The NHS: gifts and markets - the need for both economies

Life has been busy so I have only just got round to reading last week's Society section of the Guardian. It carried an interesting article, Gift rap, by Paul Hodgkin about the role of gift economies in the health service.

I agreed with the main thrust of the article that altruistic and collaborative enterprises (such as support groups) have a vital role in NHS. Hodgkin is chief executive of Patient Opinion which is itself a good example of such gift enterprises. “Co-production” is likely to be a growing part of NHS activity in the future too.

What I disagreed with Hodgkin about was his casual rejection of "markets" in the NHS. He commented:

there are a number of reasons why the search for fully functioning markets in healthcare has little likelihood of success.

He went on:

First, markets within the public sector are zero sum - more hip replacements here means less chiropody there. Or put another way, the foundation trust's surplus tends to mirror my PCT's deficit.

But there will always be a choice between hip replacements and chiropody - unless resources are unlimited. Love it or loathe it, but the National Institute for Clinical Excellence is a way of making those decisions by setting entitlements. The market (or call it choice for patients and competition among providers) is a tool for resolving whether those treatments are at hospital A or hospital B or polyclinic C.

Hodgkin continued:

Second, the "goods" the market is trying to allocate are usually not desirable - unlike a holiday in the Maldives. No one aspires to go to hospital for a mastectomy. As consumers, patients can call some shots in a market. But their fears and anxieties are easy to exploit by suppliers (read doctors) inducing demand for ever "better" care.

I think that medical treatment is very desirable when you need it - even major surgery. The point about professionals over-treating is valid although incentive structures can be developed that address that risk. So doctors and/or hospitals are rewarded for healthy outcomes rather than simple throughput of treatments.

One of the biggest obstacles for markets is the imperfect information that patients have about alternative doctors, hospitals, etc. But Patient Opinion and similar initiatives are tackling that.

I believe that Hodgkin's article reflects are cultural weariness of "markets". We hear the word and imagine Del Boy selling three legged tights or City traders yelling "Sell, sell, sell" into their mobile phones. Perhaps there would be less prejudice against "markets" (and associated hostility to reform) if we spoke about decentralised decision making by patients (or parents or service users or whoever) rather centralised decision-making by planners and politicians.