In Pursuit Of An Improving National Health Service

PROLOGUE: Reforms of the British National Health Service (NHS) have been the focus of much debate for nearly two decades. Resources have long been scarce and waiting lists long. Surveys indicate high levels of dissatisfaction. Alain Enthoven first went to study the NHS in 1984 at the invitation of the Nuffield Provincial Hospitals Trust (now the Nuffield Trust). The trust published his occasional paper called Reflections on the Management of the National Health Service in 1985, in which he first proposed the idea of an “internal market” within the NHS that would maintain a tax-funded program of universal access, free at the point of service, but which would create market forces within the NHS to motivate improvements in efficiency and customer service. In 1989 the governments of Prime Minister Margaret Thatcher released its White Paper, Working for Patients, which proposed to implement the internal market idea. In 1998 the Nuffield Trust invited Enthoven to come back, as the Rock Carling Fellow on his 1998–1999 sabbatical, to review the experience. In this paper Enthoven presents lessons learned from the reforms and offers some suggestions for the NHS to build on its successes while addressing some of its painfully obvious shortcomings. Enthoven is the Marriner S. Eccles Professor of Public and Private Management at the Stanford University Graduate School of Business. He holds degrees from Stanford, Oxford, and the Massachusetts Institute of Technology. The Rock Carling Fellowship, from which this paper was derived, commemorates the late Sir Ernest Rock Carling, a governing trustee and chairman of the Nuffield Trust's Medical Advisory Committee. Enthoven delivered the 1999 Rock Carling lecture at the Royal College of Physicians in London in November 1999. ABSTRACT: The British National Health Service (NHS) before its 1990s internal-market reforms was a gridlock of perverse incentives. The internal market, an attempt to introduce some market incentives, stimulated much innovation in primary care commissioning and practice improvement and led to increased efficiency. However, its effects were quite limited, because the essential conditions for a market to operate were not fulfilled. There now exists a crisis of confidence in the quality of care in the NHS. It is doubtful whether a culture of innovation, efficiency, and good customer service is possible in a public-sector monopoly whose services are in excess demand and whose units do not get more resources for caring for more patients. It also is doubtful whether the NHS can modernize without consumer choice, competition, and more resources.