So things are heating up in the English NHS. Reforms are rushed, reckless, at a time of crisis, many are warning. Is that strictly true? Reform to those who have to implement it can always seem rushed, especially when driven by a reforming coalition government and a mounting debt burden. The past, oh, say 20 years, have not been easy for the NHS, but what is becoming evident is that a reforming mindset has not set in.
What do I mean by a reforming mindset? I mean a willingness for clinicians, managers and all the other staff to engage with the challenge of improving the quality of the healthcare patients receive — indeed, of justifying the public expenditure by providing a service that patients and the taxpayers more generally will value and use with confidence. With an obviously too broad a brush, this means that opportunities to innovate are missed, opportunities to try something new are avoided. It means that the ‘top’ has failed to manage, preferring perhaps to be stewards of their NHS organisations, adopting an inclusive approach that avoids confrontation, never upsets a particular stakeholder group too much, and in general avoids making waves. Apart from the day-to-day challenges of clinicians, we see, despite the McKinsey report on managerial excellence, weak strategic execution. Now the chips are down, decisions need to be made that will upset people — see my earlier post on shroud-waving. Each profession seems to be taking turns highlighting how their specific interests will be threatened.
Rather than coming forward with innovative and creative solutions, minds are retreating into denial and avoidance of the challenges ahead.
As any regular reader of this blog will know, I quite like disruptive innovations. Healthcare hasn’t had much of it really, just a sustained litany of top down reform pressure, but the real reforms, which need to come from those who are in daily contact with patients cannot be best served by organisations parachuted in to ‘encourage innovation’. This has to be embedded in people’s daily approach to work. Having run an internal consultancy in a very big academic health science centre, I appreciate the fundamental importance of using internal capabilities and building internal capacity.
But what might act as an incentive? We now know that being publicly owned and funded does not guarantee that organisations will be kind and caring toward patients. There are just too many instances where NHS or social care organisations have been able to abuse the public’s trust behind a veil of public ownership. The challenge facing Monitor and the Care Quality Commission isn’t just to regulate, but to disinfect.
My thoughts, though, turn to patients as a force for change. I have always felt that patient involvement is the most disruptive force in healthcare, and we have had years of this or that programme to engage patients in their healthcare to uneven effect. The one thing, though, that might actually make a difference would be to introduce a substantial co-payment which patients would pay, as part of the funding of the system. Now, the health economists will jump up here and call such a proposal a ‘policy zombie’, a term for an idea that should stay dead. However, co-payments are used in such advanced health systems as France and Spain. Indeed, I think the best thing the NHS could learn from these other systems is the use of co-payments to align patients’ and clinicians’ interests. The old adage ‘fog in Channel, Europe cut off’, can also mean that good ideas ‘out there’ never get ‘in here’. If you don’t look, you don’t see, and won’t find.
Paying for this is offers an interesting option. A huge amount of money is raised every year through National Insurance ‘tax’, which is a broadly hypothecated (but regressive) tax for health, social care, unemployment, that sort of thing; its original purpose as a form of ‘insurance’ has now been lost. In 2007-8 it raised some £98 billion. My proposal is this. Abolish NI and return the money to individual taxpayers and employers. In turn, individuals will use this money for a variety of purposes such as the healthcare co-payment, investing in pensions, funding ‘retirement’ social care insurance, and probably a lot of other things I can’t think of, and which are currently paid for out of public coffers — isn’t one issue facing the coalition government how to shrink the public side of the balance sheet and shift funds into spending from individuals based on choice?
The NHS funding side looks like this. Over the next few years, the NHS has to find around £20 bn of its current £110 bn or so annual cost as savings. The NHS continues to make these savings. In time, annual NHS spend (ceteris paribus) of around £90 bn would now be composed of £70 bn in central state funding and £20 bn in income from patient co-payments. The effect of this is liberating more generally, but achieves an important social benefit as it broadly aligns the interests of all parties, and engages patients in the actual cost of their healthcare — a tax-funded system with no co-payment insulates patients from the financial consequences of their healthcare decisions. Of course, I know that some design features are needed to take account of people with no income, fraud, and so on, but nothing that is a deal-breaker as other countries have managed this so presumably it can be done.
Removing probably the bulk of NI income from the public revenues has enormous consequences, and it does require comparable reinvestment in those services currently funded by the NI system, but by individual taxpayers instead. Most of the discussion on the abolition of NI has focused on the government continuing to be responsible for the items NI pays for (e.g. the apparent position of the Institute of Directors in the UK). My proposal shifts this burden entirely to an insurance model and has the effect of shrinking the state by building up individuals — goodness, a big society.