When it pays to be second best: English NHS “preferred providers”

For all the reform and protestations that the public deserves a health system for the 21st century, the ongoing saga of health reform in Britain continues to amaze.  The Secretary of State for Health for England, Andy Burnham, has decided that NHS providers get to try twice to prove they are worthy of continuing public confidence.  As he has put it, the NHS is the “preferred provider”, apparently for itself.

Those not familiar with the reform of the NHS, and indeed those who are, must be wondering why mediocrity should be rewarded, and in these difficult times, why the taxpayer or the government should countenance circumstances that public public money at risk.

The NHS commissioners (purchasers in real world speak) are the surrogates for consumer choice, as while NHS patients do have some choice, commissioners in the end are deciding in which directions that choice can be exercised.  A bit like Henry Ford’s model T car: you can have it in any colour as long as it is black.

Why should this matter? The Minister has said that the NHS should not be agnostic about who provides healthcare service delivery but instead favour NHS providers.  But as a monopoly supplier of services, the NHS and the English Department of Health must be mindful of abuse of a dominant position and in particular favouring institutions that are in effect emanations of the state, on the one hand, and forcing the public to experience second-rate service on the other.

Favouring a failing provider strikes me as looking a lot like state aid.  It also does not appear to be a service contract either, as the reason for awarding the contract seems to depend on the ownership of the provider (and protecting their status) and not whether they can deliver the service to a quality standard (which is the purpose of the contract).  The clue that this is a policy fudge is that a failing provider gets another chance to be a preferred provider over a potentially more competent and higher quality provider.  Can you legally enter into a contract for a service to a quality standard, knowing in advance that the provider is unlikely to be able to deliver to the terms of the contract?

Hmm. So much for value for money and healthcare fit for the 21st century.  Do I hear the auditors stirring?

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