Andy Burnham’s announcement this autumn that ‘the NHS is my preferred provider’ has raised hackles among the architects of Labour’s health reforms – notably on these pages – and brought fears that the principles of choice and plurality in public services are under threat bubbling to the surface. Certainly the development and communication of the apparent shift of emphasis could have been better handled, creating an impression of a ‘sell-out’ to the unions. Despite the rhetoric on both sides of this debate, however, Burnham’s announcement should not mean the end of reform. On the contrary, it provides an opportunity for a valuable debate about the use of markets in public services.
To begin with, the ‘preferred provider’ announcement does not stop the use of competition in its tracks, despite the wailing and gnashing of teeth on either side of this often polarised debate. In the detail of the announcement it is clear the NHS will be ‘preferred’ in the provision of its existing services where it can show it can do so at high quality and value. Where NHS services are failing and are not improved then commissioners can open up tenders to alternative NHS, private or voluntary providers. This is common sense contracting – it’s more efficient to fix your current service than go out to buy a new one. Indeed, when NHS providers are failing it is often because they have a tough service to deliver, and new providers have shown little interest in taking them over. It is also fairer for staff to be given a chance to improve – and we know we need them engaged in reform.
Secondly, this isn’t about going back on manifesto commitments to patient choice. The ‘Any Willing Provider’ policy remains for services under patient choice. A total of 149 independent providers have now entered the market at NHS prices to compete for patients. In August alone 8,400 operations were provided under the contract, quadrupling from the year before (while private demand has fallen). ‘Preferred provider’ is about procurement decisions by PCTs, not choices by patients. There will still be the opportunity for companies and charities to compete to provide NHS care where there are new services being commissioned or when there is a need for transformation or innovation. So sensible and justified use of competition is still a key tool for commissioners.
Whilst critics have attacked the process and the positioning on NHS competition, there has been less debate about the evidence for using markets in healthcare. Public service reform originated from a pragmatist position where what worked was felt to be more important than what ideology dictated, and this is to where we should return. Evidence from research on the effects of competition on quality in healthcare remains ambiguous. Competition can be a powerful tool in controlled conditions where quality can be specified and monitored. But there are also risks, including decline in less visible aspects of quality and fragmentation of care pathways.
Thus a recent OECD report on achieving value for money in healthcare recommended a mixed use of integration for the majority services, with use of competition where the conditions are right and experimentation at the margins. This is fairly close to the emerging position.
As we enter uncharted waters with a public sector spending crunch ahead, advocates of reform should be arguing for the most effective course to steer us through. Stopping or reversing change is not an option. We need the full range of levers for improvement including competition, disruptive innovation, integration, incentives, performance management, professionalism and co-production with users and the public – but we need to know when and how to use them wisely. We also need to recognise the importance of vision, leadership and staff engagement to deliver improvement and efficiency. More broadly, setting aside positioning and dogma (on either side), progressives need to have an honest debate about the benefits and risks of markets in public services, as well as the wider economy.