Coronavirus Shows the Dangers of Letting Market Forces Govern Health and Social Care

By Marianna Fotaki, Network Fellow, Edmond J Safra Center for Ethics, Harvard University and Professor of Business Ethics, Warwick Business School, University of Warwick and  Kate Kenny, Professor in Business and Society, National University of Ireland Galway. Originally published at The Conversation.

In March, 10,000 NHS staff signed a letter to UK prime minister Boris Johnson demanding better protection against COVID-19. Nurses and doctors wanted to treat patients without fear of infecting them and to minimise their own risk of falling ill. But they lacked the proper protective equipment.

The problem they described was rooted in changes made long before the arrival of the coronavirus. The NHS’s reduced capacity for dealing with the pandemic – including a lack of PPE – has been the result of years of allowing financial considerations to dictate the quality of care. Back in 2017, the government rejected advice that the NHS should stockpile protective equipment in case of a potential influenza pandemic. The reason? An economic assessment found it would be too expensive.

Such failings are representative of the long-running trend, beginning in the 1980s, of letting the logic of the market dictate how health and social care systems are run, both in Britain and abroad. It has left many systems without the capacity to withstand a crisis of the scale we’re currently seeing.

In turn, the pandemic has seen whistleblowers in health and social care disclosing systemic failures to protect staff and patients. The marketisation of health and social care, we suggest, has increased the need for these whistleblowers to protect the common good – and we need to support them better.

The Results of Market Logic

The US’s private healthcare system epitomises the failure of letting the market govern care services. The country spends 17% of its GDP – or US$3.6 trillion (£2.8 billion) – on health, more than any other nation. Despite this, almost 30 million Americans (9% of the entire US population) remain uninsured because their employer does not offer health benefits or they cannot afford their own insurance. These are mostly working-age adults in families with low incomes.

The inaccessibility of health services to those who need them has contributed to the US having the highest number of COVID-19 fatalities in the world (together with one of the highest death rates per 1 million population). Yet, even while the pandemic spreads, some of its poorest hospitals and other healthcare institutions have had to put much-needed staff on leave. Having to compete in a ruthless market environment, they cannot afford to pay them.

The pandemic has also exposed failings in care homes. Prompted by the rising costs of elderly care and users’ expectations for personalised services, both the UK and Sweden introduced a market-based system of care in the 1980s. The idea was that encouraging competition among multiple providers would deliver more cost-effective and responsive services and empower consumers by letting them choose among them.

Large for-profit businesses with no prior experience of delivering such services were encouraged into the market. In the intervening years, research has clearly shown the deficiencies of these changes. Both sociological and economic analyses debunk claims that the market delivers high-quality care services efficiently.

A recent survey by the Office for National Statistics found that over half of care homes use temporary staff. EFE-EPA

In order to reduce costs, both British and Swedish organisations have come to rely on short-term staff with rudimentary training. During Sweden’s COVID-19 outbreak, a lack of continuity and skills stemming from using short-term staff has contributed significantly to the high death toll in care homes, exacerbated by the relaxed approach to social restrictions that was adopted by the government. Sweden’s care homes account for half of the country’s COVID-19 deaths.

In the UK, care homes account for half of all excess deaths. Higher rates of infection among residents have been linked to these institutions relying on temporary workers and not offering sick pay to staff (incentivising them to work even if ill).

The Need for Whistleblowers

Health professionals’ disclosures have become a societal safety valve. Over 100 UK carers have called a whistleblowing helpline to report safety concerns during the pandemic.

Whistleblowers’ disclosures are invaluable for showing us the necessity of reform, and also the specifics of what must be done. The Mid Staffordshire NHS Trust scandal – which saw up to 1,200 patients die as a result of substandard care – was made known by a whistleblower. So too the infamous failings in paediatric heart surgery at Bristol Royal Infirmary in the 1990s.

However, whistleblowing is typically a last resort, requiring significant moral courage. The sector can be hostile to doctors and nurses who disclose wrongdoing. Because of this, we need stronger systems for making disclosures and effective protection for whistleblowers forced to go outside their organisation to speak up. Offering whistleblower protection that covers all employees at an organisation is also key.

But first and foremost, we should bring health and social institutions back to their rightful purpose. This work should start by putting to rest, once and for all, discredited market-driven ideologies and prioritising providing good quality care.

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  1. PlutoniumKun

    If I recall correctly, it was Kenneth Arrow who back in the 1960’s demonstrated that even using standard neoclassical tools, it could be proven that markets could not provide optimal outcomes in health systems. Needless to say, this was ignored when convenient.

    I think its a mistake though to overemphasise the influence of markets based theories – I think the real enemy is managerialism, specifically driven by MBA’s working their way into both private and public health systems. Some years back, when both my parents required intensive nursing care, one in a private home, one in a public facility, I could see how the pressures were similar in both. There was, for example, a strong preference by managers for temporary agency staff, usually from Asia, over locally recruited permanent staff. It had nothing to do with patient care, and not a lot as far as I could see with efficiency. The main motivation seemed to be that this type of recruitment undermined unions and ensured more pliable front line staff which made senior managers lives a lot easier.

    1. ObjectiveFunction

      Much of frontline health care can’t be readily automated or offshored, although the MBA types are certainly trying their hardest. So it seems like their substitute tactics are downskilling work tasks to lower paid drones wherever they can, while savagely ramping up workloads (throughput) for the remainder. The latter also encourages turnover because experience or judgment beyond a certain point is a liability: just follow the process and move ’em along. We don’t pay you to decide. Mooooo.

  2. Ignacio

    May be this is not correctly framed. In relation to public administration it is not market forces what we are talking about but administrative decisions. Market forces would instead be something related with how public HC services compare and compete with private HC services to the extent these compete, or with how public HC services negotiates with providers. It is well known that in this sense, public HC services have advantages over private providers and these advantages should be exploited.

    The administration of HC services, IMO, is not subject to such market forces but on how the successive governments decide to administrate this service. If it is the willing of a government to administer this the same way private organizations are organized and subject the HC to MBA-ization and prioritize some cost-cutting measures over the ability to provide better care and emergency services, may be as a roadmap to privatization, it is the government and not ‘market forces’ what should be blamed and named for how wrong they are.

    So, Coronavirus shows the dangers of Public HC being managed or governed as if it was a private company when it is clearly not the case. The financing, scope and objectives of public HC services are much wider than those of private companies. This mandates a different management, different priorities etc. I might be obscuring the theme instead of making it clearer…

    1. Amfortas the hippie

      as i’ve related before…when riding the hospital elevator with suits descending from the 10th floor, i…of course…started talking to them.
      when they each ended up getting around to uttering the word “Markets”…i asked where the Price Discovery was…because i had yet to see a price tag on anything in the place, after 3 weeks.
      and none of the nurses, doctors or techs had any idea either.
      this stopped all of these suits(3 ,on different days) in their tracks.
      it ain’t a “Market”.
      people in there don’t have a choice, and aren’t given a menu…or even a price tag….and often don’t even know what’s being done to them. Just. ” well, here’s 500 separate bills you hafta pay for all this incomprehensible stuff we say we did for you”
      we’re foolish for allowing it to get this way.

  3. Susan the other

    Such a bland, polite and tempered article discussing the most unforgivable, rapacious behavior of “the Market” in modern times.

  4. JEHR

    In Canada we have both private and public long term care homes. More deaths and poorer care were evident in the private facilities because of short term employees and lack of adequate training and inadequate safety supplies. In some cases, the work became so onerous to the employees that they just left the elderly people in place without any care: some patients were not adequately fed and some were left alone sometimes to die. It was a despicable situation which must be remedied. Health care is not meant to run on “efficient market” principles. (Definition: “Efficient” means hire fewer employees; “market” means what will make a profit no matter what.)

  5. Igor Slamoff

    Not only is American health insurance expensive, but it covers only a modest part of health expenses. In my last year in the US before I left for good, although I didn’t have any serious illnesses and I was fully insured, I spent more than 6 thousand dollars on health care just for myself.

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