NHS Reform & Other Privatisations

With the passing of the NHS reform bill in the UK last week, I’ve been reflecting on the discussion that went on between the conservative supporters and almost everyone else in the country who was deeply worried about any bill which would seem to meddle with a system that was fairly ok and doing quite well.

The frightening proposition is that health in the UK would be privatised. Not just like the system in the USA, but having to possibly pass through a system far worse in order to finally be dragged towards the regulated compromise the Americans have found themselves in.

The point we’re told from conservatives over and over is that capitalism and corporate business practice can bring many efficiency gains to the way health businesses operate. Competition is sighted as a key mechanism to achieving this result. Much needed capital could be found in the private sector and the whole system would be closely monitored to make sure it kept on curing people and setting broken bones.

But, as readers of my blog will know, I’m not really attached to any particular mechanic in achieving what we wish to happen in society. If a privately capitalised, for-profit business which takes it’s organisational strategy from Cadburies really is the best was to set up a hospital, then so be it. But on the other hand if you believe in capitalism in your heart, but not in your head; then one’s politics might be driven towards operational and funding mechanics which might be ill fitting. Politicians who probably aren’t evil or even that naughty, get confused by positive bias and fallacies from popularity and especially group think and persistent ideas.

Really thinking about the simple rules which allow such a mechanic to work well enough to provide all those great examples isn’t simple. Let’s start with a simple rule of markets: ‘Buyer must have the option not to buy’, do we think that health is something we can opt out of? Do we get a choice not to be saved if we’re in an accident and picked up by a private ambulance? That’s the unsettling thing about the USA’s ‘fairer’ health care bill, forcing people to buy products isn’t right there and it wouldn’t be in the UK either.

Here I’d like to slide into a wider concern. Health is something of an important system, without this service the economy would be very quickly loosing people to illness and injury. The pain felt in the USA is not just by individuals, but keenly by companies big and small. They often pay for some or all of the health coverage for all their employees because having employees without health care would be detrimental to their own operation. So clearly some functions are so important, that organising them collectively has great benefits.

Then there’s competition. Is it a good thing? Well the first thing to ask is what competition hopes to achieve. In market terms, competition is a group selection process which hopes to push forward the fitness of each organisation as it strives to out bid other organisations for available resources, other organisations that can not claim enough resources are deemed unfit and are allowed to fail. This system of evolution does require (system-wide) a larger amount of resources to invest. In organisations which will fail and organisations which will perform activities outside of their core function to innovate. It’s a bet on the future which requires a trade off between cost today and expected organisational innovation tomorrow.

But with a system like the NHS, which will always be tightly controlled. Will there be added resources to cope with this new evolutionary requirement? Will there even be the flexibility to change the organisation in such a way as to find new and brilliantly innovative organisational methods?

Then I see we have a combining. If I like the idea of competition, does it follow I have to swallow private capital funding too? So often we fail to be able to articulate well when we’re talking about funding source and the organisation’s market forces. The lack of distinction and separation of the two probably doesn’t allow us to come up with more interesting rules or more innovative funding ideas. Although it’s amazing to think that the Government of a G8 country, can’t seem to put the money together for anything any more.

In conclusion: When the government says they want to privatise a working public service, what they probably mean is: “We don’t have the money to make it better and we don’t trust the current public sector operators to know their job well enough to improve it’s operation.” and not “We have some added cash to turn this inappropriately publicly operated function into a number of well functioning business concerns.”