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I didn't know classical economics predicted these 'outcomes'. Perhaps John Gray put it best: "Here they are endorsing the caricature of Smith propagated by neoliberal ideologues anxious to confer a distinguished patrimony on an illegitimate intellectual offspring. Certainly, the ‘invisible hand’ is one of Smith’s central ideas, but he never saw it as working in a mechanical fashion." ... Even Kenneth Arrow, who many call a neoclassical economist, understood and taught us the "differentia of medical care as the object of normative economics". Galbraith had the depth of intellect to accept and embrace the fact that life can not be predicted or distilled through economic axiomatic descriptions...

But then again, I stress, depth of intellect, with a soul to match... 

Ali


On Wed, Mar 17, 2010 at 9:32 PM, David McDaid <[log in to unmask]> wrote:

FYI – a report from another centre right think tank Civitas – looking at effects of NHS market reforms: concludes that the reforms have not been proven to bring about the beneficial outcomes that classical economic theory predicts of markets, including provider responsiveness to patients and purchasers; large-scale cost reduction; and innovation in service provision

 

Report available at

 

http://www.civitas.org.uk/nhs/download/Civitas_LiteratureReview_NHS_market_Feb10.pdf

 

 

Although there are presently very few studies that evaluate the cumulative effects of market reform in the NHS either 1991-97 or post 2002, there is an abundance of research on the effect of individual policies. While evidence on the impact on quality of care is mixed, research has found attributable impacts in the form of reduced waiting times, improved access for patients, and increased provider efficiency. However, potential confounding factors (such as simultaneous increases in funding and pressure from enforced targets), along with weak monitoring strategies, make attribution to market policies alone questionable. That said, the market reforms of the past 20 years have had unmistakable effects on the culture of the NHS. In particular, the introduction of competition has developed a system-wide awareness of costs, efficiency and accountability

 

However, the reforms have not been proven to bring about the beneficial outcomes that classical economic theory predicts of markets, including provider responsiveness to patients and purchasers; large-scale cost reduction; and innovation in service provision. Many researchers have attributed this to the failure to create a true, functioning market (e.g. due to political interference, weak purchasers, and barriers to exit and entry), as well as a lack of a stable policy environment to inspire staff commitment and enthusiasm.

 

Further research is clearly needed, but the available research indicates that the NHS may have found itself in a lose-lose situation—taking on the extra costs of competition without yet experiencing the benefits.

 

BW

 

David McDaid

LSE Health and Social Care and European Observatory on Health Systems and Policies,


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