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  • Published in Book Reviews

For the last 30 years governments have stated their support for the NHS whilst insisting on the need for reform. But why have previous reforms not been successful? And what hope is there in future reforms? This book provides much of the answer.

Julian Tudor Hart, The Political Economy of Health Care: Where the NHS came from and where it could lead (The Policy Press 2010), 2nd edition, 319pp.

Julian Tudor Hart worked as a GP in a working class area of Wales, and he has experienced the reality of what reform has meant in the consulting room rather than in the management offices of the NHS. Central to his argument is a recognition that the economic structure of the NHS is not a neutral factor in determining what the NHS actually does, and how successfully it does it. As originally established in 1948, the NHS had a centrally co-ordinated ‘gift’ economy, in which all internal processes were money-free. This meant that the NHS could focus on meeting patient needs, and that priorities could be efficiently established for the population as a whole. Hart demonstrates that this structure for the NHS arose from its origins in working-class organisations offering collective responsibility for medical care.

The ideological offensive of capitalism in the 1980s led to the Thatcher government demanding greater internal financial accountability. As a result, all the subsequent reforms have been aimed at developing an internal financial structure, diverting more of NHS resources away from patient care and into management. For example, each individual section needs to prepare budgets and negotiate contracts with other sections of the NHS.

Hart points out that this change in the economic structure has led to profound consequences. From a managerial point of view, the fragmentation of the NHS has meant that planning and organisation are less efficient. Major structural and communications projects can no longer be reasonably undertaken by the NHS as a whole, but have become hazardous burdens for individual Trusts. This problem has been made worse by the use of Private Finance Initiative (PFI) funding, which is more costly than public funding. In addition, the shift of emphasis to financial relationships means that it has become ever easier for private businesses to take over aspects of the NHS and gain access to public money. But it can prove difficult or impossible to make sure that these businesses meet the standards set out in their contracts. On the one hand, they may be too large or too specialised to be replaced easily, whilst on the other hand they may go bankrupt if they abide by the contract. They may also get paid for work that is never actually required.

From the point of view of patients, there are more serious problems. Firstly, clinical decisions are now complicated by financial and contractual issues. Secondly, the sharing of information between sections can conflict with their financial interests as businesses. Thirdly, the need to demonstrate financial efficiency has led to the use of measures of processes, rather than outcomes. As a result, performing more hernia repairs through hospital day care (which is agreed to be better) can represent a fall in efficiency compared with performing fewer as an inpatient treatment. Finally, essential information about how well the NHS as a whole is delivering health can no longer be gathered simply, and it is impossible to plan the use of NHS resources efficiently to meet the needs of the population as a whole.

By looking at the NHS as a political economy, Hart successfully explains what so many patients and workers in the NHS realise intuitively: that its existence is being subverted to deliver profit not health. At the same time he emphasises the political conclusion, that the NHS has proved that a planned money-free economy can deliver what people need more efficiently than profit can.

Throughout the book Hart uses his analysis as basis for broader political statements, and so it is a shame that his political theory does not match up to his practical knowledge. Despite showing that the NHS proves the benefits of a revolution in social relations of production, he relies constantly on Adam Smith, rather than on Karl Marx, and ends up calling merely for a new direction in the Labour Party.

Tagged under: NHS
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