Decentralising healthcare

April 21, 2010 12:55 PM

An interesting article in Public Finance magazine highlights two very important issues in healthcare. The first is targets. In the article, Carol Propper from the Centre for Market and Public Organisation (CMPO) says that targets in the NHS should remain, and that any party in power after the election should maintain some form of target-setting. Looking at CMPO's analysis of the parties' manifesto healthcare policies, their position is more nuanced, arguing that too many targets is a bad thing but more holistic targets are certainly necessary:

"Research also shows that facing organisations with too many targets is counterproductive, leading organisations to focus their effort on the easy to meet targets and ignoring the others. It can also lead to gaming and fiddling the figures. So the lessons are that politicians should focus on a few key targets that really matter."

We've seen the consequences that centralised bureaucracy can have in Mid Staffordshire. According to a Department of Health inquiry, failures to react to problems when they were flagged up were down to an obsession with targets and ratings. Under a heading called 'Figures preferred to people', the report said:

"A common response to concerns has been to refer to data, often of a very generic type such as star ratings, CNST levels and so on, rather than to the experiences of patients and their families."

Much more effective than better top-down targets - even fewer and broader ones as the CMPO suggest - is the genuine decentralisation of healthcare. As our report Wasting Lives showed, our system is too centralised, overly-managed by politicians and too closed off to competition.

As for the second issue, CMPO also say that centralised wage bargaining is not only unfair but can actually put people's lives at risk. This backs up earlier studies which argue that pay regulation dramatically effects the quality and productivity of hospitals. Pay is the biggest item of expenditure in most, if not all public sector budgets and in healthcare it should be controlled locally. Centralised bargaining means paying staff in poorer areas more than is necessary and not paying enough to get good staff in more affluent areas with higher living costs. Any potential extra cost to the taxpayer could be offset as there would be a huge reduction in the use of agency staff, which greatly effects cost and performance. The quality of the healthcare provided in hospitals would improve, too.

An interesting article in Public Finance magazine highlights two very important issues in healthcare. The first is targets. In the article, Carol Propper from the Centre for Market and Public Organisation (CMPO) says that targets in the NHS should remain, and that any party in power after the election should maintain some form of target-setting. Looking at CMPO's analysis of the parties' manifesto healthcare policies, their position is more nuanced, arguing that too many targets is a bad thing but more holistic targets are certainly necessary:

"Research also shows that facing organisations with too many targets is counterproductive, leading organisations to focus their effort on the easy to meet targets and ignoring the others. It can also lead to gaming and fiddling the figures. So the lessons are that politicians should focus on a few key targets that really matter."

We've seen the consequences that centralised bureaucracy can have in Mid Staffordshire. According to a Department of Health inquiry, failures to react to problems when they were flagged up were down to an obsession with targets and ratings. Under a heading called 'Figures preferred to people', the report said:

"A common response to concerns has been to refer to data, often of a very generic type such as star ratings, CNST levels and so on, rather than to the experiences of patients and their families."

Much more effective than better top-down targets - even fewer and broader ones as the CMPO suggest - is the genuine decentralisation of healthcare. As our report Wasting Lives showed, our system is too centralised, overly-managed by politicians and too closed off to competition.

As for the second issue, CMPO also say that centralised wage bargaining is not only unfair but can actually put people's lives at risk. This backs up earlier studies which argue that pay regulation dramatically effects the quality and productivity of hospitals. Pay is the biggest item of expenditure in most, if not all public sector budgets and in healthcare it should be controlled locally. Centralised bargaining means paying staff in poorer areas more than is necessary and not paying enough to get good staff in more affluent areas with higher living costs. Any potential extra cost to the taxpayer could be offset as there would be a huge reduction in the use of agency staff, which greatly effects cost and performance. The quality of the healthcare provided in hospitals would improve, too.

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