Monday, 23 April 2007

NHS Reform - Time to lay out a plan

A number of exellent posts regarding the recent exposure of NHS incapabilty (at DK, Tim Worstall), so I will not re-hash their words.

For some time I have been in favour of a move to a Swiss Model for healthcare. This is basically:
  • State regulated to ensure and enforce a minimum level of provision and general standards
  • Privately run delivery via competing companies
  • Funded by individuals taking out insurance via a range of competing companies, but with a safety net for the truly destitute
  • Ability for people to change insurance provider on a regular basis (every 6 months, IIRC).
  • Prevention against insurance companies abandoning the old or chronically sick.
  • The State regulated minimum package allows for competition on price and quality of service tradeoffs without hidden trade-offs on coverage.
  • Individuals are free to top-up both in terms of insurance policy extensions and ad-hoc payments (the Sociofascists HATE this aspect)

The issue is how on earth to get there from here?

The current NHS looks a bit like this:

As you can see it looks like a Pedigree Chum rosette - no surprise because it is a complete dog's breakfast!

Big worry is, if reform becomes some form of sell-off this will either be at fire-sale prices (we lose) or with some ghastly underwriting or income guarantee (we lose).

One potential plan would be:
  1. Devolve Primary Care (NHS Direct, GPs, Dentists, Opticians etc) most of which is either all the way there or almost all the way there now. These entities will either remain independent or become not-for-profit organisations if State run. They should be free to compete with each other and offer services outside of their original SHA/PCT, i.e. be unconstrained geographically.
  2. Devolve Secondary Care Trusts - Secondary Care Trusts should be immediately free to compete with each other and offer services outside of their original SHA/PCT, i.e. be unconstrained geographically. These entities should begin as not-for-profit and some form of mutualisation of the entity should be considered. In the medium term there should be the potential for these entities to merge. In the long term there may be the potential for them to be bought under certain conditions.
  3. Rigth from the start, the true concept of "National Insurace" should be established to clearly ring-fence/demarcate the funding for healthcare provision within the tax system. The revenue for the NI of the citizens in an area should be the sole source of funding for the SHA that covers it.
  4. The SHAs and PCTs currently have a monopoly over the access to care for the people living in their geographies and this shall cease once Primary and Secondary Trust liberation has settled and that the people have clear NI contribution flows into the SHAs/PCTs. People shall be free to switch to another SHA, now evolving into a Health Insurance provider. Note that the Primary and Secondary Care Trusts are no longer under the SHA/PCT structure, so can provide services anywhere in the country by coming to an arrangement.
  5. At some stage bodies not previously SHAs should be free to compete for NI policies. This could include groups of Primary and Secondary Care Trusts and existing Health Insurance providers.
To me the issue is breaking the monopoly at each level. Primary and Secondary is not such a problem - the SHAs and PCTs are the pain and in the Private Sector their role is more like the Health Insurance company, but they are hamstrung by their geographic monopolies. The migration should be gradual and SHAs should be given fair warning before they have to compete in the outside world. Shape up or ship out. It is expected that many SHAs and PCTs will cease to exist, that Secondary Care Trusts will merge and that some will expand into fully fledged healthcare providers selling policies and coming to arrangements with other healthcare providers to give national coverage.

You also notice that the whole PFI scam is dealt with right at the beginning - the Secondary Care Trusts are unhitched. PFI providers will either have to renegotiate down or see their investments collapse as the hospitals they build at great cost and vast profit become uneconomic to operate.

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