Term Paper on "UK Healthcare"

Term Paper 36 pages (9250 words) Sources: 1+

[EXCERPT] . . . .

According to Enthoven, the focus was directed towards enabling private practice to develop and forcing more elderly people to independent private nursing homes, where they had to pay from own resources until their money ran out. Within this approach, the goals of the government as addressed by Enthoven were:

To improve its ability to control the NHS financially by separating 'health' from 'social' care and to continue offering 'free' if services were provided by the NHS staff based on 'means tested' access.

To increase the efficiency of the NHS by improving both productive efficiency and allocative efficiency.

According to Le Grand et al., (1998), the basis of the development of the 'internal market' involved the introduction of competition via the establishment of more and smaller provider-units created by breaking up the large health districts and replacing the power of the health professionals by specialist managers. Competition between providers of health care was expected not only to improve patient choice but also to supply health authorities and individual hospitals with incentives to work efficiently. However, as explained by Le Grand et al., medical personnel opposed this approach, claiming that managers and accountants were given too much power at the expense of the interest of patients. Even though the general public tended to support the perception of professionals, the government moved forward with the effort, separating the health authorities (the purchasers of health care) from the providers (the newly created Trusts).

According to Edwards (1993), in April 1991, there were a total of 57 NHS trusts and 306 GP fundholders that had begun operating; however, an internal market had not as of yet been established. By 1994 more than 400 providers accounting for 95% of NHS activity had become self-governing trusts. However, as noted by Klein (1995), even though the "labels" had changed, few of the dynamics that had plagued the NHS still existed. According to Klein, in theory, internal markets would be driven by purchasers, and would therefore lead to altering the provider dominance that had previously been associated with the NHS. As well, it was believed that the further development of health services would no longer be driven by the self-interest of consultants. However, as explained by Klein, this was not the case for the following reasons:

An asymmetry of information existed, whereby providers had both greater expertise and information about their services.

An asymmetry of managerial resources existed, as the most able and ambitious staff had mostly gone to work for provider units rather than purchasing authorities.

The problem existed that some services in some areas were monopoly providers, and most purchasers and providers were locked into permanent relationships

Over time, as noted by Klein, the vocabulary of the NHS and labels associated with the internal market was gradually moderated and changed in response to such complexities. Such changes as outlined by Klein included the following:

Purchasers became commissioners: a recognition that monogamy, rather than polygamy characterized the internal market, with most purchasers and providers locked into permanent relationships in which each partner sought to modify the other.

The internal market became the managed market: a recognition that purchasing was about shaping the nature of the services available to the local population over the long-term, rather than buying to satisfy immediate wants.

Competition became contestability: acknowledging that the internal market appeared to be creating regulated local monopolies rather than a free-for-all, it was argued that this did not matter as long as new providers could move into the market and purchasers could threaten to move their custom.

Reforms emerging from the 1980s and implemented during the 1990s were also those that were focused on medical accountability and managerial responsibility. In an effort to strengthen strengthening the link between clinical and budgetary decision making, the "clinical directorate" was initiated (BMA, 1990; Institute of Health Services Management, 1990). The clinical directorate was designed as a unit based on a medical specialty or group of specialties, to which full budgetary responsibility was transferred and within which clinical and budgetary decision-making were to be combined (Salter,1994). As well, the clinical directorate was to be structured as a clinical management team, consisting of a clinical director who was a physician, senior nurse manager and business manager, with equitable distribution of responsibilities and powers (Connolly, 1991). Problems developed, however, as previously all consultants in the NHS had equal status; thus, it was difficult for the clinical director to establish himself/herself in a role of authority over his/her colleagues (Connolly, 1991). As well, as noted by Connolly, as there were all too few financial or professional incentives associated with the role of clinical director, most directors accepted the position reluctantly. Ultimately, as explained by Salter (1994), even with the implementation of the Directorates, purchasers were having to negotiate with clinicians as well as managers to ensure realistic contracts and that, for their part, clinicians were prepared to use their clinical discretion to manipulate their waiting lists to satisfy purchaser demands. Thus, the clinical directorate emerged as the primary demand-regulating unit and as Salter suggested, Trust managers found their capacity to influence what happened inside the clinical directorates varying according to the roles taken and constrained by the clinical director and senior nurse manager. According to Salter, via the clinical directorate, the long-established culture of the NHS as medically dominated continued to be reinforced.

In evaluating whether the reforms of the 1980s and 1990s were successful, as suggested by Le Grand et al. (1998), five criteria can be used as a measure of their effectiveness. The five criteria used and the results obtained by Le Grand were as follows:

Efficiency: Overall efficiency in the NHS appeared to have increased1.

Equity: Two major equity issues were examined: 1. Whether the internal market would lead to "the deliberate selection of patients both by hospitals and by fund holding practices who were easier or less costly to treat in order to protect budgets"; and, 2. Whether the reforms would lead to a two-tier system. No evidence was found that either had occurred.

Quality: This was measured by looking at the range of services offered, the lengths of waiting lists, and surveys of the public's attitude to the NHS. The overall conclusion was that the introduction of Trusts had not led to any improvement in quality but that fundholders had obtained quicker admission for their patients to hospitals and a greater provision of services in the community i.e. In or near patients' own homes).

Choice and responsiveness: No evidence was found that choice for patients had

Accountability: There was no evidence that Trusts had become more accountable to their local populations, and that "the decision making of either Health Authorities or Trusts had become more transparent to the public."

According to Le Grand et al., the separation of functions between purchasers-providers was successful and was retained by the incoming Labour government in 1997. However, as indicated by the researchers, evidence pointed to the fact that there remained too many managers in the NHS. As well, as reported by Le Grand et al., the internal market also failed because the people involved in the NHS did not behave in the kind of self-interested way that market theory demands.

As reported by the EOHCS (1999), even after reforms had occurred, the NHS remained primarily financed through central government general taxation together with an element of national insurance (NI) contributions. As displayed in Table 1, in 1996/1997, 93.7% of gross spending on the NHS in England was met from these two sources: 81.5% from the Consolidated Fund (i.e., general taxation), and 12.2% from national insurance contributions. The remainder of NHS finance (6.3%) was raised through user charges (2.1%) consisting mainly of charges for pharmaceutical prescriptions and dental charges; from repayments of NHS trust interest bearing debt (3.0%); and from other miscellaneous sources (1.2%) such as health authority capital repayments.

Table 1: NHS Sources of Finance

As was also reported by EOHCS (1999), as well as general tax-based funding, there was an estimated £7474 million of private expenditure on health care in the UK in 1996, representing 14.6% of total spending on health care in that year. According to information provided by EOHCS, fewer than 11% of the population had some form of private medical insurance. As well, there were substantial amounts of private spending out-of-pocket, taking the form of payments for private medical care, payments for long-term care and co-payments for pharmaceuticals, dental and ophthalmic services.

CHAPTER TWO

Summary of 2000 NHS Plan

According to the Department of Health (2000), the 2000 NHS Plan represents an effort to provide the public with a health service designed to meet their needs within the 21st century. In responding to the long-standing problem of under funding, the Plan is based on consideration of other forms of funding healthcare which were also found to be inadequate. Therefore, as explained by the… READ MORE

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