Excellent, health care - even the NHS - works by the normal eonomic rules

As we know the National Heath Service is the national religion. As such we're continually told that it's different. That the rules which apply are in some manner orthogonal to the rest of reality. This being a usual feature of religions.

This appears not to be so:

GPs are doling out fewer antibiotics after being paid bonuses for cutting prescribing levels, research shows.

Under the schemes, groups of doctors can receive an extra £5 for every patient on their list if they meet targets to cut antibiotic prescribing.

A study by Imperial College London and Public Health England found that the financial rewards helped to reduce antibiotic prescriptions for common respiratory tract infections by three per cent.

The first thing to know about standard economics being that incentives matter. Here we have a simple response to a simple incentive. We are not off in some alternate reality, we're in this world with the normal rules.

Markets increase efficiency and productivity. Indeed, so far as we know, competition is the only manner in which productivity continually increases over time. For economic systems without it don't.

Similarly, prices do indeed impact demand.

Excellent, we can get on with discussing health care - yea even the NHS - using the normal rules we have about reality and human reactions to it. That is a relief, isn't it? 

Tariffs and Trade Wars

In this week's Madsen Moment, Dr Pirie takes aim at those that play with fire when they propose tariffs and trade wars. 

Judging productivity measures in the NHS

As the demands upon the NHS increase, it needs to harness technology and drive out waste to be more productive.  More targeted and effective drugs and keyhole surgery have done that and in some maternity wards, expectant mothers barely have time to warm the bed sheets before, babes in arms, they are in their taxis going home. 

Yet in all the debate about funding, there has been little if any discussion of productivity, how should it be measured or how it should be enhanced.  The health lobby has politicked its way to more funding without any commitment to the better use of that funding.  Both nationally and for secondary care (hospitals) productivity should be the key metric: how much is spent matters less than the money being spent as well as it could be.

Measuring healthcare productivity, i.e. dividing the multivariate outputs by the inputs, is not easy. The Office for National Statistics takes the outputs to be:

• Hospital and Community Health Services (HCHS) – includes hospital inpatient, outpatient and day case episodes
• Family Health Services (FHS) – includes General Practitioner (GP) and practice nurse consultations, publicly-funded dental treatment and sight tests
• GP prescribing – includes all drugs prescribed by General Practitioners
• Non-NHS provision – including services funded by the government but provided by the private or third sector

And then they adjust the output quantities for quality:

• The extent to which the service succeeds in delivering its intended outcomes: for HCHS services, this is measured using short-term survival rates2, health gain following treatment in hospital and changes in waiting times; and for primary care, this is measured with a selection of measures from the GP Quality and Outcomes Framework, including measures for the percentage of certain groups of patients meeting target ranges for blood pressure"
• The extent to which the service is responsive to users’ needs: National Patient Survey.” 

The ONS compounds the input figures from:

• Labour inputs, ideally measured in hours worked, are differentiated by type of labour, for example, we distinguish between doctors, nurses and other staff
• Goods and services used up in production, such as heating and lighting costs, textbooks, bandages and dressings 
• The cost to the government of the activities performed by private sector providers of healthcare, such as independent treatment centres or hospitals made available under the private finance initiative
• An estimate of the annual use of fixed capital assets, such as the school and hospital buildings and the IT equipment”

All that complexity makes the results hard to believe when the productivity metrics swing wildly year to year for no obvious reason.  From the turn of the millennium to 2003 productivity changes fluctuated wildly between of -.3%, +2.8%, -2.2% and +1.3%. These outcomes show no correlation with outputs or inputs.  

Given the stable total workforce and steady march of government funding the figures should be more consistent but they are not. We can be sure about one thing about the NHS: it is very big and like most other big things, seen as a whole, it changes slowly and so should credible measures of productivity.  

The second two of the three inputs are what the government spends on healthcare apart from labour. The only difference, therefore, between the ONS definition of the total input and the cost of healthcare is using the time the workforce uses, and the cost of that time. It would be more realistic simply to use total healthcare cost – possibly adjusted by inflation – as the denominator. It would both be more honest and more stable.

The government made a serious mistake this month by promising large increases in funding without gaining specific undertakings on productivity.

Perhaps the increased funding was a political necessity – but putting in more money without achieving more outputs, simply reduces productivity.

Bed blocking is a prime example.

According to the Government Statistical Service, nearly 2 million NHS England beds were occupied a day more than they need have been. With NHS England having just over 130K beds, blocking occupies about 4% of hospital beds throughout the year. As hospitals take two thirds of the NHS budget, that alone wastes about 2.7% of the NHS budget (or £3bn if you prefer straight number costs), according to Lord Darzi.  

Social services usually get the blame for bed blocking but 58 per cent in 2016/17 were due to the NHS' own inefficiencies and the clock only starts when all the medics have signed off and the admin has been completed – often another two days. I am far from alone in insisting, twice recently, on discharging myself when I was ready to go home. For those who do require ongoing care, the costs are about £50 per person/day compared with £400 in hospital. Saving a over 87% of the cost is not to be sniffed at.   

Advocates for reform have highlighted many other areas of waste in the NHS whose elimination would enhance productivity, reduce waiting times and enthuse patients and staff once they had gotten over their resistance to any change.

Let's not forget of course that reform has been offered. Simon Stevens promised of £22bn. efficiency savings but none were delivered. We don't need an NHS that over promises and under delivers. 

No. What we need now is clear commitment to specific NHS efficiency savings. They need to be simple, credible, and easily understood.

Yes, some budgest may have to rise. Social care will need money. Maybe up to £3bn from existing NHS budgets to get them to sort out bed blocking. And we estimate nearly another £1bn is available from unnecessary DHSC quangos. But right now we need to clarify how we're going to measure successes, else we could be pouring good money after bad and not even know it. 

Britain's doctors demand GP appointments be paid for - in cash preferably

Quite obviously medical appointments with a general practitioner are already paid for. It's just that it is via the tax system, the appointment itself being free at the point of use. The British Medical Association - the doctors' trade union - is now insisting that this must change. To a system whereby there is an out of pocket expense to the patient for such a visit.

We think that's a good idea, with the appropriate caps on prices for multiple visits, as we already do with prescription charges for example, and we're quite happy with some to much of the cost still being tax financed. The existence of a price up front does usefully change behaviour however minimal it is.

The above isn't quite what the BMA says but it is clearly what they mean. You know, doctors being bright people and all that, they must have thought this through: 

GPs “will go insane” unless strict limits are imposed on the number of patients they say each day, medics claim.

The British Medical Association has called for a cap on the number of patients, with doctors hailing the system in Sweden where GPs see just 13 patients daily.

Medics said they were too often expected to have up to 70 consultations a day – and said this was not safe for them or their patients.

Dr Satash Narang, from Gwent and South Powys division, said GPs would “go insane, quit and become insolvent” if limits were not introduced.

“For the sake of quality and safety of patient care and the sanity of its troops, we urge the BMA to take a fresh approach by defining and agreeing what is a safe workload,” he said.

Previous research has found the average family doctor sees 41 patients each day.

Such limits would mean soaring waiting times to see a GP.

One solution would be that we have four times as many GPs. No one, no one at all, thinks that's going to happen. It's also not what the Swedish solution is. Not at all. 

In fact, Sweden has fewer GPs per head of population than the UK. They've thus, clearly and obviously, not lightened this workload through increased supply. Instead, they must have - and it is must have - changed demand. Which they have one through changing the price.

For yes, those little charts at the beginning of every economics book are indeed correct, supply and demand curves do work, price is the intersection. We can change the price and so affect supply and or demand just as it's possible to fiddle the other way around. 

A GP appointment in Sweden costs £15 to £20 (200 SEK say). The full cost is about what it is in the UK, £200 or so. We have 100% third party financing through tax, they only 90%. But it's that 10% out of pocket that allows fewer, per population, GPs to have those 13 visits and meet demand instead of our 40 rising to 70 and still not meeting it.

Prices affect demand, d'ye see?

As far as we know there are no complaints about the degradation to the health of the Swedish population this causes.

As at the top, doctors are clever people, they have thought all this through, haven't they? 

Vince Cable wants to steal your money

This isn't quite how the distinguished Solon, Vince Cable, would quite put it but this is what he's intending. That he, or the state, or perhaps even more horrifying the local council, should simply be allowed to come along and steal your money.  

That there might be better solutions to the housing problems is possible isn't it? 

What Sir Vince is suggesting is that councils, or perhaps some new body, should be allowed to purchase land and grant it planning permission. OK, fair enough. He's also insisting upon the ability to compulsory purchase. Well, that's a power which needs to be sparingly used but we can at least conceive of that being at times justified.

Then here comes the theft:

The most eye-catching element of Cable’s speech, among sections released in advance to the Guardian, is a so-called British Housing Company, an arm’s length government agency assigned to acquiring land at low cost.

Using compulsory acquisition powers given by law, the organisation would aim to save money by purchasing land at a price that would not include a hike in value factored in to include possible planning permission.

“The aim would be to acquire sites at a price as low as 40% of land acquired in the open market without paying the ‘hope value’ which attaches to those sites currently earmarked as having development potential,” Cable is to say.

That idea of compulsory purchase is and has to be backed by the insistence that market price will be paid. That hope value is part of the market price. Insisting upon not paying that market price is theft.

It is true that it's annoying to have to pay more for that hoped for value if planning is granted. But then the only reason there is that option value is because we don't grant enough planning. If we did grant enough then the hope value would be nothing.

But then if we issued enough planning to bring the hope value to zero then we'd not need the compulsory purchase, nor the state purchase of the land, as land with or liable to permission wouldn't have a higher value, would it?  

Or, as we might put it, if Vince actually tried to solve the underlying problem then he'd not need to insist upon state theft. Which would be a useful thing to do really, being as we are against both the problems in the housing market and also state theft.

Greetings from Australia!

After moving from Sydney to Perth at the beginning of the year, I became involved in an organisation called Mannkal. This organisation offers many different opportunities to university students and aims to provide a different view point than most of the educational institutions. Myself and two other students from Perth have made our way to London to intern for two months with the others interning at the Centre for Policy Studies and the Institute for Economic Affairs.

Being new to neoliberal ideas, I was drawn to the Adam Smith Institute and their range of publications and opinions. I was also drawn to London due to the excitement and uncertainty of Brexit negotiations and how this will end up shaping the future of the UK. As an Australian, I am particularly interested in the renegotiation of immigration policy. Separation from the European Union allows for a closer relationship with Australia and the UK may be more inclined to strengthen this relationship.

Last week saw the completion of my Commerce degree and now, thanks to Mannkal and the ASI, I’m interning here for the next two months. I believe this will be a great opportunity for me to use the knowledge that I learnt in my degree and draw on my interest of a freer society for all. I am very excited to start my next educational journey and career in a place that has such a significant influence within the UK and worldwide.

Those poor children working in the tobacco fields

The Guardian wants to tell us of the horrors of child labour. Fair enough, we're against it too. They are looking specifically at that which takes place in the tobacco fields. Which seems an odd thing to be doing as much to most of what then same newspaper recommends increases the poverty of those who grow tobacco.

The children working the tobacco fields: 'I wanted to be a nurse'

Children in poor families work the fields in Malawi, impacting schooling, reports Sarah Boseley, amid signs of a growing international crisis. 

Poor rural children do work in the fields. That's what poverty means, having to work rather than something better, like going to school. This was true of our forbears when England was as poor as Malawi is now. It's true of all other places as poor today as well.

Quite why tobacco is singled out we're not sure. Because they most certainly don't go on to point out how public policy more generally makes this all worse. Malawi itself gains tax revenue from tobacco exports. The sales price is of course set by the international market - that tax comes from what the producers, the farmers, would have got. Yes, export taxes - unless you've a global monopoly - are incident upon the producers, not the buyers.

We in the consuming nations also tax tobacco highly. We may have good reason to as well but there's no doubt that our doing so reduces those rural incomes. UK alone tobacco duties are more than Malawi's entire economy. Further, even while w tax the EU offers growers within the EU subsidies. One calculation insists that such are, per pound grown - just the subsidies that is - higher than the market price Malawians receive.

Our actions are increasing this poverty which is being complained about.

All of which is interesting but not really the point. So, what o we do about it? Well, obviously enough, try to make Malawi richer, so that there are no children poor enough that they must work in the tobacco fields rather than going to school. Fortunately we know how to do this, neoliberal globalisation.

Other parts of this reporting insist that there are similar problems in Bangladesh. Which there may well be. But Bangladesh also has those clothing sweatshops where people stitch our £1 t-shirts for £50 a month. As Paul Krugman says, this isn't great but it's better. And it isn't the children of those sweatshop workers out in the tobacco fields, they in school instead.

We've thus got a solution. We should be buying things made by poor people in poor countries, that neoliberalism and globalisation. This makes them richer.

Ah, but The Guardian is against fast fashion, cheap labour and sweatshops, isn't it? Which is a bit of a problem, as they're against the solution to their complaints. We at least are recommending something that obviously works... 

To apply a little bit of Bernard Levin to the passing scene

Bernard Levin had a concept he called the sieve of history. We continue to perform, view, adulate, the great works of art of the past not because they reflect the time and place of their creation. Nor because of current fashion. Rather, because they have indeed passed through that sieve and shown that they are indeed great works of art.

Not that the movie was quite right but Mozart is indeed a better composer than Salieri, despite what the fashions and money flows of the time might have indicated. The historical Salieri knowing this very well of course.

The drive to rid schools of “dead white men” like Shakespeare will leave children at the mercy of fads and fashions, Jenny Agutter has said.

The veteran actress urged teachers not to remove literary greats from school curricula on spurious grounds.

“Definitely don’t remove someone who is dead and white just because they are dead and white,” she told The Telegraph.  

“That is pigeon holing and shouldn't be allowed. There are French writers who are dead, there are Greek writers, there are all sorts of people who are dead but one doesn’t want to put them in that category.

“My feeling is that the best writing crosses time and social backgrounds. No one should be classified as black, white, dead or alive if the writing is good.”

While it is important for children to learn about writers from different backgrounds and countries, “we must not lose our literary heritage”, Agutter said.

Othello and Desdemona can, if we wish, be viewed as a musing on the difficulties of inter-racial marriage - something that certainly accords with current preoccupations. But to do so is to miss that it's a great exposition of the difficulties of jealousy, one of the human perennials. 

We can also - and we do - run this the other way around. It's not just that what were considered great works are, some mote of flour might, over the years, become recognised as a great as it wasn't in its own time. It's still too early for A Confederacy of Dunces but it's a strong contender.

What is a great work of art is, therefore, something emergent from the system - something you'll note is a preoccupation of ours, systems and emergence. To complain about what has emerged is an exercise in missing the point therefore.

One point of the current complaints we do agree with though. That classic canon survives as such, has become such, because it does speak to those great human problems and emotions that are common to us all across time and geography - race and culture too. Where we agree is that each modern work should indeed be accorded the same consideration as to whether it's to be included in that canon of the future. Exactly what the sieve will achieve whatever we do otherwise of course. 

Or as another of our preoccupations might put it, equality of opportunity is the aim, not equality of outcome.

Gosport Memorial Hospital shows that Friedrich Hayek was right

There's nothing that will produce more gales of laughter at a meeting of the bien pensants than Hayek's idea that the NHS would lead to serfdom. What? Government provided health care will lead to anything other than a properly planned and efficient health care system? Nonsense, eh, and then the entire argument Hayek actually made is suppressed in gales of giggles.

The argument he actually made simply being that to give the state power over us gives the state more power. If we have government running health care then our health care will be under the control of the state, the politics and politicians who drive said state power.

At which point we get:

Exactly the same cause of death was routinely given by those doctors involved in the “life-shortening” of the mentally incapacitated in Germany in 1939-41. This programme of extinguishing what the Nazis termed Lebensunwertes Leben (life unworthy of life) came to an end when another bishop — Galen of Münster — heroically thundered from his pulpit that fellow citizens were being eliminated merely for being a burden to society, as if their lives had no intrinsic value.

And yet more than 50 years later the same chilling disregard for the intrinsic value of life, however “difficult”, was manifested in an NHS hospital. Is Gosport an isolated case? I wouldn’t count on it.

(That's paywalled, an open discussion here.)

Gosport Memorial Hospital, a part of that NHS, was routinely killing people by overdosing them on opiates. Because, you know. No, really, that was the reason given.

As Hayek might have put it, the difference between socialist and national socialist state power over our lives isn't all that great. Their controlling health care does indeed lead to this serfdom where our very lives are in their gift.

But is is to laugh that this could possibly be true, isn't it? The difficulty being that Hayek was in fact right.

Having given the state control of health care we find that the national religion is topping us left, right and centre for the reason of being a little inconvenient to the state and or its avatars.

Having ignored the warning what do we do now?

Doesn't this just illuminate those social mobility statistics

There is much shock horror as it is said that white working class communities, families, might not have quite the ambition and drive for their children as is evident among migrants. There's a little caveat to apply here, given which it doesn't seem that remarkable. An then there's that effect upon those social mobility statistics:

White working-class children have fallen behind because their families can “lack the aspiration and drive seen in many migrant communities,” according to Amanda Spielman, the chief inspector of schools in England.

The caveat there is "many." Certain immigrant groupings - we dislike this talk of "communities" of such - do indeed appear to have a certain driving ambition for their children. That all will become doctors, pharmacists, engineers- secure and well regarded professionals. This has always been so of course, the jokes about the Jewish mother desiring that a son be a doctor or a daughter marry one are at least a century old. That migrants might have this, well, why do people migrate? In order to make life better for their children is a pretty obvious incentive, isn't it? 

Certain other such groupings perhaps don't have that same cultural drive. Shrug. People are as people do.

However, that implication for the social mobility statistics. If there are certain portions of the country that don't have that drive and ambition for their children then in those sections there's unlikely to be all that much social mobility, is there? Rather Shakespearean, the fault is not in the stars - the external environment - but in ourselves. 

As ever, the identification of the cause is important to solutions. For if this really is about the internal family dynamics of some sections of the British white working class then all the usual suspects - income inequality, capitalism itself, the iniquities of neoliberalism - aren't the cause, are they?  

We'll not try to insist upon this diagnosis of the base problem being correct. But we do insist that if it is then near all the plans currently being pursued - even the basic whining about the problem itself - to increase social mobility are wrong.