24 March 2006

Flying blind

SIR – The results reported by the Office of National Statistics on measuring productivity in the National Health Service do indeed demonstrate that a wide variety of estimates are possible depending on the inputs and outputs used and the assumptions made about them (“Take your pick”, March 4th). The reality is that, at present, there is no accepted measure of the value of total NHS output and comprehensive data to calculate one does not exist. ...
This letter from the UK's national statistician appears in the current Economist. It tells us that billions of pounds of taxpayers' money are spent without a clue as to how many billions are being wasted. If there is a debate, it's over the measures of inputs, outputs and assumptions. Nobody dare tackle the fundamentals. The UK's National Health Service has iconic status, rather like the principle of non-selection in state schools. The ideologues and public sector unions in both cases stand like road blocks in the way of anything except the most trivial reforms.

A Social Policy Bond regime would not take as a given any ideology, nor the vested interests. It would instead start with broad social goals, including targeted outcomes for physical and mental health. It would not assume that a National Health Service or even a government-run agency is the best solution. It might decide on a safety-net type insurance scheme for every citizen; it's quite possible it would allocate a lot more funding to preventive medicine. It would have no incentive to obscure measurement of how well it's doing by putting off debates about how well it's doing until 60 years after its founding. On the contrary, bondholders would have every incentive to measure their progress accurately, because in maximising their returns they would also maximise returns to the taxpayers' investment.

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