Failure of analysis' adds to ill health of system
By Nicholas Timmins
Published: June 29 2008 23:13 | Last updated: June 29 2008 23:13
It is less than 15 years since independent observers were giving the National Health Service reviews to delight its founding father, Aneurin Bevan. It was, according to the 1994 verdict of the Organisation for Economic Co-operation and Development, “a remarkably cost-effective institution”.
By 2000 the OECD analysts had reached a very different conclusion. Britain's cancer survival rates were poor, its waiting times long and, according to several other measures, health service treatment did not always produce good results. The NHS looked under-funded and under-resourced.
So what went so wrong, so fast? According to Clive Smee, who retired as chief economist at the Department of Health in 2004 after 20 years, the answer is “a failure of analysis and a certain British complacency”.
From the mid-1960s, Britain's health spending as a share of national income started falling below the European average. But the NHS had low administrative costs, and family doctors who controlled access to hospitals. On all the measures of health comparison then available – chiefly relating to life expectancy – the UK appeared to perform “solidly in the middle of the OECD pack”, Mr Smee says.
But there were problems with the data that cast the country in an undeservedly good light. Until the early 1990s there were no reliable international comparisons of the effectiveness of treatment. Difficulties in assessing the service's performance were compounded by a 1980s change in the way the NHS measured hospital stays. If a patient was treated by one consultant and then another, his treatment counted as two “consultant episodes”, rather than a single stay.
The result was an apparent, but largely artificial, increase in activity for the same amount of cash. “So when ministers asked how we were doing given our low level of expenditure, the efficiency measures were misleading and the treatment outcome measures weren't there,” says Mr Smee.
For a long time, “no one seemed to ask why, if we were so efficient, we still had waiting lists and were not getting them down. It only slowly dawned on people that in most other European countries, hospital care is also effectively free at the point of use, but they did not have these awful waiting times. Sure they spent more, but we appeared to be so much more efficient. It was hugely inward-looking and complacent really – a refusal to believe we had much to learn from other countries.”
In the early 1990s, however, the first decent data for comparing the outcome of treatment became available. That helped prompt the OECD's far bleaker turn-of-the-century analysis. Its views were reflected in a report to the Treasury in 2002, which concluded that over 25 years the UK had under-spent by a cumulative £220bn compared with the average of other European Union countries.
That supported the decision to double spending in real terms to bring it much closer to the EU average – leaving the NHS with fewer places to hide if its performance continues to lag other European health systems. |
