Anthony Woodhead 1

A Critical Evaluation of the English National Health Service. January 2010.

____________________________________________________________Introduction

This essay will evaluate the current English NHS from the bottom up; discussing its establishment, looking at the role played by GP’s who refer on to secondary care, analysing the environment surrounding cutting edge practices in tertiary centres before turning to issues of governance. Its focus will be on analysing the emergent system, arguing any critique will ultimately depend on an individual’s perspective with regard to its aims. It intends to show that supply induces demand; highlighting how healthcare professionals may attempt maintain the status quo and discuss ways of addressing principal-agent problems thus helping obtaining technical and allocative efficiency. This is of particularly relevance in the current economic climate where the NHS has been tasked to reduce costs by as much as £20bn by 2014. (HSJ, 2009)

A Brief History

President Truman said “the only thing new under the sun is the history we do not know”, (as cited in Miller 1974 p.26). I believe this argument holds within the NHS, and many current issues are historical ones manifesting in new contexts. There was an initial aim for equality; though the NHS was established in 1948 but as Aneurin Bevan’s widow reminds us its roots lay much deeper:

Many of us have associations with the between-the-wars health service; a great patchwork, a good deal of good intentions, a great deal of inadequacies. (Lee, 1968 p. 1)

Its founding coincided with the recent invention of Penicillin. Along with this and other medical advancements, the NHS helped facilitate the virtual irradiation of communicable disease in the UK (Bud, 2007). This was not without consequence:

We’re all glad now that it works, but then you’ve got the reverse side of the medal, because I’m now accused of being partly responsible for the population explosion which is one of the most devastating things that the world has got to face for the rest of this century. (Florey, as cited in Ligon, 2004 p. 3)

Different ideologies debated the best ways to gain efficiency; initial support for a service free at the point of need was divided; not in the least amongst medical professionals. In order to help get agreement from the GMC and then parliament GP ‘gatekeepers’ were employed as independent businessmen and “capitation was the defence against the perils of state servitude.” (Pater, 1981 p. 142) Research has also strived to establish the best methods; when Winston Churchill was returned to power in 1951 he caved to demands, commissioning Claude Guillebaud to look at how effective this tax-based health system was. To the chagrin of many in his party it concluded the NHS was very effective and needed more money if anything. He increased funding, as did his successors, and there’s. (Rivette, 2009) The NHS has grown to be Europe’s largest organisation, employing around 1.4 million people. By 2006/7 NHS budget was about £104bn, roughly 8 % GDP. (Wellards, 2008 p. 1)

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Primary Care

At the frontline of the service is primary care; this was traditionally provided by subcontracting through the GMS contract. However since 1977 37% of GP’s have signed up to PMS schemes, which allow payment through salaries. (Wellards, 2008 p.10) This has helped extend care to areas where traditional GP practices had sometimes opted not operate, particularly in the deprived inner cities; and a large strength of the system is that strives to provide universal coverage. (DH, 2006)

Marketization and the purchaser/provider split (see appendix fig 1)

The notion of primary care as the gatekeeper has altered, following the demonstration of some success in GP fundholding in the 1990’s (Dusenko et al., 2006) practice based commissioning was rolled out in 2005, resulting in the purchaser provider split. This was marketed as a way of giving patients more choice, aiming to increase productivity through quasi competitive market forces, termed the politically softer contestability. (Warwick, 2007) Government gives primary care 75% of revenue hoping to use purchasing power to obtain cost efficiency savings whilst enabling response to differential local demand, however in practice the market is seldom allowed to fail. (Maynard, 2005) Trusts get bailed out and savings have been limited, particularly to rural areas, where there is little real choice and benefits from marketization must also be weighed against opportunity costs imposed by continual change. (Mannion, 2005; Warwick, 2007)

Principal / Agent Problems

Many efforts to improve efficiency have addressed principal agent problems (Mannion & Goddard, 2002), in Primary Care a recent attempt establishing goal congruence has been through pay for performance via the QAF (Maynard & Bloor, 2003). This is important since 70% of NHS expenditure is on salaries; however efficacy has been minimal. (Doran et al., 2008; Gravelle et al., 2007; Wellards, 2008)

Technical and Allocative Efficiency

A topical area, leading on from the QAF in its ‘real world’ application is that of nurse substitution (Lankshear et al., 2005) and there has been a Cochrane review into this subject:

Findings suggest that appropriately trained nurses can produce as high quality care as primary care doctors and achieve as good health outcomes for patients. However, this conclusion should be viewed with caution given that only one study was powered to assess equivalence of care... substitution has the potential to reduce doctors’ workload and direct healthcare costs, achieving such reductions depends on the particular context of care. Doctors’ workload may remain unchanged either because nurses are deployed to meet previously unmet patient need or because nurses generate demand for care where previously there was none. (Laurant et al., 2004 p.2)

Nurses form the backbone of the NHS (see appendix fig 2). This review is significant because it fundamentally questions the NHS’s application of this resource to basic primary care. There is an opportunity cost to this which I believe the NHS wastes.

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The need for evaluation

Laurent et al.’s findings are also synonymous with similar reviews in that they highlight gaps in our current knowledge base. A large criticism of health systems in general is that they operate without proper evaluation of either clinical let alone managerial practice (Maynard, 2005). A 2007 analysis of 1016 systematic reviews from all 50 Cochrane Collaboration Review Groups found that “44% of the reviews concluded that the intervention was ‘likely to be beneficial’, 7% concluded that the intervention was ‘likely to be harmful’, and 49% concluded that evidence ‘did not support either benefit or harm’. 96% recommended further research.” (El Dib et al., 2007 p.689)

This problem is compounded by the fact that it’s hard to address efficiency in any context without collecting relevant data to base evaluation upon. PROMS data has only begun to be collected in NHS hospitals from April 2009 (DoH, 2008). This has not been done since the time of Florence Nightingale and the Lunacy act of 1845 (Maynard 2005). Primary care lags even further behind in this respect, there is data but it is limited to a practice level; large numerical studies of individual GP activity are generally based on prescribing data and there is no national collection system. (Hippsley-Cox et al., 2007; Maynard 2005)

Ideas for the future

The NHS must continue investigation and optimization of chronic disease management from a national perspective; continuing to asses cost efficiency through nurse substitution for example. The socialist in me believes there should be more salaried GP’s to help contain costs whilst current pay for performance measures remain unproven. (Maynard & Bloor 2003) Integration could make it easier to collect data require for further evaluation however the evidence base generally upholds the use of networks as opposed to mergers to facilitate this. (Walshe & Rundall, 2001) A key skill of a GP is to know when to refer patients on to secondary care; then manage co-morbidities safely and efficiently when they come back; I feel the NHS needs to provide better guidance for the latter.

Secondary Care

Much secondary care revolves around procedures and many attempts to address technical and allocative efficiency, thus containing costs have been through industrialisation; borrowing ideas from other sectors to reduce variance and move away from a “craft like model of production.”(Walshe & Smith, 2006 p.6) The medical profession has resisted this approach to ‘cook book’ medicine, claiming the context is different and highlighting problems in managing co-morbidities (Buse, 2005), however Variance is a real issue, for example the activity rates of the top 25% of surgeons are 60 to 85% higher than the bottom 25% (Bloor et al., 2004) and there are relevant comparators:

We suggested mail processing for ideas about exception handling; repair shops for ideas about diagnosis; universities for ideas about evaluation; science laboratories for ideas about interprofessional collaboration; courts for ideas about accommodating friends and family; and the organised religions for ideas about the provision of comfort. (Morton & Cornwell, 2009 p. 429)

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Hard v’s Soft Approaches

Recently industrialisation has been attempted through applying quality approaches, such as LEAN and Sigma Six. There have even been efforts to combine them and exploit synergies and both have resulted in real improvement. (Boden, 2008; Linderman et al., 2003)

Six Sigma relies on scientific, statistical methods for strategic process improvement in reducing derivation from the mean and has resulted in significant, though generally localised improvements (Linderman et al., 2003). Like in primary care the data such ‘hard’ approaches are based on is limited; however hospitals are is now collecting PROMS data (DH, 2008) and interventions are also being assessed using QALY’s; which quantify disease burden, placing a value on differential care, allowing for direct comparison between different treatments. (McCabe et al., 2008).

However measuring may be impractical, having too great an opportunity cost; if not impossible, say due to large time lags of interventional effects. Subsequently the NHS has adopt ‘softer’ tactics; such as creating high levels of trust, re-emphasising the power of internal intrinsic motivators and control through shared goals and values rather than incentives and fault finding. (Davies & Mannion, 2000) Hence Lean seeks to weave on-going improvement into an organisations culture hoping for more systemic effects than with harder scientific strategies applied to reduce variance. (Jimmerson et al., 2005; Liker, 2004)

Addressing Resistance

Industrialisation efforts often operate in direct opposition to organizational cultures and the NHS can be resistant to change. (Scott et al., 2003) As exemplified with nurse substitution, supply could induce demand and healthcare professionals have vested interests in maintaining the status quo. From an economic perspective, classic principal-agent problems will result in moral hazard leading to rent seeking behaviour. (Krueger, 1974; Maynard, 2005; Smith, 1776; Tullock, 1967)

The external environment is having an effect here with scandals, widely publicised in the media, helping creating a more open culture. The Bristol enquiry in particular may have wide ranging effect in this respect. (Smith, 1998) There are also signs that the NHS’s culture is slowly changing through the generations ; with newer professionals are being trained to work more in multidisciplinary teams for example. (Carter et al., 2003) The establishment of networks within healthcare organisations has tried to instil trust, minimise transaction costs and exploit efficiency savings. Indeed, the process by which patient care pathways are drawn up and then implemented is example of this approach in action. There is large potential here, especially as pathways can cascade best practice down to primary care. (Burgers et al., 2009; Goodwin et al., 2004) It could be hoped the NHS reaches at a tipping point and starts to become proactive but cultural change takes a long time. (Gladwell, 2000; Scott et al., 2003)

Ideas for the future

I believe secondary care generally lends itself more readily to measuring and subsequently industrialisation. Further moves towards performance related pay; as opposed to current payment by results; which Street & Maynard (2007) believe to be essentially an activity based tariff, could

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theoretically have more potential benefit here if outcomes are measured more effectively, yet to date PbR has largely focused on the primary sector (Maynard & Bloor, 2003).

Softer strategies will also need to be adopted to help instil a more open culture. Financial constraints in the coming years will mean more will have to be done with less; however if medicine continues along its flat of the curve trajectory, rationing will increasingly become an issue, if it wasn’t already (Beaglehole & Bonita, 2004). This will undoubtedly have implications throughout the NHS, possibly effecting tertiary care most of all.

Tertiary Care and the role of Arm’s Length Bodies

Cutting edge medicine is indeed a marvel. I have been lucky enough to witness the benefits a new MS drug has had on my cousin. Campath® (Alemtuzumab); currently undergoing phase three trials, reduces relapses by 78% over and above that achieved with interferon therapies (Coles & Compston, 2008). It arose through collaborative work between Cambridge University and the NHS hospital Addenbrookes, the same hospital where the first ‘test-tube’ baby was born (Rivette, 2009). Another credit to a service strong at helping develop new health technologies, though often slow at rolling them out (Liddell et al., 2008).

Research and Rationing

Continued research is important and can have significant impact; however unlike with treating communicable disease many new treatments of chronic disease have incremental benefit, for significant outlay (Lee et al., 2002; Bud, 2007). Again the NHS needs to spend its money wiser and again it doesn’t know all that much about how to best apply technologies we already have let alone new ones (Lankshear et al., 2005). This need for improved evaluation and efficient implementation of both clinical and managerial resources caused the Government to commission a large review to build agreement on the best institutional arrangements for a new single fund for health research. There were many good recommendations, including:

Formal arrangements be established between the NHS HTA Programme, NHS SDO Programme and NICE in order to Implement NICE recommendations (Cooksey, 2006 p. 104)

Rationing problems has always been there; penicillin’s first human recipient dying after initial improvement because there was simple not enough to give him (Bud 2007). My issue is not of rationing itself; rather that NHS still does so relatively badly. (Maynard, 2005):

Rationing should be based needs to be co-ordinated nationally to stem duplication, confusion and inefficiency... (with) no public accountability rationing will continue to look like government subterfuge to cut resources and indeed is more likely to become so. (Sheldon & Maynard, 1993 p. 12)

Arms-length bodies are very important in helping facilitate evidence based practice. (Maynard, 2005). NICE was established in 1999 and its role in particular is often criticised in the media however its pathways are potentially very useful tool for implementing rationing efficiently throughout the service. (Walker et al., 2007) Again the evidence on which they are based can be weak and there is a

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need for organizational buy in from the bottom up. Poor rationing would be my biggest criticism of the service but things are improving, slowly especially as the service is being pushed to control costs (Burges 2009; Crisp 2009)

Ideas for the future

As we have seen, healthcare will generate need and unless we are prepared to continually pay more for it, these have to be controlled. (Maynard, 2005) The argument thrown against socially governed medicine is that market forces are both more inclined to and more efficient at catering for need and allowing for choice particularly of an individual. The UK’s health is affected by wider issues which are essentially political; being about the sort of society we want, about levels of investment in research, and education as these are likely to have greater impact on public health in the long term. (Crisp, 2009)

Governance, a matter of perspective?

Taxation

The NHS in England is directed by the Secretary of State who is the head of the Department of Health and holds a cabinet post. He is aided by junior ministers and civil servants. The government collects progressive direct income tax and national insurance, redistributing funds to individual departments. Indirect regressive taxes are also placed on items deemed bad for health, especially cigarettes and alcohol; unfortunately no attempt is made at hypothecation of either type. (Wellards, 2008)

Redistribution

Till the 1970’s redistribution was incremental, budgets being adjusted up or down each year, with no real link to relative need or any regression. (Carr-Hill, 1988) Historically this favoured healthcare centres such as London and had a large southern weighting (Rivette, 2009) The current, RAWP formulae uses sophisticated statistical techniques to create a weighted population formula with an age, needs and relative cost adjustment. (Carr-Hill, 1988) This equitable regressive distribution is applied to hospital and community services but not primary care, though there is a potential to link it to practice base commissioning. Whilst ‘postcode lotteries’ do persist, a strength of the system is that is strives for equality. (DH, 2006)

Implimentation

However taxed based public systems are certainly not the only option available and should equity even be the main aim?

The Libertarian-Conservative-Republican camp believes freedom to be the supreme goal for society. The Egalitarian – Socialist – Democratic perspective focuses principally on creating and sustaining equality of opportunity. (Maynard, 2005 p. 299)

My views on the strengths of a public health service stem from a belief, informed by my interpretation of current evidence, that it is more efficient relative to private insurance at providing

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care for the most at least cost. I would argue the Americans spend 16% of their GDP on healthcare for marginal additional benefit, compounded with the many problems of private insurance including administrative costs and coverage in particular (24% v’s 16% in the UK). (Enthoven & Fuchs, 2006; Reinhart 2005).

This view could be contrasted with one of a public system being limited in its ability to adapt and respond to provide what is really valued by an individual. In a sense private systems are more optimistic, catering for life as opposed focusing on preventing mortality. We are not born equal, genetic and behavioural factors are likely to have more influence on a person’s quality of life, why strive for equality? (Maynard, 2005).

Maynard (2005) believes inherent problems and possible solutions are not necessarily mutually exclusive, that we should accept this and where possible we should seek to bridge the divide, implementing what is shown to work. Certainly the right sentiment but results are open to interpretation and as we have seen in this essay evidence based healthcare can be difficult to assess let alone implement and change in the NHS is slow.

Conclusion

We saw that the NHS began in an environment of conflicting ideologies and this state endures. Supply induces demand, yet resources in the NHS are finite. In primary care we looked at attempts at cost containment through marketization and at improving efficiency via pay for performance. With secondary care we discussed difficulties in using hard and soft approaches to exploit efficiency savings through industrialisation. In tertiary care we looked at rationing, seeing that there will be and discussed how arm’s length bodies play an important role in evidence based practice. Finally with governance we touched on ideological concepts, postulating that a critique of the NHS will be dependent on an individual’s point of view regarding how to best cater for need.

Whilst the context has changed with time the fundamental philosophy of the NHS being free at the point of need remains very relevant. It should not be forgotten that many people still choose to work within the NHS out of a desire to help others as well as for self-interest. Aneurin Bevan said “no society can legitimately call itself civilised if a sick person is denied medical aid because of lack of means.” (1951, p. 100) Whilst the NHS is difficult to manage and change happens slowly, I believe its greatest strength is that upholds an egalitarian point of view.

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Appendix:

Fig 1. NHS Structure in the UK (www.nhs.uk, n.d., 2009)

The above structure highlights the purchaser / provider split, here Tertiary Care is combined into Secondary Care and arms-length bodies such as N.I.C.E. come under the umbrella, reporting into all sectors.

Fig 2. Staff Groupings in NHS 2006 (Adapted from Wellards, 2008 p.17)

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Acronyms

DoH Department of HealthGDP Gross Domestic ProductGMS General Medical ServicesGP General PractitionerHTA Health Technologies AssessmentNHS National Health ServiceNICE National Institute for Clinical ExcellencePMS Personal Medical ServicesPbR Payment by ResultsPROMS Patient Related Outcome MeasureQAF Quality and Assessment’s FrameworkQALY Quality Adjusted Life YearRAWP Resource Allocation Working Party SDO Service Delivery and Organisation

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