The English NHS: from market failure to trust, professionalism and democracy

The third instalment of our Soundings Futures series analyses the problems in the NHS and offers some solutions

In the summer of 2016 the fate of the NHS in England hung in the balance. The funding squeeze imposed by George Osborne had reached a point where it was clear that services were not being made more efficient - as government rhetoric persisted in maintaining - but were being cut. Waiting times for treatment for even urgent conditions were rising steadily, while draconian new spending cuts were being enforced on hospitals with budget deficits that everyone except the Secretary of State, the regulator and the Treasury recognised were due to inexorably growing demand.¹

There was no obvious way out of the crisis except by restoring an adequate level of funding, something that a reformed tax system and moderate economic growth could well support. But the post-referendum economic outlook made this an unpalatable prospect for Osborne’s successor, Philip Hammond. If per capita funding falls any further the NHS could be reduced to a residual, low-quality free service, leaving those who could afford it to take out private medical insurance. But not only would this be intensely unpopular, not least with older Conservative voters; there are also no private health facilities capable of meeting a major increase in demand for private care. To compound the government’s problem, the Health and Social Care Act of 2012, which was supposed to complete the project of making the NHS more efficient by fragmenting it into a system of independent trusts and subjecting them to market competition, has proved a comprehensive failure, while adding to its cost. The Chief Executive of the NHS, Simon Stevens, who took over in early 2014, set himself to try to solve the problem by recreating a system of central management that strongly resembles that of the original NHS, while leaving the 2012 Act unchanged - but this approach has a limited life-span given the legal constraints, not to mention the questionable politics, that it involves.

Faced with the bankruptcy of the market model, its proponents assert that the NHS as originally conceived is out of date and ‘unaffordable’, implying that it can only survive if some radical new system of service provision is adopted, which it is up to supporters of a free and comprehensive NHS to propose. But this is spin. The route to a revived and successful NHS does not lie in ‘new models of care’, although innovative models always deserve consideration, but in taking a limited number of measures to restore the service’s essential strengths: scrapping the dead weight of the 2012 Act; terminating for-profit provision of clinical services; trusting health professionals instead of treating them as self-interested slackers; replacing the apparatus of audits and penalties with a pro-active system of democratic accountability in both national and local health policy and decision-making; and giving public health a prominence in all spheres of policy that it has never previously enjoyed.

The failed market project

Over the last thirty years relentless ideological pressure and health industry lobbying have induced successive governments to push towards making health care into a commodity: they have reorganised the main providers of NHS secondary care -hospitals, ambulance services, mental health services - into a system of nominally independent businesses (‘trusts’) run on business lines, to the point where Andrew Lansley, as secretary of state for health in the Coalition government, could finally inaugurate a proto-market in health care. The Health and Social Care Act 2012 allowed private companies to compete with NHS hospital trusts, ambulance trusts and mental health trusts to provide NHS-funded services, and required the commissioners of care - Clinical Commissioning Groups, or CCGs - to invite them to bid to do so (see Figure 1). The state, however, remained the ‘single payer’ on behalf of patients - a crucial step short of a full market in which patients, or their insurers, pay for whatever care they can afford.

Figure 1.

The NHS under the Health and Social Care Act...