The NHS doesn’t cover what it used to

One of the ways the NHS in England has rationed services is by labelling some treatments as “Procedures of Limited Clinical Value”. Introduced from 2009 onwards, the label is a way of focusing NHS expenditure on surgery with the greatest clinical benefits. Sounds a reasonable way to get value for money, doesn’t it?

Yet, according to the Royal College of Surgeons, Procedures of Limited Clinical Value have “been extended” because of financial restrictions and “many proven operations known to enhance health and improve quality of life have been included in this category, and hence are being denied to patients who need them.” What’s more, the Royal College says that: “Many of the procedures deemed of low value prevent complications and more serious conditions developing later. Denying them ultimately endangers the lives of patients and the standard of treatment available in the NHS.”

In reality, the supposed Procedures of Limited Clinical Value include surgery that a specialist in an NHS hospital thinks their patient would materially benefit from. What counts as a Procedure of Limited Clinical Value is determined locally by NHS commissioners, so the list varies around the country, but banned treatments can include early cases of cataracts, hip replacements for osteoarthritis, surgery for shoulder pain and hernia repairs, where patients are deemed not to have met a “clinical threshold”.

The patient might well be told that they could apply to the local NHS commissioners in an attempt to get special funding for their treatment – a process designed only for exceptional circumstances. Patients in NHS hospitals may also be given the option of paying for the treatment themselves, either in the private patient unit of the NHS trust or in a nearby private hospital.

So why is this rationing happening? The easy answer is to suggest that it’s due to cuts in NHS funding. The only problem with this argument is that NHS funding has significantly increased in real terms during the entire time that Procedures of Limited Clinical Value have existed. The real issue is that resources the NHS already has are not being used productively because the incentives in the system are set wrong.

I used to work for a private provider to the NHS, which ran the Nottingham NHS Treatment Centre for 11 years, under an initiative created by the Labour government. The operating theatres there ran at 1.5 times to twice the throughput of an NHS-run hospital. The building used thinking that came from Lean manufacturing, where the aim was to eliminate waste in processes, so surgeons never had to wait for the next patient. Systems were organised like a Japanese production line so that everything was in the right place at the right time. The centre was great for cutting down the waiting lists in Nottinghamshire, and it had an excellent safety record. Indeed, the Care Quality Commission rated the facility as “outstanding” for surgery.

It is difficult to replicate high productivity in NHS-run facilities because there are bureaucrats and incentives trying to stop it. NHS surgeons are paid fixed salaries, whereas in the private sector they are typically paid a fee for each patient they treat, or paid for a “session” (what others would call a shift). As a result, the private sector gives them a big incentive to make themselves available for extra weekend or evening surgery, and to have a well-organised operating theatre so they can treat as many patients as possible. Conversely, if doctors try to increase the throughput of an NHS operating theatre to get through the waiting list for elective treatments, they may be discouraged from doing so to save costs and to help the budget of their local NHS commissioners. So the NHS has huge overhead costs for buildings, equipment and staff, but tries to save money by slowing down the treatment of patients.