The debate about price competition in the NHS is a very good example of a more general point: the impact of competition in health care will depend on the ‘rules of the game’.
The Health and Social Care Bill sets out some of the parameters for competition but much of this is of necessity very broad and open to interpretation. This job of interpretation falls largely to the new economic regulator – Monitor. Its approach (or regulatory stance in the jargon) will have a profound effect on the way competition evolves over the coming years.
The market mechanism session of the Nuffield Trust’s third annual Health Strategy Summit explored some of the key issues that the new economic regulator will have to address to be effective.
The session was chaired by Professor Alan Garber of Stanford University. Alan Garber is unusual as he a professor of economics and a practicing physician. From this stand point he is able to bridge the seemingly vast divide between the debate about quality improvement among medical professionals and the approach of economic regulators.
The Summit also heard about the experience of economic regulation in the utilities (gas, electricity and communications) and the East of England SHA’s approach to competition.
There were many interesting themes but one stood out: the approach to pricing is really fundamental. The current Payment by Results (PbR) systems sets annual prices for individual hospital spells for over 1,000 different diagnostic related groups. The PbR system was useful when the challenge facing the NHS was reducing waiting times for elective surgery but it also has huge limitations. Alan Garber highlighted the real risk that it could ossify innovation.
The IT revolution is a great example of how innovation doesn’t just change the process of production, it changes the output – the computer made the typewriter obsolete but it is not the same as a typewriter. If there had been a PbR system of pricing for typewriters would anyone have designed the lap-top?
So, one of Monitor’s key priorities must be to take a long hard look at the current PbR system. The NHS needs a payment system which places more emphasis on outcomes and less on activity. It needs to develop prices across pathways or a year of care to provide the scope and financial incentive for innovation.
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If the Health and Social Care Bill sets out some of the parameters for competition but much of this is of necessity very broad and open to interpretation - and If this job of interpretation of so-called parameters for competition falls largely to the new economic regulator – Monitor, then who else most importantly gets to interpret things as they happen? Dare I remind everyone even at this late stage about the Patient led NHS brought in back in 2005. Patients and the public come first so let's make sure there's room for even one individual to raise concerns appropriately when it's necessary to affect the direction of change. Surely the personalisation of health and social care thanks to the most modern of IT technology is possible, without compromising upon the wholeness of an individuals work/life balance - including one's enjoyment of a fullfilling family life lived as one may choose in privacy, dignity and with autonomy. This may require some unbundling of various assumptions which may or may not have been seemingly written in stone, but the point is anything should become possible with the best intentions and a proper dialogue.
The "IT revolution" is an interesting example to pick; not least because the NHS hasn't really had an IT revolution. Many people would say that one reason that it hasn't has been that has been locked into big contracts to deliver kit; and that it has not been focused enough on what that kit is meant to do and change (although IT strategies for two decades now have been clear and consistent about that bit). Another has been that there has been an apparent lack of incentives in targets and prices for trust to shift to doing things using IT, even when they could do this outside the NPfIT contracts(monitor waits electronically, for example, instead of employing an army of information collectors and analysts to do this on paper). Monitor is quite interested in IT; and might think about how its regimes and prices could encourage its use.
I agree, but NHS IT systems only measure activity. We need to enhance our IT systems to monitor health outcomes as part of regular NHS process and to provide real-time feedback to clinicians about how their patients are faring at the point of care. This is not so hard to do, but it is not being done.
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