The political economy of health care

Where the NHS came from and where it could lead

Tudor Hart, Julian

• Publisher: Policy Press
• Year: 2010
• ISBN:
  9781447315223
• Topic: Medicine
• Subtopic: Health Policy

With a foreword by Tony Benn. Drawing on clinical experience dating from the birth of the NHS in 1948, Julian Tudor Hart, a politically active GP in a Welsh coal mining community, charts the progress of the NHS from its 19th century origins in workers' mutual aid societies, to its current forced return to the market.His starting point is a detailed analysis of how clinical decisions are made.He explores the changing social relationships in the NHS as a gift economy, how these may be affected by reducing care to commodity status, and the new directions they might take if the NHS resumed progress independently from the market. This edition of this bestselling book has been entirely rewritten with two new chapters, and includes new material on resistance to that world-wide process. The essential principle in the book is that patients need to develop as active citizens and co-producers of health gain in a humanising society and the author's aim is to promote it wherever people recognise that pursuit of profit may be a brake on rational progress.

Notes and references

Preface to the second edition

1 There is just one important piece of evidence comparing performance of the entire NHS with just one chunk of the hugely variable market in health care in the US, the Kaiser Permanente (KP) health care programme in San Francisco (Feachem, G.A., Sekhri, N.K., White, K.L., ‘Getting more for their dollar: a comparison of the NHS with California’s Kaiser Permanente’, British Medical Journal 2002; 324: 135–43). According to Prof Feachem, KP provides a higher quality service than the NHS at a much lower cost. Surprisingly, he has as one co-author, Prof Kerr White, formerly a lifelong advocate for a national health service covering the whole US population. KP is not representative of the whole US care system. It is nominally not for profit. Profits are listed in its balance sheets, but they are apparently mostly shared by its medical staff and administrators. It is generally recognised as the most enlightened large unit so far developed in the US. However, even as a comparison not between two national systems, but between the NHS as a national system and KP as a single large corporate unit, like was not compared with like, and many other aspects of this study make its conclusions extremely doubtful. Its methodology falls far short of the standards normally required for research papers in peer-reviewed journals.

Unlike the NHS, KP does not cover any whole geographically defined population. It has responsibility only for people who can afford to be its customers, or are entitled to its care through an employment contract, or a government programme such as Medicare or Medicaid, whereas the NHS has responsibility for continuing care (not just emergencies) for every UK citizen, regardless of their wealth or circumstances. KP does not provide care for mental illness, or for chronic illness in dependent elderly people. By its own admission, Feachem’s paper includes no comparison of case-mix data, which might have gone some way to show that, despite all these serious exclusions (all of which put much greater burdens on the NHS), like was being compared with like, or at least that this difference was somehow allowed for in comparisons. Data on case-mix were available both for the NHS and for KP when this study was done, so why were they not used? Most seriously of all, its cost comparisons are invalid. As everyone knows, the cost of all medical, nursing and other staff procedures, and of all medications, is very much higher in the US than in the UK, precisely because in the US their prices are set by market competition, whereas in the UK both NHS staff and commercial suppliers relate to a state monopoly which must minimise costs and is in a much stronger bargaining position than KP. This is an important advantage inherent in the NHS as a state-organised gift economy designed to meet needs, rather than a commodity economy designed to maintain profit. International price differences of this kind, largely determined by the strength of public care systems as market negotiators, are the main variable determining their comparative efficiency (Parkin, D.W., McGuire, A.J., Yule, B.F., ‘What do international comparisons of health care expenditure really show?’, Community Medicine 1989; 11: 116–23). Feachem deletes this difference by adjusting all NHS data to US prices, comparing the NHS with KP not according to its actual costs, but according to notional costs it would face if it were operating in the US. Apparently an aim of this paper was to show greater cost-effectiveness in a market system than in a system of profit-free public service, and that is how it was been interpreted by all media commentators. The study design assured that this conclusion would be reached.

Feachem showed his first draft of this study to an eminent colleague, Prof Clive Smee, who advised him not to publish it, for the following reasons:

Kaiser is indisputably much more expensive than the NHS per capita. At the currency conversion rate used by the authors and after their adjustments for differences in service and population coverage the per capita cost of the NHS is barely 60% of Kaiser – $1161 compared with $1951. If we are looking at the total costs or macro-efficiency of two systems it is simply wrong to adjust for differences in healthcare prices, over and above adjusting for general differences in prices. But to suggest that NHS per capita costs are 60% of those in Kaiser is to give the comparison a spurious accuracy that is not warranted by the data presented … Alternative (and arguably more defensible) assumptions – e.g. about treatment of Kaiser’s profits, their ‘considerable’ administrative costs, and the currency conversion rate – would reduce NHS costs per capita to barely half those of Kaiser … The NHS has equity and universal coverage objectives that are irrelevant to Kaiser. The NHS also aspires to provide a range of health services that is significantly more comprehensive than is available under Kaiser … from the data in this paper there can be no doubt at all that in terms of total costs per capita or macro-efficiency, Kaiser is far more expensive than the NHS. (Smee, C.H., ‘What have we really learned from the NHS v Kaiser comparison?’, BMJ website, Letters, accessed 31 January 2002).

This paper could be used to illustrate all the most serious errors of biased design and statistical casuistry. Had its authors been less powerful, and its peer-reviewers applied normal standards, it is hard to believe it could have been published in any reputable peer-reviewed journal. Its only importance lies in its status as a publication in an authoritative and normally objective peer-reviewed international journal of medical science, the British Medical Journal (BMJ), which has been quoted over and over again by advocates of marketed care. BMJ website correspondence, almost all of it critical and from experts in the field in both Britain and the US, had reached 70 pages by 20 February 2002. Shortly after it was published, the then BMJ editor resigned, to take up a new post as director of the UK branch of the largest health care corporation in the US.

2 Gannon, Z., Lawson, N., Co-Production: The Modernisation of Public Services by Staff and Users, www.compassonline.org.uk, accessed 1 January 2010. The idea of co-production in public services seems to have originated from Gail Wilson (‘Co-production and self-care: new approaches to managing community care services for older people’, Social Policy & Administration 1994; 28: 236–50).

3 Webster, C., The National Health Service: A Political History, Oxford: Oxford University Press, 1998. I had already read Webster’s excellent official history of the NHS, but those volumes naturally compelled him to restrain so far as possible his own opinions to what the civil service would tolerate. In this short history he combines inside knowledge of how government policies were made, or more often allowed to drift along making themselves, with refreshing expression of his own exasperation with drifters or, occasionally, admiration for rare examples of imagination and leadership.

4 Adam Smith held more enlightened views than most of the people who now claim him as a founding father of classical economics. Here is what he had to say about the state:

Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all. (Smith, A., An Enquiry into the Nature and Causes of the Wealth of Nations (1762), Oxford: Oxford University Press, 1993, p 413)

And about how it should be funded:

The subjects of every state ought to contribute towards the support of the government, as nearly as possible in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state. (Smith, A., An Enquiry into the Nature and Causes of the Wealth of Nations, p 451)

We now call this suggestion income tax.

5 The book most relevant to my argument is Naomi Klein’s wonderful Shock Doctrine: The Rise of Disaster Capitalism, New York: Metropolitan Books, Henry Holt, 2007.

Chapter One

1 A commodity is a good or service produced for sale in the market, at a price determined by demand and competition. A good or service produced as a gift, just to help somebody, perhaps in your family, is not a commodity. The cobbler who makes a pair of shoes to sell has made a commodity. The same pair of shoes, but made as a gift for his child, is not a commodity. As my argument proceeds, this apparently simple difference will turn out to be critically important.

2 Dental care was the first bastion of the 1948 NHS gift economy to fall, essentially because it has always been taken less seriously than care for every other part of the body, and because NHS dentists were paid by fees for each item of service in a shop-around market (easily translated into direct patient charges), rather than as GPs originally were, by flat rate capitation for registered populations. Oral health deserves as much respect as any other kind of health. In many areas, NHS dentists are now hard to find, because private practice, especially for cosmetic dentistry, has become so much more profitable than NHS work. However, in Wales at least, dentists as an organised profession are opposing this trend. Stuart Geddes, Director of the British Dental Association in Wales, says dental charges are inequitable, deter people from seeking necessary treatment, and violate the basic NHS principle of free care at time of use. At present, 45% of adults in Wales have to pay dental charges, ranging from £12 to £177 for each treatment. Based on 2007 data, free NHS dental care in Wales would cost government about £26.7m a year. NHS dental charges in Wales have now been frozen at £12 for a check-up between ages 25 and 60 (they are free above and below this age range); in England these charges have now risen to £16.20 (Brindley, M., ‘All patients in Wales should receive fre...

Table of contents

• Cover
• Title Page
• Copyright
• Dedication
• About the author
• Contents
• Abbreviations and acronyms
• Foreword
• Preface to the second edition
• ONE: The NHS as wealth production
• TWO: What does it produce?
• THREE: How does it produce?
• FOUR: Generalists and specialists
• FIVE: Ownership
• SIX: Justice and solidarity
• SEVEN: A space in which to learn
• Notes and references