Tuesday, 23 April 2013

An Elevator Pitch (or Lift Pitch) on NHS Reforms


The Health and Social Care (HSC) Act was passed in March 2012 and came into effect on April 1st 2013. GP led CCGs (Clinical Commissioning Groups) became responsible for the NHS budget and are now compelled to use competition as a means of improving NHS services. To most of us this seems like a good thing at first glance. Many of us are unaware of what this really means. To help public awareness, here is my ‘Elevator Pitch’ on NHS reforms. An Elevator Pitch is a summary of a concept or argument, short enough to be delivered between floors in an elevator. In the UK, we might call this a Lift Pitch.

The NHS is one of the most efficient healthcare systems in the world. It provides universal, comprehensive healthcare to EVERYONE. Healthcare is free at the point of delivery. We do not run the risk of personal bankruptcy when we fall ill. NHS hospitals are run on a non-profit basis where savings are reinvested in healthcare. Clinical outcomes are excellent. The US spends 2.4 times more on health per person than the UK, yet Britons live longer than Americans. Despite these achievements, the NHS has come under significant attack in the media. Budget cuts at a time when the NHS is at its most efficient have led to staffing shortages and ultimately problems outlined in the Francis Report.

The HSC Act 2012 removes the Secretary of State’s legal obligation to provide or secure healthcare for everyone. The NHS is also now subject to EU Competition law. Section 75 (being debated in the House of Lords today) compels CCGs to invite bids for all health services from ALL willing providers. This leads to a free market based system where expensive tendering processes will consume much of the CCG budgets and time. In the US, administration costs account for 20% of healthcare expenses, three times higher than in the UK.

Healthcare providers will compete against each other for the contracts. This may improve some services. However, barriers between primary care and hospitals will move us away from integration and data sharing. There is a risk that profit making organisations will cherry pick lucrative contracts, leaving difficult and expensive services to non-profit organisations. The irony is that a last minute amendment to the HSC Act makes this even more likely. The amendment declares that the only services NOT subject to competition law are those which can ONLY be provided by a current provider (most likely to be complex, expensive services).

As NHS budgets become tighter and healthcare becomes more expensive (largely as a result of spiraling administrative costs), the NHS is likely to change from a mostly single payer (government funded) system to a US style multiple payer healthcare system, what Don Berwick refers to as a ‘zoo of payment streams’. We only have to look to the US to see how our healthcare system might look in a few years.

Vinod Achan

For my blog on Don Berwick, see here.