It's the accounts, stupid


Health Secretary, Andrew Lansley, brings considerable experience of NHS issues to his new job, having been the Shadow Minister for many years.

Encouragingly, he is reported as believing that Monitor, the regulatory body, should play a crucial role in bringing about modernisation and competition in the NHS.

Indeed, he should use Monitor to push forward the NHS deregulation agenda, not just to the 129 Foundation Hospitals that it currently oversees, but also to the remainder.

Monitor should also seek to narrow the gap between the private sector and the Foundation Hospitals. Central to its activities should be the compilation – and updating - of accurate costs for each common type of surgical procedure, based on standard accounting principles.

Furthermore, parts of the NHS are ripe for disengagement from the existing system, especially imaging and pathology services.

Requiring each hospital to provide separate accounts for these two services should be the first step towards creating a competitive market in imaging and pathology; it should also facilitate the raising of much-needed – and contract-backed - investment funds.

The principles to be used - based on a gradual move to full competition in imaging and pathology - should be similar to those employed in introducing electricity competition in the 1990s.

In time, a few major imaging and pathology businesses should emerge from NHS hospitals. They could also operate in overseas markets and become flag-carriers for the technical excellence of the UK medical sector.

But crucial to the many necessary improvements in the NHS is the availability of accurate numerical data, a role that Monitor is best placed to ensure.

Drawing up ring-fenced regulated accounts on common principles will be crucial in this process. To bowdlerise James Carville, the ‘Ragin Cajun’ of US politics, - It’s the Accounts, Stupid’.

Are these proposals too radical or just standard business practice?