An article in the Financial Times last week reported the former commercial director of the Department of Health, Ken Anderson, saying EU law will soon force the NHS to open up many more of its services to bids from private sector companies. His argument is basically that that the government’s policy of slowly introducing more competition into healthcare is “increasing the likelihood that NHS services may be subject to EU single market and competition rules”. Probably true. In which case could the EU, finally, be doing the UK a favour?
The NHS, at least by international standards, really isn’t a very good health system. Take the main killer diseases: cancer, coronary heart disease and stroke. The OECD measures deaths before the age of 70 that were potentially preventable by good medical care. The UK had the third worst death rate from cancer in nine developed nations in 2003. For ischaemic heart disease, the UK had the second worst death rate in 2000 and was still there in 2003. An OECD report on strokes found that in 1998 the UK was by far the worst performing country measured by deaths within 30 days. Fatality rates were often double those in 11 other countries. Despite recent reforms NHS patients still wait far longer for treatment. In 2005, 41 per cent of UK patients waited four months or longer for elective surgery, compared with 33 per cent in Canada, 19 per cent in Australia and less than 10 per cent in the US and Germany.
As David Green writes in the Daily Telegraph, a large part of this can be attributed to the fact that, unlike other European countries, the UK health system – the NHS – is a public sector monopoly. Crucially the NHS is not subject to the competitive pressures that drive improvement in patient care and productivity. A report on Financing Sustainable Health Care in Europe, currently being drafted by a number of European stakeholders, supports this case. It specifically calls for increased competition in health care provision; ‘incentivised’ and empowered consumers; and results-orientated healthcare. Why? To ‘thereby enhance quality, choice, efficiency and equity for EU citizens’. The French, German and Swiss systems have proved the truth in this; in these countries hospitals are under diverse ownership and health care is paid through social insurance, yet the poorest people receive a higher standard of care than the UK.
So, if the single market and EU competition rules are forcing the NHS down this route, three cheers for the EU? Well, possibly. The EU broadly produces two types of regulatory policy: what might be termed ‘negative’ integration – the removal of barriers to international trade and competition by creating a single market – and ‘positive’ integration, the establishment of new EU-wide regulations. On the former, great. Negative integration should abolish national rules and liberalise national markets, i.e. be deregulatory. Included in this are those that are ‘forcing’ the NHS to open up: that on ensuring real competition for public procurement, ‘mutual recognition’ of minimum standards and antitrust/state aid regulation. Properly applied to healthcare, such measures could provide for competition between providers (from all Member States) for NHS contracts and dilute government interference. It is this principle that, for example, the NHS Partners Network (inc. e.g. Bupa, Netcare and Nuffield) have used to protest against ‘social enterprise’ groups of NHS professionals (doctors and nurses) being given preferential ‘sweetheart’ deals to provide NHS services in Surrey.
However, as with many things EU, there is a downside. Exposing the NHS to the single market also increases its exposure to the EU’s current obsession with positive integration; namely harmonising and re-regulating sectors and thereby effectively removing the very competition between different systems that the single market should thrive on! All in the name of creating a ‘social’, unified, Europe.
We can already see the detrimental effects of this on the NHS as it is; reports abound of how the Working Time Directive is causing chaos by, for example, forcing ambulance teams to take meal breaks of up to 45 minutes and thus failing to properly respond to 999 calls. And the NHS has been penalised by not being given enough ETS pollution permits to the tune of something like £6m (Open Europe). On top of this, there is the long-term trend of the EU getting its hands in more and more pies and, perhaps of even more immediate concern, that any liberalising measures the EU tries to introduce at the moment gets watered down to the point of uselessness or, worse, actually serves as re-regulating. This has happened with the Services Directive, which healthcare – perhaps thankfully in the end – was excluded from. The same will no doubt happen with the current consultation document of the EU Commission on cross-border health services, introduced after this exclusion, which aims to ‘reconcile greater individual choice with the sustainability of health systems overall’ (Health Commissioner, Markos Kyprianou).
So if EU law on the single market and competition does ultimately force the NHS to open up, where does that leave us? Who knows! The risk is we exchange an inefficient public sector monopoly for a ‘competitive’ market for healthcare with the EU’s regulatory tentacles all over it. Take your pick!