Notes on NHS and Social Care Market Lessons

Introduction

• Date of Publication: December 5th, 2013

• Author: Marianna Fotaki

• Purpose: To elucidate lessons from the introduction of markets in social care for the National Health Service (NHS).

• Comments: 3 | Shares: 32

• Estimated reading time: 5 minutes

Overview of Health and Social Care Act 2012

• The Health and Social Care Act was introduced by the coalition government.

• This Act introduced competition into the NHS.

• It seeks to create a market in state-funded health care services and allows private sector providers to bid for NHS services.

• The intent is to capture competitive benefits by providing better quality services more efficiently.

Historical Context of Social Care Markets

• A market for state-funded social care was established over 20 years ago.

• This historical instance of marketisation serves as a reference for examining the effects on NHS services under similar competitive pressures.

• Resource constraints are highlighted as a critical issue affecting both social care and the NHS.

Key Lessons from Social Care Markets

• Lesson 1: Negative Impact on Quality of Care

  • The introduction of competition aimed to control costs but adversely affected care quality.

  • Local authorities were forced to award contracts primarily based on cost rather than service quality due to funding restrictions.

  • Result: Quality of care often reduced to the 'minimum quality level allowed.'

  • Norman Lamb, the current Care Minister, noted that the systems incentivise “poor care, low wages, and neglect.”

  • Implication: If NHS providers compete on price, similar degradation in care quality can be expected.

• Lesson 2: De-professionalisation and Casualisation of Workforce

  • The competitive market has de-professionalised and casualised the social care workforce.

  • Example: Social care workers often earn below the minimum wage.

  • Over 50% of home care workers reportedly work on ‘zero hours contracts’.

  • Of the estimated 1.4 million care workers in England:

  • Fewer than half hold a basic NVQ2 qualification.

  • 30% have not completed basic induction training.

  • Despite increasing care complexity (e.g., growing dementia cases), workers are expected to deliver care within severely limited time slots (e.g., 15 minutes each).

  • Conclusion: Competitive pressures could cause a similar impact on the terms and conditions of the NHS workforce, as seen in the Mid Staffordshire NHS Trust report.

  • A rise in healthcare assistants has been noted, with fewer nurses available to provide care, leading to potential quality risks.

• Lesson 3: Inevitable Provider Failures

  • The experience in social care indicates that provider failures occur frequently, significantly affecting patients and service users.

  • Between 2003 and 2010, nearly 2,000 care providers closed in England, often giving less than 4 weeks' notice.

  • Consequence: Residents and families suffer from these abrupt closures, primarily due to local authorities limiting fees.

  • Industry consolidation has intensified, with a few companies dominating the market (20 companies owning 30% of care home beds).

  • The failure of large providers raises concerns about the stability of care services, as evidenced by the collapse of Southern Cross in 2011.

  • Current forecasts suggest potential collapses in the coming decade, affecting both independent and NHS providers.

Conclusion

• While experiences from social care markets are not entirely applicable to the NHS, the issues raised warrant public discourse.

• Developing informed strategies to avoid repeating these outcomes in the NHS market is essential.

Author's Background

• Marianna Fotaki

  • Position: Professor of business ethics at Warwick Business School, University of Warwick.

  • Visiting professorship at Manchester Business School.

  • Background: Graduate in medicine, public health, PhD in public policy from LSE.

  • Experience: Worked as an EU resident adviser and as a medical doctor with Médecins Sans Frontières and Médecins Du Monde for eight years.

Based on the article, here are points addressing your questions:

How has introducing market mechanisms into the NHS impacted healthcare equity and quality?

• Impact on Quality of Care:

  • The introduction of competition, while aiming to control costs, adversely affected care quality.

  • Local authorities were compelled by funding restrictions to award contracts based primarily on cost, leading to care quality often being reduced to the 'minimum quality level allowed.'

  • Norman Lamb, the Care Minister, observed that such systems incentivize “poor care, low wages, and neglect.”

  • The article implies that if NHS providers compete on price, similar degradation in care quality can be expected.

• Impact on Workforce and Indirect Quality:

  • The competitive market has de-professionalised and casualised the social care workforce, with many earning below minimum wage and working on 'zero hours contracts.'

  • This workforce casualization, despite increasing care complexity, leads to severely limited time slots for care (e.g., 15 minutes), raising potential quality risks.

  • A rise in healthcare assistants and fewer nurses available for care also poses quality risks, as noted in the Mid Staffordshire NHS Trust report.

• Impact on Service Stability and Patient Equity:

  • Frequent provider failures (nearly 2,000 care providers closed between 2003-2010), often with little notice, significantly affected patients and service users. This disrupts continuity of care, which impacts equity of access for those requiring ongoing services.

Examine the tension between the NHS's core principle of universal healthcare as a right and the drive for competition and efficiency.

• The Health and Social Care Act 2012 introduced competition into the NHS with the intent to capture competitive benefits by providing better quality services more efficiently.

• However, the experience in social care markets reveals a tension: while the goal was efficiency and better quality, the reality was cost-driven competition that reduced care to a 'minimum quality level allowed.' This directly conflicts with the principle of universal access to inherently high-quality care as a right.

• The casualisation of the workforce and poor wages (Lesson 2) challenge the idea that essential care as a right can be delivered sustainably and ethically under severe cost pressures.

• Frequent provider failures and abrupt closures (Lesson 3) demonstrate that market mechanisms can undermine the universal guarantee of care, as patients suffer interruptions and displacement, contrary to the stability implied by a 'right' to healthcare.

What does this case reveal about the limitations of applying market principles to essential public services?

• Quality Degradation under Cost Pressure: Market principles, when applied to essential services like social care, can lead to quality degradation as providers compete on price rather than value, reducing services to the lowest acceptable standard.

• Workforce Exploitation: The drive for efficiency in a competitive market can de-professionalise the workforce, leading to low wages, precarious contracts, and an inability to deliver complex care adequately, thus compromising the quality of the essential service.

• Service Instability and Disruption: Market competition can result in frequent provider failures and industry consolidation, which destabilizes essential services and causes significant harm and disruption to vulnerable service users and their families.

• Incompatibility with Public Service Ethos: The outcomes (reduced quality, workforce issues, service failures) highlight the limitations of market principles in contexts where universal access, high quality, and stability, rather than profit or pure efficiency, are paramount for public well-being.