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Reconciling Equity and Choice?
Foundation Hospitals and the future of the NHS
By John Mohan
EXECUTIVE SUMMARY
1. Introduction
• Legislation to create new Foundation Hospital Trusts in the NHS
has polarised the Parliamentary Labour Party. Behind what are presented
as modest and sensible administrative reforms, bigger political and ideological
issues are at stake.
2. New times, new Labour, new NHS
• New Labour is keen to emphasise that it has moved on from the 1970s
and is echoing the rhetoric of the Conservative New Right in its attacks
on "top down", "command and control", "one size fits all" models of public
provision.
• In fact by the end of the war there was little alternative to hospital
nationalisation which was seen as a necessary response to the failings
and inequities of inter-war municipal and voluntary provision.
• NHS planning in the post-war period was about strategic investment in
response to social need; its shortcomings had as much to do with external
circumstances as with inherent problems of state intervention.
• Arguments that greater diversity and choice run with the grain of a
more individualistic and consumerist society provide only part of the
explanation for Labour's new policy – a key rationale is a perceived
need to cater to middle class voters in marginal constituencies.
• Invocations of a lost co-operative and mutualist inheritance often overstate
the importance and success of such models in the past. Moreover, the emphasis
on competition between hospitals cannot easily be reconciled with such
traditions.
3. The implications of Foundation Trusts
Planning
• Encouraging patient choice runs the risk that the choices of the
few rather than the needs of the many will determine the trajectory of
hospital development – the effect may be to financially destabilise
smaller hospitals and segregate patients.
• The Treasury/Department of Health compromise over borrowing powers
creates the likelihood of distortions in the prioritisation of capital
projects within the NHS.
• Asset disposals by Foundation Trusts will distribute proceeds according
to the accidents of geography and the vagaries of the market rather than
pooling them and reallocating according to need.
• Freedom of Foundation Trusts to depart from national employment terms
can only exacerbate staffing difficulties faced by other hospitals in
many parts of the country.
Privatisation
• Co-payments and charging for some services are not in the plans but
the idea has been floated. The time-limiting of "intermediate care" may
provide one opportunity.
• The scope for commercial activities is increased by the ability
to borrow against income streams from "unprotected" assets and set up
subsidiary companies.
• Experience in other countries suggests that competitive pressures
will drive not- for-profit hospitals to increasingly emulate private providers.
Democracy and accountability
• It is not clear how the members and governing body of a Foundation
Trust can be truly representative of the large and diffuse community a
hospital serves.
• There is a risk that Trust boards end up simply rubber-stamping
business strategies rather than challenging them, because the majority
of members, whatever their local connections, lack the expertise needed
to challenge professional interests.
• Studies of the social economy show that the performance of not-for-profit
enterprises is highly contingent upon local leadership and circumstances.
Regulation
• The duty to meet "reasonable demand" for services may offer scope for
patient selection according to demographic profile to avoid expensive
caseloads.
• Much remains to be clarified about rights of access to services –
for example, whether the regulator would approve of changes in configurations
of services which involved substantially increased travel for patients
and visitors.
• In fact, the Regulator's powers may entrench the private sector as the
main provider of aspects of NHS care in some locations.
4. Conclusion: pragmatism, principles and the future of the NHS
• At present Labour policy seems informed more by pragmatism than by
principle, resulting in a dangerous drift back towards a pattern of services
determined by the ability of hospitals to compete in markets rather than
one determined by social needs.
• It might be bolder to return to principled arguments for integrated,
egalitarian public services and concentrate on how to improve the NHS
within that framework.
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