You've got to laugh

Len Burch

What nonsense this '''

"Yes, it's the end of the world as we know it! God forbid that anyone actually receives a reward for providing a service - or, to put it another way, makes a profit."

"Profit" is not just some reward for providing a service.

Wages, Salaries and any form of "earning" is NOT a profit.

"Profit" is not just any earned "gain". It is a gain made by exploitation - usually through ownership of the means by which others must earn a living - and the advantages in bargaining power that such ownership gives in "free exchange conditions"

So dont just "put it another way" but put it as it is

Stephen Pollard

I am assured that Len Burch is real, and not a spoof. How lovely!

Tiberius

LB: I may be misunderstanding what you're saying, in which case forgive me, but it appears that you dislike profit.

But without profit, there is no wealth creation out of which to provide healthcare from either the private or public sector.

So "to put it another way", dock leaves are not much good at curing potentially terminal illnesses.

Martin

This post sounds OK in theory - entrenched and backward vested interests stand in the way of progress etc.

In practice however, the consultant guy is likely to be proved correct - for which manager is going to choose these uber-managers? They will reach straight for the bloodsuckers of management consultancy, who by their past record should be barred from any public enterprise in the UK.

I don't doubt that management and leadership are lacking, and I don't care about profit, but it would be better to develop a cadre of turnaround managers from within the NHS, rather than bring in managers who will bring in all their consultant pals at the first opportunity.

A naive post. Thatcher understood. She barred Andersen from public work for their misdemeanours, and it served as a warning against greed and malpractice. Labour waved them straight back in in 1997, which speaks volumes.

Nick Kaplan

I didn’t realise people like Len existed anywhere outside North Korea or Cuba, I don’t know whether it’s amusing or worrying. Len let me very briefly explain how profits work. A company creates a product; it costs a certain amount of money to make. That product is then put on the market, if someone values that product at more than its price they will buy it, thus the consumer benefits (otherwise he wouldn’t have purchased it), this benefit is the equivalent of profit for a consumer. If the consumer benefits enough he will pay a higher amount for that good then it cost the producer to produce it, thus the producer will make a profit (this is his incentive for doing the producing). If the consumer does not benefit enough he will not pay, if the producer does not benefit enough he will not produce. This is what happens in an imperfect market where there is not perfect competition. If there were perfect competition there would be zero economic profit and some accounting profit which is essentially the returns to capital. Where in that process was anyone exploited Len? Is it not more exploitative to demand someone else pay for a service you are going to use, and they aren’t going to benefit from, by threatening to imprison them if they don’t comply i.e. through redistributive taxation?

Nicola PT

What is truly amazing about all this though is Lansley's reaction "these skills are already in the NHS".

Have the tories totally disarmed on any sort of health reform? They now seem to be the backward anti-reform party whilst Labour makes the running against the vested interests.

Robert Jago

You are all missing the point.

I am a retired surgeon. I worked in a provincial District General Hospital. I have experience (on the receiving end) of hospitals in France and Spain and limited experience of hospitals in the United States.

There is no doubt whatsoever that hospitals work best when they encourage and are mainly run by the vocations of their staff, medical, nursing and auxiliary. The driving aim of the hospital is then quality of care, not financial or ‘performance’ targets. Quality of care can only be assessed intuitively by the professionals involved – forget outcome measures: for statistical reasons these do not work.

You still see this vocational leadership in France and Spain (and, I believe, elsewhere in Europe). You see the reverse in many US hospitals, where health care is dominated by financial management, both by the hospitals and the insurance companies.

In our country, we retained this sense of vocation and morale until the mid nineties, even though many of our hospitals used to be like mission hospitals in the third world. Since then central micromanagement and the dominance of political and financial targets have produced the current chaos and poor morale.

The answer is NOT commercial companies. That is the US pattern. It is local control guided by vocational appreciation of need and quality of care. Look to France, Spain, Holland etc., etc. They all do it better than we do.

Nick Kaplan

I was under the impression France allowed private companies to manage many of their hospitals and had the government provide the funding. Can anyone confirm this or am I completely wrong?

catesby

Having missed the earlier episodes, I watched the penultimate 'The Apprentice' last night. We were down to the top 5.

Most of them appeared already to be earning six figure salaries in the private sector.

With only one exception, they were coarse, vulgar, self-obsessed, poorly educated and quite amazingly stupid.

The exception was amiable enough, but hopelessly ditsy.

If this is truly representative of 'private sector management' - then I don't want it anywhere near a hospital.

London Calling

I Laughed.... thoughts of Punch and Judy playing pass the Parcel with our services...

Profit driven public services never produced a better service for anyone, have we learnt nothing?

Transport? travel like sardines in a can, no seat to sit down,
delays, more delays, and a high price for the pleasure... who profits? not the public...

Dentist?
Doctor?

All about profit, did I really need that extra work on my teeth that cost an arm and a leg also, I only went in for a filling ?

Find a Doctor in your area? If your lucky ….
Receive a form once a year in the post addressed to each member of your family to confirm you all still exist and if you don’t fill them in and send them back you will be considered non void? tough go elsewhere...

This isn’t a public service, lets not kid ourselves, those days are over.....

Its all about the Money Honey... which way you turn,

Sad Britain.....what a shambles.

London Calling

Yes I watched the Apprentice last night, so funny, especially when
'Now that’s what I'm talking about'
got caught out lying about his degree, two years? a background check confirmed he had only attended for four months...

Tut,Tut, how many more in our City that talk the talk but have a funny walk and are clueless salesmen and women....many I should imagine, what a farce which just goes to prove that Molly and her Mop could probably run the country and the NHS better.

As my Grandfather use to say, there’s nothing worse than a Twat, than an Educated Twat.

floatingvoter

MMmm. The central point of the article is that people should be allowed to make money out of making you better. Sounds fair enough I suppose except that their reward could be treating another sickie. Down to the basic problem that health care costs much more than the counry can afford to pay. The answer if people want to try a different system is to obviously scrap the NHS, the last time I heard, this wasn't too popular though.

The reason it isn't is because when you ill, the last thing you want to think about is whether you can afford the treatment. this was brought hom eto me recently when I needed some dental work. Did he suggest that treatment because it is what is needed or was is suggested for another reason.

I do agree though that the NHS is badly managed

Len Burch

Regrettably here, (and popular places elsewhere) there is no possibility for examining the wider issues more deeply. So little gets resolved, beyond expressions of opinion and a reliance on intellectually spurious but persuasive tactics.

However, Nick Kaplan, after the normal demeaning references, is to be congratulated in seeking to contradict me on the basis of the issues themselves, rather than resorting to those purely dismissive and intellectually worthless, (but no less persuasive), antics adopted by Stephen Pollard. (See his answer to me – what is it relying on. It has no intellectual basis at all.?)

Nick Kaplan essentially misconceives the issues, by confusing “a benefit” or gain with a “profit” as if they were one and the same. He talks of consumer benefits as being consumer profits”.

A profit is of course a benefit. But any benefit or gain, or earning does not thereby become a profit. The meaning of a gain, earning or benefit is much wider than that of profit, which is a far more specific form of benefit.

Because of the subtle way in which the notion of “profit” has been widened and equated with any benefit or form of “earnings”, we have now had to invent, and resort to, such new terms as “windfalls”

Nick however rightly notes that under the unlikely (but theoretical) conditions of perfect competition, profit would be zero. It would simply disappear, since profit is a product of monopoly of one kind or another, and by which I do not just mean big conglomerates like Microsoft. An organisation can be quite small, (as Microsoft once was) and yet still be in a monopoly position, for a while at least, and its monopoly position will help keep it there – and the level of the profit its shareholders thereby make will be as a result its monopoly features and position.

The extent that such an undertaking (well its shareholders) will continue to make a profit will depend on it retaining some monopolistic feature – which may in the end be no more than its physical location – given the cost of transport.

The classical economists moved from the nonsensical notion of perfect competition to imperfect competition. But the basis of economics, and the economy, is imperfect monopoly which gives different answers from that starting point of imperfect competition – just as a bottle represented as half empty is not the same as one suggested as being half full.

David

Edwards' comment is indeed sensible, in contrast to your own prejudging of his position.

Fielden's comment is also fair enough - it certainly meshes well with everything I have heard about management consultants involvement in the public sector - this is exactly the kind of New Labour practice that has turned off the voters.

Since you feel that other countries systems are superior, perhaps you could publish details of the amount of money they have been spending per patient over the last 20 years?

The NHS has lower overheads than insurance/privately-run alternatives - if we matched their spending then we might have superior service!

Rob Cremona

The NHS is about the patients first or have we all conveniently forgotten this?

I have just come off a kidney machine for the third time this week. I do this every week and will have done so for the best part of thirty-two years next month.

The NHS not only extended my life by so many many years but, at the age of fifty-two, I can look back at my wife and three children with the love and pride that nobody in this world or beyond could have given me.

This is what the NHS is all about saving and creating life itself. This, of course, only applies to people as lucky as myself and not those who have their minds stuck up some neurotheological bubble nor to those politically correct sharks for whom money, religion and corruption runs deeper in their veins than love, peace and emotion.

Nick Kaplan

Len;
I am glad you recognise that a reference to Cuba is demeaning, you are not a completely lost cause (unlike many of your socialist friends who continually glorify the murderous tyranny and theft committed by Castro in the name of ‘progress’).
The mistake of you argument is the one typically made by socialist which is to assume that the interests of man are diametrically opposed, especially that the interests of rich and poor, producer and consumer are opposite. But this is not the case, the profit motive and competition are the mechanisms by which the interests of the producer are intrinsically linked to serving the interests of the consumer. In a system of voluntary exchange one can only profit by producing value, by giving to others what they want at a price less than they are willing to pay and thus at a value greater than they already own, or else why trade at all?
Exploitation cannot involve making someone better off than they otherwise would be (a necessary condition for free trade to occur). Instead is not being forced to give to others at no benefit (or even a loss) to oneself exploitation? Just because the later involves exploitation of the rich by the poor does not make it right. However the socialists have only ever defined exploitation as an interaction between those with advantage and those without, they don’t consider the trade that takes place or who benefits from it, and thus they are so blinded by their envy that they cannot see the great achievements of capitalism.
The other unspoken assumption, and fallacy, is that high profits mean high prices. But in a market with competition (even if not pure competition) the profit motive almost inevitably means lower prices and greater efficiency. The easiest way for a company to increase profits is to reduce costs so it can charge less and sell more (given that firms have no control over demand, charging more and selling less is rarely sensible). It has been estimated that a supermarket makes a clear profit of about a penny on a pound of sales. If that sounds pretty skimpy, remember that it is collecting that penny on every pound at several cash registers simultaneously and, in many cases, around the clock. That means low prices for consumers as well as high profits for producers and therefore high tax revenues (which are taken as a percentage and hence increase as profits increase) for government.
The reasons why governments all over the world privatized during the 80’s and 90’s is because private companies tend to do things better and cheaper in order to retain their customers. Governments on the other hand, don’t lose custom when they make mistakes, they remain useless, expensive and inefficient precisely because they have no profit motive and their means of exchange are not voluntary but coercive (i.e. If you don’t pay your tax you are locked in gaol). In the Soviet Union there never existed a profit motive, instead meeting government targets became the basis of pay leading to highly uneconomic activity. For example Glass companies were first awarded pay in accordance with the amount of glass they produced, so they produced glass so thick that you could barely see through it, simply to meet government weight targets. When the rules were later changed so that pay was awarded in accordance with the number of square metres of glass produced the glass was made so thin it broke whenever anyone wanted to use it.
The profit motive is not evil; it’s the best way to enhance productivity, efficiency and entrepreneurial creativity that humans have so far developed in an imperfect world. The profit motive will continue to be the most effective motive until we can all join the socialists in the mystical fairy land where scarcity isn’t a problem.

Jo S. Ascot. Berks

Mr Kaplan your posting is so long that it's hard to digest what you're on about unlike the enlightening one of Rob Cremona. This brave man must have a will of steel and a desire for life that most of us will never understand. What a fine example to all! Mr Cremona is also able to makes his point simply and gets straight down to the root of the emotional reality and genuine values that face our country's health service on a daily basis.

You've got to laugh at so much in this country these days: the police, politicians (some things never change), our local councils etc etc.... and going back to the NHS, we are treating so many foreigners in our hospitals (just visit any ward in your local London hospital)that we must be the most generous country in the world when it come down free medical treatment. For years the NHS has been used by seriously ill foreign patients,(and also abused - "...I fell ill while on holiday in the UK 20 years ago and I'm still having my treatment here...").

Our hospitals treat everyone and our DSS makes sure that they, and their families, are accomodated, children educated and they get regular cash benefits too. Has anyone in government noticed the scam yet?

Mr Kaplan, this is yet another good reason why you've got to laugh (or cry) when you pay your taxes.

Nick Kaplan

The problem with Rob’s post is the inherent assumption that also lies behind Len’s ranting; that a profit motive is against the interests of the consumer. My post was an attempt to dispel this myth by explaining that the profit motive links the interests of the producer to that of the consumer. I am not suggesting that healthcare should no longer be ‘free at the point of delivery,’ all I am saying is that there is no good reason for the government to provide it. As far as I am aware the French government does not run hospitals (as our government does) it merely pays for them, allowing for some patient/ consumer choice and therefore some competition. It isn’t the amount of money spent but the system itself that will determine the quality of the health care and a system in which hospitals are allowed to profit is not one where patients interests will be disregarded (as can often be the case in our current flawed system).

HJ

Nick Kaplan is correct and this is where Len Burch's argument falls down.

The issue is not one of profit, but one of monopoly vs competition/alternatives. Just as monopoly private sector suppliers tend to overcharge and lack incentives to improve, so does the state run NHS monopoly.

Frankly, it doesn't matter whether alternative suppliers are profit-making, charities, mutual organisations or even locally run and financed public sector organisations. The point is that they are not monopolies. Alternatives can be tried and tested. Users can choose.

None of this applies to the NHS. They may not make a profit, but unions such as the BMA have succeeded in ensuring that by restricting supply and using their monopoly power within a monopoly provider that they are extremely well remunerated and have little need to become more efficient compared to the more diverse systems of provision in the rest of Europe.

loic

To: Nick Kaplan: you are correct, over 30% of French hospitals are run by private companies and get their funding from Securite Sociale (officially a non-governmental institution, in practice a government entity). One of the companies s even listed on the Paris Stck Exchange, and in "socialist" France, nobody seems to mind...
On the post itself: fine with private management if it can be demonstrated that the people who are coming in have catually some experience in running hospitals. Otherwise you do end up with management consultants, and they have been an utter disaster.

Dr R S

You have to laugh but the joke is on you. Why do you and others, such as Ioic and Nick Kaplan continue to liken the NHS with modern complex business ideals that in this case are totally irrelevant?

Anyone with the most basic experience working within the NHS system realizes that it is by no means perfect and there are a multitude of areas that can definitely be improved upon. I call the unrealistic comments because we are talking about saving lives and creating them as pointed out so heroically and perceptively by Rob Cremona in an earlier reply.

This is the important part because unless you work with, or if you happen to be, a long term chronic illness patient it is impossible for the Pollard's of this world to appreciate this strong institution that gives so many people and their families a chance to live with their disabilities and make some choices of their own, the choices ones that most of us take for granted as we do not have to make them.