The NHS needs competition—but may not get itby Philip Collins / November 14, 2012 / Leave a comment
Andy Burnham leads a protest against the proposed changes to the NHS (photo: John Giles/PA Wire)
The shadow health secretary, Andy Burnham, is a great fan of Everton football club and no mean player himself. In a distant age I shared a pitch with him as two of the early members of Demon Eyes, the Labour party football team. So I have weekly evidence that Burnham absolutely understands that competition and collaboration are not incompatible. He is well aware that the competition from the other team spurred ours to acts of collaboration in the quest to win the league (which we did, seeing as you’re asking). The Demon Eyes team did not fragment as we competed. Indeed, it was the very act of competition that brought us to a peak of integration.
Burnham might reflect on this lesson in his current post before a false argument traps him into a position from which there is no escape. There is no seminar on healthcare at the moment in which learned people do not talk about the need to integrate the National Health Service. If the rise of chronic diseases is not to consume all the money available, it is said, the fragmented NHS will need to come together. This move, the argument goes on, will require the tempering of previous moves towards competition, which is intrinsically inimical to co-operation.
The implied conflict is a false one. The NHS is a fragmented institution already and any attempt to integrate its many services from the centre is bound to fail. There are great virtues to a more integrated NHS but that goal can only be achieved if services are integrated around individuals, not around the system. That objective will, in turn, require many providers and effective competition between them. Far from being opposing sides, integration and competition run together. But, at the moment, those who are demanding that the NHS simply integrates, as if by magic, are having the better of the argument.
Stripped of the professional vernacular, what does integration actually mean? Someone with an illness will often go through many NHS institutions. Not every medical professional will be located at the same place, nor even have the same employer. The result, from the point of view of the patient, can be a time-consuming mess. A properly integrated NHS would obviate the need for all this to-ing and fro-ing. If a single body could guide the patient through the maze, the “pathway,” to lapse into the jargon, it would be so much easier to navigate. There is also resilient evidence that integration improves the quality of specialist services such as cardiac, cancer and stroke care.
Put like that, it is hard to be opposed to greater integration in the NHS. The aggregate case is unanswerable, too. The Office for National Statistics has projected that the 14.5m people aged 60 and over will have grown to 16.4m by 2020. Within this group, there will be an increase in the oldest of the old. Many more people will end up living alone and there will be an increased requirement for carers. The NHS is not structured to deal with this pattern of need. It is currently set up as an episodic care service in an era when illness is no longer episodic. Long-term conditions such as diabetes, asthma and dementia account for 75 per cent of NHS spending, and all of these require integrated services.
You might well be wondering why such an evidently good and necessary reform has not already happened. There are two main ways in which integration can run through the current labyrinth of NHS structures. Existing bodies can merge, to combine functions and make the system simpler. Or a temporary team can be brought together by the relevant authority and contracts drafted with incentives for them all to work together.
Hereby hangs the first difficulty. An integrated system demands that somebody (or some body) is in charge. There are only three candidates for the vital job of prime mover. A hospital can extend its reach, the general practitioner (GP) can take on a co-ordinating function, or some new agency can be invented to take on the task. You do not need to know much about the history of the fragmented NHS to know that there is no natural body of leaders to whom all the other professionals are happy to bow. The real story about the NHS is that fragmentation was written into its origins. When, in 1948, NHS hospitals were nationalised, the consultants becoming salaried staff in hospitals that were owned by the state. Primary care, meanwhile, was established in GP services that were constituted as private franchises.
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It is not just that nobody is in charge and the NHS is constituted, a bit like the United States, to make it impossible for anyone to take control. The very task of integration is colossal anyway. In any given health authority, for example, it will require the coming together of roughly 1000 people, spread across 15 professional cultures, to produce an integrated mental health service. More than four-fifths of the services required to keep frail elderly people out of hospital are not, strictly speaking, health services. Even those services that fall within the fold of the NHS are provided by a range of different people. We are asking the system to overcome the separation of budgets, the institutional chasm between primary and secondary care and different streams of information and data. What prospect that this complex array of organisations will be integrated by the mere desire that it should happen?
Despite the inherent fragmentation of the NHS, politicians and professionals continue to entertain the fond hope that they can engineer integration from the centre in Whitehall. The Health and Wellbeing Boards, which were created by the 2012 Health and Social Care Act, are the latest incarnation of the myth of integration from the centre. The mission of these new, sinister-sounding, boards is, as always, to bring together the relevant teams so that care magically becomes seamless.
The hubris of yet another attempt is not lessened by the example of Gordon Brown’s government, which was the last to try this method with the introduction of Integrated Care Organisations (ICOs). A recent evaluation of the pilots by the health care research body Nuffield Trust was not, however, encouraging: “The summary results of our work showed that… there was no evidence that these sites were reducing the level of emergency hospital care. Overall, secondary hospital care costs for patients were not any lower than expected.”
This is a repeat of what happened in the 1990s in the structural mergers between health and care services. An evaluation of care trusts by the King’s Fund in 2005 concluded that structural integration had not really done anything to bring teams together. “The New NHS,” a white paper published in 2000, was another attempt to wish integrated care into being. Nothing much came of it.
It was for all these reasons that the NHS Confederation, in a recent international survey of health systems, suggested that integration that is mainly focused on bringing organisations together is not likely to produce better care and may not even produce any significant integration at all. Economies of scope and scale, they argued, took a long time to realise, if they ever appeared at all. Professional demarcations and turf wars were always a problem. The NHS Confederation’s conclusion was clear: “Many attempts at integration have started at the organisational level. A more profitable approach might be to start at the level of the frontline team and the patient journey and then consider the most appropriate organisational form to deliver the required level of integration.”
The case for pessimism on integration looks well founded. As Walter Leutz, an associate professor at the Schneider Institute for Health Policy at Brandeis University, has written of the attempts to manage change by policy fiat: “You can integrate some of the services for all of the people, all of the services for some of the people, but you can’t integrate all of the services for all of the people.”
But politicians and professionals are insufficiently sensitive to the fact that system integration does not work. That is because this argument is the cover for a more profound dispute about change in the NHS. To counter-pose integration (good) with fragmentation (bad) is an effective way for conservatives, such as the British Medical Association, to fight off reform.
The argument was succinctly put in a paper from the Royal College of GPs in response to the government’s latest reforms: “The bill seeks both competition and better integration, which can be seen as mutually exclusive; it is difficult to see how competition rules could be framed to deliver both of these objectives. The fear is that it will no longer be possible to deliver integrated services in practice, especially where integration relies on close collaboration between different providers and commissioners, and could be seen as anti-competitive.”
The idea of integration has thus become a code word in which a covert argument is taking place. The fear encoded within it, however, is misplaced. Integration by national bureaucracy is a hopeless endeavour. The only possible way in which integration can feasibly develop, as it has been with the development of policy for “problem families,” is if it is wrapped around the individual patient. That insight leads, in turn, to another. The best ally of integration is competition.
The best example of how integration has to take place around an individual comes from Torbay and, in particular, the case of Mrs Smith. Peter Thistlethwaite’s paper for the King’s Fund is required reading for anyone interested in the argument about integration. Torbay council had a poor reputation for the quality of its services. Over the years it had tried every method handed down from the central government to improve its offer to the local citizens, all to little avail.
It only changed when Mrs Smith came along. Mrs Smith was an 80-year-old resident. When the chief executive analysed the journey Mrs Smith had to take through the various institutions of Torbay’s health and social care landscape, he was horrified. She had to endure numerous different assessments, repeating her story over and again. It could sometimes take days for relevant information to be relayed from one body to another. Mrs Smith was well known in the local community and her plight resonated with the staff. She soon became a metaphor for a new way of working, in which the professionals sought to fit around the needs of the patient, rather than the other way round.
There is just one other thing about Mrs Smith. She is fictitious. She was made up by Torbay officials to demonstrate how their world worked for real people. Yet Mrs Smith was instantly recognisable. She is, unfortunately, an archetype. Ever since Max Weber’s pioneering work on bureaucracy, we have known that one of the drawbacks of large systems is that individuals tend to get lost. Once Torbay decided to keep Mrs Smith in mind at all times, they tore their bureaucracy up.
Budgets were pooled to pay for new intermediate care services. Newly integrated care teams suddenly worked well with GPs to help older people live independently in the community. Some team members were charged expressly with bringing together the many things that Mrs Smith needed.
The revolution has been a thorough success. The use of costly hospital beds has been reduced. Emergency hospital admissions for those aged over 65, which is a major and unnecessary burden on the NHS, have almost been eliminated. Transfers between institutions are now expedited. The use of residential and nursing homes has fallen and there has been a lot more reliance on home care services. All told, the Mr and Mrs Smiths of Torbay are in better health and more likely to be where they want to be, which is at home rather than in hospital, than they have been in many years. Approval from the official system has followed as the Care Quality Commission has given Torbay excellent ratings.
The example shows that integration works if it revolves around a patient. But the lesson goes deeper than that: integration works even better if that patient is in charge of the process. When patients take up the option of a direct payment or a personal budget, they have the capacity to direct the care they need. The system is forced to integrate because the sovereign patient makes it so.
There are already 338,000 personal budget holders in social care, spending £1 in every £7 spent by councils, and the idea has now been extended to the NHS. The system works by making the money available to the patient. On condition that a plan is agreed with professionals, the patient is then free to purchase whatever they need to alleviate their condition, even if that involves straying beyond the existing providers and even beyond conventional health care goods.
Some of the personal health budget pilot sites have brought together the referral, assessment, budget setting, planning and monitoring of personal budgets without many of the complexities of structural integration between the NHS and local authorities. Clearly, in order for an individual to genuinely get what they need, there has to be a multiplicity of providers. There is no point giving a Mrs Smith control of the budget and then prescribing exactly what she is permitted to purchase. The existence of individual control, modified and negotiated in all cases with medical professionals, implies a range of providers.
It implies, in other words, a degree of competition. It is a myth that integration and competition are in terminal conflict. Indeed, the opposite is the case. The only way that integration can successfully be achieved is by organising services around individuals and the only way that can be achieved is by increasing the competition in the system. There are great virtues to a more integrated NHS but that goal can only be achieved if services are integrated around patients, not around the system. That objective will, in turn, require many providers and effective competition between them. Far from being opposing sides, integration and competition run together.
This is confirmed by a report from the Co-operation and Competition Panel, an advisory panel to the department of health, which investigated hospitals that were undergoing mergers between May 2011 and May 2012. In each case the trust was competing with at least one rival to attract referrals. This led to direct competition for patients based on reputation. It was clear that those hospital trusts that were subject to competition were more innovative in attracting referrals. But most interesting of all for current purposes is that the hospitals all understood that those things that mattered to GPs were an important determinant of whether they would secure patients. The competition, therefore, was encouraging integration between the two usually separate parts of the NHS.
It is not just in football matches that co-operation and competition can be seen in tandem. The best health systems, such as Kaiser Permanente in Oakland, California, have a similar model. Each person or employer who contracts for their health care with Kaiser could just as well go somewhere else. It is a highly plural and competitive market. However, Kaiser’s main selling point is its co-operative approach.
This marriage is a common feature of all modern supply chains. There are rivals to supply any consumer good, such as a loaf of bread. The retailers then compete to sell it. But think of the co-operation that must have taken place in order for the ingredients of that loaf of bread to come together in a bakery. Adam Smith famously said that it is not out of the goodness of his heart that the baker will bake you bread. His incentive is the sale. But in order to carry out that sale he needs an integrated process that produces an edible loaf.
In June 2011, on the Andrew Marr Show, Clare Gerada, chair of the Royal College of GPs, had an illuminating exchange with Stephen Dorrell, chair of the House of Commons health select committee. They agreed that integration of disparate services was vital but disagreed entirely on how that should come about. Gerada demanded command and control; Dorrell thought that competition was the midwife of integration. They were having the argument that, in the desperate search for efficiencies as the money runs out, will dominate the next phase of the NHS. It is very important that Dorrell wins the argument but, ranged against the most impressive set of trade unions in British history, it is far from likely that he will.