Mixed economy of healthcare is more intelligent than a supertanker

From the UK Guardian: private healthcare providers.

The research on comparative performance of for profit and not for profit healthcare providers is well developed, so it is surprising to see such a weak quality assessment about private providers in the NHS.

The NHS is a very difficult customer for a number of reasons, primarily the glass box of public scrutiny and politics. But many countries successfully navigate public scrutiny of providers in general. So what is the story behind this newspaper article?

  1. It is true that many private providers have handed back their contracts to the NHS usually because either they didn’t do their sums properly, or found the environment more challenging than they expected. But a significant number of NHS providers are in substantial financial trouble, too, and they can’t hand back their contracts, but instead get a state bail-out. This is hardly a level playing field of course, but indicates that the financial regimes for public and private providers is different and that the commissioners may be unable to purchase care services from a mixed economy of providers.
  2. Private providers are often accused of not providing the highest standards of care. This is an interesting problem as virtually all the doctors on private contracts work the bulk of their time in the NHS and all belong to their Royal Colleges and the GMC regulates doctors, not just NHS doctors. It is worth being reminded that the NHS employs 57% or so of all registered nurses, while 37% work in private settings and an additional 7% in nursing homes. As well, the public sector is not the major employer of pharmacists and nutritionists, and the list goes on. Are these health professionals agreeing to work in less well-run and managed private facilities or do they believe they are providing a higher personal standard of care.
  3. Yes, the private hospitals are free-riders on the training system for health professionals as they don’t participate in that system, but there is no reason they couldn’t. They also don’t have emergency facilities, which is pointed to as evidence of poorer standards of care as a patient in trouble would need to be transferred to an NHS provider. But in the NHS, A&Es are being rationalised, converted into trauma centres, and patients transferred to superior treatment facilities when a particular hospital cannot cope. Patients and ambulances are apparently queuing outside the A&Es. There could be a case to be made for private urgi-care centres (18 hours a day, out-patients only), but the private sector would need to made a strategic decision that they wanted to elevate their service mix above elective, private insured care. Until they do something to fix that fault line, they’ll likely be continuing target.
  4. As for the money, in the total scheme of things, private contracting is still less than 10% of total expenditure on the NHS. The article typically falls into the trap of making numbers look big, when as a proportion they are quite small.
  5. NHS managerial expertise is generally what is used to run private hospitals. Many former NHS managers work in hospital contract management, where a hospital is run by a management team on contract.
  6. Circle had trouble not because the Hinchingbrooke is particularly challenging but because the managerial and financial environment was unsustainable partly because of underfunding of the contract by the NHS among other reasons.
  7. It is worth keeping in mind that while the US is seen as a bastion of private healthcare, the majority of providers are not-for-profits (including the hospitals associated with universities where the care is of world class excellence) and that the US care system is over 50% funded from the public purse. Private care providers exist globally and we might usefully look to countries in Asia, such as South Korea, to see what at future healthcare system might look like. Think Samsung.

What Cognology would say:

The government does not consider healthcare as a whole system but fragments regulation by ownership type; this is the root cause rather than something intrinsically problematic with private care, especially given the substantial evidence of problems with NHS care. This means they have failed to create a single regulatory environment to cover both public and private providers which would benefit all citizens in the country regardless of their personal choices. Taking this one step further, embedding intelligence in organisations, hive mind type logic which drives complex adaptive systems, would alter the objectives of regulators and embolden the component parts toward greater autonomy.

 

 

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