This page was part of a 2000 criticism of Samuel's speech, where he speaks of a single funding stream. It is peripheral to the main thrust of the particular section so I have put it separately. It addresses the impact of linking money directly to services. This bit was put here and I somehow I never got to editing it. It is disjointed but the points are there. I will get back to it one day!

By turning health care into a marketplace, care becomes a commodity. The care a particular patient receives is linked to how much is paid for it and how much it costs. This is a paradigm shift and creates a pardigm conflict.

Behind all market systems is the market concept that you get what you pay for. Those who pay more get better care. While this may sometimes happen in practice it is not congruent with the values of equity and good care for all. It is a departure from community values and the values of the health professions.

The extent to which this market thinking has entered health care is reflected in the way in which some "experts" charge more than their colleagues because of their reputations or their expertise. They refuse to treat anyone for less and won't treat anyone who won't pay their fee. They feel that because they are better those who want their services should pay more. The market law of supply and demand operates. This is not a position I support.

This is a market ethic and foreign to medicine. Traditionally doctors provided care to all then charged according to the patient's needs. They did not seek wealth. The development of public and private hospitals has changed the context. As a consequence professionalism has bent to accomodate this. Few doctors confront the paradigmm shift - from the position that overall patients should receive comparable (or even better care) if they are treated publicly. By going private they were paying for convenience, comfort and choice not standards. Bending this further by refusing to provide care to anyone who does not meet your large fee is another matter.

This is how the market works. It illustrates how the market fails in health care. It is easy to exploit this marketplace thinking in the community and build a reputation for excellence by simply charging more. Everyone wants the best and few can tell the difference. Tenet/NME did this in its psychiatric and substance abuse hospitals. Much of the care they provided was of no benefit to the patients.

The ethic which separates care from payment ensures that doctors give patients in the public system the same standard of care they provide to their paying patients. Employment contracts as such do not normally motivate health care professionals to go the extra mile. It is the Samaritan ethic which does this. A market mentality which directly links payment to services discourages them from doing so.

Health care staff also become disenchanted and alienated when they feel that their good will is being exploited and this can impact on care. My experience is that when remuneration is directly linked to services provided then staff feel resentful when their additional Samaritan services are not remunerated. All health systems depend on the goodwill of those who provide care - those prepared to go the extra mile.

Like laboratory rats behaviorism works. Microeconomic reform - financial incentives do stimulate people to do more and objective outcome measures confirm this. Like all behaviorist solutions is fails to take account of cognition. These strategies often create paradigm conflicts, dissonance and unpredictable negative outcomes. We learned this in education in the 1960's. In health care increased productivity is likely to be at the expense of 'caring" - empathic communication.

My own view is that in a civil society the source of funding should not impact on care. In Samuel's words they should be at arms length from care. Traditionaly doctors treated all those in need and then charged according to the persons needs rather than the service provided - the rich paid for the poor.

The contrasting market view was expressed by Richard Scott, Columbia/HCA's chairman. He complained about the US Samaritan tradition and the community's expectations that he would provide care to those who could not pay. He was selling Macmedicine. MacDonalds was not expected to feed the starving poor. He did not feel that he had any responsibility in this regard.

I am not accusing Graeme Samuel of adopting Scott's views. He genuimely seeks equity. I doubt the market can provide it. The point is that his model will bring people who think like Scott into health care. They may provide what they have been paid for but they will not go that extra mile when it is required. You cannot provide caring medicine like that. You cannot regulate for it. You can put it into contracts but the words will be meaningless.

I have no problems with a single payer system, but I do not believe that how the funds for care are generated should be a "key element" in any medical system. One way or another money goes from those who can pay to help those who can't.

A common method of keeping costs down in a market based health system is a capitation fee. A fixed sum is paid for each patient or for each medical condition. Payment is not linked to the actual work done but is supposed to even out. Capitation systems are particularly prone to misuse in the market. The more competition the greater the pressure.

To survive in a competitive marketplace providers must cut services, not provide the care, and provide substandard care. Usually this is accomplished by cutting staff. Meaning systems are developed to make this legitimate. The provider gets all the money he did not spend on care. All of the incentives are away from care. The purchaser and not the patient is the customer.

There is a paradigm conflict. In the market profit is directly linked to care. In the health care paradigm care is provided regardless of monitary considerations. This is why costs rise in an uncapped system. I am not contesting this but I am contesting the marketplace solution. There are ways of addressing this problem which do not expose vulnerable citizens to exploitation in the marketplace.

Is this capitation? Presumably Samuel is talking about a capitation system in which a provider is paid a specific sum of money to provide all the care needed by a patient. Once again he does not use the word capitation which has a bad name and has been strongly criticised. Capitation systems are particularly prone to misuse as providers are under strong pressure to cut services, not to provide care, and to provide substandard care. The provider gets all the money he did not spend on care. All of the incentives are away from care. The purchaser and not the patient is the customer.

There is a paradigm conflict. In the market profit is directly linked to care. In the health care paradigm care is provided regardless of monitary considerations. This is why costs rise in an uncapped system. I am not contesting this but I am contesting the marketplace solution. There are ways of addressing this problem which do not expose vulnerable citizens to exploitation in the marketplace.

WHO IS RATIONING:- If my interpretation of this is correct then the purchaser is squeezing the provider and it is the provider who will ration the care. The provider will make the profit out of skimping on care.

Samuel has not specifically indicated in his speech who will actually decide on what care is to be provided to an individual patient. With Samuel's economic mission to cut costs it cannot be the patient. His attitude to professionalism makes it unlikely that it will be the doctors who make all the decisions about the care patients receive although he later claims that they will. We are left with decisions made by company directors in the big for profit groups which Samuel clearly envisages as the future - Tenet/NME, Columbia/HCA, Sun, Vencor, Aetna or their successors.

The reports from the USA indicate that Sun Healthcare made its money by not providing the care paid for by a capitation like system, and providing excess care when it was paid by a fee for service system.

The only thing which is really clear is that strong commercial pressures are to be introduced and that the commercial pressures will almost certainly be towards denying care and underfunding services. It is also clear that this is to be prevented by measuring outcomes to be sure that the care is provided.