Commons Health Committee Evidence and supplementary memo

Memorandum of evidence for Health Committee’s inquiry into Commissioning.


The aim of any system of universal healthcare is to distribute healthcare according to need, hence avoiding the ‘inverse care law’ which states: “The availability of good medical care tends to vary inversely with the need for it in the population served. This … operates more completely where medical care is most exposed to market forces, and less so where such exposure is reduced.” (Hart, 1971)

Evidence about health inequalities shows that the inverse care law still holds true today, and yet the aim of distributing care according to need has been replaced with the aim of distribution according to market forces. Economists as diverse as Freidrich Hayek, Adam Smith and Amartya Sen, all recognised that markets are blind to need. Whereas healthcare distributed according to need may be efficient, the converse is not true; for example refusing to treat someone may be cheaper than treating them and screening low risk populations can be highly profitable.

1. Commissioning increases the role and effect of markets in the NHS and will therefore exacerbate health inequalities. As GPs our primary duty as codified by the General Medical Council is to our patients. Mentor, the body set to oversee commissioning will add the conflicting duty to behave competitively and efficiently. Well educated, motivated patients with uncomplicated needs that are amenable to medical solutions can be looked after efficiently and will therefore attract more resources. Complicated patients with high levels of socially determined health needs, complex medical problems, low literacy and chaotic lifestyles cannot be looked after as efficiently and we will lose resources even though their needs are greatest. It is important to note that the very best quality care may not be efficient. Patients in primary care very often need a doctor who listens, who is considerate, understanding, and sympathetic and who gives a clear explanation and reassurance. It is hard to see how, if at all, visiting a bereaved patient or taking time to discuss a serious diagnosis can be deemed efficient. Up to 30% of patients in primary care and 50% in secondary care consult with medically unexplained symptoms. The evidence is that these patients benefit from continuity of care and are harmed by excessive investigations. British general practice has a universally admired tradition of continuity of care but this will be undermined by a plurality of providers and payment by results rewards excessive investigations.

2. The serious choices patients have to make, such as when to stop chemotherapy, whether to die at home or in hospital, whether to continue with an unwanted pregnancy depend on continuity because they are best made with a doctor they know and trust. These choices are far more important to patients than the choice of hospital.

3. GPs in affluent areas with low levels of need are already supplementing their income by offering cosmetic treatments, whilst in deprived areas GPs still lack the resources to manage serious physical conditions, psychological problems and drug or alcohol addiction.

4. Forcing providers of health within the NHS family to compete with one another instead of collaborating is a great threat to the provision of integrated care. My patients with serious long term conditions depend on close collaboration between primary, secondary and community care. The purchaser provider split and payment by results are already damaging the relationship between GPs and their hospital colleagues; GPs are suspicious that their hospital colleagues see patients in order to earn money even when they could be managed in primary care and hospitals worry that GPs are working beyond their expertise by holding onto patients in an attempt to make savings.

5. The abandonment of practice boundaries enables young, mobile patients with few health needs to join practices designed for them, leaving other practices to look after higher concentrations of complex, elderly patients. Historically, GPs have been able to afford to manage their complex patients because they have a balanced population, including an income from young people who only consult occasionally.


The conversion of the National Health Service into a fragmented system of competing providers based on profitability marks the end of universal health care planned and distributed according to need.

Supplementary Memo

I thank the Health Committee very much for the opportunity to speak today.

There are just three comments.

1. One of the last questions from the committee was on the cost of commissioning. The questioner referred to the cap on administration costs.

Presently my PCT receives £33 per patient. We have been told that our commissioning group will receive just £9 per patient.

My reply informed the committee that the administration and transaction costs of running a market are higher than running a non-competitive system. Not only will we (City and Hackney GPs) have to take over PCT functions on a fraction of the budget, but we will be expected to take on the significant, additional costs of managing a competitive market. This is not recognised in the White Paper.

2. Efficiency is aimed at maximising profit. It’s essential that we don’t confuse maximising efficiency with responding to clinical need. If Dr Charlson sets up a blood testing enterprise on the doorstep of my surgery he may well be enterprising and efficient (blood tests are easy to organise efficiently), but he’s not responding to patient need, because we already do our own blood tests. Our patients need more drug and alcohol rehab provision, but under the proposed system it is not going to be provided unless it is profitable, in spite of the desperate need.

3. The other speakers objected to my comparisons with the US system. In my defence I will explain the similarities and I include the quote I read out and a reference.

The White Paper proposes that NHS services become social enterprises and hospitals become foundation trusts. These processes will allow the transform of the NHS from a publicly owned service into privately owned businesses. Secondly the intention to remove practice boundaries and allow patients to register with commissioning consortia is based on the US Health Management Organisation (HMO) model. Thirdly the conversion of the NHS into competitive markets converts medical care into a commodity in trade. Finally and most importantly, the major private companies competing to provide services to the NHS (like United Health) are US health care companies. It is for these reasons that I believe that comparisons with the US are vital if we are to understand our future prospects.


“The US devotes a much larger fraction of its GDP to health care than other advanced countries—nearly twice their average. We spend, in US dollars per person, two and a half times as much as our counterparts in Europe. The most important reasons for the uniquely high costs are its commercialization and the effects of business incentives on the provision of care. The US has the only health system in the developed world that is so much owned by investors and in which medical care has become a commodity in trade rather than a right.” Health Care: the disquieting truth<>

2 responses to “Commons Health Committee Evidence and supplementary memo

  1. For an illuminating brief history of the privatisation of public goods, see Tony Judt, What is Living and what is Dead in Social Democracy.
    I’m reading his book Ill Fares the Land

  2. Pingback: Who is commissioning who? | Abetternhs's Blog

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