Health reform increased death rates

Were acute services downgraded?

By Steve Schifferes BBC News Online economics reporter

The NHS reforms of the previous government increased death rates from heart attacks, a study suggests.

New research suggests that 8,000 more people died from acute heart attacks in hospitals subject to competition between 1991-99 than would have been the case had there been no competition.

Death rates from heart attacks fell much more sharply in hospitals that had no competition and were not subject to the internal market, according to researchers from Bristol University.

The news will acutely embarrass the government, and health secretary Alan Millburn, as he prepares to announce detailed plans for new foundation hospitals which will be free of NHS controls.

Wrong targets

According to Carol Propper, of Bristol University's economics department, it is likely that the problem was that her measure of quality - deaths from acute heart attacks - was not used by purchasers of hospital services.

She suggested that instead, attention would have been focused on shortening waiting list times by increasing the rate of non-acute operations for such conditions as hip replacements.

But this may have diverted resources from the acute services in accident and emergency rooms.

Carol Propper suggested that getting the right measures of targets and outcomes was crucial if "non market" services like health care were to benefit from the introduction of market-led reforms.

Lessons for today?

The research was examining the operations of the internal market, which was introduced in 1991 by the Conservatives and abolished by then health secretary Frank Dobson in 1999.

During that time, some hospitals (mainly in urban areas) were able to compete for contracts for the provision of services with area health authorities and some GP practices.

In other areas, there was no competition, because there was only one hospital within a reasonable distance of patients suffering heart attacks.

Death rates from heart attacks were generally declining in this period, because of improved technology, but failed to decline in the hospitals which were facing increased competition.

Now, under Health Secretary Alan Milburn, aspects of the internal market have been reintroduced into the health service, including the bulk purchase of services from GP fund holders, who are now grouped together and have replaced area health authorities.

It is unclear whether the output targets selected by these bodies, which may also apply to foundation hospitals, will repeat the same mistakes of the l990s.

Productivity gap

The research highlighted the general problem facing the government in its drive for public sector reform.

It is very difficult to measure success in areas where services do not have a cash value.

But without concrete outputs, there is a fear that the extra money the Treasury is pouring into public services could just be wasted, or just go into higher wages for groups like the firefighters.

And some new research from the Office of National Statistics points out how widespread the problem is.

According to ONS estimates, productivity has fallen across a wide range of public services since Labour came to power.

Despite extra funds, outputs have increased slower than inputs in health, education, and social security.

Only the heavily privatised prison service, and the police have increased their productivity.

However, this only goes to illustrate some of the difficulties of measurement.

The police have increased their efficiency - as measured by clear-up rates for crime - because there is relatively more violent crime, which is easier to clear-up (compared to property crime like burglary where it is more difficult to track down the criminal.)

In the fire service, in contrast, productivity has gone down - because the number of fires has gone down, despite the fact that funding has fallen in real terms.

Competition and Quality: Evidence from the NHS Internal Market 1991-1999, by Carol Propper, Simon Burgess and Denise Abraham, and Measuring Productivity Change in the Provision of Public Services, by Alwyn Pritchard, were presented at a conference by the National Institute of Social and Economic Research in London on 19 November 2002.