Image via Wikipedia

Does the proposed amending directive on providing medicines information to the general public (sometimes thought of as advertising) actually enhance patients’ rights? Will it lead to good regulation? The document in question can be found here.

I’ll grant that a lot of people have been involved in this, so there must be some consensus, but is the proposed directive strictly in the patient’s best interests and how are we to truly cost the benefits?

The document itself is cumbersome as if trying very hard to close off any possible loop-hole in case advertising disguised as information might slip into the hands of an unsuspecting patient. To do this, a variety of tests are proposed, a net through which information must pass, presumably though, not advertising, that might meet these tests:

• objective
• unbiased
• evidence based
• up to date
• reliable
• factually correct
• not misleading
• understandable
• meet patients’ needs and expectations

These tests are all good things, and I have no issue with them as such; certainly one would not wish to be in favour of subjectivity, bias, opinions full of errors and likely misleading, despite being incomprehensible — I suppose much like an insurance contract.

If I prioritise the last though, meeting patients’ needs and expectations, information would need to pass these tests for a reason other than internal scientific tests, namely, that it be useful. My fear is this process will produce information that may struggle meeting the test of being understandable. The reason for giving the information itself is to help the patient after all, so starting with their needs seems to me to the test against which I would assess everything else. Of course, little in this world passes these tests anyway, or if it does only for a very short space of time, and even then, facts can be in dispute and there are differences of opinion over how to interpret them. What we are left with in this proposal is a technocratic solution for what in the end is a human need for information.

What are policy makers afraid of in drafting this directive? What do they fear should patients have more information? And have they fully costed this approach?

It all seems to very old-fashioned and dated. Like trying to put the genie back in the bottle, I think this in time will prove to be the actions which caused more harm than good. Indeed, it may be that the benefits are less than the total system wide costs.

The question, then, to ponder further, is what decisions by patients are enabled through this directive, how does it specifically enhance the rights and needs of patients (keep in mind that most health systems neither respect nor completely understand what these mean). Certainly, taking a decision-based approach, perhaps a ‘decision architecture’ which determines what information in what form is needed to help patients make what sorts of choices, then we might know better what degree of ‘coercion’ is needed, if any — but can you give me an example where it is even ethical to withhold information from a patient?

Of course, such an approach would would be in conflict with this directive which builds on the view that only health professionals know best. Hardly a firm foundation for legislative reform of this magnitude. But we need to think of whole-system regulation and the distribution of costs and benefits on that basis, and not just the information issue itself.

I am not surprised that it has come to this, as there is a sort of ‘consensus’ amongst professional vested interests that an information and advertising free for all would lead to chaos, loss of control of drug budgets, and a flood of advertising on our televisions and newspapers about drugs influencing hapless patients and consumers (as though advertising to doctors didn’t achieve similar effects). But compared to the monastic model we have now, where patients know less about the drugs they take than the amount of fat in a kilo of ground meat, it would serve to open up to greater scrutiny industry claims and counterclaims. This lack of knowledge itself has a cost and serious consequences for the costs of healthcare systems.

Recently, the Economist has noted in an article on red tape in Washington how the various costs of regulation are identified, and how wider public benefits are calculated or missed. The US Congressional Budget Office has speculated that a moratorium on DTC would likely have perverse consequences and be unlikely to lower drug prices, and only shift advertising toward physicians. This of course challenges the narrower focus (not meant pejoratively) of the Directive which clearly fails to take account of wider regulatory costs, which are ignored as they fall outside EU competency. These regulatory costs include but are not limited to:

• the potential beneficial impact on treatment costs and compliance with medicines regimes arising from wider engagement of patients in their care
• the potential corresponding (and likely beneficial) challenges to the authority of health professionals (but ignoring that many countries are seeking to encourage patient selfcare which is designed to achieve just this result), who are influenced in other ways in their choice of medicines, with considerable evidence of irrational and inappropriate prescribing, despite efforts to counter this
• greater awareness by the public of national medicines policies which may actually encourage greater cost efficiencies, such as trade-offs between medicines and inpatient care, as well as greater public scrutiny of how new drugs gain market access (a process which the public has little knowledge of and which has perverse consequences in many cases for patient access to new medicines — something an informed patient may wish to have a view on)
• greater public awareness of the decisions of health technology assessment agencies, which may raise serious social and ethical issues
• the possibility that the costs of regulation and claimed benefits to the health system may lead to the loss of research productivity and innovation from a more open environment; indeed the losses here may swamp the regulatory benefits.

I think keeping patients in the dark, as some have written, leads to greater system costs, and perverse consequences and incentives, than full and open disclosure to the public of medicines information, and indeed, even advertising. In an open environment, claims are tested in the real world and can be taken into account in whole-system benefits realisation, not exactly something that is designed to create an additional layer of regulation. In the end, the patient is excluded from playing an informed role in their own healthcare.

Want to know more?

Keeping Patients in the Dark, by Cardy, Edwards and Gay, Civitas, 2000. (Amazon sells it)

Benefits and harms of direct to consumer advertising: a systematic review, Gilbody, Wilson, Watt, Qual Saf Health Care, 2005 Aug;14(4):246-50.

Direct to Consumer Advertising is legal in the US. This is some material from the FDA: Information for Consumers: http://www.fda.gov/Drugs/ResourcesForYou…

US Congressional Budget Office, Potential Effects of a Ban on Direct-to-Consumer Advertising of New Prescrption Drugs, May 2011, Economic and Budget Issue Brief.

HTA, not boldly going where our moral sentiments dictate

Increasingly widespread amongst the world’s healthcare systems is the assessment of medicines and devices using various types of cost-benefit or cost-utility analysis; this is called health technology assessment or HTA. HTA seeks to determine, using evidence of one sort or another, whether something is broadly speaking affordable, taking account of the cost of the medicine/device taken against the benefit to a particular constellation of diagnostic attributes in patients. This is usually quantified in a measure called a QALY: a quality-adjusted life year, which is a way to assess the value for money of a particular health technology. In short, it is a way of valuing lives.

HTA is a utilitarian approach to assessment. To some extent, this is not surprising as HTA is in the main a method developed by health economists, who, like economists in general, hypothesise that we make daily decisions based on the utilty of this or that, in terms of trade-offs (Pareto optimisation, for instance) and rational decision making (that people seek to maximise value, or utility in what they do). This approach is increasingly in dispute in light of the findings from neurosciences and behaviour economics: by posting that people do not always make decisions that are in their own best interests, a key assumption of traditional economics, that of the rational actor, always calculating trade-offs and maximising benefits, and so on, is questioned.

The problem with utilitarianism, though, is it doesn’t pay attention to the freedom of the individual; it positions the justification of its results on the net benefit to society, regardless of the impact on rights of individuals. Obviously, health economists don’t watch Star Trek or they would know that the needs of the one outweigh the needs of the many. But then, that, too, is a moral position.

Indeed, it is perhaps the sense that utilitarian conclusions don’t seem to correlate with many people’s moral sentiments that may explain why decisions of HTA agencies, for instance NICE in the UK (England) lead to moral outrage and a sense of, if not injustice, at least unfairness. While the results of an HTA process may lead to a quantitatively defensible conclusion, people sense that this conclusion is not morally defensible.

How are we to judge? Few would use utilitarian arguments in this way in other spheres: would we calculate who needs welfare in terms of the net benefit to society in terms of quality of life years, though perhaps we do allocate welfare on moral assumptions that some people deserve welfare while others don’t.

Do we allocate support to communities ravaged by floods based on their overall contribution, or utility, to society.  If you could donate £10 million to a university, would you pick Oxford University or Thames Valley University; which one is more worthy? But would you want to treat people this way?

HTA doesn’t even let us value lives in quite this way, since it neatly avoids deciding about the worth of any particular type of person, who just happens through misfortune to find themselves needing some medicine that fails the HTA tests. HTA keeps us from confronting the fact that HTA is a way of drawing a conclusion, without actually having to decide any allocations for any one person in particular. Bentham would approve.

There is, though, a technical problem with HTA and it has to do with whether at one level of assessment outcome, a utilitarian models can be used when the decision to be made does not have life threatening consequences for some people.

If the QALY threshold is, say £35,000, as it apparently is in the case of NICE, are the decisions below that threshold, which tend toward ‘yes’ or ‘approval’ morally different from decisions above that threshold?  I suggest that different moral criteria come into play above the threshold and this is where I think out moral outrage should be directed and where HTA fails.  Regretfully, HTA models see the results as broadly continuous, that is, decisions above and below this threshold are seen as essentially of the same type.  But I have argued elsewhere that above the threshold, HTA models fail but for reasons other their analytical soundness, because above this threshold, the conclusions may lead to a lessened quality of life, in other words, they actually crystallise the health outcome rather than avoid it.

Therefore, in valuing lives, those above the threshold experience greater injustice than those below; they are treated differently, unfairly, unjustly, perhaps less worthy, but certainly differently.  Indeed, above the threshold, we feel we are more in the realm of our moral sentiments about the value of human life, and less our moral sentiments about the allocation of scarce resources.

If this were not so, then we would be living in a society that believes that the determinant of all important moral and political decisions is affordability, and if that were so, they we could not even afford the costs of inefficiency brought on by democracy, the inconvenience of not being able to exploit people, the costs of equal rights.

Perhaps, though, on our financially contaminated world, all we can think about today is money and that is further contaminating our perception of what sort of society we are actually trying to foster.  Certainly, protests on Wall Street and elsewhere point to the view that there seems to be some unjust allocation of the benefits of government bail-outs that just doesn’t benefit those ‘at the bottom’.

John Rawls wrote that the we should distribute opportunity in a society in such a way as to ensure that the least well off benefit the most. In the context of HTA, medicines and technologies that benefit only a few, but at great cost, represent a cost worth having as the least well off, namely those who would need it most ( have the condition it treats, and in some societies can afford it least), would benefit, even if a little, as that is the price we pay for justice.

This, I suggest, is the root of our moral outrage at HTA, that is unjustly fails to serve those who need it most.

I am left with wondering about the underlying morality of HTA as a government scheme. Governments, as we know, are the last resort, when things are tough and one would hope, ensure that the least well-off in society are not penalised simply in virtue of being least well-off.  In healthcare, someone has to be the carer of last resort; using HTA as a way of avoiding this responsibility is not morally defensible.

Green is good = lower public debt

Vito Tanzi’s book on the modern state “Government versus Markets” is a mine of fresh perspectives. His subtle challenging of the ability of governments to intervene in market failure is thoughtful — when is market failure simply an excuse for hyperactive civil servants to do something, rather than clear evidence of a problem? And not to speak of motives as we are familiar with the ‘rent-seeking’ behaviour of public bodies/officials which can frustrate efforts to streamline and prioritise public services.

European governments are today the cause of considerable global anxiety with their bloated state bureaucracies, high levels of taxation and disincentivised, but pampered (subsidised) industries. It is instructive to reflect that a large component of state debt arises from their healthcare sectors; that much Greek debt lies in the capital funding of hospital construction, and that rising taxes in France are designed to protect social welfare and health benefits through the regressive social charges (contribution, in French).

Tanzi also challenges the scale of modern governments, as a percentage of the economy.  An article by Neil Reynolds, writing in Toronto’s Globe and Mail started the discussion. (lead article here) A subsequent article in The Globe and Mail listed the following countries as a short list of small state sector countries: (specific reference here):

Hong Kong: Population: 7.1 million. GDP: $302-billion (U.S.). Per-capita GDP: $42,748. Unemployment: 5.3 per cent. Inflation: 0.5 per cent. Five-year compound average growth rate: 3.1 per cent. Percentage of GDP spent by the state: 18.6 per cent.

Singapore: Population: 4.8 million. GDP: $240-billion. Per-capita GDP: $50,523. Unemployment: 3.0 per cent. Inflation: 0.2 per cent. Five-year compound annual growth rate: 4 per cent. Percentage of GDP spent by the state: 17.2 per cent. Singapore requires its citizens to buy their own health and employment insurance – a requirement that has produced an exceptionally high level of savings and one of the richest countries on Earth.

Chile: Population: 17 million. GDP: $243-billion. Per-capita GDP: $14,341. Unemployment: 10.8 per cent. Inflation: 1.7 per cent. Five-year compound annual growth rate: 2.8 per cent. Percentage of GDP spent by the state: 21.1 per cent.

Costa Rica: Population: 4.6 million. GDP: $35-billion. Per-capita GDP: $11,579 (the highest in the country’s Central American neighbourhood). Unemployment: 7.8 per cent. Inflation: 5.8 per cent. Five-year compound annual growth rate: 4.5 per cent. Percentage of GDP spent by the state: 20.9 per cent. (Costa Rica is running a deficit these days – keeping tax revenue as a percentage of GDP to 15 per cent.)

Taiwan: Population: 23.1 million. GDP: $736-billion. Per-capita GDP: $31,834. Unemployment: 5.9 per cent. Inflation: 0.9 per cent. Five-year compound annual growth rate: 2.5 per cent. Percentage of GDP spent by the state: 18.5 per cent.

Now, returning to healthcare, these countries also tend toward healthcare systems that are not social insurance or national taxation based, but are what some authors (see S-Y Lee and C-B Chun, The National Health Insurance system as one type of new typology: the case of South Korea and Taiwan. Health Policy  2008 Jan;85(1):105-13. Epub 2007 Aug 20. Abstract here) are called “national health insurance systems”, characterised by a large government interest through establishing rules and standards, but mainly private delivery, with high co-payments, consideration patient choice, and rising levels of investment. These emerging successful, small state sector economies may also be inventing an affordable and sustainable healthcare system, which could be explored in more detail in European countries as they grapple with public debt. The current financial crisis in Europe, entails the need for root and branch reform of the largest elements of public expenditure — health and social care, university funding, etc. — along with venting the gaseous expansion of the regulatory state.

It will be difficult for European-level policymakers to engage in sensible policies when key drivers of cost are driven at the member state level. An obvious example is Spain, where the debt resides at the regional level, but the policy tools for that debt are owned by the national government. To illustrate, Castille La-Mancha can’t pay the pharmacists for drugs, so pharmacists are asking patients to pay cash. (article here: scroll down to find the specific reference).

Having 19th century sized governments, does not entail having 19th century healthcare.

could it be that simple?

The media do have considerable trouble reporting health statistics partly because these statistics often report probabilities, estimates, and approximations. Phrases like “x times more likely” abound. Without knowing what the base likelihood is, we have no idea whether this is a lot or a little. So small numbers can sound impressive and people can be easily mislead into think that they might live forever. Like reporting that 42% of the population will die with or from cancer — the difference is important: men frequently die with prostate cancer, but not from it.

What do you think this paragraph means from The Guardian newspaper: (by the way, a search was unable to locate the relevant document the article was based on. Newspapers should these days cite the names of the documents, with links, to enable independent followup.)

“Twenty-year-olds are three times more likely to reach their 100th birthdays than their grandparents and twice as likely as their parents, official figures show. A baby born this year is almost eight times more likely to reach 100 than one born 80 years ago, according to the figures issued by the Department for Work and Pensions.  A girl born this year has a one-in-three chance of reaching their 100th birthday, while boys have a one-in-four chance.”

Many people look to the media for information on health, but it doesn’t help when within a single paragraph (!) we are confronted with this rush of statistics.

They sound important, like they ought to mean something. But what? Can these statistics be converted into something that might actually shed light on what the the numbers might mean or is the newspaper just repeating statistics in the usually confusing way papers do? (Another example of where papers confuse when they report statistics, is they’ll say something like the number of mortgages issues declined by 1% last month; of that 200 were remortgages. Huh?)

Today’s grandparents were probably born, say, 1930, when the life expectancy was about 60 years, while today it is about 75, and for a twenty year old today it is estimated at 100, 80 years from now. Life expectancy rose about 15 years between 1930 and today (about 80 years) and will rise a further 25 years by the year 2090. Hmmm, that suggests growth in improvement in life expectancy is accelerating as it will increase 40% or so more over the next 80 years than if it just continued at a steady, linear, pace.

Most people die by 100, and certainly for this discussion, we could say 99% of the population born in 1930 will be dead by 2030. So I had a tiny chance of living to 100 if I were born in 1930 and now a baby born today has an 8 times chance, which still seems like quite a small number. We also know it is twice as likely as that person’s parents, say born in 1950 of whom most will also be dead by 2050.

Let’s be generous: 1% of the population lives to 100 born in 1930, now 8% of the population will live to 100. Is that what they are saying? But it also says that boys have a 25% chance of having a 100th birthday, while girls have a 33% chance. Are they saying that of 100 boys, 25 ‘may live to 100′, and and is that broadly equivalent to an 8 times improvement over their grandparents? Hmmm.

So how many boys born today will live to 100? And how many girls? Answers need to take account of the probabilities, so we also need to know if the various statistics in the quote above are compatible with each other or are they inconsistent? Do you think an average person would understand the article? (By the way, we know that doctors often misunderstand what statistics like this mean when referring to the likelihood or not that people may or may not acquire a particular disease or condition, so if that is true, what are the chances for the rest of us: 1 in 50…..?)

Post your answers.

QED, I think.

A French Entrepreneur?

A paper by academics Nadine Levratto and Evelyne Serverin, “Become Independent! The Paradoxical Constraints of France’s Autoentrepreneur Regime” (available here) shows the failure of this programme to generate entrepreneurial behaviours.

What went wrong, and why should other member states not copy France?

Since January 2009, when the autoentrepreneur category of working was first introduced, over 550,000 people have registered. They system differs from the also complex Regime Reel in France by taxing autoentrepeneurs on gross turnover (up to the allowed ceiling of €32100, at the rate of between 12 and 21.3%) rather than on revenue (turnover less expenses). People in this category discharge all their taxes by paying this amount, but do not get to claim expenses and do not need to do VAT accounting. In France, the very high national debt is driving lawmakers toward a regime that is levying the regressive social charges on everything from the first euro (!); this is evidence more of desperation than leadership — that entrepreneurs have been captured by this is not surprising.

Almost 50% of autoentrepreneurs in France had an annual turnover of zero, while 15% had a turnover of less than €1000. Only 500 autoentrepreneurs exceeded the upper threshold.

This regime fails because it is not about being entrepreneurial, but about collecting tax and creating bureaucratic barriers to success: more specifically:

• autoentreprenurs can’t hire anyone — the authors speak of them as ‘lonesome’, working out their entrepreneurial dream on their own, forbidden to collaborate with others, even hire an assistant
• they can’t recycle capital to build the business as it taxed away at the turnover level as there is no recognition of the extraordinary expenses of business startups
• because of the structure of business, they are a bad risk for banks to lend to
• two autoentpreneurs can’t collaborate as tax authorities would view them as a company
• there is an excessive concern for employment law and insufficient understanding that entrepreneurial behaviours are not about being secure, but about risk, and therefore has little to do with employment law itself.

There should be no surprise that the system failed and people outside France can say simply on this basis, and with some justification, that the French don’t have a word for ‘entrepreneur’ as clearly they don’t seem to understand what the word means. Indeed, the authors note that the programme has been such a dismal failure, that the French government is rebranding it as better for second incomes, than entrepreneurialism.

What we need is an analysis of these failing efforts at entrepreneurialism by member states, certainly as a warning to others, but more importantly to establish a general understanding of how entrepreneurialism should be treated within member states from the perspective of taxation and law.

If I were forum-shopping for a member state to pursue my entrepreneurial dreams, I would be looking for a country with light-touch taxation, and flexible employment rules.  Start-ups have real problems with cash flow and locking them into high social charges and rigid employment laws is counterproductive.

What is worrying is that other member states, according the authors, have copied this regime: Portugal (recibos verdes) and Poland (samozatrudnierie). Others may be thinking about it. We should all be very afraid of this.

If you are entrepreneurial or have experience in specific member states, please email or comment. Which do you think is the best country in Europe to start a business or be entrepreneurial?

But who will notice?

“Linda Sanders, director of social care at Hillingdon, accepted that Steven and his father had been let down by collective errors of judgment.” [from the UK Telegraph]

There is a court in the UK that belies belief that such an authoritarian and secretive judicial entity could exist in a democracy. Away from public scrutiny, legal injustices occur in the name of protecting the interests of vulnerable people. Maybe.

But what this particular case indicates, and the quote is not the whole story, is that vulnerable people can be held essentially captive (the court ruled that his human rights had been violated and he had been ‘unlawfully detained’). It is further evidence that vulnerability and disability lead to a net diminution of an individual’s rights. I worked on the legal rights of disabled people at the beginning of my career, cataloguing one of the first directories of how officialdom removes rights from individuals through a systematic and bureaucratic process, sanctioned by law, and in this case enforced by all the power of the state.

What is worrying is the director’s comment that it was ‘collective errors of judgment’.  This is grovelling code for ‘group think‘.

Group Think is a deadly force that infects organisations, and allows bad things to happen because people fail to challenge injustices, go along with the crowd, or ignore their ethical and moral compass.

Collective errors of judgment are not accidents of nature either. They arise from systemic elements in organisational design and structure, reinforced by leaders that see dissent as evidence that someone is not a team-player, where deep ethical issues are viewed as interesting but not relevant to the task at hand. It emerges when no-one looks at a situation as a whole, and asks what is going on here, and why. The old adage, would you like to see your decisions on the front page of the newspaper, on Facebook or Twitter, apply.

It is hard not to blame the culture and management of social care organisations, as this is not the first case where there is evidence of systemic failure. It revolves around how organisations form opinions about the care needs of individuals, how individuals (not collectives) arrive at those decisions and in what way, how they discourage alternative perspectives, and fail to change their views when confronted with new evidence, evidence to the contrary, or as in this case, a clear challenge to their authority. A patronising organisational response no doubt prevailed.

Group think also infects decision-making in any organisation where actions are based on an hypothesis about what needs to be done, and from which various actions flow. Getting that initial starting point wrong, means actions flowing from it are wrong. This is not a collective error of judgment, it is evidence of deep failure of decision-making processes. Other social organisations work in this way.

The way forward includes directors of social work not blaming some vague collective, but examining how decisions are made, how challenges to decisions are received and their attitude to dissent. A clue is here: an organisations that describes itself as a ‘family’ is likely authoritarian. Family language means dissent is suppressed within an organisational type that is either matriarchal or patriarchal in form.  And you know what it means to disagree with your parents.

Is this a sign on the European innovation road?

The World Economic Forum meeting in Vienna this week will be grappling with the challenging problem of European innovation. The evidence is suggesting that rather than leading the world, Europe is worryingly backsliding. Worse, of course, is the public rhetoric is not backed up by actual real-world action by governments, who persist in the old ways. This has produced the current complex mix of disincentives for risk-takers with governments fearful of the disruptive impact of innovation on European preferences (ranging from employment to lifestyle), coupled with frequently ineffective and unreformed public sector organisations. This has been admirably addressed, too, in the WEF report on the future of government.

Rather than FAST government (flatter, agile, streamlined, tech-enabled) as the WEF calls for, we find hierarchical and bureaucratic, slow and sluggish, complex and unreformed, tech-naive government — these are hardly attributes needed if the public sector is to play a role in public/private partnerships to drive forward innovation. Our innovation culture instead gets:

• social costs that burden small and medium businesses with a disproportionate share of social costs, which kill off risk takers because they can’t even afford the first day of business; this includes unreasonable start-up capital requirements (1€ should be enough), pointless company start up procedures, wrong-head bankruptcy laws, and inflexible employment laws;
• unreformed central governments, which absorb productive capacity , require very high levels of tax funding to support, and which generate administrative and regulatory red-tape to little end other than to control;
• public ownership of intellectual property as the default position for publicly funded research, coupled with the poor commercialisation record of state-owned research infrastructure, leading to hoarding of innovations within bureaucracies, and not accessible to risk-takers;
• weak academic performance amongst the universities, with little competitive forces within academe to encourage researchers to move outside the university to become entrepreneurs, or to work with investors to generate new ventures, as it frequently jeopardises public sector employment contracts as in many countries academics are civil servants (that is itself is undesirable) — there are very few world-class European universities, based on recent global rankings.

I have some experience here, and while governments value stability in their civil services, what they often get instead is classic ‘rent-seeking’ behaviour, whereby civil servants seek to monopolise whole areas of the economy, ranging from failing to control regulatory creep, to governments having all sorts of pre-emptions rights over private arrangements. This latter point is particularly concerning when it comes to pre-emption rights over intellectual property created with public funds — as the Commission has noted, Europe badly needs its equivalent of the US’s Bayh-Dole Act.

I put my money in a few areas, not just because I know a little about them, but because they have the benefit of driving wider benefits — they act like breeders for other innovations, as well as magnets for innovations developed in other areas:

• health technologies, including life sciences, devices, new materials, nano-tech, imaging, remote monitoring;
• information technologies, including the internet (many governments are fearful of the disruptive influence of the internet);
• new media as the convergence of technological delivery systems (potentially disruptive and problematic when the state is an owner of media).

There are no thousand kilo gorillas in Europe because Europe’s governments have become authoritarians that fear disruptive innovation that may challenge deeply held beliefs and challenge the European model. This is the type of pride that goes before a fall.  So, action is needed in at least four areas:

• liberating the investment climate to encourage a higher tolerance of risk and acceptance that higher risks should lead to higher rewards, which has implications for taxation, capital gains/losses and bankruptcy;
• liberating labour markets, to incentivise business to create experimental forms of employment, whereby firms in acknowledged startup situations can have greater flexibility retaining and rewarding staff without being confronted with first euro social costs and minimum wage regimes;
• understanding the tremendously heavy burden unreformed government and excessively zealous taxation has on entrepreneurs and the need to liberate the entrepreneurial system from official structures as much as possible; this also means that government needs to understand what it can and should do (and of course what it shouldn’t do);
• placing publicly funded intellectual property on the open market — I would suggest even creating an auction market for publicly funded IP.

The European Innovation Road is not a paved autobahn; it is full of holes, and in some places just goes over a cliff, but it has the potential to be a superhighway if we get the fundamentals right.

Uncertainty can never be removed from the innovation process. We shouldn’t act as though it can.

Want to know more?

Just searching on the internet will produce an avalanche of information. Regretfully, much academic research is still published in journals that are not open access which means accessing them requires either a subscription or the payment of a fee, despite the vast majority of this work having been publicly funded. These articles are not listed. However, authors of papers who would like to have their papers listed here, and provide a pdf for download are encouraged to provide a paper for listing here.

Also consider:

Martin Fransman, The New ICT Ecosystem: implications for Europe (Kokoro, 2007) presents a thoughful policy framework.

Anything by Annalee Saxenian, but her The New Argonauts: regional advantage in a global economy (Harvard 2006) is worth reading in the context of European regional development.

Josh Lerner, Boulevard of Broken Dreams: why public efforts to boost entrepreneurialism have venture capital have failed, and what to do about it (Princeton, 2009) offers a research-based critique of the role of government and why for every dollar/euro/pound government puts into commercialisation of research, the private sector takes one out.

The new report from NESTA, Atlantic Drift [here] is worth reading for its US/UK investment comparisons with important insights for other countries.  It is authored by Josh Lerner, Yannis Pierrakis, Liam Collins and Albert Bravo Biosca.

Lawton Burns, The Business of Healthcare Innovation (Cambridge, 2005), explains important innovation drivers in healthcare, which offers some thoughts on how Europe can succeed here, despite widespread government control of healthcare systems. It is worth noting that virtually all EU countries and their regions have prioritised biotechnology/healthcare/life sciences in at least their top 5 areas.

Outpost on the Digital Maginot Line: doomed to fail

As has been noted by other commentators, the French government has a problem with the internet, and endeavours to stave off its impact with ill-timed, and ill-thought out regulation. Of course, as a national government, they can try to build a digital Maginot line around France; they’re always doing that and as Santayana said, having failed to learn from history, they persist in repeating it.

One can only hope that such efforts will not be copied by other governments and certainly be given short shrift at the European level.

History shows that efforts to build up walls such as these are doomed to failure. Brute force, smarter opponents, and new technologies prevail in the end. France, regretfully, seems to prefer to hide behind its social-cultural rhethoric rather than deal with the opportunities that the internet offers, by fearing it more than understanding it.

The internet is not just a telecommunications novelty to send emails, view your vacation pictures, or keep in touch with friends. It is has become a digital glue that binds communities and nations together in a way that international treaties have failed. It could be seen as the ultimate success of the internationalisation of societies in a way that brings with it greater understanding and peace. Indeed, why do autocratic governments, usually just before they collapse, try to shut down the internet, for it, like the photocopier in what was the Soviet Union, represents all that they fear: openness, liberty.

Efforts to counter this new technological force of nature are at root authoritarian. They say the government in power knows better than individuals. Francis Bacon wrote in 1597, “knowledge is power” [Meditationes Sacrae], certainly not anticipating the internet, but deeply understanding that control of knowledge (or information as we think of things today) gave those who controlled it power. From this come cartels, censorship, autocratic governments, and authoritarian regulation from fearful democracies.

The former US Supreme Court justice, Louis Brandeis, is famous for saying that “sunlight is the best disinfectant”, and today the internet is the best disinfectant there is, for it is revealing where injustice lies, and uncovering official hypocracies. It is laying bare the landscape of opportunities for all, and not just a privileged few.

But some fear this for it also reveals where the internet challenges past comforts, vested interests, and the quiet whisper in the ear.

And so this digital maginot line that some countries are trying to build will fail, and fail for all the right reasons, as we don’t live in that kind of world anymore, and governments, both national and at the EU level need to grasp that as the internet changes everything, it also changes the very logic we use when we govern.

In a frictionless internet I can eliminate fr, .de, .uk, even .eu, with a mouse click, erase them from my universe more thoroughly than the thundering barbarian hoards.

Or I can make them the centre of my world.

Group Think

I was watching the Public Accounts Committee on 23 May 2011 take evidence from IT suppliers and NHS executives on the NHS IT contracts. This monstrous contract was doomed from the start, yet few seemed to be in a position of influence to alter the ‘group think’ that prevailed in government. Civil servants and ministers seemed to breath each other’s air as they pursued this pig in a poke. Worringly, the PAC exchanges shed a bit of light but more revealing was the lack of common language amongst those concerned. Frequently, answers were not relevant to the question, used jargon or introduced further obfuscation.

In the end, whether supplier or NHS exec, the PAC was faced with a sea of denial, avoidance, or sheer hubris. I say hubris as NHS executives in particular were at pains to avoid rocking their own boat by being completely candid about things, preferring warm phrases that all was well, despite the CEO of the NHS being unable to answer many questions clearly, and seemed painfully ill-informed of his brief.

Evidence of obfuscation abounded as the MPs had to ask suppliers many times to answer with yes/no to what were straightforward questions. I was impressed with the efforts of some MPs (Bacon in particular) to get clear answers to important questions.  As a rule, complex answers betray a lack of understanding of the underlying logic — there are simple answers to these questions, not ‘it depends’ or ‘you’re comparing apples and oranges, pears’; indeed, at one point, the sessions seemed more about the comparative merits of different fruits than IT procurement. As well, the lack of clarity of underlying logic also evidences people were unable to agree on what the core problems were.  Now, granted for some this is likely to be a complex problem (in the technical sense of the word, a wicked problem), but I doubt that — the NHS’s needs and responsibilities are complex, but an electronic health record is a thing, with a defined functionality.

I remember sitting in a room just as this NHS IT for heatlhwas being firmed up (2002), and hearing the Director (Granger) at the time speak glowingly of the benefits. Upon hearing this, others in the international teleconference asked, “surely you’re not serious about doing this”, to be told, “absolutely”. As is said, act in haste, repent at leisure.

An important question was, knowing what we know today, was the original decision to proceed with this central and top-down approach sensible? The answers were evasive and broadly technically wrong. In 2002, it was perfectly possible to develop distributed systems, with broadly distributed functionality using various systems integration options to enable diverse technical architectures to co-exist to deliver uniform service. No one wanted to think that way for a couple of reasons. The first is ego: grand plans appeal to people’s ego needs, to be in charge of something big. The Director at the time exhibited serious Machiavellian behaviours, and failed miserably to engage users.  The second is conceptual: at the time, Department of Health and NHS executives were still thinking the NHS was a single lumpen thing that needed single solutions to its complex problems. In the early 2000s and late 1990s, that the NHS should be seen as a complex adaptive system was understood, but not acknowledged as it flew in the face of prevailing ideology about central control, driven by the mistaken (technical) belief that a distributed system, while diverse and pluralistic, would be unable to deliver a common standard of performance.

In the end, you end up with a system that is rigid, technically obsolete as soon as it starts operating and because it fails to evolve with changing clinical needs, which will change as clinicians become familiar with the technology and comfortable with its use, and start to specify more sophisticated applications. That some PAC evidence said that clinician need had evolved is nonsense — we know then that these were the core needs. Anyway, we’re moving on to smartphone apps, and there is little evidence that the system can accommodate the wireless world of healthcare. The best selling clinical app is ePocrates, for drug information. How many clinicians have that app? How many clinicians are using smartphones? Distributed and simple systems can deliver often quite complex solutions; for instance, the Danish electronic prescribing system was built on simple secure emails.

The approach that was ignored at the time was this:

1. specify common standards of interconnectivity and functionality, that is results;
2. allow providers to use whatever system they wished as long as it met these requirements;
3. allow the system to evolve over time as needs become better understood;
4. start with the patients who are heavy users (high risk/high utilisation) and roll out from there.

That’s it.

Where the English NHS and Department also lost the plot was failing to exploit the NHS IT project to drive innovation into the IT sector to encourage the formation of a potentially world-class health IT industry in the UK. Is it any coincidence that the main solutions are from outside the UK and the critical supplier expertise betrayed North American origins?

This is a real shame, as once again the Department has shown antipathy toward enabling a commercially successful and innovative health supplier industry, in favour of mean-spirited control. This was perhaps the greatest missed opportunity, as instead, the Department came up with false logic of needing suppliers of scale (who are now quasi-monopolists).  Indeed, one member of the PAC did question whether CSC’s corporate logic was to make itself a monopoly supplier to the NHS.

The tragedy, too, is that virtually all the functionality that the NHS needs can be downloaded for free in the form of open source software.

Finally, the best thing the NHS and the Department could do is make sure all that intellectual property that has accumulated is given away, to try again to jump-start a health IT industry. If there is a value-for-money lesson the PAC could draw it is to determine whether there is sufficient residual value in the NHS IT procurement to be translated into investment in the economy, to build new suppliers to the NHS and perhaps the world. An opportunity awaits.

UPDATE

I thought I’d add reference to this diagram on distributed clinical systems. The copyright dates from 2002, a time when the PAC was told such capability didn’t exist. The diagram is taken from the OpenEHR website, which adds “Much of the current openEHR thinking on distributed computing environments in health is based on the excellent previous works of the (then) OMG Corbamed taskforce, and the Distributed Healthcare Environment (DHE) work done in Europe in EU-funded projects such as RICHE and EDITH, and the HANSA and PICNIC implementation projects.”  In those days, the UK’s NHS was still charting a proprietary, and non-standard, approach to EHRs and clinical systems; an example of one failed programme is the ‘common basic specification’ — there is an interesting commentary here on some reasons why it failed.

Diagram of a distributed clinical system, ca 2002

As in pool, health policy is full of uncertainty -- get used to it.

I disagree with Chris Ham (CEO of the King’s Fund) that the ‘arm wrestling’ within the coalition is bad for the NHS (see here) Chris seems to believe it is better to have public agreement, and private disagreement, than the debate being played out in public for all to see.

The Coalition is made up of parties with different ideologies, though both should be broadly libertarian and their default political posture should favour citizen empowerment.  What Chris, and others apparently are missing is the comfortable fit of public policy and top-down policy-making, something neither Conservatives nor Liberals should favour, if, and I emphasise IF, they are true to their ideologies. But NHS thinking has generally been authoritarian, top-down and favouring a default logic of state mandated reform, rather than bottom-up reform. That this comfort zone is being sought causes me great discomfort. Perhaps, too, they miss being paid attention to, as Coalition politics does derive more sustenance from the public sphere, than majoritarian politics.

If, as Chris asserts, it is causing health professionals to be anxious or that it is stopping people from doing their jobs, then the problem lies with the NHS not the political debate. Having spent time in hospital management, while we may have had our anxieties with public policy, it never stopped us from getting on with the business of running a hospital.  If this is in fact true, though, then the public should be far more concerned with the ability of the NHS to deliver a service than it might already be, and far more concerned with that than a lack of political consensus within a Coalition government — where differences of opinion should be expected, not supressed.

The real public policy challenge of the current debate is less about the elements of reform than the mode of its presentation — regretfully, the Coalition appears to be buying off the vested interest groups and forgotten about the long-suffering patient and health consumer for whom the system exists in the first place.

These reforms are minor compared to the really urgent priority of ensuring that financial discipline exists within the system, that it is responsive and innovative, and can in fact reform itself from within — what is called emergent reform, quite natural in complex adaptive systems, but not familiar to people who when push comes to shove prefer the comfort of authoritarian policy.

Unsurprisingly, as you move closer to government, one finds increasing policy authoritarianism. I should blog a bit about how policy options are suppresed within government, how policy consultation processes selectively filter options out that are probably the best solutions, and how the upward accountability of civil servants to ministers often fails to pass the test of ‘speaking truth to power’.  And this is not to ignore the behaviour of ministers to ignore the advice of civil servants, and to prefer to take their options from the public space, something that can upset overly academic policy groups and think tanks, who live and die by the press they get.

I doubt there will ever be a time when there will be a consensus on health policy. Differences actually matter in policy and are evidence of opportunities for reform itself.

The pluralism that the NHS so badly needs, to replace the one-size-fits-all mentality, should be the direction of travel.

The Political Arena

The NHS Confederation wants it all to stop, according to journalist reporting in the press (for example, here).

Over the years, there has always been this fear of the words NHS and political football being in the same sentence. Perhaps the better approach for both the government and the NHS would be for the NHS to more explicitly engage in the political debate.

Mike Farrar, the new head of the NHS Confederation (which seems to have its own problems), says that the system is a democracy. Yes, but what does that mean? It should mean empowered to participate in the machinery of democracy and political debate, and not just take orders.

By explictly engaging in the political debate, NHS actors would widen the marketplace in ideas that the political space needs to chart the future direction for the NHS. This would create greater political space between the NHS (whatever that actually means these days), the civil servants in the Department of Health, and the political machinery of government. At least at a public level, NHS actors have avoided the political dimension, thinking it a better strategy not to become ensnared in the politics. But of course, their political debates are more likely to be argued through responses to government consultation documents, presentations to the Health Commmittee, exchanges at professional conferences (but this is frequently a one-way dialogue), and closed door meetings. They are all generally well-behaved, articulate and ineffective, but importantly not engaging citizen preferences.

This stance may be past it usefulness, especially if the providers of care are supposed to really engage with their local communities.

The purchasing side of the equation is equally fraught with avoidance of too much public engagement and as a consequence, purchasers (I do like that word), seem destined for provider capture, and the protection of legacy provision (mainly to avoid any hint of private sector participation). Hardly a reform agenda. The new Agences Regionales de Sante in France may actually show how this should be done, but again that is another story. Major reform is not just a UK thing.

Providers have weak public affairs capabilities, little political nous, and less ability to galvanise public understanding of the options facing providers. They, too, may be subject to capture by their own professional staff, so disruptive changes are avoided to keep the peace.  Foundation Trusts may not exercise their autonomy well, perhaps discomfited with the notion of too much autonomy generating an unfavourable press.

Anyway, one benefit of greater engagement in the political arena would be to shift the logic internally from the NHS being a policy-taker, waiting for the politicians to decide what to do, to becoming a more active participant in the marketplace of ideas for the healthcare, in effect a policy-giver. As such, the NHS, taken together, has virtually no political capacity, no capacity to develop structural options, no formal relationship with the public to seek their views on this or that.

All this has been handled by the Department of Health which sets the tone for the political debate and defines what is and isn’t in the frame from a reform perspective. This serves the Department just fine, as it furthers the role of the Department of Health as being responsible for the publicly funded health system, which is not a bad thing given how much public money it consumes. But it also means that the Department is the only one framing the political debate, and that is not particularly good for democracy. And not all political positions need to be played out in the Commons, but can be debated vigourously in the real world as NHS organisations drive forward changes. Keeping NHS organisations on a short lead only means more work for the Department of Health, but less value being derived from all the people running hospitals and clinics.  It is time to replace notions of the NHS as a single ‘thing’, like supertanker which takes forever to change, with the concept of a school of fish, which can change direction really easily and quickly.  See my blog post on distributed systems in health care here.

But arguments are what they get because the object of their affections has weak autonomous and collective decision-making structures, and a cognitive capacity to engage in the arena of ideas except through special interest groups such as the health professions or Royal Colleges, or the Confed. These do not represent the interests of the provider side of the NHS, but only their interpretation of these interests through their own lens on the NHS.

The Confed is not sufficiently robust to act in a political capacity in this arena despite publishing various position papers and having a lobby office in Brussels (funded I believe in part by the soon to depart Strategic Health Authorities), and attracting high-profile people, all of which are worthy.  But the Confed is shot through with conflict of interest problems and may not be certain what its role is — time will tell.

Mr Farrar speaks in this article of a ‘public interest test’, for example. Well, the challenge for NHS structures is simply to introduce it as a matter of managerial autonomy and good practice. If it is such a good idea, why wait for the government to make up its mind. With all the smart people supposedly thinking grand thoughts about the future of the NHS, would it be too much to expect someone to be courageous enough simply to get on with putting these ideas into practice, to test them out.

It would also nicely balance the political realm, as the NHS actors would be demonstrating their ability to get on their job of managing the healthcare system with innovative approaches, without legislative intervention.

The problem as always is courage.

A Department of Health contract with a private provider of healthcare

The Bureau for Investigative Journalism reports that £500 million was spent on private health clinics in the NHS that in their view represents poor value for money. No doubt commentators will point to the private aspects of these contracts as evidence that they failed. A few comments on their Report:

1. The contracts were pre-paid block contracts, and in most cases the complement of procedures paid for were not used. Now whose fault is that? In the same way as hospitals do not go around soliciting business from GPs, these clinics need referrals. The question in my mind is was there so much capacity that the pre-paid procedures weren’t needed? How many patients did not get treated because of a failure to use these contracts? Of course the same thing can happen in the NHS, just people don’t see it as quite the same waste of money as when private contractors are involved. But they are the same.
2. That the Department of Health is buying them back is the Department’s problem, which the taxpayer has to deal with. I’m not sure what the point of buying them is, especially since they will close and their treatment capacity lost to the doctors. Is there that much excess capacity in the NHS that they can take out that much capacity? The Report doesn’t clarify what is actually going to happen next. I don’t disagree with them about this being a poor use of money, but the decision to remove these facilities from available capacity is a bad decision, regardless of who runs them. The firms running them have excellent clinical performance track records in the main.
3. The original contracts were commercially naive. But the UK’s NHS has a very poor track record with commercial suppliers, and so to get anyone interested at a time when there were serious shortages of capacity (and still are of course), they had to underwrite some of the risk. Of course, what might be thought of NHS facilities such as Foundation Trusts are increasingly not publicly owned as such but owned by the organisations that run them, and there are similar contracts with them. (GP premises are also private) Keep in mind, too, that pre-paid block contracts are an acknowledged (but poor) way for buying hospital services, so NHS facilities have also benefited from this — but just to be clear, many NHS facilities over-provide on these contracts, run out of money, usually 9 months into the contracts, then have to pull back in the last quarter. With payments based actual activity, you pay for what you buy, which explains in part why NHS facilities are running out of money — they cost more to run than the activity they are providing based on the income they derive from that activity. Nothing to do with being a public or private organisation, but a lot to do with how contracts are structured and of course how the hospital is managed. One hopes that more sophisticated contracting will emerge.
4. NHS contracts are generally risk-free, that’s why there is the current fuss over competition in the NHS, as it would introduce risk. If risk were introduced, it would naturally level the playing field for private providers. But with risk-free public contracts, all the private providers wanted was the same contract conditions as NHS providers. The sensitivies around this, though, tend to favour a default assumption that the publicly owned, if that is strictly true anymore, institutions are better value-for-money than the private ones, when it comes to clinical activity.

This Report focuses on the expenditure of money without asking the next level of questions which go the heart of how and why money gets wasted in healthcare and why the NHS has so much difficulty with its contracts (let’s not get started on NPfIT).

But the Report is useful by illuminating the financial consequences of poor commercial decisions within the Department and the NHS. I just wonder whether there has been any learning as a result.

Something autocratic leaders don't understand

Another day, another perspective. The Guardian reports that another member of the select few advising the PM, Cameron, on health reform has been a bit off-message. It just goes to show that the people who held positions of power and authority in and around the NHS, when removed from that public duty, may just hold somewhat different views from they professed to hold. Did Mark Britnell think this way when we worked in the public sector? If so, why so silent?

Of course, part of the problem is the general lack of alternative perspectives within the NHS and the Department of Health, driven by the need to maintain a tight control on dissent (bad for decision-making). There is a somewhat natural and regretable tendency that when governments get into trouble, they behave like authoritarians, meaning they move to suppress dissent. Of course, the result is that they also legislate, or act in haste, and then repent at leisure, often courtesy of the courts, as decisions are progressively unpicked.

Britnell said things to please his audience, hardly unguarded, but certainly counched in language familar to Americans. Having chaired a conference on how to export American healthcare expertise to Europe, it is easy to get drawn into thinking that all things are possible when talking with Americans, something that folks familiar with the NHS would find seductive for its novelty.

Let’s look at what Britnell might have meant. There is nothing strange for the NHS to be a state insurer, since that is what it in effect is. Why were the premiums called ‘National Insurance’ anyway. The term insurance is also more easily understood in the US, and it more familar to those within the EU, as well. Perhaps the problem lies more in these shores, at not understanding the need to ‘translate’ language so people in fact can understand you. But then fog in channel, England cut off.

The NHS is highly politically polarising in the US; it is associated with rationing, queuing, and at least to many on one health discussion group, poor clinical outcomes. So the evidence, from the US side, is the NHS is not something to copy. The Canadian system is also highly politically polarising. Neither system particularly fascinates Amercians anymore, they are much more interested in the Netherlands. So it is with some courage that Britnell talked about the NHS in the first place — into the lion’s den and all that.

Would it be such a bad thing for the health system to thought more like an insurance system? Probably not. There is some evidence, controversial to some, that Bismarckian systems (i.e. insurance-based health systems), are more productive, easier to incentivise and provide better care than Beveridgean (i.e. the NHS, tax funded) systems, which are seen as better at managing costs. When Bismarckian systems get into financial trouble, they adopt centralised or other control systems familar to tax funded systems (cue recent reforms in France or Germany), while tax funded systems when they need to improve outcomes, shift toward insurance-type approaches, cue managed care, co-payments, clinical carve-outs (disease or medicines management) and so on.

The one big issue, hospital autonomy, or state ownership, is largely a non-starter if you really think about it. There is really no need for the public sector to own the means of production (i.e. the organisations that delivery health services), unless one is an unreformed Marxist. The NHS is probably better thought of as a guarantor of quality, access, and the purchaser of the care itself, something more akin to what proactive insurers should be doing. What appears to be interesting results from the last decades of reform is that public ownership of hospitals apparently concealed poor management, weak financial controls, convoluted clinical workflow, all of which led to poor productivity and value-for-money. These types of problems are not fixed by simply throwing more public money at them, but by changing the way they operate, the incentives that drive organisational behaviour. If you want to reduce emergency 7-day readmission rates (where most of the problems really lie, not at 30 days), some disincentives are appropriate, otherwise people don’t pay attention. A type of tough love.

One good thing is there is some possibility that this closet advisory group may not be breathing each other’s air, and that some original thinking may actually be taking place. However, I remain doubtful, since the people involved built their reputations within the very system they are now being asked to reflect upon. If they were that good at thinking this way, why weren’t they doing it before? Perhaps they were too obediant and on-message.

Regretfully, this mantra appears to be more important than the problem of NHS reform.

Better this than trying something new

Steve Field was asked to lead the collective rethink by another group of vested interests of proposed NHS reform.  He apparently thinks, according to the Guardian, that the English NHS reforms are not workable. Apart from the rather pointless delay in getting on with reform, in the patient’s interest, rather than the interest of providers, he overstates the challenges faced by competition.

There is a general fear of what is called ‘creative destruction’ being applied to public institutions. But governments for years (think back to Thatcher, Blair) have tried to reform Whitehall, trim the scale of the public sector, and bring needed new thinking — the New Synthesis project is one example of people trying to rethink the public domain. Most of the changes in the NHS over the past two decades have been clearly in this direction, but regretfully, the Coalition failed to signal that they were tidying things up — who suggested all this needed primary legislation anyway as the SoS has enough power to do this anyway.  The push-back from entrenched public institutions can be unnerving to governments, in particular Coalitions, who need to keep their political dance partners happy.

So what to make of the comments in this interview:

1. Head to head competition is unlikely across the bulk of England as integrated Foundation Trusts tend to be the sole and dominant provider in their areas. Major cities are the exception and the high operating costs, difficulty accessing services, and duplication of services is something that needs to be dealt with through targetted commissioning. Failure to do the hard bits will simply drive costs further skyward, and reward failure.
2. There already is competition with the private hospitals, but they have their own interests, and launching a major assault on the NHS would be largely pointless — their customers are NHS consultants who provide their services to people who have taken out private insurance in order to opt-out of the NHS.
3. So-called cherry picking is not a bad thing — aggregating similar cases in specialist units is clinically sensible as it produces better outcomes. Now why has the NHS resisted this sort of service rationalisation? If NHS providers are unable to sort out their clinical priorities they why shouldn’t a new entrant offer this service if they can do it better? I reviewed two hospitals once that duplicated services, and seemed unable to provide a single service between them. Outcomes weren’t good either.
4. The ‘rules’ the Department of Health works with have rigged the market anyway in favour of incumbent NHS providers, whether they are providing a high quality service or not. There is real fear here in Government, but the patients’ priorities for a high quality service they can value may be more important than ideological considerations.  Perhaps we have to wait for the Facebook generation to start consuming health services for the mandarins to ‘get it’.
5. Unbundling hospitals is something that can be done, but understanding the complex interaction of hospital-based services also needs to take account of the general shift toward out-patient services and increased focus on primary care, meaning hospitals aren’t going out of business soon, anyway. Field is right to point to shroud-waving, but misses the point that it was this shroud-waving that caused the panic in the Coalition.
6. He uses the term ‘free market’ when in fact it won’t be, it will be a regulated market as there are very few free markets anyway (including in the US where there isn’t really a free market in their largely publicly/federally funded system of not-for-profits and loss-making hospital chains — try getting care from an HMO that you aren’t a member of).  The only existing health market regulator in the Netherlands seems to be managing just fine.
7. Other countries have forms of competition between hospitals (France, Germany, Netherlands, Belgium, Spain, golly, this list could go on and on) and their systems haven’t crashed into some incomprensible quagmire of service chaos. Field overstates the problems, but it may betray some degree of fear that competition will unearth further underlying challenges that provider managers may be ill-equiped to deal with. There are some incredibly well-run hospitals in countries like the Netherlands, France, Switerland, Sweden, Belgium, not to ignore some of the best US hospitals but training in hospital management in the UK is not to world standards.
8. That some NHS hospitals are badly run seems apparent, and something needs to be done about that, so removing motivation for an executive focus on financial and service performance seems a bad idea, at least to those who would be faced with the job of actually managing a hospital, and not just taking up office space.
9. You don’t go out to tender for a trauma centre, as you need a catchment population in the millions to justify the necessary skills. Commissioners who don’t understand this shouldn’t be allowed anywhere near the NHS.
10. There are examples where novel solutions to challenges have been inspired, my favourite being the establishment of five world-class academic health science centres; all we need now is for them to assume a leadership role in driving excellence in management and patient care through the wider system.

I find it interesting that those who have the greatest stake in maintaining the status quo are those who are leading the listening exercise; why didn’t the Department of Health select perhaps an international panel or empanel a group of people with alternative perspectives? The vested interests run deep in the corridors of power.

As for some of the pending conclusions:

1. no problem reserving a spot for nurses, but what about pharmacists, occupational therapists, and a host of others? Oh dear, patients and users?
2. why hospital doctors on commissioning bodies; aren’t they part of the system that most would keep services in hospitals. There is serious risk of provider capture here. Including them because they might feel alienated is plain silly. The most alienated part of the NHS is the patient.
3. inclusiveness is running mad here, and would make any ‘clinical cabinets’ virtually unworkable — when will they all have their group hug? I think it will just make work for consultants in organisational dynamics, who will be needed to help develop them, and keep them from constant bickering. The NHS spends too much time worrying about emotional intelligence of managers and whether their leaders are getting enough cheese. The proof is in the pudding and the leaders aren’t leading.
4. GPs can acquire skills to commission anything they like, and to say otherwise is insulting and perhaps other words might be more applicable.  This is a lame excuse, otherwise we would never get anybody doing anything because one could always argue that they don’t know what they are doing and someone else could do a better job. The NHS Commissioning Board isn’t needed; it is just the continuing felt need for ‘national’ bodies and will hoard expertise that should be distributed around the system, to avoid the problem Field thinks exists.
5. I doubt plans to reform medical or other professional education will be affected. This the job of the universities anyway, and they should get on with the job regardless. If that were true, then the NHS has colonised the education field inappropriately.
6. The levy on private hospitals is unworkable. Half of nutritionists don’t work in the NHS — should Waitrose pay for the nutritionists they employ, should self-employed physiotherapists reimburse the NHS, and what about the 25% of nurses that work in the private sector.

What is clear is that listening exercise has beneficially galvanised those who didn’t have a problem with reforms to point out that this is now delaying essential service innovation — not the NHS innovates at the drop of a hat! France recently reformed its system. Anyone notice. Quick and likely to be quite effective.

I look forward to their final report, to see what changes I need to make in my comments above.

If only it were that simple!

The current debate in the UK, specifically England, on reforms of the publicly funded health service have raised the red-flag of privatisation. Hostility has centred in the main on private firms offering health services and the scope and meaning of ‘any willing provider’.  Signals from politicians are confusing given they are walzing back and forth across the dancefloor depending on criticisms. Indeed, there appears to be some risk that dance partners may change, as the Lambs, for instance, change sides to avoid slaughter in the arena of public opinion. Such self-interested face-saving aside, is there an issue to answer here?

Article 106(2) TFEU as a general interest exception: which involves invoking public interest grounds, specifically, “undertakings entrusted with the operation of services of general economic interest … shall be subject to the rules contained in this Treaty … in so far as they application of such rules does not obstruct the performance … of the particular task assigned to them. The development of trade must not be affected to such an extent as would be contrary to the needs of the Community.” [Community here referring the EU, not the local community.]

In operationalising competition arrangements, the EU approach is built on simple foundations, of equal treatment, and that firms given special treatment cannot also be protected through public measures which favour them.  There has always been some debate about public monopolies and what has been called ‘emanations of the state’, and through it all a recognition that state organisations are deemed to have a dominant position that they cannot abuse — perhaps more importantly, state organisations delivering a service cannot be protected by the government engaging in abusive market practices simply to protect them. It is certainly an abuse for a government to create a monopoly that cannot deliver the services required.

From an EU perspective, can states create a monopoly situation simply because they want to avoid competition in a particular area of the economy? Well, presumably yes, if it is of general economic interest, and if the prohibition of competition is necessary for the resulting bodies to do their job.

The ‘get-out’ clause is whether restriction on competition is necessary for the NHS to do its job. What is the job of the NHS?

If it is to procure health services from any “qualified” provider, then it is a procurement body and restrictions on competition would not be appropriate as this might lead to contracting for services from a subset of qualified providers who would be preferred on other than a level playing field — that public and private firms compete on an equal basis. The interesting question underlying the assumption is also that there would be market failure otherwise. But one test of market failure is that there are no providers willing to enter the market. But an any provider situation presupposes that isn’t true, that firms would enter the market and provide health services. So prohibiting competition effectively partitions the market in favour of public providers and that doesn’t seem to sit with the general EU competition tests. There is a subtle change in terminology that may be political but may be important (hah!): between any willing provider and any qualified provider — being willing isn’t enough, being qualified is, but can the determination of being qualified act to restrict access to the provision of health services, as being qualified may preclude organisations that might provide care, i.e. they are willing, but currently aren’t.  A bit like the only way to learn glass is fragile is to break it, the only way to find out if an organisation is qualified is to let it offer services. Of course, with an onus on qualified, there could be a presumption in favour of legacy providers, as obviously they are willing and qualified. (How many angels was that again?)

Does the EU treaty permit monopolists to abuse their dominant position by providing a service to a level less than is needed? In other words, can the purchasers purchase in such a way as to ignore lower cost/higher service level providers in order to protect the legacy NHS providers? Not really, as that violates the simple test of neutrality with respect to ownership status under competition law.

Granted that the purchasers could argue that financial controls are necessary as not everything would be affordable for everyone all at once, but the ECJ healthcare rulings have established a base line test: would the person involved eventually get treated? Saying ‘no’ is not an option for a state monopoly health service as that is called rationing and the ECJ has ruled that such decisions must be made on the basis of international clinical evidence, not administrative niceties.

So we are left with the question whether the prohibition of competition is necessary for the NHS to provide care. This is where it is necessary to decide whether the providers of health services in England are really state-owned entities, or simply contracted-in subcontractors. GPs in England have always been private businesses, though they have badged themselves as within the NHS since 1948, unlike community pharmacies, who similarly have virtually monopolistic contracts with the government, but are more readily perceived as not part of the NHS. It seems that as soon as you create a distinction between the delivery of services from the purchase of those services, you create the basic conditions for a market, for contestability, and by definition have eliminated the applicability of the market failure argument.  So the NHS delivers services of general economic interest, but it is not necessary for the delivery of that service to prohibit competition.

That means that the competition rules apply.