Reform release a report on the NHS with Liberal Democrat leader Nick Clegg

Today the think tank Reform have released a new report 'Making the NHS the best insurance policy in the world'.  At the launch the leader of the Liberal Democrats, Nick Clegg, also set out some details of his party's healthcare policy.


The Reform scheme is to reform the NHS to produce a system similar to that in the Netherlands (PDF).  Each person would be given £2,000, roughly the amount that Britons spend on healthcare under the NHS now, that they would have to use to buy health insurance, that met a Government standard for coverage, from a Healthcare Protection Provider (HPP).  Existing Primary Care Trusts would become HPPs and new ones would be allowed to set themselves up.


Some drugs might not be covered in the core - £2,000 - package, just as some drugs are not available on the NHS, and people could either buy those drugs on an ad hoc basis or get additional insurance.  HPPs would face a financial incentive to encourage their members to behave healthily and to buy healthcare as efficiently, getting as much healthcare per pound spent, as possible so that they could offer the best  deal and attract new members.


This system has a lot to recommend it.  It introduces competition and accountability to ordinary people.  Managers of healthcare trusts would no longer be accountable to Ministers in Whitehall, who have little real idea - beyond a small number of dry statistics - of the quality of care being delivered, but to patients.  That kind of competition delivers great results in other countries who spend similar amounts of moeny to us but get vastly superior health outcomes.  It would end the farce of all the hundreds of NHS organisations being theoretically responsible to a single minister who then theoretically represents the public and put ordinary people - who pay for the NHS in their taxes - back in charge.


The only downside is that Reform's plan leaves the NHS still dependent on taxpayer funding.  The mix they propose, where government provides most of the funding and determines the amount of provision required and NHS bodies deliver services, is similar to the way councils are organised.  It is a recipe for confusion and buck-passing if things go wrong.  The HPPs will insist the requirements are too steep or there isn't enough funding in place and the Government will insist the HPPs have to be more efficient.  There will be no way of telling who is correct.  The Dutch system, where people are left with the money to buy healthcare themselves, and the amount they need to pay is determined by different providers competing to offer the lowest price, will lead to clearer lines of responsibility and less government intervention.


Nick Clegg set out the Liberal Democrat plan.  They agree with Reform that more accountability is needed and copayments should be allowed, as it is illiberal to prevent people buying drugs the NHS can't provide.  However, they aim to introduce accountability by introducing elected local health boards (which may be taken over by councils).  The idea is that such politicial accountability will maintain the link between health providers and local communities.  That would probably be a step up from the current NHS monolith but it has serious problems.


Unfortunately, political accountability is a poor substitute for direct accountability to ordinary people who can take their business elsewhere.  Political accountability is slower, less refined (people are usually offered a limited number of slates of positions by the different candidates) and does not allow for different people with different priorities (who under plans like that put forward by Reform can choose different HPPs) - those with minority tastes or needs can't get the provision they want.


It is great to hear that Nick Clegg takes the issue of a lack of accountability in the NHS seriously, and that the Liberal Democrats now support copayment.  However, neither of the schemes offered today is the best way of satisfying the priorities we outlined in our report Wasting Lives (PDF) - an end to centralisation, political management and monopolies in the NHS.


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