Is it time we faced up to the fact that the NHS itself is the reason for the continuous stream of scandals? It’s not just the Mid Staffs Foundation Trust, or the ‘Nicholson Challenge’ or ‘the reforms’, or ‘the culture’. The NHS suffers from systemic faults. Above all, the regular flow of defects and failures is what you would expect from a command-and-control regime that has a monopoly.

It’s not as though making this claim is new. The last Labour Government recognized the structural flaws in the NHS nearly a decade ago. The NHS Improvement Plan of 2004 specifically denounced monopoly: There would be ‘contestability … so that patients and the public, rather than monopoly institutions, can make choices about where, when and how care is delivered.’ Giving people greater personal choice would give them ‘control … allowing patients to call the shots about the time and place of their care, and empowering them to personalise their care to ensure the quality and convenience that they want.’

As a result, there was a big push for ‘contestability’ and patients were told that they were now consumers with choices that put them ‘in the driving seat’. The Government came up against strong entrenched interests and Tony Blair famously declared war on the ‘forces of conservatism and reaction’ in the public sector. The government report, Creating a Patient-Led NHS, said in 2005: ‘At its worst, the NHS has a very hierarchical tradition with professional divides and bureaucratic systems and inflexible processes. These can get in the way of good patient care.’

Since then, the battle lines have been drawn between monopoly NHS insiders  and the champions of the consumer. The monopolists want to suppress competition from alternative suppliers, claiming that it is incompatible with the public-service ethos. The Francis report has finally shown that meretricious claim to be utterly unfounded. On the other side are critics who argue that the best way to encourage high standards and value for money is to promote pluralism, so that the best ideas can emerge from comparison of one provider with another. No doubt in every walk of life the insiders would like to be ‘preferred providers’ with no irritating rivals compelling them to raise their game. But we all know as consumers that, unless we have alternatives, producer interests come to dominate.

Since Blair’s time there has been a steady increase in the involvement of the private sector. Provision of diagnostic services has been vastly improved and the Independent Sector Treatment Centres have been a success. Unfortunately Labour’s commitment to pluralism was weakened by its simultaneous attachment to performance targets. Lacking any real sympathy for pluralistic rivalry, its reforms were increasingly reduced to target-setting.

Professionals and other employees, whose work unavoidably depends on judgment and individual conscience, typically react badly to compliance regimes. GPs notoriously seized on the reforms to advance their own narrow interests. In the first year of their new pay deal, called the Quality and Outcomes Framework, they increased their average pay by about 30 per cent. In many cases they stopped providing an out-of-hours service, when no doctor who truly cared about his patients would hand over the out-of-hours service to anonymous subcontractors.

Some hospitals were soon found guilty of extreme negligence. The Healthcare Commission’s report in 2009 found complete failure at ‘virtually every stage’ in the care of emergency admissions at Stafford Hospital. According to Sir Ian Kennedy, the commission’s chairman,  ‘There is no doubt that patients will have suffered and some of them will have died as a result.’ There were ‘too few doctors and nurses, vital equipment was not available when needed, patients did not receive the care they deserved and the trust had no system in place to spot when things were going wrong.’ Some wards  were filthy, with blood and excrement caked on surfaces; and some nurses were unable to operate cardiac monitors or intravenous drips, which meant patients were not receiving the correct amount of fluid.

During the same period, the annual survey of NHS staff found that many would not want to be treated in their own hospital, suggesting that Stafford was not unique. The Healthcare Commission asked employees of all acute NHS trusts in 2006 if they agreed with this statement: ‘As a patient of this trust, I would be happy with the standard of care provided.’ Under half replied positively: 42% agreed, 25% disagreed and 32% said they neither agreed nor disagreed. In ‘large acute’ trusts only 34% agreed. In 2007 the survey asked staff in all acute trusts whether, ‘Care of patients/service users is my trust’s top priority.’ Only 48% agreed, 23% disagreed and 28% sat on the fence, neither agreeing nor disagreeing.

Compliance regimes operate by remote control, whereas pluralism makes it easier for organisations to emerge that put patients first without compromising respect for the professionalism of staff. Compliance systems treat employees as self-interested individuals who must be incentivised by managerial sticks and carrots to behave in specific ways. As a result, they drive out alternative ways of motivating staff. Pluralistic competition gives rival providers more scope to try out different way of encouraging the best in people.

In a personal service like health care, the first line of defence is the conscience of the individual doctor or nurse. Remote performance targets put external compliance before internal morals. They tend to de-professionalise and encourage cynical gaming of the system, often with harmful clinical consequences. The requirement that hospitals should ensure that no one waited more than four hours to be treated by an accident and emergency department became one of the most abused targets. Some patients were made to wait on trolleys parked in corridors before they had been fully treated, so that they could be ‘signed off’ as discharged within the time limit. Other sick and injured patients were kept in ambulances in the hospital car park because the four-hour clock did not start ticking until the patient was brought inside the building. Similar manipulation became widespread.

If the latest scandal does not trigger a fundamental challenge to the NHS monopoly, it will soon become only the latest in a regular series of similar outrages. The Government has typically reacted by ‘doing something’ that can plausibly be portrayed as useful. But a new hospital inspector will not get to the heart of the problem. We should look overseas to the social insurance schemes of France, Germany and elsewhere for better ways of guaranteeing health care for everyone, whether rich or poor.

David Green is Director of Civitas.

Tags: NHS, Stafford Hospital, UK politics