Andrew Lansley realised a long time ago that the way to get good press as Health spokesman was to butter up the doctors. His first wife and his dad were in the medical business. Doctors have a much bigger stake in the NHS than patients - in every sense. He spent the last five years courting the British Medical Association, going round the conference circuit and telling doctors what they want to hear. In return they told him that they wanted to run the NHS without politicians and managers getting in the way. So that is what he is offering them. If they accept his offer they will have nowhere to hide. They will have to handle the biggest financial crisis the NHS has faced in 50 years without having anyone else to blame if it all goes wrong. The Government will deny responsibility for any local problems.
What he is proposing is denationalisation, removing the central command and control structure of the NHS. He says he wants to 'replace the relationship between politicians and professionals with relationships between professionals and patients.' That sounds good. Who wants a politician to come between them and their doctor? He no longer wants to hear the sound of bedpans dropped in local hospitals from his office in Whitehall. He wants to drop most of Labour's targets. He proposes to reduce the management costs of the NHS by more than 45%. Most of the responsibilities for running the NHS, and most of the money will go to an NHS Commissioning Board which will be the biggest quango in the universe. This will allocate money to individual General Practices, who will be obliged to join a local Commissioning Group. Each Group will buy services from hospitals and from any other provider which meets NHS quality standards. The existing hospitals and Trusts will become social enterprises.
So we can no longer hold the Minister to account for the management of the NHS - something most Labour health ministers have wanted to achieve for the last 13 years. The price, however may be a real market in healthcare, not the controlled token market we have had since 1990.
There are not many people who want to defend the central command and control structures. Primary Care Trusts and Strategic Health Authorities don't have mass support although they have for the most part done a good job. In fact they hardly have any friends. Health managers are not wildly popular either. There will be a lot of Commissioning Groups, and they will need to employ managers, or contract with organisations to provide management services. So it is unlikely that there will be large numbers of unemployed health managers or that the management costs will really fall.
It is unclear what Lansley means when he says all NHS Trusts will become social enterprises. This may not be a move into the private sector as the term is normally understood. There is no legal definition of a social enterprise, and the term can embrace charities, friendly societies, companies limited by guarantee, Community Interest Companies, co-operatives and privately owned companies. Some could reasonably be regarded as in public ownership and cannot be bought up by private companies. They might be more accountable to their local communities than NHS institutions are now - which is not much. They might also be rather better at delivering services to disadvantaged communities - ditto.
These social enterprises would not be 'outside the NHS'. They would be the NHS. The NHS would be essentially a brand, with a guarantee of quality (provided by regulation), or a franchise, like Burger King. The Social Enterprises would have the right (as Foundation Trusts already have) to determine the pay for their own staff, but they could continue with the existing NHS pay and conditions. Their debts will not be public debts and they can make profits or surpluses which they retain.
Given the immense difficulty of persuading people to leave it, the pension scheme could become the defining characteristic of the NHS. It isn't clear but perhaps any organisation which counts as a social enterprise as far as Lansley is concerned could be in the pension scheme. The Labour Government tried to encourage NHS staff to transfer to social enterprises, with little success. Only one of any size, Central Surrey Health, seems to have been established. The existence of the NHS pension scheme is a major barrier to the establishment of alternative providers of medical services, because the NHS is essentially a monopoly employer of clinicians. There are few clinicians willing and able to work for alternative providers other than those rejected by the NHS or imported from abroad.
The move towards a real market in the English NHS will open up a real division between England and the rest of the UK which has moved away from the purchaser-provider split. Proponents of markets claim that the English NHS market has driven up efficiency and that Wales and Scotland are lagging behind. It is very difficult to substantiate such claims because there is a bureaucratic conspiracy to ensure that there are no comparable statistics across the borders.
There is a logic to developing the market. Labour's move towards marketisation involved substantial costs and bureaucracy, but few benefits. The proponents of market forces regard innovative disruption and driving out poor performers as the most significant benefits of markets. Labour's reforms delivered neither. There was no real penalty for failure, except that the Chair and Chief Exec were sometimes taken out and shot - but generally failing institutions, loyally supported by their local population, continued to fail. In a system where reward comes from above, not from the users of services, there is little incentive to introduce innovation or to adopt the best practice of other organisations. One of the results of an effective market is that successful innovation spreads rapidly, something which has never happened in the NHS. But this market is not a place where most patients make choices - only a small minority, perhaps 15% of patients, are in a position to make choices about where they get their treatment. In most of the NHS the patients are the goods, delivered by the commissioners to the providers bringing with them lots of public money.
Market forces with GPs in the driving seat could be disruptive. Most GP consortia will engage other organisations, maybe local authorities but perhaps private companies to manage the commissioning processes. Not many doctors want to do this, and not many will be good at it. There is scope for conflict of interest, if not downright corruption. GPs may take significant personal financial risks which they will take steps to mitigate. There will be opportunities for drug companies, who already know a lot about GPs. But in a tight financial climate the incentives for private sector organisations may not be strong. Local GPs may be more interested in protecting local hospitals than in bringing in new providers. GP fundholding under Thatcher was not terribly disruptive. If Lansley continues to prevent the closure of hospitals and clinics then perhaps this market too will be only a pretence. It may all end in a yawn rather than tears.
A more fundamental issue is the lack of any clear accountability mechanism for the consortia, either for the spending of a lot of public money, or to the local community. There will be new statutory arrangements with local authorities, but it is very unclear how these might operate.
This is the biggest redisorganisation in the history of the NHS - from the government which promised no more top down reorganization. The evidence suggests that we will have institutional paralysis for the next three years. This isn't going to make coping with a financial crisis any easier. There is no evidence that any of the past reorganizations have generated benefits, because none have stayed in place long enough for anyone to find out.
The last Conservative Government's reaction to the evidence of health inequality in the Black Report was to refuse to discuss it. For 18 years the words 'Health Inequality' were officially banned. Anyone using those words didn't get government research contracts, because they clearly imply something morally wrong for which the Government might be responsible and imply the expenditure of large sums of public money. Instead we were allowed to talk about 'Health Variations', which obviously arise naturally like variation in the plumage of birds.
Mr Lansley now does talk about health inequality quite a lot. He thinks the problem is about differential access to treatment. Of course access to treatment is affected by socio-economic equality, like access to everything else in our society, and that could be improved. But the essential problem is that economic inequality in the UK is so enormous as to be damaging to health. This government's policies will increase inequality. The reductions in benefits and services will have an immensely bigger effect on the poor than on the rich - far outweighing any possible improvement in access to treatment .
Dismantling the structures of the NHS is quite understandably seen by the 1.5 million people who work for it as a threat to their terms and conditions of employment. Those at greatest risk are the poorest paid - the porters and cleaners. Market forces generally tend to increase inequality. If the rich get richer and the poor get poorer no amount of efficiency in the provision of healthcare will counter the resulting damage to the health of the population.