Anatomy of the NHS reforms | Analysis

Andrew Lansley's market-inspired methods make Labour's reforms seem like tinkering

The NHS in England was changing even before Andrew Lansley caught everyone unawares last summer with the radicalism of his reform white paper. It was in mid-2009, under the Labour government, that NHS chief executive David Nicholson first told the service that rising costs, growing demand and the end of a series of huge year-on-year budget increases meant it would have to make 15bn-20bn of efficiency savings in the three years starting in April this year.

That is the main reason why so many hospitals are now shrinking their workforce, so far through natural wastage. It also explains why so many primary care trusts (PCTs) have started restricting, or planning to restrict, what they offer patients. Cuts to IVF and homeopathy make news. But the growing number of PCTs postponing or abandoning elective surgery on tonsils, varicose veins, hip and knee replacements will affect far more patients, and ram home the message that rationing is back.

Health professionals not renowned for their ability to work together will have to start doing exactly that, co-operating to do things differently, such as letting GPs offer services that are currently the preserve of hospitals.

Lansley's shakeup will involve a reorganisation of the NHS on a scale never seen before. No one really knows how that will play out, or even pretends to. To quote Nigel Edwards of the NHS Confederation: "This is a voyage into the unknown here."

But some outcomes seem inevitable. First, while many of the new GP consortiums will use private healthcare management firms to help with tasks such as IT and planning, others will employ familiar faces from their just-disbanded PCT. So why scrap PCTs at all?

Second, the amount of NHS funds going to private healthcare providers to treat NHS patients, currently estimated to be 400m a year, will surely increase: the "any willing provider" policy almost guarantees that. Only time! will te ll if that is the tip of the privatisation iceberg, or a modest extension of that sector's current share of the NHS's 100bn cake.

And third, hospital units A&E, dermatology, children's services, orthopaedics and some entire hospitals will not be able to withstand more patient choice and ultra-competition.

Tony Blair and Alan Milburn were criticised for using competition in the NHS. But that will seem like tinkering compared with the likely effects of Lansley's insistence on market-inspired methods: competition between hospitals on price, and all hospitals having to "liberate" themselves from what he sees as the dead hand of state control. As Milburn says in Polly Toynbee's column today: "'Any willing provider' means anyone can set up shop and steal easy patients: the result will be anarchy. What a naive assumption that you can leave everything to the market. Price competition changes everything."


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