to provide or secure provision of health services was the seminal change that brought this transformation about. Duty to care: In defence of universal health care. Pollock, A & Price, D. Policy Paper. Centre for Labour and Social Studies _A_duty_to_care_%28Allyson_Pollock David_Price%29.pdf
24 MARKETS IN HEALTH CARE
25 There are twin forces at play here: an increased use of market forces (defined as creating a competitive environment where services and labour are commodified) and privatisation (defined as ownership of public assets sold or transferred to the private sector) Daniel Callahan makes a distinction between two levels of market intervention: those that aim for fundamental change, that include privatisation of parts of the system, moving them out of government hands; and those that aim for market mechanisms to improve efficiency without changing the underlying system. The health care reforms in the 2012 Act aim to bring about the first conception of a market in health care, and build on the previous health reforms that achieved the latter.
26 Is the NHS under threat from these forces? The end of the NHS has often been prophesised, in an article exchange Rudolf Klein argues that: The monolithic NHS is being transformed into a more pluralistic organization. The NHS in England is being neither privatized nor destroyed; the rights and entitlements of citizens, as enshrined in the NHS Constitution are not at risk. It is, however, evolving toward the kind of health service that would most probably have emerged had Britain s last coalition government not been replaced by Labour in The wartime coalition s plans represented a much more loosely articulated model, with room for a variety of providers and a large role for municipalities, than that subsequently introduced by Aneurin Bevan. (2013)
27 On the other hand In a response, David Hunter argues: The British National Health Service (NHS) is undergoing possibly the most far-reaching set of changes in its sixtyfive-year history. The coalition government is committed to restructuring the welfare state and public services and to rolling back the state. These [changes] threaten to dismantle the NHS and replace it with amore costly, fragmented, and less effective system of care that is driven by profit in place of the public interest. (2013)
28 However, the direction of travel is David Hunter argues the Coalition government s neo-liberalism drives these health reforms, the aim is to roll back the state and increasingly rely on the use of private providers. The CQC is seeking to recruit more inspectors from independent hospitals as it is conscious of a risk of political bias towards independent providers. July 2015
29 MORALITY AND MARKETS
30 Underlying ethical questions to consider It has been argued that health care organisations have particular ethical obligations on top of those usually required that distinguishes them from other kinds of organisation. Many authors have argued that health care commodities are not analogous to other market-exchange commodities: the vulnerability of most health care patients; the necessity for professional excellence; asymmetries of information; demand is not price led; demand is negotiated by the providers
31 These ideas are underpinned by particular conceptions of healthcare 1. Conceptualisations of health care as a social good from which flows concerns over equity of access and justice 2. Healthcare itself is a moral practice the goals of medicine are promoting well-being and human flourishing and medical professionals have unique obligations as professionals to promote the good of their patients These are at odds with a market approach to allocating resources
32 Relman, a former editor of the New England Journal of Medicine, has written extensively on the dangers of these trends in health care provision in the US. The continued privatization of health care and the continued prevalence and intrusion of market forces in the practice of medicine will not only bankrupt the health care system, but also will inevitably undermine the ethical foundations of medical practice and dissolve the moral precepts that have historically defined the medical profession. (JAMA, 2007)
33 Key issues What is the role of the state in the provision of key resources? What are our individual rights healthcare and who has the corresponding duty to provide it? What is healthcare? What are the ends of healthcare provision?
34 ETHICAL DIMENSIONS OF THESE CHANGES
35 Does it matter who provides our services? The NHS has always been a hybrid Independent provision of NHS services is not new. NHS GP, ophthalmic and pharmacy services have all largely been provided by independent contractors since 1948
36 Originally, the BMA rejected the idea of the NHS Bevan s solution was to If necessary I will stuff their mouths with gold Concessions won: Keep rights to private practice GPs to be on contracts, not direct employees Private pay beds to remain in NHS hospitals
37 It might matter - ethical aspects The system that is evolving will have a large amount of provision by NHS organisations with independent providers bidding for particular services, sometimes in conjunction with NHS organisations The ethical issues raised by this type of system, due to its novelty, are as yet unknown, so there has to be some speculation and drawing on evidence from other area
38 There are a number of possible ethical concerns that could arise as a result of the increasing use of providers outside the NHS. 1. The problem of market success/provider failure 2. It is not clear what limits will be placed on competition as an end in itself. 3. With the increase in private providers conflicts of interest might be created such as a conflict between patient welfare and the profit making aims of an organisation. a. There is much more evidence for the possible problems that might arise in the US context, due to their established market in health care 4. Managing the complex network of providers
39 Markets and Provider Failure Hinchingbrooke hospital in Cambridgeshire serves as an example of some of the problems with transferring NHS assets. In November 2011 it was taken over by a private company Circle Health. Not long into the contract reports suggested that Circle was facing finance problems and had not been able to make the cost savings anticipated.
40 Companies have other obligations, to ensure that their services are translated into profits and this, arguably, can create a conflict of interest for such organisations that could threaten patient care. This concern was realised at Hinchingbrooke when it was rated as inadequate in 2014 by the Care Quality Commission (CQC) (who inspect health and social care to ensure appropriate stands) and the hospital was put on special measures : The inspection highlighted serious concerns and CQC has told the trust it must improve. In January 2015 Circle Holdings announced that it would end the contract to run the hospital, citing problems with funding cuts and demand for Accident and emergency services.
41 Under the terms of the 10 year contract, it could be ended once they had invested a specific amount of money ( 5 million), a form of get out clause (although reports suggest it has to date spent slightly less than this figure m)). While all these pressures are recognised, unlike publically owned hospitals, private companies have the option to walk away from these difficult situations A problem with provider stability has been highlighted in the Dalton Report into NHS providers (2014)
42 Role of competition The BMA for example said: Since the Act received Royal Assent in 2012, we have maintained our opposition to increased competition and the development of the market in the NHS. Despite Government assurances, many, including the BMA, felt the Regulations were unclear as to when commissioners would be able to legitimately restrict competition.
43 It was also not clear from the regulations alone whether commissioners would be able to prioritise integration over competition and choice without leaving themselves open to challenge from Monitor [ And this is] potentially damaging to the comprehensiveness and integration of services.
44 Conflicts of interest and poor care Perry & Stone give a good overview of some of the problems such conflicts create in the US: overtreatment of patients (for instance for-profit facilities giving drugs in excessive of clinical guidelines); referral on the grounds of business interest not patient welfare; lowering staff ratios; and in their own area of hospice care, the rise of for-profit hospices has resulted in, selective recruitment of a longer-term, increasingly non-cancerous, population of Medicare patients and the payment of lower salaries and benefits to less-skilled staff.
45 It is difficult to infer whether problems faced by the US system would arise in the UK with its very different culture and organisational structure of health provision. There is some evidence from the UK to suggest that the more commercialised environment is already influencing health care delivery
46 A recent study on the views of nursing staff who had relocated to Independent Sector Treatment Centres (which are private providers of routine and low risk care) from the NHS found that, clinicians described new ways of working as extending managerial or corporate control over clinical practice. One nurse in their study said: We re not a supermarket, so don t try and turn us into [Supermarket name]. They might be really efficient and make lots of money but they are doing something different.
47 How to manage a diversity of providers and ensure quality of care? Administering, monitoring and enforcing these contracts is costly. We estimate that there are now some 53,000 contracts between the NHS and the private sector, including contracts for primary care services at an annual cost of 1.5bn. Contracting for healthcare is highly problematic. Asymmetry of information makes it almost impossible for a commissioner to know whether a provider is delivering according to the terms of the contract, or is cutting corners or reducing quality in order to gain extra revenue. Winterbourne View and Serco s out-of-hours primary care contract in Cornwall, where the NHS has failed to manage contracts with private sector providers effectively. (CHPI, 2015)
48 WAYS OF MINIMISING THESE CONCERNS
49 How do we ensure this new landscape operates in the interests of users of the service? Rudolf Klein suggests the NHS Constitution will guide provision Lord Darzi s review of the NHS in 2008 recommended that the NHS should have a constitution First one published in 2009 As our health care system becomes increasingly devolved, autonomous and entrepreneurial, there is a need for system-wide values, which reaffirm the social purpose of the NHS, to staff, patients and the public and inspire behaviours that put the needs of patients, staff and the public foremost in people s minds. Institute for Innovation and Improvement. Living our Local Values. NHS, 2008.
50
51 The Constitution sets out rights to which patients, public and staff are entitled, and pledges which the NHS is committed to achieve, together with responsibilities which the public, patients and staff owe to one another to ensure that the NHS operates fairly and effectively. (2013) You have the right to receive NHS services free of charge, apart from certain limited exceptions sanctioned by Parliament. You have the right to access NHS services. You will not be refused access on unreasonable grounds.
52 However, The 2012 Health Act includes a provision that Clinical Commissioning Groups must promote the Constitution and they will be held to account by the NHS Commissioning Board. Who ensures that the increasingly diverse range of health care providers will adhere to these values? How compliance with Constitutions rights and pledges policed? In practice what does have regard to the Constitution actually mean?
53 CONCLUSIONS
54 Evidence? Hard to make decisions on evidence alone, as often it does not exist or is imperfect What evidence we have does not suggest the NHS needs to be as radically overhauled as media reports would have us believe Ideology comes into play what we believe to be the role of the state in healthcare and we believe are our obligations to others This needs to be made explicit
55 Is there a crisis? There has always been financial scarcity in the NHS Estimated cost of NHS at the beginning 1948: 170 million p.a. Actual Cost (1949): 402 million p.a charges introduced for spectacles and dentures and Bevan resigned in protest
56 Prior to austerity measures the NHS performed well Key conclusions from Commonwealth Fund data The UK has one of the least expensive health systems among the countries studied The NHS outperforms other high income countries on many measures despite spending much less than most of them It enjoys the highest levels of public confidence and satisfaction of all the countries studied The effects of increased investment and policy improvements over the past decade are clearly visible
57 Current health expenditure in the UK was 8.46 per cent of GDP in 2013 This compares to: per cent in the USA, per cent in the Netherlands, per cent in Germany, per cent in France, per cent in Denmark, per cent in Canada 8.77 per cent in Italy.
58 This level of spending is alongside a good level of performance Although the UK seems to deserve criticism in specific areas, these are outnumbered by the areas in which it does well Moreover, the levels of public confidence and satisfaction measured in the UK were higher than in any other country How the NHS measures up to other health systems. Ingleby, D. McKee, M. Mladovsky, P. Rechel, B. BMJ 2012;344: (Published 22 February 2012)
59 Norman Daniels - Main lesson from US Don t emulate US we do poor job Little protection for equity Increases power of private, vested interests Much evidence of high cost of private schemes Greater portion of the healthcare dollar not spent on health Costs of marketing, profits, 25-8% vs 6% in Medicare Much of effort of health insurers is keeping enrollees from using health care Considerable fraud possible in multi-payer schemes Speaking at the Medicine, Market & Morals meeting October
60 The NHS beat both the monarchy and the Olympics to take gold in the patriotism stakes, as Ipsos-Mori's polling for British Future's new State of the Nation 2013 report. It shows that while attitudes to the NHS have fluctuated, commitment to its founding principles has remained remarkably consistent. Seventy two per cent of people declared the NHS to be "a symbol of what is great about Britain and we must do everything we can to maintain it"
61 Increasing marketization is not the answer The NHS is a much loved public institution and there is no evidence to suggest that the proposed reforms will cut costs or deliver a better service There is a campaign for a NHS Reinstatement Bill that wants to abolish competition, the provider-purchaser split, re-establish public bodies and accountability and restrict the role of commercial companies in the NHS.
62 References BMA Competition Law and the NHS. (2015) BMA Lords debate on motion to annul Section 75 regulations, 24 April Cabinet Office, (2012) Wave Right to Request Projects, at Care Quality Commission (CQC) (2015) Chief Inspector of Hospitals recommends Hinchingbrooke Health Care NHS Trust is placed in special measures following Care Quality Commission inspection. 9th January. (accessed 28th January 2015)
63 Callahan D, Wasunna A. Medicine and the Market: equity v. Choice. Baltimore: The John Hopkins University Press, CHPI (2015) The contracting NHS can the NHS handle the outsourcing of clinical services? Dalton (2014) Examining new options and opportunities for providers of NHS care: The Dalton Review Department of Health. NHS Constitution. London: DH, Department of Health, (2006) Our Health, Our Say. London: DH. HSR-Europe. (2011) Health Services Research into European Policy and Practice. Final report of the HSREPP project. Utrecht: NIVEL. Hunter, D (2013) A Response to Rudolf Klein: A Battle May Have Been Won but Perhaps Not the War Journal of Health Politics, Policy and Law, 38. 4:
64 Kings Fund (2015) Is the NHS heading for financial crisis? Klein, R (2013) The Twenty-Year War over England s National Health Service: A Report from the Battlefield. Journal of Health Politics, Policy and Law, 38. 4: NHS England (2014) Five Year Forward View Perry J, Stone R. In the business of dying: questioning the commercialization of the hospice. J Law Med Ethics 2011;39: Duty to care: In defence of universal health care. Pollock, A & Price, D. Policy Paper. Centre for Labour and Social Studies _A_duty_to_care_%28Allyson_Pollock David_Price%29.pdf Relman A. Medical professionalism in a commercialized healthcare market. JAMA 2007;298:
65 Waring J, Bishop S. Going private: clinicians experience of working in UK independent sector treatment centres. Health Policy 2012;104:
66 MEDICINE, MARKETS AND MORALS Network Glasgow Meeting 11 th 16 th February 2016 London Meeting 26 th May Twitter - #mmmnet
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