Health and Social Care Bill 2011

Many have spoken out in opposition to the bill. Some have spoken out in support. As health economists most of us have done little of either. I recently wrote to health economists asking them to answer a simple question:

“With regard to the future of the Health and Social Care Bill 2011, what do you believe to be the best course of action and why?”

Here are the responses*.

Christopher McCabe, Professor of Health Economics, University of Alberta

I believe that the most appropriate action with regard to the Health and Social Care Bill would be to stop its current procession through Parliament.

The bill’s immediate impact will be to fragment care, when all the evidence points to co-ordinated care being both more effective and more efficient. In addition, the bill allows both primary care and hospitals to develop their private sector practice without regard to the impact on the health of those who cannot afford private health care.

The democratic accountability for the expenditure of over £100 billon will be significantly diluted through the changes to the responsibilities of the Secretary of State, whilst the ability of the public to hold third and private sector providers to account through freedom of information will be substantially reduced.

The costs of implementing the reforms are likely to be equal to the cost savings that have been cited as a justification for them and there is no evidence to support the government’s proposition that the new structures will improve the quality of care.

The bill is now too complex to amend with a view to overcoming these substantial problems. Therefore it should be abandoned.

Cam Donaldson, Yunus Chair in Social Business & Health, Glasgow Caledonian University

My feelings on this are many and complex, but here are some ‘starters for ten’:

  • Those who say there was no mandate for such reforms must have missed Tory policy documents in the run up to the last General Election.
  • Those who complained during the ‘pause’ have made things worse, as it is now no longer clear who holds the purse strings. Not a good situation in the midst of a health care credit crunch.
  • The previous system was unsustainable due to its emphasis on the most expensive part of the health care system (the ‘black hole’ of the acute sector). The creation of Foundation Trusts and associated incentives (such as PbR and the need to pay off PFI-funded projects) had created too much power on the supply side, backed by encouragement of funds to flow in that direction.
  • That’s why I like a model based on GP fundholding. PCTs could not stop flows of funds into the acute sector, and, by my experience, even ‘cosied up’ to FTs under the previous arrangements. The evidence is not great, I admit, but what there is showed that fundholding has potential to create countervailing power on the demand side of this imbalanced market – a market that became even more imbalanced than it had been under Thatcher or Ken Clarke. These guys (GP practices and consortia) might be smaller than PCTs, but the countervailing power might come from something to do with their professional status.
  • I agree with people’s worries about the explicit push to more commercial interests becoming involved. This is the bit I’d want junked, revised or whatever.
  • Is going back an option? Given my third bullet point above, I’d say not. So, when people slag off the Bill, I’d like to know what THEIR alternative is. That’s what’s frustrating about Twitter!!!

Stephen Wright, Executive Director, European Centre for Health Assets and Architecture

The Health Bill raises a number of questions:

  1. The compatibility of integration of care with competitive provision
  2. GP conflicts of interest as providers and commissioners (let alone as rationers)
  3. Whether the NHS will be converted into an insurer rather than a provider, by stealth
  4. Centralising administration (Commissioning Board) – in the name of localisation
  5. Whether administration costs will rise with the partial privatisation
  6. Reorganising a system while simultaneously expecting it to achieve unprecedented economies
  7. The legitimacy of reorganising the architecture of care provision before the Bill has even been enacted
  8. Whether the proposed failure regime can achieve its goals (to bring in commercial capital)
  9. The lack of clarity of the mechanisms for planning long-term investment in assets
  10. The inadequate nature of the tariff (PbR) and associated payments streams, including Market Forces Factor and Service Increment for Teaching and Research, both of which need serious reform.

These questions of health economics principles (principal-agent; the health production function; factor pricing; capital investment decision-making; etc.) are so profound that the Bill is destined to create system failure.

David Cohen, Professor of Health Economics, University of Glamorgan

I am very much against the bill for 3 principle reasons:

  1. There are many criteria on which inescapable resource allocation decisions can be made – one being efficiency (maximise health gain from available resource). In recent years, largely due to the influence of NICE, the efficiency/cost-effectiveness criterion has played a much larger role in these decisions thus reducing the role of other less defensible criteria such as the political power of consultants or the ability to gain public sympathy by shroud waving. These 2 – as well as prioritisation according to drug company influence – are certain to increase if the bill is passed.
  2. There is no evidence that increased competition by private providers will improve efficiency.
  3. “Evidence” used to defend greater use of market principles in the NHS on the basis of what patients want is dubious. Who would say no if asked “are you in favour of more choice?”. I can see no evidence that ‘more choice’ is a burning issue for patients. Free market health care has advantages including consumer choice. Socialised health care has advantages including greater equity. Attempting to get both from the same health care system won’t work.

Peter West, Health Economist

The key point is that changes should be piloted for some time, in say one geographical area and across a range of institutions and services. PCTs were, let’s be frank, not very effective purchasers because purchasing is difficult and they never had the skills and resources. Will something clinically led be better? Very hard to say. Indeed, it is hard to know if it really will be clinically led.Will competition damage networking and the moving of the patient to the best place rather than the place that wants to keep the most income from that patient? Possibly. But in practice NHS hospitals already compete and, in addition, once a patient has received their initial urgent care, hospitals develop strong ownership. Competition is always weakened in the NHS anyway because the obvious place for assessment is local OPD and once assessed as needing continuing care, the patient has a relationship with a doctor and hospital and is likely to continue their care there unless some problem came up in the assessment phase.For those less familiar with the NHS, some examples of competition and collaboration. I do not pretend that similar stuff could be found everywhere but I think issues like these are widespread:
I have worked in a merged teaching hospital where rivalry between the two sites was fierce, dating back to a historic schism around 200 years ago. The new combined medical director regularly received hate mail from some colleagues on his former site. Could market competition be any stronger? I have also heard of hospitals holding on to patients after the King’s Cross fire instead of sending them to a Burns Unit, because the receiving hospital in Central London wanted to build up its plastics service. And it had of course already stabilised the patients and started their care. Similarly, I have seen local doctors in a far flung part of the NHS raising money for cancer equipment so that they could have a go locally at treatments which are acknowledged to be best carried out in a major cancer centre. So collaboration is far from perfect, but it could still get worse with more competition.Of course it will frustrate some that we cannot move directly to a new system but without evidence, collected with significant research resources, we would be lurching in the dark yet again!

Gillian Mann, Health Economist, Liverpool School of Tropical Medicine

I believe the primary function of a public health service should be to provide universal coverage of appropriate promotive, preventive, curative, and rehabilitative services at an affordable cost. These should be delivered equitably such that those with the greatest need should have the greatest utilisation. I believe that the most efficient means of ensuring equitable cost-effective services is to have treatment and care guidelines written from a strong evidence base taking into account the views of medical professionals, patients and other stakeholders. In a publicly funded system this must be based on cost-effectiveness, so that the maximum health benefit is gained from the public purse.

I do not believe that putting increasing decision making power in to the hands of GPs can achieve this. They do not, and should not, have the time nor the resources to weigh up all new evidence across a range of care needs.

I believe the argument for patient choice is misguided; effective choice relies on evidence, not media reports. As a patient, I expect medical professionals to make evidence-based decisions – an individual cannot. Patient choice will lead to inequitable service provision, since the most informed patients, who are more able to negotiate with their GPs, are unlikely to be those with greatest need, who in all societies tend to be poorer with access to fewer resources.

As both a patient and an economist I believe the proposals are regressive; I would not like to see them implemented.

Let us know what you think in the comments below, and be sure to vote in the poll.

*if you missed the deadline for submissions, but believe your views to be of interest to readers, you can contribute by clicking here.

Does money really make you happy: An economic approach

A couple of weeks ago when I was out shopping with a friend, after informing him that I had never bought a scratch card from the shop he persuaded me to buy one to tick it off the list of things to do in life. It cost a whole £2, much to my amazement I won a walloping £5, this short term ‘victory’ delighted me and definitely brought me a short term utility boost. It’s amazing the affect that winning can have on someone in the short term, but what about the longer term?

We always hear stories about lottery winners who say they wish they’d never won or about how it made their life a misery and all their friends abandoned them etc e.g. http://articles.moneycentral.msn.com/SavingandDebt/SaveMoney/8lotteryWinnersWhoLostTheirMillions.aspx

So what’s the truth behind it all….is this the exception or the rule?

Does money really make you happy?

After a bit of research I found an excellent paper by Gardner and Oswald (2007) in the Journal of Health Economics, which you can read here http://tiny.cc/3zee7. This longitudinal study examines medium sized lottery winners who won between £1000 and £120,000 in 1998 British pounds with a sample of n = 137. There were two control groups, small winners and people who didn’t win. Although this is a relatively small sample and results should therefore be taken with caution I would argue it is large enough to draw reasonable conclusions. Mental well being was measured using the general health questionnaire (GHQ) which is a measure of psychological strain or stress. When followed up 2 years after winning… compared to the control groups, medium sized lottery winners using the GHQ had a 1.4 GHQ increase. This probably means nothing to the majority. To give some perspective the impact of being widowed (the worst observable impact on GHQ) leads to a 5 GHQ point decrease. Given this, it is clear that this is not just a statistically significant increase in mental well being but a substantial increase in mental well being.

So what conclusions can we draw from this?

The obvious headline from this is that money makes us happy. In the medium term for medium sized lottery winners anyway. As good a study as this is it however leaves some questions unanswered. Here are a few of interest to me. Firstly, this only follows individuals for 2 years so we don’t know whether in the long term there are any adaptation effects. As frequently seen in health economics and discussed by Sen (and provides the basis for the capabilities approach), humans, adapt to new situations and over time expectations adjust and the situation becomes ‘normal’. Essentially in this case, people get used to having money. It would be interesting to see whether this is the case for lottery winners. Again a longitudinal approach would be ideal for testing this. Furthermore due to the infrequency of ‘large’ winners the authors did not investigate whether a large win has a larger or smaller effect on well being than a medium sized win. One wonders if and if so, at what point diminishing marginal utility becomes disutility and what is an optimal amount to win if this is the case. I would also be interested to know how happiness is affected by money when comparing earned money to won money. Is money the same regardless of whether it’s earned or won? These are all questions I hope to one day see answered (if not already!!). At the end of the day it seems like money does in fact lead to improved mental well being, in the medium term at least, we can only speculate whether these medium term improvements carry on into the long term.

Reference:

Gardner and Oswald (2007), ‘Money and mental well being: A longitudinal study of medium-sized lottery wins’, Journal of Health Economics, Vol. 26, No.1, pp. 49-60.