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Andrew Lansley: competition is critical for NHS reform

The section of the Health Bill which seeks to increase competition within the NHS is the focus of the growing row over the legislation. Here, in an exclusive article, a defiant health secretary Andrew Lansley champions the importance of competition.

With a world gripped by an immediate and pressing financial crisis, it is easy to lose sight of the longer term challenges faced both here at home and around the world. But without health we have nothing, so there is no long term challenge more pressing than how countries meet the rising health needs of their populations. Both in the developed world, and the developing, national governments are examining how to cope with the rising tide of demand for healthcare in the context of what is for all a difficult fiscal environment.

There are a number of challenges we face in healthcare – some of which exist across every part of the public sector, including how we harness the power of the information revolution and how we keep up with ever-rising public expectations. But what makes healthcare so unique are the developments of new treatments and technologies. Although technological advance is not solely restricted to the health sector, in healthcare new technologies do not simply create additional demand, but they change the nature of that demand. Over the last 20 years, for example, new treatments have converted what were once severe, acute illnesses into long term, manageable conditions. People now diagnosed with many cancers can expect to survive for many years, whereas once those diagnoses were a death sentence. People with once severely disabling conditions like rheumatoid arthritis now find that they can enjoy a much improved quality of life. So new treatments are not only demanded to help manage conditions; they actually change the symptoms of those conditions and the outlook for those people living with them.

In understanding the nature of this change and how to cope with it, there is little that we can learn from examining the past. The NHS – and, indeed, every healthcare system – has for the greatest part of its history existed almost solely to respond to an acute need for treatment. It is only in the last 20 years that medical advances have truly begun to shift the focus of healthcare systems towards the management of long and healthy lives.

This changing pattern of healthcare delivery has an important implication for the approach societies should take to health service funding. Whereas once the

job of healthcare systems was to manage the decline and death of patients suffering short-term illness from which there could be no recovery, the job of healthcare systems today is increasingly to keep those patients fit and healthy. An individual with cystic fibrosis, for example, could not have expected to live longer than five years in the 1950s. Now, life expectancy for that condition is almost 40.

This is a critical change. Because, as the focus of healthcare systems shifts towards keeping people productive – and potentially in work – it becomes in a country’s best interests to provide health care comprehensively to boost economic growth. In economics terminology, extra investment in healthcare confers supply- side benefits.

It is partly because of this that we witness around the world countries gravitating towards a model of healthcare provision we are fortunate to possess already in this country. Countries such as the USA have only just begun to appreciate the opportunity cost of failing to insure the tens of millions of potentially productive workers who are left without comprehensive healthcare. The next generation of economic powers – like China, India and Brazil – already recognise the importance of doing so, and are building comprehensive health services based on the experience we have of the NHS.

The continuing development of new treatments and technologies has been a welcome feature of healthcare in the past, and will continue to be in the future. It will mean that life expectancy continues to lengthen, quality of life continues to improve, and that previously terminal conditions are brought into the realm of the illnesses we have conquered through cure.

But to be truly effective, the key task of any healthcare system in the future is to ensure that those innovative new treatments and technologies get to the right patients, in the most efficient way. In achieving this aim, the challenges which are putting pressure on public sector services over the world – meeting the rising expectations of a public which is becoming better informed – can be turned to our advantage. Because if we allow more informed and more demanding patients and health professionals to agitate for these new treatments and technologies to be made available – rather than accepting the misplaced belief that a centrally-planned system based on past patterns of delivery can do it better – then the NHS will find itself facilitating rather than frustrating innovative care. After all, in any other sector, it is the thousands of individual decisions to adopt a new technology – from, say, cassettes to compact discs to mp3 players – which combine to sweep away less effective services.

And this individual creativity and innovation is best supported by competition. This word is used sparingly in healthcare because it is seen as a loaded term. But it has never been, nor should it be seen as, an alien concept in healthcare. It means simply that those who strive to innovate to provide the best possible care should find their efforts supported rather than stymied – supported through, for example, clear freedoms for any qualified provider to deliver NHS services to patients if they meet NHS standards and NHS costs, and through funding systems which are flexible enough to support the changes which health professionals want to lead. It also means giving patients more control over the care they receive, sharing in the decisions made about their treatment. These aims have been viewed as desirable characteristics of healthcare reforms for the past 20 years, and the next decade will see them further realised.

In healthcare, the term “competition” is often used pejoratively by vested interests with something to fear from change. But the vast majority of the NHS – including the many world-beating services we have which already compete with other health providers on a global scale – recognise that there is nothing to fear from competition. As the former Labour health minister Lord Darzi has commented, the NHS is up for competition. Competition between organisations facilitates the adoption of new treatments and technologies, and allows innovative individuals within those organisations to flourish. It is a critical element of healthcare system reform.

It is, though, not the only element. New treatments and technologies come at a cost – and although reform is needed to ensure those new treatments and technologies are used in a way which improve productivity (both in the NHS and in the wider economy) – the need for further investment in the NHS, albeit modest by historical standards, will continue. The government will safeguard a comprehensive health service both through our investment and our reform – both of which will help to drive further improvements in quality.

So in healthcare the aim of the next decade is a simple one: it is to ensure that the new treatments and technologies on which our own individual health depends are adopted quickly, efficiently, and in the best interests of patients for whom health systems care. And the reason for this is equally simple, driven by the changes in healthcare which those technologies have brought about: it is to ensure that, through delivering the very best healthcare, we live longer, remain happier, and stay more productive for longer.

Andrew Lansley is Secretary of State for Health. This article appears in The Next Ten Years, published on 1 March by Reform.

Readers' comments (52)

  • The term "exclusive" suggests some value to the piece. I personally see no value to providing Andrew Lanslet with a platform for his crude rhetoric, nor do I need a lecture from him on the NHS first thing in a Monday morning. It's certainly not what I pay my HSJ subscription for.

    Now if you were to get the scoop on his resignation, that would be another matter...

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  • Well done HSJ we do need to have as much light on the NHS reforms, why and how. This contribution helps. so many try to muddy the waters with a strange privatisation argument the only thing that matters is as much health as possible is delivered free to the patient. If I choose to pay for a bit more pampering at my local hospital whats wrong with that I am still entitled to my NHS service. GPs are private partnerships not NHS organisations; and so many of the vital equipment, drugs etc are provided by profit making company s so the argument about private is dead. The outcry from from the professions etc is just about closed shops and pensions. Roll on the changes

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  • It strikes me that whatever Lansley says there are those who have set their face against him and all that he stands for. I'm prepared to look at what he has to say and there isn't much to argue with in his statement. How is the NHS to be modernised in the future? by planning or by waiting for the next debacle (care of the elderly for one) and then reacting?

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  • Competition (or privatisation to use the more loaded term) is not the part of Lasnley's reforms I am against. It is placing power into the hands of people who are inexperienced and the vast majority of whom are not interested/against participating.

    The chaos lies there. I am not looking forward to 2013!

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  • The few salient points that are made here are made redundant by some the sweeping generalisations it makes. Healthcare is vastly different to the other consumer markets that are referred to. All the evidence suggests that elements of regulated competition have improved non-complex services – no evidence exists to extend that to all provision. To take such drastic steps seems unjustified, if not irresponsible. A balance between competition and integration is possible, and something that consideration should be given to.

    Interestingly a piece in the Lancet this morning disputes the efficiency premise that these reforms are built on. The government’s use of cancer statistics has largely been discredited. Some evidence can be found to support this reform program, but nowhere near enough.

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  • The whole article is a feint, diverting attention from the downsides of the bill. Unless there are integrated systems competing with each other (e.g Kaisers, InterMountain etc) there will be obstacles to the coordinated/integrated care we are all after through creating many "bits" that dontl quite fit together. There will be an explosion of bureaucracy worse than now. Additionally, competition implies surplus supply and, thus, inflation in prices or exploitation of staff which works against £20billion efficiency gains and/or quality improvements. Nor does he address the risk of an increase in the postcode lottery with increased competition.

    Essentially, the bill is based on specious, structural tinkering with no narrative or vision driving the health system we are actually striving for.

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  • I dont think many have a problem with the underlying principles - its the way the reforms are being implemented and Roy Lilleys mantra that you dont need the bill and the mass upheaval to get on with this.

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  • Anon - 7.59 - I would be far more inclined to listen to what Lansley has to say if there was at least a suggestion that he is equally prepared to listen to the points being made by a huge and extremely diverse group of opponenets to his bill - however since he shows no sign whatsoever of listening to anyone I no longer have any interest in listening to him. I am sick to death of hearing this condescending view that the reason there is so much opposition to the bill is because the government hasn't sold its policies effectively, that the message has been politically mismanaged. Whilst that may be true the reality is that the opposition withitn the NHS is because the bill simply does not hang together as a coherent piece of policy and is utterly unworkable. Working in a PCT and seeing the absolute train crash (Alan Millburn's words) that is ensuing no manner of slick political presentation would convince me this bill has any merits whatsoever. See Roy Lilley today for an idiot's guide as to why the whole policy is a nonsense.

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  • Andrew Lansley says "Competition between organisations facilitates the adoption of new treatments and technologies, and allows innovative individuals within those organisations to flourish. It is a critical element of healthcare system reform." We already have this as the HSJ and other major awards demonstrate. Competition between NHS organisations to be the best locally, regionally and nationally is here today as NHS managers and clinicians seek to innovate and improve performance and outcomes. We have some of the most stringent performance regimes in the world to encourage those who don't do this to fall into line. I'd therefore argue that what we don't need is more competition from a private sector which still creams off the most profitable work leaving the NHS to deal with the "break even at best" work such as most non elective, maternity, complex renal.

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  • One of the main problems with competition (or marketisation) in health is the high level of information inequality between buyers and sellers. And this will not be resolved by having GPs "buying" on behalf of patients.

    Pursuing the market is a distraction from the primary issue we all face - how to pay for healthcare whilst medical innovation drives the costs up and people live longer.

    Lansley seems to have some kind of grip on the problem - it's just the solution which is evading him. This Bill is a terrible, wasteful distraction from resolving the underlying issues with healthcare in the 21st century.

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  • Roy Lilley

    Did LaLa write this - or the new press office guy?

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  • What an absolute load of tosh. The quicker Lansley is moved on, the better.

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  • The whole article is a feint, diverting attention from the downsides of the bill. Unless there are integrated systems competing with each other (e.g Kaisers, InterMountain etc) there will be obstacles to the coordinated/integrated care we are all after through creating many "bits" that dontl quite fit together. There will be an explosion of bureaucracy worse than now. Additionally, competition implies surplus supply and, thus, inflation in prices or exploitation of staff which works against £20billion efficiency gains and/or quality improvements. Nor does he address the risk of an increase in the postcode lottery with increased competition.

    Essentially, the bill is based on specious, structural tinkering with no narrative or vision driving the health system we are actually striving for.

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  • and therefore why did Lansley not set out this vision before the last election? No top down reorganisation of the NHS??? why should anyone believe anything this discredited SoS has to say...

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  • Steven Burnell

    I think one of the things missing is a clear, unambiguous explanation of how Hospital Failure will be handled. Imagine, what-if my local hospital is a Loser & enters a spiral of Cuts & Service Losses until it is Bankrupt. Will it be closed or will it be bought by a Competitor or Fanchised like Hitchingbrooke? If it is closed, what happens if the nearest Hospital is more than 25 miles away? A clear Policy should alleviate some Fear. After all, an Acute or Community Hospital is not like a Chemist Shop on the High Street or even a GP or Dental Practice.

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  • Roy Lilley puts tthe case very succinctly and I set this out below for all those who have not seen today's Newsletter 'Seven Simple Truths':

    1. The Bill replaces three levels of management (DH, SHA, PCT) with Seven; (DH, NCB, 4 Clustered SHA, 50 Commissioning Support groups, 300-ish CCGs, Clinical Senates and HealthWatch.)

    2. GPs cannot 'do commissioning'; it is too complex, they can't fit it in part-time and look after patients. They can and should influence local commissioning decisions.

    3. The complexity of buying healthcare is recognised by the DH who have invented Commissioning Support Organisations (not in the Bill), to help. They are intended to be private companies who will decide what healthcare we can have and pocket any savings.

    4. The Coalition has not saved millions in bureaucracy; they have shifted costs by sacking really experienced people who are now being re-hired to commission care on behalf of GPs.

    5. No one is really worried about the 'private sector' per-se. But, if you spend £100 on healthcare in the NHS you get one hundred quid's worth of healthcare less about 5% management costs. In the private sector you'll get a hundred quid's worth less 3% management costs, 5% profit, 12% to pay bank loans and charges, plus a chunk for bonuses, dividends and return for investors. And, no provision for what happens if they go broke or get fed up.

    6. There is no increase in patient choice; we are all stuck with our local GP who is stuck with his local CCG who are stuffed into CSO's who will decide what we can have and when we can have it. All the decisions about us are being made without us.

    7. The NHS will function perfectly well without the Bill; it is performing pretty well now and can coalesce around what it is doing. But, waiting times are on the way up and we are getting fatter and older. The Bill does nothing about any of that and the Service should be allowed to concentrate its efforts to meet those challenges.

    As a Senior Manager I left the NHS last year after being repeatedly told that I could not continue delivering services to the 'gold' standard. It was time to leave and put my skills, knowledge and experience to better use - still helping and serving others.

    Having been through many reorganisations, this one is absolutely stupid - it defies description.

    It takes a really big person to admit they've got it wrong. I feel sorry for you. Andrew, for your own sake, admit it and move on. The profession will think more of you and I am sure will willingly work with you on how best to move the NHS forward.

    Incidentally, I've not long re-watched Director Michael Moore's film on the state of the US healthcare system and I am even more convinced that we should not be contemplating going down this route. We have a system that is envied throughout the world, it is productive and does need modernising further, but your reforms will kill it off completely. I really pity you as I really would not want that to be on my conscience.

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  • This just really summarises what's wrong with both the Bill and LaLas whole approach. His analysis of the problems facing us - technology, ageing population, multiple patholgies, the need to shift towards a less hospital=-based model of care - is not bad at all. he gives every sign of understanding of the issues.
    And want to pick the guy up and shake him. His analysis of the solution is so facile, inept, one-dimensional and downright ignorant, I could scream.
    I could go on for hours, but let's pick just two:
    - his idea that central planning always equals service delivery based on past patterns of service.Codswallop. Tripe. Balderdash. I've worked in the NHS long enough to see massive reshaping and improvement in the delivery opf services in a whole shedful of areas (cancer springs immediately to mind). Centrally driven and led, with local engagement.
    - the idae that millions of individual market exchanges between pateients and Drs drives big technological and service change is equal twaddle. Let's not forget the enormous percentage of patients who access services as emergency and unplanned admissions. The idea of competition being the driver there is bunk.

    I could go on, but I won't. The man's bright but he's inept and arrogant and has spent too much time talking and not enough time listening properly. Sadly, I think we're stuck with him until the Bills' through (Cameron will tough it out).

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  • Andy Cowper puts it better than I can.

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  • I'm fed up with being patronised. Lansley is now trying to make his case and blames opposition on his failure to get his point across, vested interests, pension disputes etc. Actually, the NHS is full of very intelligent and experienced individuals who have got a lot of valid reasons to oppose these reforms and to dismiss them in the offhand manner AL and DC have done so is appalling. If the pair of them keep insisting there is no alternative, then please set out the alternatives, the analysis and why they won't work instead of imputing ulterior motives on anyone who voices any opposition.

    I live in DCs constituency where a donkey would get elected if it wore a blue rosette - unfortunately, with his stubbornness to listen and consider alternatives. it looks like a donkey was elected.

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  • For La La to get this as a platform to repeat his mantra is an insult. The assumption that competition will make things better is not evidence based. Greater competition will increase transaction costs (per USA system) and if honest intention is to channel greatest resource into clinical care then this hardly seems the way to go. Good for privatisation but not the patient. You can't help but think a proper consultative period following a green paper would have been better all round than the smash it in approach of the white paper.

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