Glory be, something sensible said in The Guardian at last. Admittedly, it is being said by Simon Jenkins who does sometimes get things gloriously correct. His point is that the NHS simply cannot be run as one single monolithic bloc, it's just too large for that:
Yet one subject that is unmentionable – and therefore untouchable – is the size of the NHS itself. A public service that, for a generation, has successfully nationalised its virtues finds it has now nationalised blame for its vices. Where glory once shone down on the Commons dispatch box, now there is only scandal. It must make sense that, when every conceivable reform – devolution, centralisation, purchaser-provider split, internal markets, fundholders, commissioners – has been tried and seen to fail, someone should challenge the very concept of a central service. It might be worth looking at how others do it, and not smugly concluding that the public likes the NHS the way it is. The health service is not useless or uncaring or that bad at making people better. It is just too big. Aneurin Bevan was wrong to nationalise it back in 1948 – and his great foe, Herbert Morrison, was right in wanting a new service based on charitable and municipal hospitals, as remains the case almost everywhere in the world.
The NHS is some 11% of our entire economy. We might think that only running 11% of the economy as a Stalinist style top down and planned organisation isn't so bad. But this is an organisation the same size as the total economies of Finland, Greece or Portugal. And other than Seumas Milne there's no one at all left who thinks that rigid state planning of any organisation that size is likely to work or be efficient.
So, to localism and small scale management it is then. Jenkins mentions Denmark as a reasonable example, where it is the commune (as small as 10,000 people but usually substantially larger) that both raises the tax money for health care and also allocates its spending. Sweden does much the same but at the county level. And when the basis of the system is that fine grained then it's obvious that not all treatments can be provided by all outlets. There's therefore a considerable market in who provides what to whom.
And yes, that is the other side of pushing decision making and planning down to that level. We still want a coordination method for the whole. But we've just agreed that it cannot be central government nor planning. The answer is, thus, the other method of coordination that we know of: markets. For that is what markets are a method of, coordination, cooperation. The competition part of them is a terribly minor part: that's the bit where people work out who they are going to cooperate with.
A decentralised NHS would be, as Jenkins says, a better one. And we'd therefore need to use market mechanisms to provide the coordination across the different providers. It can still all be tax funded if that's how we decide we'd like to do it. But whether we do that or not it is still true that currently we've Stalnist central planning in an organisation that ios the economic size of entire countries. And the interesting lesson of the second half of the 20th century was that central planning on that scale just doesn't work.