Monday, 16 April 2012

Murkeet musings # 1.

Now that the Health and Social Care Bill has received Royal assent we here at ND Central have been having a series of discussions about the NHS murkeet and how it might change for the better or not. The architect of the bill is a Mr. Andrew Lansley who is a right wing conservative politician who has never worked in healthcare.

One of the Conservative Party’s principles is that of the free market whereby initiative and free enterprise should be encouraged but as we hope to show the healthcare market is anything but a free market.

To most customers the idea of choice when they shop would seem self-evident. Take a humble tin of baked beans. Different manufacturers make and market them. Different shops sell different varieties and charge slightly different prices. This would appear to be a free market offering the customer widespread choice both of product and of price. Now given that there are different manufacturers of drugs you would think that the same would apply?

Let us take the baked beans of the antibiotic world Amoxycillin and see how the free market works in healthcare. Lots of companies make it and it is a cheap drug to buy in the bit of the free market that exists in its passage towards the customer or as we prefer to call them the patient.

The wholesale cost of this drug is about a pound (or less) for a typical prescription of 250mg three times a day for a week. Now if you buy from a manufacturer of your choice this drug that is where the Conservative’s free market ends and you now enter the NHS murkeet.

To the untrained eye there are lots of retail outlets where you could “buy” your Amoxycillin. These are called pharmacies or chemists. You can take your prescription for Amoxycillin to any one of them. It is your “choice” as a consumer.

For 90% of people in England and for all those who live in Northern Ireland, Scotland and Wales the NHS murkeet fixes the price at a very desirable £ 0.00 to the customer which means there is little, or no, need for any competition here. Therefore the NHS internal murkeet works doesn’t it?

Your local chemist buys their drugs from a wholesaler and then in effect sells them on to the customer which is really the Government. Now all members of the current Tripartite coalition on NHS murkeets believe that the cost of drugs to the State should be fixed by something called the Drug Tariff. This is what the Party will pay, a fixed amount to any (willing provider) chemist for a given drug and you cannot negotiate a different price

The chemist gets a dispensing fee for each prescription as well as the Party’s Drug Tariff price via the fixed NHS murkeet. A good chemist will try to maximize their profit as a supermarket does by buying low and selling high.

In other words if for the sake of argument the Party via the Drug Tariff decide in a free (fixed) NHS market that a week’s supply of Amoxycillin is worth £ 2.00 to the Party then if a chemist can buy this drug for say £ 0.75 they can make a profit of £ 1.25 plus the dispensing fee for that prescription.

So up to this point everyone is happy. The Party uses the free market to fix prices and keeps costs down, the wholesaler is happy because they are making money and a good chemist will also use the NHS “free” market to maximize their income.

But what of the 10% of consumers in England who actually pay for their prescriptions? They are used to shopping around and finding bargains but when it comes to healthcare the Party does not do a free market approach it screws the prescription paying member of the public by a heavily fixed NHS murkeet.

The prescription charge paying customer has a free choice of any retail outlet called a chemist but when they are there they have a “choice” of the same murkeet “fixed” price. The fee paying NHS customer can shop around for different outlets and possible variation in quality of the Amoxycillin supplied (although chemically it should all be the same) but like the NHS tariff the “free” NHS market allows a fixed price only.

Furthermore in the NHS free market the price is fixed and in the case of prescriptions for Amoxycillin the customer is paying well over the odds for something that is worth only a few tens of pence.

And so comrade workers given that the HSCB is designed to open up the market and encourage competition given all of the above and the fact that price is not negotiable only “quality” is, how will the NHS customer (patient) benefit from all of these reforms?

In essence the reforms are no different from the way anyone who pays for prescriptions benefits now. A lot of people are paying too much for their medicines now well above what the free market charges and only a few paying customers will actually benefit from the NHS prescription charge murkeet.

Will the new “any willing providers” do as our retail chemists do and seek to maximize profit from the “fixed” NHS murkeet price or will they scorn profit and concentrate on increasing quality regardless of cost?

Next time you get a prescription ask your chemist whether they go for quality or profit? Their answer may tell you a lot about Mr. Lansley’s new “free” market, competition, quality and price. They are effectively the same.

Praise be to the Party and its commitment to opening up the free healthcare market using the time honoured laissez-faire approach to benefit us all in the same way that the Soviet Union did democracy.

Maybe some more murkeet musings to come?

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