A free market? The NHS? Don’t believe it!!

It’s unbelievable but apparently true; it seems that the Ipswich Hospital, having cleared the backlog of patients awaiting non-emergency operations, are not to be paid by the North Suffolk Primary Care Trust, the purchaser of care for the area, if it deals with new patients almost immediately.

This is because the hospital, in doing so, is in breach of a trust rule which says that all non-emergency patients must waiting a minimum of 122 days before receiving any treatment. The rule, it seems, was introduced to help the trust “manage demand” and keep within budget. Recent breaches of this rule has left £2.5m shortfall in the Ipswich Hospital budget and has earned hospital a severe reprimand from Richmond House, the NHS (National Health Service) headquarters. Surely, some would say, a hospital that is proving so efficient that it can provide its services almost on demand, as Ipswich appears to be able to do, is a hospital that deserves praise and reward not censure and penalty. You would think so, says Simon Caulkin in today’s The Observer Business, but then you have to understand how ‘ hard it is for managers to manage Labour’s idiosyncratic pseudo-markets.’ In this case, what interferes with the “free market” mechanisms, is a set of

.. simplistic NHS accounting rules give PCTs no …similar incentive to treat patients quickly. They are like an insurance company boosting this year’s profits by postponing carrying out repairs on a legitimate claim until the following year.

In the final analysis, having examined the how the “pseudo-market” is flawed in this and other ways, Caulkin comes to the conclusion that:

Under many circumstances, choice and competitive markets are powerful mechanisms to drive innovation and reallocate resources from less productive to more productive producers. However, given the requirement for equity and the inflexibility of capacity – even with the touring specialist treatment units – there are strong grounds for thinking that healthcare is not one of them.

You are not alone in thinking that, Simon.


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