Introduction to NHS and NHS waiting lists by chenshu

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									Management and Systems
Cass Business School




UNDERSTANDING THE PROBLEM OF
NHS WAITING LISTS




By Aastha Gurbax




Dissertation submitted to Cass Business School, City University in
partial fulfilment of the requirements for the ward of the BSc (Hons)
Management and Systems . June 2004

Supervisor : Professor Erik Larsen




                                     1
                                 ABSTRACT

Among the numerous problems facing the NHS, the most significant today is the
long waiting time for treatment of thousands of patients. Exceedingly large
number of patients on the NHS waiting lists has inevitably implied that this topic
has always been a high social, political and economic priority for the United
Kingdom. However, the volume of ‘useful’ research into the topic is considered to
be relatively limited.

The main aim of the report is to ‘understand’ the NHS waiting lists and what
influences them rather than offer a solution to the mammoth problem. This
project endeavours to ‘converge’ the ‘research’ carried out on the issue with
‘Systems methodology’. Where the general content ends and systems approach
begins is debatable. The intention has been to ‘merge’ the general content with
Systems knowledge and present the project in the most systematic and structured
manner possible. A variety of Primary and Secondary resources have been used
for compiling this report. These include NHS’s internal policy documents obtained
from West Middlesex University Hospital, interview with NHS Waiting List
Coordinators and Compliance Managers as well as internet resources, numerous
NHS statistical reports, press articles, class lecture notes, self notes made after
visiting the various hospitals and recommended course books. A critical analysis of
the current situation in the NHS and Private Health Care aimed form an integral
part of the report.

The research involved employing employed Cross Impact Analysis and Systems
Dynamics to understand the internal and external factors influencing the NHS
waiting lists in UK. This paper combines the use of Soft Systems Methodology (by
using softer variables like the morale of doctors) and Hard Systems Methodology
(by simulating different Systems Dynamics models to see how variables like
government funding and policy influence the waiting lists). This has facilitated an
innovative formulation and insight in to the problem.

A comparative analysis between NHS in UK with Health systems in other
countries in Europe was considered essential to explore how other countries
achieved the delicate balance between public and private health care and keeping
waiting lists low. For this purpose the author chose to conduct a comparative
analysis between German and UK health systems. Germany was chosen because it
is similar to UK in terms of size, population and GNP but suffers from almost no
waiting lists. A Research Travel Bursary from City Univery N’Ions Alumni Fund
facilitated the fieldwork in Germany where I interviewed various doctors and
Management Controllers in order to understand how their systems operated.

Finally Scenario planning techniques were employed to understand how the
emergence of the private sector in the delivery of key public sector services would
impact the system in UK in future. It is hoped that this project has achieved an
optimum balance between the depth and usefulness of analysis and has effectively


                                        2
linked theory to empirical research to offer a greater understanding in to the
complex issue.




                                      3
                            CONTENT


1. The Problem of NHS Waiting Lists……………………………………5

         Introduction to NHS and NHS Waiting Lists
         Definition of the Problem
         Statement of Aims and Objectives
         Dissertation Approach and Research Methodology

2. Background of NHS Waiting Lists……………………………………..10

         History of NHS Waiting Lists( 1948 -2004)
         NHS Waiting Lists – Facts and Figures
         Inadequacies of the Waiting List Facts and Figures
         The Need for Waiting Lists


3. Understanding and breaking down the complex problem …………15

         Characteristics of ‘tame’ and ‘wicked’ problems
         Supply and Demand Influences on NHS Waiting Lists
         Interaction of system variables with themselves and with the
          wider environment
         Use of Cross Impact Analysis for ‘identification of Driving
          Forces’ of NHS Waiting Lists

4. Applying Systems to NHS Waiting Lists………………………………26

         Creation of Causal Loop Diagram to Map the interdependencies
          between the system variables and the Interaction with the
          environment
         Application of Soft systems Methodology – Structuring the
          messiness and factoring in the softer issues
         Conceptualisation of Systems Dynamics model
         Description and Inference of Results achieved using the
          Systems approach

5. NHS and private Health Care…………………………………………….41
      Tracing the Growth of Private Medicine in UK – Not a new
        phenomenon
      BUPA’s rise to power
      Application of Porters Analysis to the Private Medical Sector in
        UK- The Current Situation
      Dominance of Private Health Care in a few key areas
      Compliment or Competition: NHS vs. Private Health Care?



                                  4
6. Private Medical Insurance………………………………………………….49
     Advantages of NHS over Private Health Care
     Future of Private Medical Insurance Market in UK

7. German Health Care System vs. NHS – The differences explored……56

     Why compare NHS in UK with German Health Care Systems
     Aging Population - UK vs Germany
     Childlessness and Immigration - UK vs Germany
     Economic Convergence / Divergence – UK and Germany
     General Health of the UK/ German Population
     Financial Resources channelled towards Health Care – UK vs
      Germany
         o Percentage of National GDP
         o Per Capita Health Spending
     Cost of Medicines, Medical Equipment – UK vs Germany
     Percentage Split between Public - Private Financing – UK vs
      Germany
     Human Resources in Health Care Sector – UK vs Germany
     Variance in Culture and perceptions re. Health Care – UK vs
      Germany
     Public Private Mix – UK vs Germany


  8   NHS Waiting Lists - The Future………………………………………67
     Why use Scenarios?
     Scenario Building Process
     Phase 1 – Scenario building
     Inferences and Suggestions


  9. Conclusions………………………………………………………………..79


 10. Bibliography……………………………………………………………....81


 11. Appendix…………………………………………………………..………85




                                    5
                             Acknowledgements


There are a number of people I would like to thank for helping me to accomplish this
dissertation within the stipulated time, resources and to the best of my ability. They
include family and friends who have supported me and provided me with the necessary
encouragement to persist during the challenging investigation.

I remain grateful to Doctor Peter Mockel from Krankenhaus Sachsenhausen Hospital in
Frankfurt for welcoming me to his hospital and spending valuable time to answer my
innumerable questions. I am also thankful to N‟Ions City University Alumni
Association and Cass Business School for endowing me with the opportunity to focus
on an area of personal interest and enable me to gain valuable research experience by
linking management and systems theory to empirical research.

But mostly, I would like to deeply thank my dissertation supervisor, Professor Erik
Larsen, for sharing his extensive Systems knowledge with me, for providing
constructive feedback and for reliable and indispensable assistance throughout the
project.




                                          6
               I. Introduction to NHS and NHS waiting lists



The National Health Service (NHS) is the organisation aimed at catering to health care
needs of the people in England. The NHS came in to existence in 1948 in a wave of
post war idealism in which equality was of over–riding significance in England where
NHS was set up to provide health care to the masses.

The primary objective of the NHS is to protect and improve the nation‟s health and
ensure that the health and social services provided by them are high quality, fast, fair
and convenient.

The NHS is funded by the taxpayer and is therefore accountable to Parliament. It works
together with the staff of the Department of Health, the secretary of state, the five
ministers of health and social care services to create and implement policies to drive
forward standards of health and social care in England. The NHS is recognised as one
of the best health services in the world by the World Health Organisation but the system
needs improvements to cope with the demands of the 21st century. 1

The NHS employs around one million people in England and costs more than £50
billion a year to run. The NHS expects these costs to rise to '£69 billion by 2005‟2.

Among the many problems facing the NHS, the most significant today is the long
waiting time for treatment of thousands of patients. Waiting times for treatment and
surgery have now become a key process performance measure for the NHS.

Further, continual and exceedingly large number of patients on the NHS waiting lists
has inevitably implied that this topic has always been a high social, political and
economic priority for the United Kingdom. However, the volume of useful research into
the topic is considered to be relatively limited. As a review by the King‟s fund has
concluded, „in order to understand the waiting list phenomenon, it is imperative that the
dynamics of the problem be properly understood; yet very few authors have sought to
implement truly dynamic models‟. (Hamblin et al.1998).




1
  www.nhs.co.uk
NHS Plan, „The NHS Plan, which the Prime Minister launched in July 2000, describes how increased
funding will be used to improve the NHS…..‟
2
 http://www.nhs.uk/thenhsexplained/what_is_nhs.asp
The NHS Explained, What is the NHS?


                                                 7
I.1. Definition of the problem


NHS waiting lists represent the number of patients waiting for treatment under the
National Health Service scheme of UK. This relates to the „length of time‟ patients have
to wait before receiving treatment from the NHS. Long NHS waiting lists are a problem
deeply exercising the government and the public.

The NHS hospitals are subject to rigid budgeting, high demand and bureaucratic
restrictions but the public still desire and expect an efficient service from the NHS with
almost or no waiting lists.

I.II. Statement of aims and objectives

Waiting lists have been endemic to the UK National Health Service since its inception
in 1948.3 This report focuses on the problem of long NHS waiting lists. The main aim
of the report is to „understand‟ the NHS waiting lists and what influences them rather
than offer a solution to the mammoth problem. In order to achieve this aim, a list of
objectives has been formulated. For this purpose, the analysis has been directed to the
following areas: -

       Examine the ‘Need for waiting lists’
       Determine and study the ‘Components of the problem’
       Analyse the ‘Influences on the waiting lists’ (movement of one thing in relation
        with another)
       Understand the ‘Interaction of system variables with themselves and with the
        wider environment’
       Explore the ‘Dynamics of Waiting lists’
       Evaluate the ‘Impact of long waiting lists’
       Conduct a ‘Comparative Analysis’ between the UK and the German Health
        Care System and examine the reasons and the impact of the differences and
        similarities between the two countries.
       Explore ‘Possible future of Waiting lists’ by the application of Scenario
        Analysis
       Assess the ‘Role and Importance of the Private Health Care Sector on NHS
        waiting lists




3
 Ackere, Ann van and Smith, Peter C- „Towards a macro model of National Health Service Waiting
Lists‟, Systems Dynamics Review, 1999




                                                8
The project aims to provide an overview of the problem of long waiting lists for patients
under the National Health Service Scheme (NHS). This project endeavours to
„converge‟ the „research‟ carried out on the issue with „Systems methodology‟. Where
the general content ends and systems approach begins is debatable. The intention has
been to „merge‟ the general content with Systems knowledge and present the project in
the most systematic manner possible.

As far as Systems Methodology is concerned the issue can be approached from two
different angles. On one hand, the NHS of UK is a bureaucratic and policy resistant
system with a bottomless hunger for funds. The waiting list, the waiting time, the
number of patients, number of hospitals, and number of surgeons are „measurable‟ and
form the basis of a „Quantitative Problem‟.

On the other hand, NHS‟s waiting list requires a „Qualitative Approach‟ since it is a
problem in which the ends and objectives for achieving those ends are themselves in
disarray. There are softer issues of conflict, lack of communication and employee
morale inherent in the system. Accordingly, it was decided to combine methodologies
(Systems Dynamics, Signed Diagraph, Soft Systems Methodology and Scenario
Analysis) using frameworks and techniques suggested by „Dr. John Mingers‟ 4 in his
report on selecting, combining and linking management science methodologies
effectively.

I. III. Dissertation Approach and Project Methodology

    The project endeavours to effectively ‘combine’ various ‘Systems Approaches’,
    ‘Management Analysis techniques’ and ‘structured Empirical and General
    research’ whilst achieving an effective link with theory wherever possible. The
    project therefore involved the following: -

       Analysis of each of the above 8 objectives discussed in Section 2 of the project.
       Description of methodology adopted for inquiry
       Description of the problem situation by definition of the key variables and the
        reference mode
       Use the technique of cross impact analysis for ‘identifying’ the driving forces
        of NHS Waiting Lists from a final set of possibilities.
       Creation of a Causal loop diagram to map the interdependencies and
        interactions between the various variables
       Application of Soft Systems Methodology to the problem
       Conceptualisation of Systems Dynamics model

4
 Mingers, John – Variety is the Spice of Life: Combining Management Science Methodologies,
December 1998


                                                9
   Description of results achieved after running the Systems Model
   Comparison of outcome achieved from the Systems Model with Actual
    Situation
   Further development of one variable of the SD diagram i.e. ‘Private Health
    Care Sector in UK’ by way of evaluation of the Private Health Care Industry
    in UK
   Fieldwork and interview research with assistance from Management
    Controllers, administrators, doctors, nurses and patients in Krankenhaus
    Sachsenhausen Hospital in Frankfurt to conduct a Comparative Analysis
    between UK and German Health Care systems.
   Utilization of the main drivers identified in Cross Impact Analysis stage to
    build stories about ‘four possible futures of Waiting lists’ by the application of
    Scenario Analysis
   Summary of the overall results

                   II. Background of NHS Waiting Lists


II. I. NHS Waiting Lists (History - 1948-2004)

The unwelcome and ever increasing occurrence of long NHS waiting lists has always
been a central political concern. However, as documented by Ackere (1999), the focus
has shifted from „size of waiting lists‟ to the „length of waiting times‟ in the last two
decades.

The original Patient‟s Charter issued by the Government in 1992 held the promise that
no NHS patient should have to wait more than 2 years for elective surgery. This
benchmark has since then been lowered to 18 months and annual performance reports
are used to document and evaluate the performance of NHS individual trusts against
this benchmark. The “Waiting List Fund” established by the government in 1986 also
went on to become the “Waiting Time Fund” in 1991.Since then, other government
initiatives include a £32 million “performance fund” awarded to health authorities that
help achieve low waiting lists and another £500 million injection of funds especially
aimed at reducing waiting lists. The NHS Plan also pledged in 2001 that no patient
would wait longer than six months for an operation by 2005.




                                           10
II.II. NHS Waiting Lists - Facts and Figures


Before explaining the figures of NHS waiting lists, it is important to note that health
professionals have repeatedly claimed that official waiting lists regularly „underestimate
the true length of time patient‟ have to wait for procedures. The length of the waiting
list depends on how waiting times are measured. „The NHS does not record or monitor
the total time that patients wait from seeing their family doctor to being treated in
hospital.‟ 5 There are inpatients and outpatients waiting lists. The former list covers the
time a patient waits from being referred for hospital treatment by a consultant until they
are admitted whereas the latter list covers the out patient list, which covers the time a
patient waits from seeing a GP until they are seen by a consultant.

The inpatients and outpatients list showed that there were 1,007,000 patients on the
inpatients list on March 31 2001. Of these, 246,000 patients had been on the list for
more than six months and 42,000 patients had been waiting more than a year. The only
data available from the outpatients list covers people who have been waiting longer than
13 weeks to see a consultant for the first time - there were 284,000 people on this list on
March 31, 2001. 6

                                               Ordinary and Day Case Admissions
                                               Patients waiting for admission              % of patients
                                Total          by number of months waiting                waiting (months)
           Period
                               Waiting
                                             <3        3~5       6~11       12~17   18+    <3    <6    <12
          31 December 2000     1,034,381 524,918 242,336 217,912 49,205              10     51    74    95
              31 March 2001    1,006,727 520,944 239,792 203,833 41,941             217     52    76    96
               30 June 2001    1,037,875 505,178 265,537 220,471 46,333             356     49    74    96
         30 September 2001     1,035,302 510,105 247,741 232,786 44,462             208     49    73    96
          31 December 2001     1,050,221 536,483 254,615 227,354 31,760               9     51    75    97
Percentage Change
     30 September 2001 - 31
                                         1        5          3      -2        -29   N/A
            December 2001
     31 December 2000 - 31
                                         2        2          5          4     -35   N/A
           December 2001

UK summary - Qtr 3 : to 31 Dec 20017


These figures keep fluctuating over time but have experienced an overall decline to an
average of 5000 patients waiting for surgery for over 18 months at any given time. The
waiting times have generally reduced from the 12- 18 month band to the 9- 11 month
band in the last 3 years. However, even though the waiting times have been reduced, the



5
  http://society.guardian.co.uk/nhsperformance/story/0,8150,547195,00.html
6
  Source- http://society.guardian.co.uk/nhsperformance/story/0,8150,547195,00.html
7
  http://www.doh.gov.uk/waitingtimes/grn20012/g2001_y00.htm


                                                  11
overall waiting list still includes just under 1 million patients. This is exemplified by the
latest waiting times table below:




UK Summary – to 29 February 2004 8


Efforts have been made by „thinktanks‟ across UK to calculate the total waiting time.
The Centre for Economic and Business Research (CEBR) acts as one such thinktank
and claims that the total average waiting time for NHS patients in England was more
than 28 weeks up to June 30, 2001.

The CEBR's study also identified „regional variations‟ of waiting times across the
country. The study indicated a growing „north south divide in hospital waiting times,
with lengthening delays for patients in the south-east. The longest average waiting time
was 217 days in the south-east while the shortest was 180 days in the Trent region.‟ 9



II. III. Inadequacies of the above facts and figures


The Department of Health claims the statistics provided by the CEBR analysis are
"riddled with inaccuracies" because researchers had merely added the inpatients and
outpatients waiting times together. Hence, the national audit office (NAO), which acts
as a parliamentary watchdog, prepared a report (Inpatient and outpatient waiting in the
NHS) on waiting times in England in July 2001. This report found similar regional

8
 Department of Health Website, NHS waiting list figures 29 February 2004, Statistical Press Notice
http://www.dh.gov.uk/assetRoot/04/07/86/08/04078608.pdf
9
    http://society.guardian.co.uk/nhsperformance/story/0,8150,547195,00.html


                                                    12
variations in inpatient waiting lists and called on the government to measure total waits
from referral to hospital treatment. But the NAO's report is also criticised, as it does
„not’ take account of the „time spent on diagnostic tests ordered by a consultant to
determine what, if any, treatment a patient requires. These procedures may be
performed on the same day the patient attends the outpatient clinic, or may take
significantly longer.‟ 10

Furthermore, leaked parliamentary auditor‟s reports in 2001 confirmed that „Hospitals
regularly manipulate patient data to make their waiting list look shorter‟ 11.Four out of
50 hospitals being investigated "lost" more than 3,000 patients when they "suspended"
patients from waiting lists in an inappropriate fashion i.e. by striking off patients going
for a holiday and patients getting other illnesses, says the draft National Audit Office
(NAO) report. The report also concluded that „considerable pressure imposed by the
government to drive down waiting lists is distorting the way doctors prioritise patients
waiting for treatment‟ 12. For instance, „one in five of 300 hospital consultants
interviewed said they had "frequently" prioritised patients ‘not according to medical
need’ but ‘to meet waiting list targets’13.


Also, it is worthy to note the difference between the officially recorded waiting list and
the real waiting list. This is because the former will always be higher than the latter due
to „the delays in recording decease or of patients included in the official list giving up or
shifting to private health care.‟ 14




10
     http://society.guardian.co.uk/nhsperformance/story/0,8150,547195,00.html
11
  Hospitals admit to waiting list manipulation
The Guardian, Patrick Butler, Tuesday June 5, 2001
http://society.guardian.co.uk/nhsperformance/story/0,8150,502016,00.html
12
  Hospitals admit to waiting list manipulation
The Guardian, Patrick Butler, Tuesday June 5, 2001
http://society.guardian.co.uk/nhsperformance/story/0,8150,502016,00.html
13
  Hospitals admit to waiting list manipulation
The Guardian, Patrick Butler, Tuesday June 5, 2001
http://society.guardian.co.uk/nhsperformance/story/0,8150,502016,00.html
14
 Gonzalez, B Busto and Garcia, R - Waiting lists in Spanish Public Hospitals, Systems Dynamics
Review, Volume 15, Number 3, Fall 1999



                                                    13
II.IV. The Need for Waiting Lists

There are various reasons associated with long waiting lists. However, these reasons are
neither very clear nor entirely credible. Firstly, it is important to appreciate that waiting
lists are „not entirely evil‟ in themselves since they fulfil a few objectives.

One approach is that some waiting list is essential in order to „regulate the flow of work
of NHS surgeons‟. This facilitates task planning i.e. estimating the time in which the
operations or consultations would take place. This would help in better resource
planning. For instance, if more people fall sick during winter months, it would be
logical to maintain sufficient resources to meet the demand during this period.

An extreme line of argument could be that long NHS waiting lists favour the interests of
NHS surgeons, who can then reap financial benefits from long NHS waiting times as
patients switch to their expensive private practice.

Another viewpoint is that some waiting time is unavoidable in case of a state provided
welfare service like the NHS.

Some even argue that the NHS waiting list serves as a „Rationing Mechanism‟ as any
“reduction in waiting lists merely stimulates demand” 15, thereby increasing utilization
and hence escalating the problem further. This viewpoint can be justified using the
following „example‟:

Say for instance, the waiting list becomes very long; this discourages individuals with
minor health problems who then decide not to go to the public health service for
treatment. These patients may opt for alternative medicines (i.e. Homeopathy,
Ayurveda, Acupuncture, non prescription based medicines available at pharmacists), go
abroad for surgery, shift to private health care etc. simply to avoid the inconvenience of
waiting. This in turn reduces hidden or occult (not obvious) demand and thereby acts as
a „self- regulating mechanism‟.

Consequently, the objective of this dissertation is to not to suggest means to completely
eliminate the waiting lists altogether, but to understand the mechanism and probably
discover a way by which the waiting list could be maintained in accordance with the
demand received, the public perception of quality of service, the resources available to
the NHS (i.e. the supply) and the sub contracting capacity of the NHS.



15
   Ackere, Ann van and Smith, Peter C- „Towards a macro model of National Health Service Waiting
Lists‟, Systems Dynamics Review, 1999


                                                14
III. Understanding and Breaking Down the complex problem


Using Dr Laurie Reavill‟s lecture on Management and Problem Solving as a reference
and further expanding on Rittel‟s (Mason and Mitroff) characteristics of „tame‟ and
„wicked‟ problems, the problem of NHS waiting lists can be classified as an
„Unbounded Wicked Problem‟. NHS Waiting lists is categorized as complex problem
because there is no rule or system of criteria that determines a solution to the problem.

Furthermore the attempts to „tame‟ the NHS waiting lists illustrate the classic traits of
tough political, humanitarian, public and managerial decision-making such as conflict
of interest between the numerous stakeholders, confusion and ambiguity of aims (i.e.
reduce waiting lists vs. improve quality of care), urgency to act, absence of complete
information, uncertainty of action and potentiality of crippling chaos in the Health
Systems in UK, which has created an intense arena of political and public speculation in
the country.




                                           15
Using Paul C. Nutt‟s 3-point criteria for tough decisions discussed by Professor Ann
Brown in the Decision Making module in Management and Systems, it is recognised
that there are many relevant stakeholder groups involved in the decision making and
implementation of policies regarding the improvement of NHS and reduction of NHS
waiting lists. However, for the purpose of maintaining focus in this section of the
project, we will be discussing the relevant variables and stakeholders in section IV of
the report. The complexity of the issue is further elaborated by the diagram below:-


                                                 Long Uncertain
             Large Scale,                        Timescale
             Unbounded and                                                    No „right‟ solution.
             Unstructured                                                     Solutions are only
             Problem                                                          better relative to one
                                                                              another



      Priorities Unclear                 NHS Waiting Lists
      – meet waiting list                    in UK
      targets v improve
                                                                            Uncertain, but greater
      quality?
                                                                            implications of new
                                                                            policies and suggested
                                                                            solutions
             Difficult to pin-
             point a single
             problem – funding,            The problem                 Numerous
             lack of resources,            definition varies           stakeholders
             poor management?              with the                    involved – Conflicts
                                           stakeholder                 of interest




The average life expectancy for British men and women at birth is currently calculated
to be 75 and 79 years respectively‟ 16. For the NHS, this will ultimately mean increased
pressure and longer waiting lists to provide for an „ageing population‟ which suggests
that the issue of waiting lists will remain a recurring concern and ongoing national
problem.

This dissertation also recognises that there is no „one correct solution‟ to the problem.
Solutions can only be good or bad relative to one another as achieving a zero waiting
list is considered to be an unrealistic objective.



16
     Mintel Report - Private Medical Insurance - UK - September 2003


                                                   16
Therefore, there is no rule as to when to stop improving, planning and setting new
performance measure targets as there is always likely to be room for improvement in a
public funded system like the NHS.

 Since there is neither an immediate or ultimate solution to the problem, the potential
consequences of the problem are played out indefinitely. There is no definitive list of
permissible operations to be used for solving the problem.

The waiting lists arise as a result of interaction between the forces of supply and
demand. „Supply to the NHS‟ includes provision of financial funds, resources,
equipment etc. and „demand of NHS services‟ arises from a complex combination of
factors such as perceptions and preferences of patients, seasonal peaks in demand and
increased longetivity of the population. The influences on NHS waiting lists are
discussed further in the following section, which analyses the factors that cause
variations in the waiting lists.

III.II. Supply and Demand Influences on the waiting lists

The „supply-demand‟ approach is employed to understand the influences on the waiting
lists. On the supply side, the health services are obviously not free. The „governmental
decision maker‟ has to take into account the „opportunity costs of investment in health
services in terms of other public sector outputs foregone‟ 17 (for instance education,
police forces to fight street crime etc.).

The supply side (Central government and NHS trusts) experiences problems of limited
budgets, increasing demand and also internal conflict and weak management. There has
always been stress, conflict and denigration between the central government and the
NHS. This is well brought out by Klien in his study of the politics of the NHS. He
describes the supply side of NHS as „an arena of internal conflicts and intense external
pressures‟ 18 arising from a never-ending demand for more resources.




17
   Culyer, A.J. and Jonsonn, Bengt-Public and Private Health Services (Inconsistencies of the NHS
Buchanan revisted-Pg.101)
18
   Klien, R –The politics of NHS, Longman (Harlow), 1983.Pg 82


                                                  17
On the demand side, the increasing demand confronting the NHS can be attributable to
the following factors: -

    Public financing of the NHS by means of taxes and social security contribution,
     leads users to perceive the services provided in the system as free. This in turn
     induces the „side effect of over consumption‟.19
    The aging population, the changing demographics, low death rates combined with
     medical progress and technological developments in medicine generate a higher
     ongoing demand on the NHS.
    Accordingly, the public‟s beliefs regarding the capacity of the system, their
     expectations of healing and increasing desires to improve the quality of their life
     have exaggerated over the years, which has given rise to greater dependence of the
     public on the system. 20
    Greater attention of the media towards public health problems and the orientation
     of the National Health system have led to increase in information available to the
     public which has acted as another stimulant for demand.



III.III. Interaction of system variables with themselves and with the wider
environment

The NHS consists of multiple variables and multiple stakeholders. The structure of the
NHS has been complicated, elaborated and obscured further by the introduction of new
layers of management hierarchy .




19
   Gonzalez, B Busto and Garcia, R - Waiting lists in Spanish Public Hospitals, Systems Dynamics
Review, Volume 15, Number 3, Fall 1999
20
   Gonzalez, B Busto and Garcia, R - Waiting lists in Spanish Public Hospitals, Systems Dynamics
Review, Volume 15, Number 3, Fall 1999


                                                  18
The basic organisation of the new NHS is given below:




Source: How the NHS works (NHS website- www.nhs.uk)21

However, the high number of variables and stakeholders involved make the level of
analysis unbounded. There are many problems „interconnected‟ with the problem of
long waiting lists such as shortage of staff, shortage of resources, lack of morale,
bureaucratic environment, increasing layers of management hierarchy, slower pace of
modernisation than is actually required, shift of balance of power from the doctors to
the management etc., which can in turn be considered as symptoms of other problems.
Consequently, there is no single identifiable root cause of the problem of long waiting
lists and none of the stakeholders are certain that the problem is being attacked at the
proper level.

Many possible explanations exist for the problem of NHS waiting lists. Depending on
the stakeholder‟s perception and explanation, even the solution takes a different form.

Therefore, it was decided to use the technique of ‘Cross Impact Analysis’ to identify
and sort the driving forces from a suggested set of possibilities using a „relative,
coherent and structured approach‟ and then „employ these drivers‟ in building a causal
loop diagram and creating possible futures of the NHS Waiting Lists in UK.

21
     http://www.nhs.uk/thenhsexplained/HowTheNHSWorks.asp


                                               19
III.IV. Cross Impact Analysis – Step 1 Identify the Variables

The important variables relevant to the problem of NHS Waiting Lists have been
identified by linking theory on NHS to empirical research. These variables are as
follows:

        The consumption of National Health Services in UK
        The demand for National Health services in UK
        Aging Population in UK
        Per Capita Disposable Income
        National Taxation
        NHS Funding
        Bureaucracy and lack of efficient managerial control
        Out sourcing to Private Health Care and other countries
        Media and watchdog Pressure
        Private Health Care consumption

The objective is now to understand and identify the drivers from the above list of
„supposed‟ relevant variables.

Step 2 Create the matrix

In step two a matrix was created where all the variables from Step 1 are represented
both as columns and rows. Since comparing a variable against itself is not expected to
achieve any useful purpose, it is to be noted that diagonal in the diagram will not be
used.

This figure below (See Figure 1 on the following page) will be the starting point for
evaluating the various influences on NHS Waiting Lists.

Step 3 Fill the matrix.

The matrix in Figure 1 on next page was filled using the procedure described below:

The dependence of each variable in the left column was determined with the variable in
the top row using the dependence scale suggested by Professor E R Larsen in his note
on Cross Impact Analysis22:-


22
  Erik Larsen, Faculty of Management, Cass Business School
Teaching Note: Cross Impact Analysis, Current version January 2002



                                                20
3= strong dependence
2= medium dependence
1= low dependence
0= no dependence

Example:
Is the level of „National Taxation‟ influenced by the „demand for National Health
Services in UK‟? It may be argued that this is a „case of low dependence‟ i.e. 1 as the
Government is likely to take in view the funding required for public services before
altering the tax bands and taxation rates for members of the UK public earning over
£4,745 per tax year.

However, the Government has to keep in account of not just the National Health
Service but other basic services like education, crime prevention, social welfare,
environment, national businesses, national transport to name a few. Furthermore the
taxes are determined by the HM Treasury and must be in line with the UK
Government's financial and economy policy i.e. „raise sustainable economic growth,
achieve economic stability, low inflation, sound public finances, improve the prosperity
of the nation and create a more productive economy‟23 .

Therefore, Funding for NHS is one of the numerous important factors that influences
the level of National Taxation. It has hence been allotted a low dependence of 1 on a
scale of 0 to 3 in the cross impact analysis matrix below.

Similarly, considering another example,

„Is NHS funding influenced by the demand of National Health Services in UK?‟ This
has been allotted a high dependence of order 3 as NHS funding is directly determined
by the demand for the National Health Services by the UK public.

Nevertheless, it must be noted that the values below are the author‟s personal
judgement and have been largely used as a preliminary step for building a causal loop
diagram to understand the dynamics of NHS Waiting Lists




23
  HM Treasury, 10 Downing Street Website, Guide to Departments
http://www.number10.gov.uk/output/page1485.asp



                                              21
           (Figure 1- Cross Impact Analysis of NHS Waiting Lists - The completed
           Matrix)


                       The consumption of National

                       The demand for health services




                                                                                                                                                                                                                                       Out sourcing to Private Health
                                                                                 Per Capita Disposable Income




                                                                                                                                                                                                                                                                                                     Lack of hospitals, beds, staff
                                                                                                                                                            Morale of NHS Employees/




                                                                                                                                                                                                                                                                        Media / Watchdog Pressure
                                                                                                                Level of National Taxation




                                                                                                                                                                                                              Management Control and
                                                        Aging Population in UK




                                                                                                                                                                                                                                       Care and other countries
                                                                                                                                                                                       Systemic Bureaucracy
                                                                                                                                                            Doctors/ Nursing Staff
                      health services in UK




                                                                                                                                              NHS Funding




                                                                                                                                                                                                                                                                                                                                      Sum of Rows
                                                                                                                                                                                                                                                                                                    and resources
                                                                                                                                                                                                              Efficiency
                      in UK




The consumption of                    3                 3                        3                              0                             2             2                          1                      3                        2                                2                           3                                 24
National health
services in UK


The demand for        2                                 3                        3                              0                             1             1                          1                      2                        1                                2                           2                                 18
National health
services in UK


Aging Population in   3               3                                          0                              0                             0             0                          0                      0                        0                                0                           0                                 6
UK

Per Capita            3               3                 0                                                       3                             0             0                          0                      0                        0                                0                           0                                 9
Disposable Income


Level of National     1               1                 0                        1                                                            1             0                          0                      0                        0                                0                           1                                 4
Taxation

NHS Funding           1               3                 0                        0                              3                                           1                          2                      2                        1                                1                           2                                 17
Morale of NHS         1               2                 0                        1                              2                             2                                        2                      3                        2                                1                           2                                 18
Employees/ Doctors/
Nursing Staff

Systemic              1               2                 0                        0                              0                             1             3                                                 3                        0                                1                           1                                 12
Bureaucracy

Management Control    1               2                 0                        0                              0                             1             3                          3                                               1                                1                           2                                 14
and Efficiency

Out sourcing to
Private Health Care   0               3                 1                        0                              0                             2             1                          1                      2                                                         0                           3                                 13
and other countries
by NHS

Media / Watchdog      0               2                 0                        0                              2                             2             1                          1                      2                        2                                                            3                                 15
Pressure
Lack of hospitals,
beds, staff and       3               3                 1                        0                              3                             2             1                          2                      2                        2                                1                                                             20
resources

Sum of Columns        16              27                8                        8                              13                            14            13                         13                     19                       11                               9                           19                                170


                                                                                                                                             22
 Step 4 and 5 Calculate the dependence and Create a Scatter Plot

 The (x,y) point on the graph {for example : Management Control and Efficiency
 =(13,14) and outsourcing of health services to Private sector/ other countries =(8,13)}of
 each variable is plotted on a scatter diagram using EXCEL. The right column numbers
 become the Y-axis values and bottom rows numbers the x-axis in the diagram. (See
 Figure 2)


INDEPENDENT
(Driving)
          Drivers of NHS Waiting Lists - Scatter
                        Diagram

 30
           INDEPENDENT
           (Driving)                                      Consumption of      LINK
 25                                                      Health services in
                                                            UK(16, 24)
                                  Morale of NHS
                                                                 Lack of Resouces,
                                  doctors/nurses,
 20                                   (13, 18)
                                                                  Hospitals, Beds, Demand for
                                                                    Staff, (19, 20) National Health
                          NHS Funding                                               Services in UK,
                                  Media/ Watchdog                                       (27, 18)
 15                                    Pressure
                      Outsourcing to              Systemic
                      Private Health                                     Management
                                             Bureaucracy, (13,
                      Care/ overseas                                      Control and
                                                     12)
 10               Per Capita
                                                                       Efficiency, (19,14)
                  Disposable AUTONOMOUS                                 DEPENDENT
                 Income(8, 9)              National Taxation,
                                                 (13, 4)
  5                  Aging Population,
                           (8, 6)


  0
      0              5             10             15              20             25          30



                                            23
It is to be noted that the blue lines on the diagram represent the average values from
Figure 2 (in this case 170/12 14.2).


Step 7 Reading the Scatter diagram

Using the lines representing the average values, the diagram has been divided into four
parts which are:

Upper left square: Independent (driving): Variables in this square i.e. Media/
          watchdog Pressure, NHS Funding and Morale of Doctors / Nurses/ Medical
          Staff are the variables which are the driving variables among our original
          set of variables (in step 1).

           In other words, these are the variables which are of particular interest for
           further analysis of the problem we are trying to understand, as these
           variables determine how the other variables behave.

Upper right square: Link: Variables in this corner are linking the driving and the
          dependent variables among the set in Step 1.

           Consumption of National Health Services, Demand for National Health
           Services under the NHS and Resource Availability are influenced by other
           variables and which in turn then influence other variables. For instance
           resource availability, number of beds and hospitals will largely be
           dependent on the driving variable of NHS funding. Similarly, the „number
           of doctors and NHS service staff‟ will depend on the driving variables of
           „Morale , Job Satisfaction, Salaries and Work Pressure‟ of doctors and
           nursing staff as well „funding in the NHS‟.

           From an analysis point of view, these variables are of less significance than
           the independent variables as they are to a large extent determined by the
           latter.

Lower right corner: Dependent: Variables in the „Dependent‟ square are “end-of-line”
          or “Influenced” variables, i.e. they are variables which are influenced by
          other variables but do not themselves influence any other variables.

           For instance, Management Control and Efficiency within the NHS is
           influenced by the morale, organization and commitment of the people
           working in the NHS as well as the funds allocated to them.


                                          24
             From an analysis point of view „they are even less interesting than the link
             variables as they are only outcomes which cannot be changed directly, only
             through the driving variables‟ 24.

             Lower left corner: Autonomous: Variables in the Autonomous square are
             characterised by not being influenced by any other variable or influence any
             other variable in any significant way. From a strategy analysis point-of-view
             these variables are the least interesting of all the variables, as they have no
             influence and cannot be influenced by the set of variables we started out
             with.

             Although Variables like National Taxation and Per Capita Income of the
             UK masses are relevant to the overall system of NHS Funding, these
             variables „independently‟ are unable to have a significant effect on the NHS
             Waiting Lists. However, when applied „in conjunction‟ with driving
             variables (for instance increasing National Taxation solely or largely for the
             purpose of increasing NHS Funding), they can result in an „indirect impact‟
             on the NHS Waiting Lists.

             Outsourcing outwardly appears as a more obvious solution for the problem
             of NHS Waiting Lists and is a variable that was initially „not expected‟ to
             be classified as an autonomous variable in the Cross Impact Analysis.
             However, the dynamics of Outsourcing and the reasons why Outsourcing to
             Private Health Care only „temporarily‟ lowers the Waiting lists is discussed
             under the System Dynamics section of the report.

Step 8 Visualise the influences:

For the purpose of this project, this stage is the most important stage of the Cross
Impact Analysis Process as it will pave the path towards building a causal Loop
Diagram.

Now, in order to understand the interaction of variables more clearly and map the
interdependencies between the variables in the system, it was decided to create and
analyse the situation using a „Causal Loop Diagram‟. This involved defining additional


24
  Erik Larsen, Faculty of Management, Cass Business School
Teaching Note: Cross Impact Analysis, Current version January 2002




                                                25
important variables in the system and understanding their relationship with the NHS
waiting lists.

In this step, variables with strong and medium dependence were selected from the
Matrix in Figure 1 and connected using a causal loop diagram. The aim has been to
avoid the causal loop diagram from getting over-complicated and messy but attain a
diagram that is well structured, understandable and usable.

                IV. Applying Systems to NHS Waiting Lists

The diagram allows for an enhanced overview over what influences the variables and
better understand the interdependencies in the data from step 1. An analysis of how this
waiting list would move over a period of time and the factors impacting such changes is
made through consideration of the variables below :

Additional Key Variables for Causal Loop Diagram


   Number of doctors, nurses, other medical staff- The „number‟ of doctors, nurses
    and medical staff working in the NHS is inversely related to the waiting time for
    patients. This implies that when the number of staff increases, the waiting time
    decreases because of added capacity. The number of medical staff working with
    NHS depends on softer variables such as their morale and work environment.
   Number of Patients on the Waiting List–This refers to the number of patients on
    the NHS waiting list. The waiting list becomes particularly long due to seasonal
    peaks and becomes short when a large number of patients shift from NHS to private
    health care.
   Waiting time- This is time a patient has to wait before the NHS can treat him. The
    average acceptable waiting time for a patient in the flow diagram is taken to be 2
    months.
   Number of hospitals, beds, medical equipment-The number of hospitals and beds
    are dependent on the annual NHS budget and funding. If there is a lack of these
    resources, it would exert tension in the system and it would take longer to treat
    patients.
   Perceived quality of Health Services (Waiting time, Treatment, and After
    Care)-This varies from patient to patient. However, if the waiting time is too long,
    the perceived quality of the service is low and this in turn causes more people to
    complain against the NHS.
   Number of Complaints- Increase in waiting times and dissatisfaction of the
    patients leads to an increase in complaints against the NHS. This causes the Media
    to draw attention to the matter. The National Audit Office acts as a watchdog that
    exerts pressure on the Government and the Department of Health.


                                          26
   Number of Patients shifting to Private Health care - The patients respond to long
    waiting times by complaining against the NHS and shifting to private health care.
   Government/DOH action- Longer waiting lists, increased media pressure from the
    media, NAO and general public discontent causes the Government to increase its
    annual NHS budget. This relaxes the system temporarily as a new injection of funds
    increases the NHS capacity.
   Investment in facilities, Medical equipment and information technology (NHS
    Budget)- An increase in the NHS budget allows the NHS to hire and train more
    medical staff and extend and improve the capacities in hospitals. As the budget
    increases, more patients can be treated within a stipulated time and the waiting lists
    become shorter.
   Partnership with Private Health care- When the waiting lists become too long,
    the NHS cannot cope with the excessive demand. It then tends to outsource its
    service to private health care e.g. BUPA, NHS express surgery units in partnership
    with state run German and French health care firms. This is quick and short-lived
    fix to the problem and tends to bring down the waiting time in the short run.
   Morale of doctors and other medical staff –This is a soft variable that depends on
    factors like the quality of the work environment in the NHS hospitals and surgeries,
    the work pressure and employee satisfaction. The morale of the medical staff has a
    positive effect on the quality of service provided to patients. Further, it also
    determines the number of doctors and medical staff that stay with NHS or join NHS.
   Political Pressure- This concerns the pressure exerted by the public, the media, the
    opposition party in the parliament and the National Audit Office when the NHS
    desperately fails to meet the public expectations. This is a balancing variable in the
    causal loop diagram that indirectly prevents deterioration of the service quality
    below the acceptable levels.
   Number of patients coming back to the NHS-When a large number of patients
    shift to private health care and/or when the NHS budget is increased significantly to
    support improved health care, the waiting list tends to decline. The waiting time for
    treatment becomes shorter and this causes some of the patients who had previously
    shifted to private health care to return to NHS. This once again puts strain on the
    system and the waiting list is inclined to increase again.

Some environmental variables could have also been considered in this system. The
Private Health Care CHI (Independent Commission for Health Improvement) monitors
and inspects quality of health care. PALS (Patient Advocacy and Liaison Service) aims
to take action against unacceptable health care and service quality and resolve patients
complaints. However, keeping in view the aim and line of focus of this project (i.e.
concentration on the length of waiting lists rather than other inherent problems of
NHS), the project has not directed specific attention to these variables at this stage.



                                           27
                              IV.I. Causal Loop Diagram

                                   NHS Waiting Times


     NHS partership with
    /outsourcing to Private
         Health Care
                                                      +
                                               NHS Budget


                                                                                 Government/DOH
                                                                                     Action
                         +
                                                                                           +
                   Number of                         Employee Morale
                                                                            1B
                  Beds/Hospitals          3B

             -                 -                            +                            Political
          -                                                           +
                                                      Number of                     Pressure(National
Number of patients                                                                    Audit Office)
                                                   Doctors,Nurses and
 on waiting List                                     Medical Staff
                                                                                               +
         +
                    +
                                      -
                        Waiting Time
                         -           6 R                 Patient perception of
                 + 5R                                -                                     Number of
                                                            service quality           -
                                                                                           Complaints
      Number of Patients                                                                  +
     moving to Private Health                                2B
             Care
       4B
                            -
                         Number of patients
                        coming back to NHS


Key: -


    1B                                         5R
          = Loop 1(Balancing Loop)                     = Loop 5(Reinforcing Loop)
+        = Augmenting Relationship             -      = Inhibiting Relationship



                                               28
Loop 1(-ve ) –Number of complaints, Political Pressure, Government/DOH action,
NHS budget, Number of beds & hospitals, Number of patients on Waiting list, Waiting
Time, Patient Perception of service quality, Number of Complaints.

Loop 2(-ve ) - Number of complaints, Political Pressure, Government/DOH action,
NHS budget, Number of beds & hospitals, Number of patients on Waiting list, Waiting
Time, Number of Complaints.

Loop 3(-ve ) –NHS Budget, Number of Medical Staff, Waiting Time, Patient
Perception of service quality, Number of Complaints, Political Pressure,
Government/DOH action, NHS budget.

Loop 4(-ve ) - Number of patients on NHS waiting list, Waiting Time, Number of
patients coming back to NHS, Number of patients on NHS waiting list.

Loop 5(+ve) - Number of patients on NHS waiting list, Number of Patients moving to
private health care, Waiting Time, Number of patients coming back to NHS, Number of
patients on NHS waiting List.

Loop 6(+ve) –NHS budget, Number of doctors and Medical Staff, Number of patients
on Waiting List, Number of Patients moving to private health care, Waiting Time,
Number of Complaints, Political Pressure, Government/DOH action, NHS budget.

Changes occur in this system at many time scales. This can be primarily attributed
to: -
  Inadequate Budget
  Lack of resources (i.e. Hospitals, Beds, Medical Equipment)
  Increasing ailments
  Seasonal Peaks in Demand
  Increased longevity of population
  Short staff
  Employee Morale
  Political and media pressure
  Inherent Bureaucracy and red-tapism in the system
  Patients shifting to private health care from NHS and vice versa



The causal loop diagram suggests that a deeper set of forces is at work. The
problem situation to be modelled is complex and dynamic. It necessitates
consideration of both hard variables (Number of Beds and Hospitals) and Soft



                                        29
Variables (Morale of medical staff, bureaucracy). The causal loop diagram also
highlights the complexity of the problem situation. There are 6 loops in the system.

The two positive loops in the system tend to be deviation amplifying. They are
likely to cause or increase instability in the system .The other 4 loops in the system
are negative or balancing loops. These loops tend to be counter deviating and
stabilise the system. It is important to note that ‘stability’ here is defined as the
state of equilibrium where the acceptable waiting time for treatment is also the
actual waiting time for treatment.

Consider Loop 1 in the signed diagraph. It is to be noted that this loop will further
be expanded and modified to develop flow diagram in Vensim. Increasing number
of patients on the waiting list augments the waiting time. Longer waiting times for
treatment lead to dissatisfaction and complaints against the NHS. This also causes
some patients to switch to private heath care. Increasing pressure from the public,
media and the political circuit force the government to increase the NHS budget.
This tends to have a positive effect on the system by increasing the NHS capacity
and reducing the waiting list. However, loop 1 is affected by loop 5, which is
positive and reinforcing loop. Some patients decide to return to NHS from private
health care after the waiting list shows a decline and /or discontent with private
health care. This is likely to increase the waiting list once again. Hence, there are
no obvious solutions to the problem or the obvious solutions are difficult to
achieve.

Furthermore, many obvious solutions to the problem (like increasing the NHS
budget) failed in the past and have even worsened the situation in the long term.
Despite increasing the NHS budget, it seems rather difficult to eliminate the NHS
waiting list permanently and completely. The causal loop diagram contains more
negative than positive loops. However, overall the system appears to be a ‘negative
system’ that ‘tends to counter uncontrolled deviation and stabilise if the waiting
list increases significantly’.




                                         30
IV. II. Factoring in the ‘Soft’ issues – Application of SSM to NHS Waiting
Lists

Furthermore, the causal loop diagram opened a new dimension to the previous research
carried out. The qualitative issues associated with long NHS waiting lists could not be
suitably addressed by using only the signed diagraph. The system required
consideration of softer issues such as perception of quality by patients and morale of
employees .It appears that NHS waiting lists is a complex problem that assumes a
„pluralist problem context‟. There is a high degree of conflict in relationships between
the stakeholders and participants. It is again worth mentioning that many obvious
solutions to the problem of long NHS waiting lists (i.e. increasing the budget) have
actually failed or even worsened the problem in the past. This shows that the problem is
not only financial but also political and social. This meant that it was not enough in this
case to simply apply control to find the best way to solve the problem. Further, since the
problem is messy and complex, there were many ways to approach the problem and
many ways to move from the initial stage to the final stage. It was thus deemed
appropriate to apply the „first two stages’ of Soft Systems Methodology to NHS
waiting lists.

   1. The first stage of SSM was the information gathering stage. This involved
      investigating the NHS waiting lists, its structures, the stakeholders involved, the
      human activity systems, the system‟s unpredictability, its processes and its
      complexity. This stage was carried out using different research sources, which
      included referring to recent journals, reading books on NHS waiting lists,
      studying the history of NHS waiting lists, exploring the NHS and DOH
      websites, interacting with NHS doctors , NHS Waiting List Controllers like Dr
      Mary McCabe, who has had significant experience in managing Waiting Lists in
      West Middlesex University Hospital as well as seeking assistance from Prof
      Peter C Smith, Department of Health at University of York who has been
      researching the NHS since the last decade.

   2. The second stage of SSM involves expressing the problem situation using the
      outcomes of stage 1. For this purpose, a Rich Picture was created which helped
      to identify other problem themes associated with NHS waiting lists.




                                            31
                                   Rich Picture




               Sub-Contracting

                                 Private Healthcare



                                                                             Public
  Government




    Patients
                                                                     Political Parties


                                                                           Media




Doctors
                                          NHS Trusts

                                                       Watchdog – National Audit
                                                                Office


    Key to Rich Picture: -



                     Scrutiny



                     Finance




                                         32
                  Pressure



                  Bureaucracy



                  Blame



                  Support



                  Feeling trapped




                  Outcry/Criticism



                  Collaboration



                  Lack of Communication



                  Conflict




It is to be noted that it was purposely decided to prepare the rich picture ‘after’
analysing the causal loop diagram. This is because although, the causal loop diagram
was able to map the interdependencies and interactions between different variables, it
had the following inadequacies: -

   Firstly the causal loop diagram could not distinguish between variables and
    stakeholders. For instance „morale of medical staff‟ is a variable in the causal loop
    diagram. However, „Morale of medical staff‟ is a related issue that stems out from
    other shortfalls and problems inherent in the NHS but it cannot be classified as an
    actor in the problem. The rich picture helped to identify the actors that are actually
    involved, impacted and affected by the NHS waiting lists.


                                           33
   Secondly, the „type of relationship‟ could not be reflected in the causal loop
    diagram. For instance, the rich picture could easily express and explore relationships
    of conflict, support, cooperation between stakeholders as well as reveal their
    differing perspectives and views. These relationships are represented on the rich
    picture using different symbols. This expression allowed for certain other problems
    and interesting features of the NHS to be accentuated, which in turn helped to
    decipher the „climate of the situation‟.

   Thirdly, the rich picture helped to structure the messiness, complexity and diversity
    of the situation rather than attempt to „solve‟ a well-defined problem. The rich
    picture by focussing on the main stakeholders „directly‟ (i.e. doctors, patients,
    public, media, NHS trusts, Government, Political parties and private health care)
    directed attention to the conflict, bureaucracy, support, communication channels,
    tension and pressure in the system. Some may not consider these issues as relevant
    as the financing of the NHS but they can actually impact the NHS waiting lists by
    causing fluctuations in the waiting lists over time.



IV. III. Dynamics of NHS waiting lists
Conceptualisation of systems dynamics model

The basic loop structure described in the „Section 7‟ was converted in to a Stock s and
Flow diagram in Vensim. This model focuses on „only‟ one particular loop (loop 1) of
the causal loop diagram and develops it further by introduction of new variables and
relationships.


Before conceptualising the model, it was decided to estimate the behaviour of variables
over time. This was done in order to make an effective comparison between the
expected and actual outcome of the model.

Reference Mode


The behaviour of the variables is expected to vary over time as follows: -

   There are peak and off-peak, location specific, age specific loads. For instance more
    patients suffer from pneumonia, bronchitis, flu in winter months. Similarly many
    patients prefer to be operated upon during holiday/summer months.
   Due to ageing population in the country and increased life expectancy, the number
    of patients on the waiting list is expected to increase over time.


                                           34
   The funding (NHS Budget) increases as well but probably at a slower rate than the
    rate of increase of patients on the waiting list.
   The department of health and government constantly come up with new policies and
    plans to improve the service. They change their course of action and priority over
    time (i.e. Partnership with Health care Services from Germany and France,
    Outsourcing to Private Health care etc.)
   If the waiting list becomes very long, the government faces increasing pressure from
    the public, media and the national audit office.
   This leads to an injection of funds in to the NHS by an increase in the annual NHS
    budget.
   Increased funds help to tackle the problem temporarily as the waiting lists seem to
    decrease.
   However, when the NHS starts providing better and prompt service, the patients
    who had earlier switched to private health care come back to NHS once again
    putting the system under strain.
   Perception of quality of the health service is variable. Some patients may receive
    adequate and satisfactory health care while some may not.


Hence, the ‘expected’ behaviour of the NHS waiting list over time is represented
graphically as below: -




                                NHS waiting list
    Number of Patients on
       Waiting List




                                                                  Patient Number




                               Time




                                          35
However, the public perception varies from the above. The public perceives that
the waiting lists are never ending and ever increasing. Hence, the behaviour of the
NHS Waiting List ‘as perceived by the people‟ is represented graphically as below: -


                              NHS waiting list
   Number of Patients on
      Waiting List




                                    Time



A flow diagram was then created using ‘the NHS budget’ and the ‘Waiting List’ as
the stocks.




                                        36
                 Flow Diagram for NHS waiting times



                                                 NHS Budget     Average Cost per patient
                              Change in Budget

  Table WToB

                Effec t of Waiting Time on Bud
                                                              monthly budget

Acceptable Waiting Time
                            Waiting Time Index


                          Average Waiting Time
                                                                        NHS Capacity
   Time to Average
                                         Waiting Time



                                           Waiting list
                       New patients                       NHS treatment




               Arrival of Patients




Details of the equations developed and used for the flow diagram are included in
the appendix of the project.




                                        37
 1,500


 1,000


   500
IV.IV. Description of the results achieved after running the model

      0
Once the model was constructed it was put to test. On running the model, the
        0     10     20      30         50    60
following trends were observed in 40 behaviour of the ‘NHS80
                                  the                70           90
                                                            budget’ and100
                                                                         the
                                    Time (Month)
‘NHS Waiting list’ over time: -
    NHS Budget : Current



                              Graph for Waiting list
 400


 300


 200


 100


    0
        0    10      20     30      40       50     60     70      80     90    100
                                         Time (Month)

   Waiting list : Current


Results and Inference


We infer from our analysis that the waiting list observes a ‘cyclical trend’.

The results are generally in line with our projections. When a considerable
number of patients shift to private health care and/or when the NHS budget is
increased significantly to support improved health care, the waiting list tends to
decline. This leads to shorter waiting time for treatment and this in turn causes
some of the patients who had previously shifted to private health care to return to
NHS. The system is now once again put under strain and the waiting list tends to
increase again. When the waiting list becomes unacceptably long, the government
again injects funds to increase the NHS capacity. Infusion of fresh funds in to the
NHS budget, in conjunction with patients leaving NHS, causes the waiting list to
decline again.


                                           38
Over a period of time, the NHS budget shows an increasing trend. Further, there
is always a ‘lag factor’ between increase in the budget and reduction in the waiting
list.


Hence, we observe a graph of NHS waiting list that exhibits an ‘Oscillating
Behaviour’ similar to the NHS budget. However, variations in the waiting list are
more prominent as compared to increase/decrease in the NHS budget.


Therefore we pose the question whether a substantial increase in the resources of
the system, until it meets the existing demand would be an optimal solution. Our
results show that increasing the budget solves the problem only temporarily. This
view is also shared by Costas (1996), who pointed out that the immediate effect of
this measure would be the appearance of surplus capacity and, consequently, this
would generate, in the medium or long term, an increase in demand and thus the
reappearance of long waiting lists. 25

After carrying out the initial run of the model, it was decided to explore the dynamics
further by implementing the model under a different scenario. A very interesting trend
was noticed on delaying an increase in budget.


It was observed that when the government delayed an injection of funds into the
NHS, the waiting list tended to reach higher peaks initially. However, when the
waiting list dropped it stayed lower for a longer duration. This could perhaps be
attributed to less frequent fluctuation in the NHS budget which meant that the
services improved slowly over a period of time rather than quickly as in the
previous case. This in turn appeared to cause fewer patients to shift back from
private health care, thereby keeping the waiting list lower for a longer period.




25
     Costas, E. Las Listas de espera. El Pais 2 (July 1996)


                                                       39
This is graphically represented below using the output from Vensim. The graph in
‘red’ represents the ‘Original Waiting List Cycle’ when the increase in
government funding is in tandem with an increase in the waiting list. The graph in
‘blue’ represents the waiting list cycle when a delay is introduced in government
funding.

                                                     Graph for Waiting list
 600




 450




 300




 150




  0
       0     5      10      15   20   25   30   35   40   45   50    55       60   65   70   75   80   85   90   95   100
                                                           Time (Month)

  Waiting list : c urrent
  Waiting list : run1




Therefore, the graph clearly indicates that the delayed funding by the government leads
to higher waiting times initially (indicated by higher „blue‟ peaks as compared to „red‟
peaks). However as the impact of the increased government funding is felt, it lowers the
waiting list and then the waiting list stays lower for a long time.


This analysis also does not indicate „delaying injection of funds in to the NHS‟ as the
ideal or definitive solution to the problem. Nevertheless, it brings to light a useful
mechanism that appears to „Stabilise the long Waiting Lists‟. As pressure on the NHS
increases, the question arises as to what extent the subcontracting to private sector will
be able to lower the waiting list.


Hence, after structuring the messiness of the situation using a rich picture and using
system dynamics to illustrate the role of Private Sector and delaying funding in to the
NHS, the author will now attempt to „build on‟ and „further elaborate‟ on the particular



                                                             40
area from Private Health Care Sector in UK. This section of the report aims to analyse
the position of the Private Health Care Sector in UK and critically discuss the impact
and the current trends in the Private Health Care in the United Kingdom.


                          V. NHS and Private Health Care


13% of the UK population or 1 in 6 people in UK now have private health insurance.
These people became private patients for one compelling reason – to avoid NHS‟s
notoriously long waiting lists for surgery. There were 224 acute private hospitals in UK
in 1996, the figure has now almost tripled to 674 hospitals. This implies that that except
the poorest and remotest parts of UK, there is at least one hospital within a mile of
every major district general hospital. 26


V.I. Tracing the Growth of Private Medicine in UK – Not a new phenomenon


Contrary to common belief, Private Medicine is not a recent phenomenon in UK. Until
late in the 19th century, hospitals in UK were primarily used by the deprived and poor
strata of the society because the wealthy people would be „ill at home‟ and underwent
surgery „privately in the comfort of their own homes‟. The origins of private health care
hence go much beyond the past few decades.


Consequently, with the advancement of medicine and surgery, „hospital care‟ took over
„home care‟ for the seriously ill regardless of social class. The special hospitals
accommodated the special patients by building elite wings with private rooms. Caroline
Richmond, established researcher on private medical care in UK confirms that
„historically the middle classes subscribed to provident societies to pay for medical care
and loss of earnings while ill.‟ 27




26
  NHS waiting lists have been a boon for private medicine in the UK
Caroline Richmond
Canadian Medical Association Journal 1996; 154: 378-381

27
  NHS waiting lists have been a boon for private medicine in the UK
Caroline Richmond
Canadian Medical Association Journal 1996; 154: 378-381



                                                 41
Typical among truly private hospitals were the „London Clinic on Harley Street‟ and the
„King Edward VII Hospital‟ for Officers where ex military personnel and the Royals
were treated.

Most of other private societies withered with the birth of the NHS but the Conservative
Government in UK started feeling the effect of NHS‟s burgeoning costs and hence
encouraged private health care companies to build private health care hospitals. The
need for private hospitals was further fuelled by external global environment such as
privatisation in the industrial sector and 1970‟s fuel crisis.

As Arabic nations became wealthy and powerful, many rich Arabs travelled to London
for private surgery where private hospitals were built in UK to accommodate them. At
the same time, waiting lists for elective surgery were becoming longer and longer and it
was acknowledged that the way to jump the queue was to see the consultant privately.
This was the „backdoor entry‟ in to the NHS waiting lists as the consultant would be
influential in arranging speedy admission to his NHS.

V.II. BUPA’s rise to power

As a result, 17 British provident associations joined together to provide private health
care for the general public: the result was The British United Provident Association, or
BUPA. However, it is largely the last two decades that have seen an upsurge in the
prominence of organisations like BUPA, AXA PPP Healthcare etc.

Even though the demand for private health care from the Arabic countries has dwindled
following development of state of art facilities in their own countries, the internal
demand for private health care continued to grow. Over fifty years later, BUPA is still
the UK's leading independent health and care organisation „with over four million
members in 190 countries worldwide, around 40,000 members of staff in the UK and 35
BUPA hospitals in the UK‟ 28.

V.III. Analysis of the Private Medical Sector in UK- The Current Situation

As the discontentment with the NHS has grown, the private medical health sector has
gained significance in UK. According to the Independent Healthcare Association,
„between 1997 and 2002 the number of people paying for treatment in private hospitals
tripled from 100,000 to 300,000.‟29 Currently the „Average household spend on PMI in
UK is around £600‟30. Furthermore, roughly seven million people in UK had private


28
   http://www.bupa.co.uk/about/asp/history/index.asp
29
   Mintel Report - Private Medical Insurance - UK - September 2003
30
   Mintel Report - Private Medical Insurance - UK - September 2003


                                                 42
healthcare insurance at the end of 2002‟ 31 which covers 11.5% of the UK population.

It therefore makes it essential to „define‟ and „further breakdown‟ the private health care
sector in to its constituent parts. Mintel's exclusive consumer research reveals the single
most popular medical protection product in UK is „Private Medical Insurance (PMI)‟,
which is defined by the Association of British Insurers (ABI) as a tool and choice that,
'enables the subscriber to receive hospital attention or undergo operations in private
hospitals at a time more suitable, or earlier, than would be available under the NHS.' 32

Health Systems in UK has now evolved in to a competitive industry and it was
therefore considered significant to conduct a Porter’s 5 force analysis to evaluate the
macro-industry forces and understand the industry evolution of Private Medical
Insurance (PMI) . The model is used as an important „preliminary step‟ to identify the
major components of the private medical insurance industry in UK and examine the
way the various components inter-relate with each other.

Suppliers of Private Medical Insurance (PMI)

The supplier industry for PMI in UK is dominated by a few key players and is not as
fragmented as the American PMI market. The supplier market is „more
concentrated‟ than the buyer market because the PMI products have only recently
gained importance in UK.

There is low differentiation between the suppliers but the long standing reputation of
the big players like BUPA has enabled it to capture and maintain a „40% stake in the
PMI market. AXA PPP healthcare comes second with a 27% market share‟ 33. These
two companies far outstrip the rest of the market. The rest of the market consists of
smaller players including Norwich Union Healthcare, Standard Life Healthcare and
WPA, among others. The market share of the various PMI providers in UK is
summarised in the bar graph below.




31
   Mintel Report - Private Medical Insurance - UK - September 2003
32
   Mintel Report - Private Medical Insurance - UK - September 2003
33
   Mintel Report - Private Medical Insurance - UK - September 2003


                                                 43
                                                                                       S
Source: Mintel 2003

The market is growing fairly rapidly which in turn means that the market share of the
„individual suppliers‟ like BUPA, AXA, Norwich Union etc is growing as well.
However, the individual market share is growing at a rate slower than the overall
increase in the market because of the increasing competition and lower entry barriers in
the market.

Substitutes for Private Medical Insurance (PMI)

There are numerous healthcare products which are frequently purchased instead of
Private Medical Insurance policies by the UK population. However, these health care
products are ideally not designed as replacements, but are intended as complementary
solutions. These products provide a reasonable level of return in the event of needing
medical treatment but are not as „comprehensive‟ as health care insurance. They are
gaining popularity mainly on the grounds that they are not as expensive. The substitutes
for PMI are therefore categorised as follows:-

      cash plans
      critical illness cover
      credit-based schemes, such as the increasingly popular self-pay policies

Besides the above substitutes, the other very „obvious‟ substitute for PMI is reliance on
NHS and withstanding the long waiting lists. The private healthcare insurance market is


                                           44
inherently dependent and proportionately affected by the sales of these alternative
products.

Buyers of PMI in UK

The buyer market for Private Medical Insurance is largely divided into two sub-sectors:
individual and corporate.

1) Individual - refers to personal/family PMI policies that are purchased by a private
individual. Average household expenditure on PMI in 2001-02 stood at £600. However,
it must be noted that this is an overall average and disguises the significant variance
between age groups and different geographical regions. For instance, „the average
household expenditure for the over-74 age group is more than £1,250 per year.‟ 34



2) Corporate - refers to private health cover arranged by an employer for the benefit of
their employees. Corporate PMI may be a free (though taxable) company benefit or be
offered as a subsidised scheme to a UK employee. Company-paid PMI accounts for just
over two-thirds of all policies purchased and the rapid growth in the corporate PMI
sector can be attributed to the following reasons:-

        Employers have realised the benefits of having a system in place that can help
         „reduce losses incurred through employee illness‟.
        A relatively „strong economy‟ has allowed the multinational companies to invest
         in employee health, rather than place their trust in the NHS
        While the cost of maintaining the subscription and premiums has continued to
         rise in both private and corporate PMI sector, the per capita basis the cost of a
         company-based scheme is still much lower than a policy purchased by an
         individual. Hence, corporate schemes „comparatively‟ appear to be good value
         for money.
        PMI has become an „integral part‟ of a corporate remuneration package in the
         new millennium. It is a benefit „many employees have come to expect, and
         companies have responded by factoring these packages into their remuneration
         budgets‟ 35.

The corporate Private Healthcare market is therefore growing at a much rapid rate than

34
  Mintel Report - Private Medical Insurance - UK - September 2003
September 2003
35
  Mintel Report - Private Medical Insurance - UK - September 2003
September 2003



                                                45
the individual Private Health care market which has been heralded as the „under-
performing sector‟. Nevertheless, since the growth in the corporate sector is rather new
and still in the incubatory stages in the product life cycle, individual PMI still accounts
for over half of the total private healthcare premiums earned at this point in time. This is
further elaborated in the table below:-




Source: ABI/Mintel

.
The breakdown of the Corporate and the Individual Private Medical Insurance
Sector (above) indicates a prosperous corporate private healthcare insurance sector and
a struggling individual PMI sector which is under pressure to maintain new business
levels.

The prohibitive cost of personal PMI premiums has been a major reason for a decline in
the number of policies taken out by individuals in recent years. The rise in premium
costs which is primarily due to the increased cost of claims, has further caused many
consumers to opt out of these schemes in favour of substitute products listed earlier in
the report.




                                            46
Source: National Statistics/ Mintel 2003

Figure 3: Total number of people awaiting admission at NHS trusts, in England
(hospital based), March 1993 to March 2003

Again, studies and media evidence suggests that the prime reason behind consumers
turning away from the NHS is the size of the waiting lists coupled with the time spent
awaiting treatment.

The public's perception of the state of the NHS is not only solely based on the long
waiting list problem. The adverse publicity - generated by stories of people being left in
hospital corridors, of doctors suffering from exhaustion and other such reports - has also
resulted in a loss of confidence in the NHS. 36



V.IV.Private health care: dominance in only a few key areas?

Despite the hype surrounding Private Health Care, the demand for private health care is
prominent in only a few areas while the NHS continues to cater to the masses in other
critical and life threatening areas. According to Professor Alan Maynard, a health care
researcher,

„the mainstays of the private sector are standard operations and encompass the
"three h's" -- hips, hernias and haemorrhoids -- along with some elective surgery,

36
  Mintel Report - Private Medical Insurance - UK - September 2003
September 2003


                                                47
particularly in gynaecology and ophthalmology.‟37 Other significant areas where
private health care has gained magnitude are fertility regulation and cosmetic
surgery.

The extent of private practice also varies according to geographical areas. For instance,
50% to 60% of hip replacements in wealthy areas such as North London are carried out
privately. The numbers are lower in other parts of UK and especially low in the north of
UK. Reports from the Central Blood Transfusion laboratory show that people with long
term expensive illnesses still depend on the NHS. For instance, there was not even one
private Haemophilia patient in Britain 2 years back.

V.V. Compliment or Competition: NHS vs. Private Health Care?

With the rise in the number of private hospitals especially in metropolitan cities like
London, consultant surgeons from NHS can effortlessly cross over the road and operate
on their private patients. Although the levels are not monitored closely or accurately,
„physician consultants are not permitted to earn more than 10 % of their income from
private practice‟ 38.

The British Medical Association, the consultants‟ trade union remain adamant that over
90% of the consultants exceed their NHS commitments and only 10% „may‟ not. The
Monopolies and Mergers Commission (MMC) surveyed 556 surgeons who further
claimed that they managed their part time and private commitments by working long
hours.

Nonetheless, circumstantial evidence shows that surgeons do not keep to the10% limit.
Sheffield University‟s Medical Care research shows that there is serious abuse of the
NHS by the surgeons. Although 95% of all consultants' time in normal hours is
contracted to the NHS, they perform „one private inpatient operation for every seven
they perform in the NHS. According to BUPA promotional literature, the figure is now
one in five.‟ 39 Furthermore, Laing and Buisson show that 70% of operations in private


37
  NHS waiting lists have been a boon for private medicine in the UK
Caroline Richmond
Canadian Medical Association Journal 1996; 154: 378-381


38 NHS waiting lists have been a boon for private medicine in the UK
Caroline Richmond
Canadian Medical Association Journal 1996; 154: 378-381


39NHS waiting lists have been a boon for private medicine in the UK
Caroline Richmond




                                                                       48
hospitals are performed between 9 am and 5 pm (i.e. during the NHS hours) by NHS
consultants. NHS consultants get away with this as their earnings are not audited by any
watchdog. Most estimates of their income have to be obtained from data provided by
private insurance companies. This data shows that some consultants earn more than
£500,000 from private surgeries. NHS Consultants are expected to schedule between 5
and 7 (out of 10 or 11) sessions to fixed NHS commitments which leaves 4 to 6
sessions for administrative or other duties, but many doctors, especially those who do a
lot of on-call work, feel justified in using this time for private practice. Usually no one
monitors whether they do or not. 40

UK is one of the few countries where the same surgeons operate in both sectors –
private sector and NHS. This raises issues like Dual Allegiance where doctors‟
commitment is split between NHS and private health care. It could be argued that by
doing this the surgeons reduce their opportunities for private work and more money.
The question that arises is why consultants carry on working simultaneously in NHS
and private practice? Wouldn‟t it be better for the consultants to just make more money
in Private Health care and leave NHS to doctors who are committed to public health?
The reason behind relatively fewer consultants in full-time private practice is that there
is still not sufficient work to go round. Furthermore, NHS appointments confer
‘prestige’ and the private insurance companies are more likely to use the services
of a consultant who has worked for the NHS.


The most revealing argument, as Laing and Buisson point out, is that there is no
evidence that NHS consultants are short of time to do private work. There are hardly
any or extremely short waiting lists for private surgery even in London, where the
„ratio‟ of private to NHS work is highest.

VI. PMI IN UK

The length of waiting lists is a strong incentive for people to take out private medical
insurance (PMI) and nearly seven million people in the UK have it.

Although the obvious incentives of buying private health cover in UK include the sense
of security that if people become ill or need an operation they can get treatment
promptly and they can exercise choice without needing to wait for months. A private
operation may be performed at the convenience of a patient by a surgeon of his choice
Canadian Medical Association Journal 1996; 154: 378-381



40NHS waiting lists have been a boon for private medicine in the UK
Caroline Richmond
Canadian Medical Association Journal 1996; 154: 378-381



                                                          49
  and often at a hospital you choose. The patient may have „further advantages of
  unrestricted visiting hours in a private room with TV, and a choice of food without
  retinue of medical students accompanying the doctor‟ 41 However, there are certain
  significant disadvantages associated with Private Health Care that deserve a mention
  and are discussed in the table below:

NHS                                                 Private Medical Insurance

(ADVANTAGES)                                        (DISADVANTAGES)

        ‘The NHS Act 1946 provides a
                                                           PMI does not provide cover for every
         complete and medical service free of
         charge at the time it is required for              medical eventuality .In general, policies
         every citizen’.42                                  do not cover the treatment of long-term
                                                            illnesses which cannot be cured.
Introduction to the NHS Act 1946


    NHS does not differentiate. Despite bad         Such conditions are commonly referred to as
   press surrounding preferential treatment         'chronic illness'. Insurance only works where no
   for celebrities (like George Best‟s              one knows who will suffer the risk of ill health.
   kidney replacement operation on NHS),            Therefore, people who are chronically sick are
   everyone is at least „theoretically‟             virtually uninsurable.
   treated as „equal‟ in the NHS.

         ‘NHS will provide you with all your              Most private health care policies only
          medical dental and nursing care.                  operate if there is an NHS waiting list of
          Everyone rich or poor, man, woman
          or child can use it or any part of it.            6 weeks or more .
          There are no charges, except for a
          few special items; there are no
         insurance qualifications. But it is not
        a charity. You are all paying for it,       Additionally, There are different policy options
        mainly as taxpayers, and it will            and many patients buy a „limited range‟
       relieve your money worries in time of        affordable policy which provides them security
        illness’.
                                                    but limited cover.
Charles Webster The National Health
Service: a political history 1998 43

  41
     Advantages of private medical insurance
    John Illman, Medical Writer
  http://www.netdoctor.co.uk/focus/pmi/advantages.htm
  42
     What‟s good about the NHS – Unison Report
  http://www.unison.org.uk/acrobat/B325.pdf
  43
    What‟s good about the NHS – Unison Report
   http://www.unison.org.uk/acrobat/B325.pdf


                                                   50
On a typical day, the NHS treats over one
million people in UK. This happens without           Since illness type or illness occurrence is not
patients being asked whether they can afford         always predictable, the consumer may still be
treatment or have the right insurance44. NHS         left without cover for his/her condition although
treatment does not cost an average man on            most common conditions may be covered by
the street to sell his house in order to get         the policy
well.

         The NHS treats for all illnesses –                 Treatment for alcohol and drug abuse,
          major (coronary heart disease, HIV,                 dental      treatment,    GP      services,
          Cancer) as well as minor (coughs,                   HIV/AIDS related illnesses, infertility
          flus, fever), psychological trauma                  treatment,        normal        pregnancy,
          etc.                                                sterilisation, routine tests etc are ‘not’
                                                              covered by the PMI policies.

         Despite the delays and defects, the                Despite the hype surrounding PMI,
          NHS has superior capability to deal                 Accident and Emergency is beyond the
          with Accident and Emergency cases                   scope of most PMI.
          across the country than other
          replacements suggested.

         The increasing power and pressure                  Finding way around the policies can be
          from the media as well as the clout                 a challenge for gullible consumers who
          of the National Watchdogs like the                  often get influenced by policy sellers
          National Audit Office regularly                     and fail to read/ understand the fine
          „exposes‟ the NHS blunders to the                   print.
          masses which has led to an increase
          in the quality and quantity of
          information available to patients.
                                                         Most often, Private Care comes with a „no
          This has made it easier for „victims
                                                         sue‟ clause if anything goes wrong.
          to contest for compensation‟.

   Furthermore under the new NHS plan,


  44
       Actually, the health service is working

  Health Secretary Alan Milburn defends the NHS against Anthony Browne's claims that it is a system in
  terminal decline
  The Observer NHS debate

  Sunday October 21, 2001
  The Observer

  http://observer.guardian.co.uk/comment/story/0,6903,577822,00.html


                                                   51
 power is increasing being passed on to
 the consumer which has initiated the
 shift of balance of power.

    Reputed NHS University Hospitals                      A private hospital is usually only „led
     are widely considered undoubtedly                      by a consultant and only includes a
     better equipped and have access to                     houseman, a senior house officer, a
     more experienced medical staff than                    registrar, a senior registrar, a nursing
     most if not all private hospitals in                   sister and limited specialist nurses‟. 45
     the country.                                           The private hospitals therefore lack the
                                                            strength of NHS hospitals that lies in the
                                                            depth and range of specialist expertise.

    NHS appointments confer „prestige‟                    Private treatment is usually dependant
     and the private insurance companies                    upon the individual consultant working
     are more likely to use the services of                 in the time he has free from the NHS.
     a consultant who has worked for the
     NHS.

Furthermore, „15% of the UK population is actually against using Private Health Care
on principle‟ 46 as they firmly believe that they should not be paying for health care in
principle.

Despite the disadvantages of PMI listed above, Mintel‟s SPSS time series forecasts
indicate that premium income from private medical insurance „will show steady growth
to reach a value of £3.9 billion by 2007, an increase of 32% from the value of premiums
earned in 2003‟47. Even after considering the effects of inflation for personal services,
the above figure in real terms „represents a 12% increase over the 2003-07 period‟ 48.

Nonetheless, the future of PMI market in UK will depend on not just quantitative data
and market research but on certain other factors discussed below:-




45
   Advantages of Private Medical Insurance - Written by John Illman, medical writer
http://www.netdoctor.co.uk/focus/pmi/advantages.htm
46
   Mintel Report - Private Medical Insurance - UK - September 2003
September 2003
47
   Mintel Report - Private Medical Insurance - UK - September 2003
September 2003
48
   Mintel Report - Private Medical Insurance - UK - September 2003
September 2003


                                                  52
VI. II. Future of PMI (Variables affecting PMI Market in UK):-

     1. Steady economy is likely to prompt further growth of PMI

The short-term outlook for the „private healthcare insurance sector is closely tied to the
domestic economy. Companies recognise the value of medical policies, both as a
bargaining tool when discussing employment terms with staff and as a means of
reducing the number of man-hours lost through ill health.‟ 49

Low unemployment levels, new recruitment in the corporate sector and increasing
confidence in the economy is likely to give a boost the corporate PMI market. However,
there is a trend of increase in premiums which may lead to some employers looking for
cheaper alternatives to PMI like cash plans and critical illness covers.

     2. NHS recovery and revitalisation could affect the individual PMI sector

 „In the April 2003 Budget, the Chancellor of the Exchequer confirmed that the
government was on track to reach the 2008 target of spending £106 billion on the
NHS.50 This investment will pay for a further 25,000 doctors and 80,000 nurses and see
through the creation of controversial Foundation Hospitals in UK.

The combined effect of the government's pledge to recuperate the flagging NHS and
injection of additional investment in the NHS should lower waiting lists- „at least‟ in
theory. Accordingly, research conducted by International Market Research Groups like
Mintel as well as Private Medical Insurance providers suggest that these efforts are
unlikely to dramatically affect the robust corporate sector of PMI, although they could
contribute to a continuing decline in the number of individual PMI subscriptions.

3. Claims must be reduced in order for the PMI market to grow substantially

„The cost of claims currently accounts for four-fifths of gross earned premiums in the
PMI market and must be reduced if the sector is to grow substantially.‟ 51 This factor
makes the PMI market unattractive as it increases supplier costs. The high number of
claims produces a knock-on effect by fuelling a rise in the cost of policies. This in turn

49
   Mintel Report - Private Medical Insurance - UK - September 2003
September 2003
50
   Mintel Report - Private Medical Insurance - UK - September 2003
September 2003
51
  Mintel Report - Private Medical Insurance - UK - September 2003
September 2003



                                                 53
affects the market size deterring the individual/ private PMI holder to reconsider his
policy.

4. Scope of further growth in the PMI market through customised deals from
   PMI providers

Policy providers are currently introducing initiatives designed to keep the cost of
policies down and lower the number of claims. Such initiatives include introduction of
flexible „pick and mix‟ policies rather than blanket coverage schemes (whereby
consumers can select which treatments they wish to be covered for) and high access
schemes (whereby customers get numerous credit options available from high street
lenders such as cash plans or self-pay schemes wherein the customer pays a percentage
of the cost of treatment in conjunction with a PMI policy). Mintel‟s PMI market report
confirms that flexible policies particularly appeal to the younger generation. This will
be also be beneficial for the PMI providers as premiums for younger population are
lower than those for mature population thereby increasing the depth and spread of the
PMI providers.


Besides PMI, outsourcing from EU is another arena significantly impacting the NHS
Waiting Lists. It also raises interesting issues as to why certain EU countries appear to
be more competent achieving the delicate balance between public and private health
care and keeping their waiting lists low. Regardless of Germany, France and UK being
nearly identical in size, GDP, Disposable Income and population, UK suffers from a
waiting list of almost 1 million patients whereas Germany had a waiting list that
consisted of „less than a hundred patients in April 2004‟ which was confirmed by Dr
Mockel during my field trip to the country.

This section of the report aims to explore the differences between the German and the
UK Health Care System and understand why a geographically, demographically and
economically similar first world country in the developed world in the Western
European Union manages to maintain a waiting list 10,000 times less than United
Kingdom.




                                           54
Firstly, the following comparative table was created to confirm the similarities in the
major economic indicators (GDP, Per Capita Income) and demographic indicators
(Population) between Germany, France and UK. This table has been created using the
latest National Statistics from OECD.

                          Comparitive Analysis ( France, Germany and UK)

     120,000

     100,000

      80,000                                                                                   France
      60,000                                                                                   Germany

      40,000                                                                                   UK

      20,000

          0
               Population (000)     GDP (US $)      Disposable Income    Waiting Lists (0)
                                                        per capita



N.B. - (Waiting Lists in the above graph are measured in 0‟s (tens) i.e. the waiting list for UK is over
1 million whereas it is either nil or almost negligible for Germany and France)


It is to be noted that German was chosen over France for the comparative analysis in
this project because waiting times in Germany are even lower than in France. This is
confirmed by BBC‟s famous report on NHS Waiting Lists in 2002, „Long waiting times
for hospital treatment are minimal in France and virtually unheard of in Germany
.French Health Systems may suffer from occasional and sporadic waiting lists during
certain peak periods. 52‟

     German Health Care System vs. NHS – The differences explored

As part of the dissertation research, I visited the Krankenhaus Sachsenhausen Hospital
in Frankfurt to conduct a comparative analysis between UK and German Health Care
Systems. This fieldwork was supported and funded through the City University N‟Ions
Annual Alumni Travel and Research Bursary Award attained for academic year
2003/04.

This section of the dissertation aims to concentrate on areas where further comparative
research will be politically relevant and scientifically gratifying to supplement the data


52
  http://news.bbc.co.uk/1/hi/health/1990909.stm
Times, Thursday, 16 May, 2002, 10:06 GMT 11:06 UK
Q&A: NHS waiting lists



                                                     55
that already exists on the subject. The research therefore included interviews with
several doctors and managerial controllers responsible for running medium sized
hospitals in Frankfurt. One of the most significant interviews was with Dr Peter
Mockel, Management Advisor and Quality Controller of Krankenhaus Sachsenhausen
Hospital in Frankfurt. The main components that have been compared are as follows:-

        General Health of the German/ UK Population
        Financial Resources budgeted and spent to Health Care in Germany and UK
        Patients : Coverage , benefits , access and perceptions of Health Care Systems in
         Germany and UK
        Structure of the Health Care System in the two countries



VII.II. Aging Population - UK and Germany

Just like UK, the „quantitative relation‟ between older and younger people is expected
to change considerably in Germany in the next few decades. The most recent co-
ordinated population projection of the Federal Statistical Office envisages that „half of
the population will be aged over 48 and one third be 60 or older in 2050‟53. These
statistics are almost identical to the UK statistical predictions and go on to substantiate
that Germany faces similar problem of „aging population‟ like UK.

VII.III.Childlessness and Immigration - UK and Germany

 The President of the Federal Statistical Office Johann Hahlen in Berlin reported that
„the number of inhabitants in Germany will decline in the long term despite the
assumed rates of immigration from abroad when he presented the results of the Office's
10th co-ordinated population projection until the year 2050‟54. Even though UK is
traditionally condemned for being a „political soft touch‟ with regard to immigration
and asylum by having one of the higher immigration rates in Europe, UK nevertheless
shares the German demographic trends towards higher life expectancy and tendency of
childlessness among the new generation. This makes the comparison between UK and
Germany constructive and valid.




53
   In 2050 every 3rd person will be 60 or older in Germany
Press Release , 6 June 2003, German National Statistics Website
 http://www.destatis.de/presse/englisch/pm2003/p2300022.htm
54
    In 2050 every 3rd person will be 60 or older in Germany
Press Release , 6 June 2003, German National Statistics Website
 http://www.destatis.de/presse/englisch/pm2003/p2300022.htm


                                                  56
VII.IV.Economic Convergence / Divergence – UK and Germany

Taking a closer look at the British and German economy, an unexpected number of
substantial similarities can be established. A general misperception is that Britain and
Germany are very different countries in terms of their economic structure since Britain
is traditionally and more so currently recognised as a „Service Economy‟ in comparison
with Germany that is generally regarded as a „Manufacturing Economy‟ (e.g. car
manufacturing and world class machine tool industry) .

Exploring the official statistics in greater depth, it is rather surprising that the two
economies do not in reality differ very significantly. „Whereas with Germany‟s share of
manufacturing of just under 30 per cent the construction industry and the energy sector
are included, in the UK‟s figure of 17 per cent these two sectors are left out. In both our
economies construction and energy contribute about 10 per cent to gross value added.‟ 55
Therefore, „after‟ making the figures comparable it is found that the „real difference in
the make-up of the two economies is approximately (depending on the statistical
sources) ‘only’ between 2 and 3 percentage points‟ 56.



VII.V.General Health of the UK/ German Population

It is generally regarded that the German population is healthier than the overall UK
population and enjoys a higher life expectancy (see table below). The „gap‟ between the
standard of health of the German population and the EU average has further increased
significantly with the continuing expansion of the EU to include less economically
stable regions of Eastern Europe.




55
   Europe Review – UK German Business Relations Report
http://www.times-publications.com/publications/ERSpring03/ER_36.htm
56
   Europe Review – UK German Business Relations Report
http://www.times-publications.com/publications/ERSpring03/ER_36.htm


                                              57
57
     Anglo-German Foundation for the Study of Industrial Society


It is to be noted that the „difference in life expectancy‟ between UK and Germany is
still severe despite the skewing of German figures to a disadvantage after the
reunification of West Germany with East Germany. Despite the lower life expectancy
and poorer health enjoyed by East Germany, the overall health of German Citizens is
regarded as better than UK citizens, which naturally puts less pressure on the Health
Care System in Germany.

VII.VI. Financial Resources channelled towards Health Care – UK vs.
Germany

          Percentage of National GDP

       Germany spends about € 226 billion annually on Health care which constitutes 10 -
       11% of the Gross Domestic Product. According to an OECD Survey, „Germany is
       with its actual share of 10.7%, among the top 3 countries with regard to the
       indicator. Only United States spent more of their GDP on healthcare products and
       services (13%)‟ 58. This is contrast with Britain which has significantly lower health
       care expenses amounting to only 7.3% of the GDP.

57
  Health Care Systems : Towards an agenda for Policy Learning between Britain and Germany –
Reinhard Busse June 2002
Anglo-German Foundation for the Study of Industrial Society
58
  Medical Technologies and the German Health Care System: State and Future
BVMed – Bunderverband Medizentechnologie e. V. Publication
Article by Joachim M. Schmitt, BVMed Director General, May 2003


                                                    58
59
     Anglo-German Foundation for the Study of Industrial Society 2002

          Per Capita Health Spending

Additionally, Germany is also one of the top four spenders in the world in terms of total
health spending per capita, „with spending of 2,808 USD (adjusted for purchasing
power parity), one third higher than the OECD average of 2,117 UDS in 2001‟60.
Again, UK lags behind not only Germany but also behind the OECD average in terms
of total health expenditure per capita, with spending of 1,992 USD (adjusted for
purchasing power parity) compared with an OECD average of 2,117 USD 61




59
  Health Care Systems : Towards an agenda for Policy Learning between Britain and Germany –
Reinhard Busse June 2002
Anglo-German Foundation for the Study of Industrial Society/
60
  Health at a Glance – OECD Indicators 2003
Briefing note (Germany)
http://www.oecd.org/dataoecd/15/30/16782333.pdf
61
  Health at a Glance – OECD Indicators 2003
Briefing note (United Kingdom)
http://www.oecd.org/dataoecd/20/47/16502649.pdf


                                                   59
62
     Anglo-German Foundation for the Study of Industrial Society 2002

However it must be noted that since the differences in health spending across
countries may also reflect ‘differences in price, volume and quality of medical
goods and services consumed63 , the monetary comparative analysis can not be
taken as entirely accurate at face value.

VII.VII.Cost of Medicines, Medical Equipment – UK vs Germany
The cost of medicines and medical equipment varies widely across the European Union.
During 1996 the European Commission fined Bayer, the German Pharmaceutical Giant
€3 million ($3.8 million) for breaking Europe's anti-cartel laws64. Numerous
pharmaceutical firms like BayerAG were recently again under the watchful scrutiny of
the European Court of Justice for monopolising the pharmaceutical industry , breaking
anti-cartel laws and „exploiting drug-price differences within the European Union‟. 65

62
  Health Care Systems : Towards an agenda for Policy Learning between Britain and Germany –
Reinhard Busse June 2002
Anglo-German Foundation for the Study of Industrial Society/
63
  Health at a Glance – OECD Indicators 2003
Briefing note (Germany)
http://www.oecd.org/dataoecd/15/30/16782333.pdf
64
  Germany's Bayer Wins Right To Limit Supply to Discounters
JAMES KANTER / Dow Jones Newswires 7 Jan04
http://www.mindfully.org/Industry/2004/Bayer-Limit-Supply7jan04.htm

65 Germany's Bayer Wins Right To Limit Supply to Discounters


                                                   60
However, in what in now considered a significant victory to the EU pharmaceutical
companies , German BayerAG can limit supplies to prevent discount traders from re-
exporting best selling drugs like Adahat (Heart treatment drug) from „France and Spain
-where prices are lower because of state regulation -- to higher-priced Britain.‟

Although beneficial for the German Pharmaceutical Industry, this victory gives power
to pharmaceutical firms to unfairly and artificially limit supplies to charge exorbitant
prices in UK. Further, according to the 2002 research by London School of Economics
using IMS Health data to track the sources, prices, and sales for 19 high-volume
medicines such as statins and heart drugs, „parallel imports from Spain and Southern
Europe in the six major destination countries (Denmark, Germany, Netherlands,
Sweden and UK, plus non-EU Norway) saved government healthcare agencies 43.1
million euros over locally developed and manufactured products‟ 66.

Yet the UK‟s National Health Service saved just two percent of its medicines budget by
using parallel imports that year, compared with a mark-up of 49 percent by the
importers.67 UK‟s savings from parallel exports were also significantly lower than those
of Germany. UK getting a „smaller share of the total pie‟ has the knock on effect of
„less value for the pound‟ and „increased pressure‟ on the National Health Care system
and the UK citizens as pharmacists „dispense approximately 8.5 million items on NHS
prescriptions‟ 68 each week in the United Kingdom.

VII.VIII.Percentage Split between Public/Private Financing – UK vs
Germany

In the United Kingdom, „82% of health spending is funded by government revenues‟ 69
which is far higher than Germany where around 75% of health expenditure is financed
through public funds. Continued reliance on Government Funding and the lack of a

JAMES KANTER / Dow Jones Newswires 7 Jan04
http://www.mindfully.org/Industry/2004/Bayer-Limit-Supply7jan04.htm

66
  Progress Against Parallel Trade
Pharmaceutical Executive, March 2004
http://www.users.globalnet.co.uk/~sarahx/articles/mar04.htm
67
  Progress Against Parallel Trade
Pharmaceutical Executive, March 2004
http://www.users.globalnet.co.uk/~sarahx/articles/mar04.htm
68
  NHS, The NHS Explained – NHS Facts and Figures
http://www.nhs.uk/thenhsexplained/what_is_nhs.asp
69
  Health at a Glance – OECD Indicators 2003
Briefing note (United Kingdom)
http://www.oecd.org/dataoecd/20/47/16502649.pdf


                                                  61
successful private funding system can be attributed as a major cause of the long waiting
lists.

The share of public funding has traditionally been even higher than 82% in UK. From a
peak of 90% in the mid-1970s the public share of health spending in the United
Kingdom declined to a low of 80% in the late 1990s, reflecting a steady rise in out-of-
pocket payments and take up of private medical insurance over the same period. The
public share of health spending is decreasing because of continued lengthy waiting lists.

VII.IX. Human Resources in the Health Sector- UK vs. Germany

The United Kingdom continues to face acute doctor shortages; there are fewer
physicians per capita than in most other OECD countries. Amid efforts to recruit and
maintain doctors in the health service, the UK reported 2.0 practising physicians per
1,000 population in 2000, well below the OECD average of 2.9, and the European
Union average of 3.3.

Hiring doctors and nurses from EU, Asia and Africa has helped to solve the problem
partially but the shift is balance is not permanent, the orientation of these doctors and
nurses to the UK heath care system in the complete sense will take time and also has
some negative side effects and ethical considerations like brain drain from developing
countries .

Whereas the UK Health sector is short staffed, both German Private and Public Sector
are under staffed. This is exemplified by the UK‟s government‟s move to hire „teams of
German doctors and nurses to perform "conveyor belt" operations at a fast-track surgery
unit for NHS patients‟ 70 being set up at a military hospital in Portsmouth. These
surgeons were provided by the German private health company, Germedica, which is
understood to have „spare capacity in its continental hospitals‟ like many other German
private health companies.




70
 NHS to hire German surgeons - Teams to perform 'conveyor belt' operations
Guardian, John Carvel, Friday February 22, 2002

http://society.guardian.co.uk/nhsplan/story/0,7991,654246,00.html


                                                  62
VII.X.Variance in Culture and perceptions re. Health Care – UK vs Germany

Albeit difficult to generalise, research on German culture suggests a stark difference in
perception between the UK and German patients. The guild like and cartelized German
business characteristics are instilled in the patients as well. Further, Sam Vankin reports
that Germans find „the thought of Asprin available in a super market reprehensible‟ 71
and prefer to buy medicines from pharmacists. The drugs for basic ailments are
available without prescriptions. The patients do not visit hospitals for every minor
ailment. This automatically reduces the strain on the medical system in Germany.



VII.XI. Public Private Mix – UK vs Germany

The first significant difference between the German and the UK health systems is how
the hospitals work. Majority of the hospitals in UK are NHS hospitals that receive their
funding from the Government. However, Dr Peter Mockel confirms that Germany runs
a so called “mixed system” of hospitals. The healthcare provision in Germany is
extremely diversified: some providers are federal, others regional, local, voluntary or
private. In Healthcare reform in Germany in comparative perspective, Christina
Altenstetter of the Graduate School and European Union Studies Centre of the City
University of New York, summarizes the principles that guided German Health care
since 1883 as follows:


71
     Vaknin, Sam - Better get sick in Germany, published by United Press International (UPI)


                                                     63
.. “ Membership in the National Health Program is mandated by law; the
administration of the health insurance program is delegated to non – state bodies
with representatives of the insured and employers ; entitlements to benefits is linked
to past contributions rather than need; benefits and contributions are related to
earnings ; and financing is secured through wage taxes levied on the employer and
employee.”72

„Majority i.e. more than 95% of the hospitals are partly privately owned and partly
funded by churches, charities and town councils. There may be about 20 to 30 hospitals
in the entire country that are state funded. These are generally the University hospitals
which the Government takes special interest in, in order to produce the next generation
of doctors and medical practitioners.‟ 73

With regard to health care expenses, it was deemed necessary to explore the inflow and
outflow of resources. The NHS is funded by the tax payer which in turn is controlled by
the Ministry of Health. However, Germany runs a Statutory Health Insurance System
that pays 57% of all German Health Care expenses. The SHI system works as a
combination of public private scheme wherein about 86% of the entire German
Population (about 80 million) contributes directly through their pay slip. For purpose of
understanding how it works, the SHI contribution for this dissertation may be
considered as the German Health Tax. It is to be noted that the SHI contribution is „not‟
actually referred to as tax in Germany.

As an Assistant Tax Consultant in PricewaterhouseCoopers specialising in UK Tax
system (where all citizens earning over £ 4745 are taxed at three tax bands of 10%, 22%
and 40% depending on the level of income), the author of this paper was also keen to
explore the relationship between German Tax System and the German Health Systems
funding.

The Extensive research in the German Tax system and interview with Dr Peter Mockel
revealed that SHI membership is mandatory for employees, workers and pensioners
with a monthly income below a certain amount. People with an income higher than
€3850 per month have a choice to opt out of the SHI scheme and go for private
insurance whereas as the people earning below this limit compulsorily have to be a part
of the SHI scheme. This is in stark contrast with NHS in UK wherein the government
decides the overall size of the NHS budget according to the yearly revenue from
taxation and „then “Rationing” occurs at three levels: at parliamentary or government

72
     Vaknin, Sam - Better get sick in Germany, published by United Press International (UPI)
73
 Extract from Interview with Dr. Peter Mockel on 5th April 2004 , Management Advisor and Quality
Controller of Krankenhaus Sachsenhausen Hospital in Frankfurt


                                                     64
level, by individual health authorities and at a clinical level by health care
professionals.‟ 74

For the purpose of exploring the SHI system in detail, an analogy between the German
Public Insurance system can be drawn with the UK Pension Contribution system. Just
like an employer in UK “matches” an employee pension contribution, SHI is also paid
equally by employers and employees in Germany on a 50/50 basis. This increases the
cost of hiring an employee in Germany as the employer has additional Public Insurance
Costs. However, the system still manages to “deviate” the burden away from the
common man to the Krankeskasse i.e. the mandatory public private national healthcare
system. The system is cleverly designed to be more public friendly and more
Government friendly by shifting the financial impetus on the employers, the hospitals
and the public insurance system.

German Health Care system is able to „bypass‟ some of the confusion , hierarchy ,
ambiguity and finger pointing because of the "de-layering" in the system. In the
German system, all citizens contribute towards the SHI and the hospitals invoice the
SHI authority instead of asking the Government for any reimbursement or funding. This
„no direct dealing system‟ between the Government and the hospitals not only reduces
the administrative, responsibility and monetary burden on the Government but also
makes the process smoother in 3 ways:-

     1. The hospitals desire a quick payment from the SHI authority and therefore
        ensure more effective and efficient management to speed up the process of
        recovering payments. This in turn has a „knock on‟ effect of quicker treatment
        of patients and lower waiting lists.
     2. Since the hospitals are either self funded or sponsored by charities, churches etc.
        as opposed to being funded by the state, they work rather „independently‟ form
        the German Government. As a result, it is in their best interest to reduce
        unnecessary administrative and personnel costs.
     3. The patients generally get a choice in terms of where they wish to be treated.
        They therefore have the „deciding power‟ and act like „market consumers or
        business clients‟ who need to be satisfied by the quality of service provided by
        the selected hospital or doctor. By the same token, the hospitals need to keep the
        patients satisfied through requisite quality control, superior delivery of service
        and no waiting lists. This works as a „mutually balancing‟ and „reciprocally
        beneficial‟ public private health care system that is generally overseen by the
        Government but overall controlled at a lower level by the „market mechanism‟.


74
  Rationing Healthcare – General Election Briefing 2001
http://www.kingsfund.org.uk/pdf/ebrationing-7.PDF


                                                 65
In addition to the above points, my fieldwork and interviews with doctors and hospital
staff would like drew at certain relevant points that „prevent the misuse‟ of the German
Health Care system. Some of the very simple but effective recent amendments are as
follows:-

      A charge of €10 has been introduced for a patient visiting a German hospital. This
       charge is controversial but pertinent for „part-contribution‟ towards the hospital
       booking and administration fee. In addition, Dr Peter Mockel confirms that „this
       minimal charge is useful in deterring people from going to the hospital for fun, free
       care and free food thereby preventing wastage of doctor‟s and hospital
       management‟s time‟.

      Secondly, the latest German there is a new rule that the €10 charge can not exceed
       more than 2% of thee patients‟ annual income in case the patient has any long term
       chronic illness. This „Upper cap‟ again protects the average German citizen against
       serious financial shortfall in the event of a serious illness.



However the downside of this law is that it is relatively new and proper systems for its
calculation are not in place. The hospital needs to see the patient‟s payslips, bills etc.
which makes the process a bit cumbersome and difficult to prove to the insurance
company.

The SHI system is regarded as satisfactory, sufficient, effective and efficient in
Germany with only 5 % of the total population opting for Private Health Care. This
small minority of population belong to the affluent class of society who pay for private
health care not to bypass the waiting lists but to obtain benefits like choosing their own
hospital and surgeon, non official treatments and alternative sources of treatment lie
acupuncture, homeopathy etc.

“We have free choice of physicians, we have practically no waiting lists” 75 announced
Professor Friedrich Breyer of the University of Konstanz in an interview with BBC. He
added wryly that he would „not consider the British NHS the envy of the world for the
simple reason that Germany spent 40% more of its GDP on Healthcare than UK. Add to
this private expenditure on health and this figure balloons to 12% of GDP.‟ 76 The author
of this paper agrees with Professor Friedrich Breyer but believes that it is not merely the



75
     Vaknin, Sam - Better get sick in Germany, published by United Press International (UPI)
76
     Vaknin, Sam - Better get sick in Germany, published by United Press International (UPI)


                                                     66
difference in funding but a „combination „ of all the above differences discussed in this
section that contribute to Germany‟s successful Health Care System.

According to Tony Blair‟s latest press statements, he has clearly indicated a move
towards the German or the Swiss Health care model where the general public re granted
a basic level of insurance and have to purchase more if they can so afford or if they so
require. However, this change is anticipated to take place only over a long run and not
in the immediate future of the NHS. The future of NHS is further explored in the
section below using the Scenario Planning Technique.



                   VIII. Future of NHS – Use of Scenarios

The NHS Waiting Lists are becoming increasingly more interconnected with various
other national and international issues. For instance the NHS is increasingly
overlapping with the private sector, International health care is merging with UK health
care (i.e. hiring nurses from Germany to make up for staff shortages in UK),
development and maintenance costs within the NHS are increasing, new institutional
forms and policies are brought out at a faster pace and the influence of different
stakeholder groups is evolving rapidly.

As a result of these fundamental changes, the dynamics of the NHS waiting lists is also
becoming unpredictable. Therefore, this section of the report focuses on the impact of
these external and internal forces on the NHS in the UK. In this case, it was felt that
generation of scenarios would be an important „complementary tool‟ to „visualise‟ the
possible future outcome of the NHS waiting lists in UK. The intention is to „establish
possible connections‟ between current decisions of the NHS and future outcomes.

It was decided not to try and forecast the future of NHS using traditional forecasting
techniques because of two reasons. Firstly, although short term business forecasting can
be remarkably precise, this project does not seek to predict the day to day forecasts in
the changes in NHS Waiting Lists. Secondly, NHS is characterised by an unstable
environment with fluctuating levels of staff, motivation, funding, resources and
capabilities. NHS does „not‟ qualify as a typical business that responds to economic
conditions, trends or seasonality in a clockwork methodical fashion. Forecasts are
known to work better in relatively stable business environments. Thirdly, history has
shown that forecasting errors grow fast as the time horizon is increased (Sterman 1985)
and therefore forecasting NHS waiting lists will neither yield accurate nor reliable
conclusions.




                                           67
To paraphrase Hamel and Prahlad (1994) „in order to create the future, an organisation
must first be able to imagine it.‟ 77 Accordingly, the main aim behind building scenarios
in this project is to be able to analyse and test NHS strategies and policies against
possible futures. By visiting alternative futures, this part of the dissertation aims to
evaluate the different courses of action that NHS may take as a consequence of changes
in its external and internal environment.

However, it important to bear in mind that there is no guarantee that future events in the
UK health sector will follow along the lines of at least one scenario discussed in this
paper. There is a possibility of an unexpected event arising, which will make all the
scenarios invalid. Therefore, the aim is to use scenarios more as a learning tool than a
predicting tool.

Scenarios have been built using detailed economic and simulation modelling with a
number of assumptions about the development of the NHS in the future.

Phase 1: The Scenario Building Process

“There is no scientific or „right‟ way of building scenarios. Rather there is a broad
framework which has been developed over the last 30 years.” 78 The scenario building
process consists of three separate but closely linked phases i.e. (1) scenario building, (2)
scenario planning and (3) environmental scanning. Keeping these guidelines in view
and slightly modifying the scenario building process to suit this paper, it has been
decided to follow only the „first stage‟ of the scenario building process due to the
following reasons:-

        1. The second phase of scenario building process is Scenario Planning which
           involves „evaluating policies and strategies against each of the scenarios
           developed in phase to see how well the policies hold up against the different
           scenarios?‟

            However, it is not conducive in our case to actually test the government
            policies and strategies in the working environment because the author of this
            paper is neither working in a hospital nor involved in the policy or
            performance management sector of NHS. Secondly the second phase
            „defers‟ from the aim of this paper which is not to determine the quality of
            government policy but to understand the dynamics and future of NHS
            waiting lists.

77
   Larsen, Erik - Understanding and Using Scenarios: The Why , When and How of scenarios , January
2002, Version 2.1(Page 2)
78
   Larsen E. (2002) Understanding and using scenarios: The Why, When and How of Scenarios.


                                                 68
           2. The third phase of scenario building process is Environmental Scanning
              which involves creation of an environmental monitoring system to enable
              the organisation to determine as early as possible which of the developed
              scenarios will actually be realised.

               However, this phase can not be applied to NHS because carrying out this
               phase without carrying out phase 2 first will not be conducive or useful.

Hence, only the first stage shall be drawn on as it is seen as most fundamental and
relevant to this paper. Before applying the scenario approach to NHS waiting lists, the
first phase shall be briefly outlined.

5.2.1 Phase 1 - Scenario Building

This is the first phase of scenario building in which the scenarios are created. “This
first part of the scenario process can be broken down in a number of steps describing
how a scenario can be put together. For this part of the process a set of guidelines is
available, which is shared by most scenario users.” 79 The end outcome of this stage
shall be a description of a complete set of 4 potential scenarios entailing the possible
future of NHS. Though the precise number of steps and the process within each steps,
may differ, the overall framework generally involves the following stages:-

          “Identify issues
          Identify key drivers
          Identify important and uncertain factors
          Create the basic frame for the scenarios
          Write the full stories, i.e., paint the picture within the frame developed.” 80

Identify issues

The first step involves establishing the boundaries of the scenarios and pinpointing the
focal point of the scenarios. In this dissertation, the very broad issue of the future of
NHS Waiting lists future shall be explored. Anticipating how NHS Waiting lists may
evolve over the years is unquestionably vital since it has the potential to affect UK
public, private medical insurance providers, NHS doctors, UK government policies,
national taxation, out-sourcing to foreign countries as well as international organisations



79
     Larsen E. (2002) Understanding and using scenarios: The Why, When and How of Scenarios.
80
     Larsen E. (2002) Understanding and using scenarios: The Why, When and How of Scenarios.


                                                  69
like the World Health Organisation. Therefore, the future of NHS Waiting lists poses
far-reaching implications.

Time Horizon

The time horizon for which the scenario building exercise shall be carried out is a
decade, since looking back on the NHS‟s history and the speed of change in the UK
health sector, many of the critical changes observed, seem to have been accepted by and
affected the health sector gradually over a 10 year period. Thus it is expected that the
next 10 years will be a crucial period for change for the NHS fuelled by the rising
significance of the private sector and increasing pressure from the public, the media and
the public watchdog over never ending waiting lists. It is aimed to strike a balance in
creation of a scenario which does not have too short a time horizon (so that no major
development can take place in the NHS) or an excessively long time horizon (e.g. 50
years so that we have no idea what might happen). Furthermore, a time horizon of a
decade provides enough scope to build an appropriate degree of certainty and volatility
in the scenarios.


Identifying the key driving forces

A combination of stakeholder analysis, trend analysis, cross impact analysis and the
systems causal loop diagram shall be collectively used in this stage in order to identify
the key driving forces for the future of NHS Waiting Lists.

The stakeholders i.e. those who are involved and who will be affected by the scenario-
based decisions are numerous since the scenario issue is extremely broad. However,
those stakeholders that can be seen to have greater influence as to how the NHS may
develop include the UK National Government as the Government would have possess
significant power and control over future policies.

The people of UK are also an important stakeholder since it is their votes that shall
determine who will lead the country. If the government fails to deliver an adequate
standard of health care and the waiting lists remain extremely high, the Labour
Government will fail to satisfy the people‟s expectation and the chance for re-election
in next general election will deteriorate. The power of the people is one element of the
NHS and the UK Health Sector‟s history that has changed drastically over time. Five
decades ago the people had little choice, little say in the affairs of the Government and
the people were not able to exercise their opinion via the media.




                                           70
The rise of power of the media has transferred a greater degree of power of the people
and made the NHS more accountable to the public watchdogs such as the National
Audit office. Not only are the People are more aware of their medical rights, they are
no longer hesitant to express their opinion. This can be reflected by the famous
lawsuits against the NHS handled by prestigious law firms like Irwin Mitchell and
Leigh day and company, regular articles in the National Dailies and the social unrests
that have occurred in UK over long waiting lists in the last decade gaining the NHS
worldwide attention.

In addition, the NHS staff including the management, trust members, the doctors,
nurses, service and support staff form an important stakeholder group. There are
significant conflicts of interest and tension within this stakeholder group which adds
more volatility to the speculation of NHS‟s future.

The next step is identifying the „major trends‟ that currently exist in the NHS. Over the
past years, Health Policy makers in UK have faced continued pressure to contain costs,
increase efficiency, raise standards and reduce waiting times in NHS. As a result, a
wide range of changes to UK health service have been introduced. The last few years
saw the rise and fall of various ambitious development, enforcement and rejuvenation
plans for the NHS. Some of significant initiatives include the White Paper for Reform,
The NHS plan etc. „Although numerous policies have been initiated and rejected by the
Labour Government ever since it came in to power in an effort to modernise the NHS,‟
81
   the 8 most significant changes, trends and initiatives are highlighted below

     I. Creation of Foundation Hospitals (Foundation status in theory allows hospital
         managers „more autonomy as they are not line-managed by the Department of
         Health (DoH), undergo less inspection and monitoring, are able to borrow
         money from banks to finance capital programmes and allowed to retain the
         proceeds from land sales for reinvestment in local services and they will have
         the ability to pay staff over and above nationally agreed terms and conditions82.
         However, the disadvantages include fears of creation of a two tier hospital
         system and insufficient accountability to the newly appointed independent
         regulator for foundation trusts.
     II. Primary Care Trusts (The NHS is currently undergoing a transition as the
         Purchasing responsibilities and other core duties are „localised‟ and passed from

81
  The NHS Plan
http://www.nhs.uk/thenhsexplained/what_is_nhs.asp

82 The NHS plan
Q&A: foundation hospitals , Tash Shifrin and David

http://society.guardian.co.uk/nhsplan/story/0,7991,946032,00.html


                                                  71
           health authorities (HAs) to primary care trusts (PCTs) in England and to local
           health groups (LHGs) in Wales.)
      III. Creation of Priority Areas (The new health agenda recognises that it may be
           necessary to distinguish between priority and routine areas of Health Care. The
           current NHS trend is focused on four priority areas where waiting lists cause the
           most severe national problems: cancer, coronary heart disease and mental
           illness.)
      IV. Joint working of the NHS and Local Governments (Joint working of the
           NHS and the local Government authorities has been initiated in order to build
           partnerships, integrate services and enable better cooperation and coordination
           within the NHS )
      V. Keeping NHS up to date with technology (Establishment and Development of
           electronic patient records ( ENRs) , increasing use of broadband and PDAs in
           the NHS and on –line information services such as the NHS Direct is
           increasingly being used as an attempt to revive revamp and update the
           information strategy of the NHS and decrease waiting lists due to increased
           efficiency in the process.)
     VI. A systematic HR strategy – Overseas Hiring (A new HR strategy has been
           given importance for the first time to address problems in the softer areas of the
           complex problem i.e. staff shortages and recruitment, pay and training and
           development plans. This is part of the so called „conveyor belt „ fast track
           surgery program where the surgeons are provided by the German Private Health
           company Germedica , which is „understood to have spare capacity in its
           continental hospitals‟ 83.
     VII. Outsourcing to EU countries and Private Health Companies like BUPA
           The government unveiled a symbolic break with the NHS‟s historic past as the
           monopoly provider of health care when it announced a plan to fund BUPA to
           run a free standing surgical hospital next to a public hospital . Privatisation and
           Outsourcing are therefore important trends that have had far reaching
           implications on the NHS lately.

          Earlier, Outsourcing in the NHS used to mean one thing – „the use of private
          firms to perform domestic work such as catering, cleaning and laundry‟ 84, but
          under the current health secretary the lines between the public, private, not for
          profit and voluntary sectors are being increasingly blurred.

83
  NHS to hire German Surgeons – Teams to perform‟ Conveyor Belt‟ Operations
Carvel, John ,Guardian, Friday Febryary 22, 2002
84
  Outward bound – Special Report , Outsourcing in the Public Sector
Guardian Website
http://society.guardian.co.uk/microsite/outsourcing_/story/0,13230,955117,00.html



                                                  72
        International Researchers have often highlighted that „the failure of governments
        to address the underlying causes of nursing shortages created "aggressive and
        sometimes exploitive" international recruitment 85especially from developing
        countries due to substantial brain-drain from under-resourced and deficient
        territories . Their recent reports warned: "Recruiting nurses into a dysfunctional
        health system is at best a short-term solution, and has ethical implications." 86

        UKCC confirms that „most of the 29,119 overseas-trained applicants in 2000/01
        were on "adaptation courses" lasting from six to nine months to prepare them for
        work in British hospitals‟ 87 with a significant majority failing the adaptation
        course and going back home after the 6 -9 months of training. Accordingly, the
        nurses recruited from developing countries like Philippines are generally
        successful in fulfilling resource deficits „only temporarily‟ and UK has had to
        increasingly rely on EU.

     VIII.       Increase in Funding
     There has been an increase in Funding for the NHS by 4.7% in real terms between
     1999 and 2002. Of this, £ 5 billion was allotted to „specifically‟ and „exclusively‟ to
     tackle the problem of long waiting lists. However, my interview with Mary
     McCabe, Waiting List Coordinator, West Middlesex University Hospital indicates
     that „hospitals have not received any funds in 2003 and 2004 that are specifically
     earmarked for waiting lists‟ 88. The Prime Minister Tony Blair has also hinted that
     „he would like an earmarked tax dedicated to health service‟ 89. The potential
     creation of a separate ear marked health tax in UK goes to prove that the UK health
     care system is gradually shifting to the semi-private Health Care culture like
     Germany where citizens compulsorily cough up to 14% of their income on SHI
     (Statutory Health Insurance). In addition, the overall increase in the market share of
     private health care products in UK also indicates a gradual shift towards a public-

85
  BBC Report - Nurses 'driven to work abroad'
Saturday, 28 June, 2003
http://news.bbc.co.uk/1/hi/health/3026960.stm
86
  BBC Report - Nurses 'driven to work abroad'
Saturday, 28 June, 2003
http://news.bbc.co.uk/1/hi/health/3026960.stm
87
  Influx of foreign nurses helps NHS
The Guardian,
John Carvel, Friday May 4, 2001
88
  Interview Notes - Interview conducted with Mary McCabe, Waiting Lists Controller, West Middlesex
University Hospital. Interview conducted on 1st June 2004
89
 Carvel, John
NHS to hire German Surgeons – Teams to perform‟ Conveyor Belt‟ Operations
Guardian, Friday Febryary 22, 2002


                                                73
private model even though it is considered highly unlikely that a US based Health
System will be implemented in UK in the short to medium term.

Quite expectedly, the new reforms and trends have attracted criticism from various
quarters. It was felt that the reforms were too radical and far reaching rather than
realistic. It was also felt that a primary care-led NHS would shake up the very
foundation and alter the dynamics of the health service to a large extent.

Now that the major trends have been identified it is important that two of the most
significant trends are chosen and that they are ranked according to the scale of
change i.e. high or low. This was carried out using a two-dimensional perception
map for clarity. The two trends that are considered relevant for scenario building
are :-

       1) Change in the Total Spending for Health Services in UK
       2) Extent of Private Sector Participation in UK Health Care Systems.



See diagram below:




                                      74
      FOUR SCENARIOS ON THE FUTURE OF NHS WAITING LISTS


                                                   TOTAL SPENDING ON
                                                   HEALTH CARE

                            High




                                                         HELTER SKELTER
             CINDERELLA
                                                              Quadrant III
                Quadrant I


                       PRIVATE SECTOR
Low                    PARTICIPATION                                                          High

                 HITLER                                     STATUS QUO/
                                                              SIT STILL
               Quadrant II
                                                              Quadrant IV



                          Stable/ Same




      I. Quadrant 1 – Cinderella, The Fairy Tale Scenario

      In the first Scenario, Cinderella the funding is very high for health Care in UK in 2014.
      This is a fairy tale scenario where there are no waiting lists for the UK Public. People of
      UK have full freedom and power to exercise their choice between private and public
      health care. Low barrier entries in to the market mean that numerous new private
      medical health providers enter the market. Enhanced competition within the Private
      Health Sector further results in improvement of the service at competitive costs. NHS is
      of limited importance. This is a Free Market phenomenon where the supply and
      demand are balanced in the marketplace.




                                                  75
II. Quadrant 2 – ‘Hitler’ Monopolistic Scenario

The second scenario signifies the Socialist Scenario. The NHS enjoys increase in power
whereas the private health care‟s importance deteriorates to be almost insignificant.
This is a classic, socialist state led system where the NHS exercises a monopoly in
2014. The NHS funding will not alter significantly and more or less stay at the same
level. The NHS therefore turns out to be further more bureaucratic, increasingly
inflexible and hierarchical. The NHS will be late to pick up on technological and
medical advancements and not adaptive to change. Instead of flattened hierarchy, new
layers of management will be added in increasing time delays and inefficiency. There is
no pressure as the private health care sector is almost non existent and NHS is the only
acceptable option for the masses.

III. Quadrant 3 – ‘Helter Skelter’ Scenario (Everything that can go wrong goes
wrong)

Everything that could possibly go wrong with the NHS goes wrong. The NHS
depreciates to a low, stagnant standard and experiences a silent gradual death. At the
same time, the Private Medical Insurance sector may improve which could drive a
change towards the American model. However, the health sector in UK will be then
driven by individuals and individual PMI companies rather than the Government. This
model will be chauvinistic against people who can not afford PMI .The common man
may get stuck in a rut where he may not be able to afford private health care and NHS
would be as good as being non-existent.

IV. Quadrant 4 - ‘Status Quo/ Sit Still’ scenario

In the Status Quo/ Sit Still scenario, Health Sector will largely remain a Government
created market. The NHS funding increases at a pace slower than is required. The
insignificant and gradual increase in funding implies that NHS will still be a lacking
and sub standard provider of health care. There is limited expansion of the private
health sector but even the private health sector is not very attractive because it provides
mediocre quality, is expensive and is considered to be competent for a key areas only
(e.g. hip replacements etc.) Therefore, even though the public and private sectors will
co-exist, the NHS would continue to enjoy more power because it is a traditional state
system whereas the Private Sector will only get the standard/ non critical operations like
hernias, hip replacements, knee replacements and ENT operations. The balance of
power will not alter despite the discontent and deficiencies associated with the NHS.




                                            76
V. Wild Cat Scenario – Fictional ‘Matrix’ Scenario

The wild cat scenario is characterised by a „Different NHS‟ that encourages more
proactive outsourcing. Increasing capability of private health care would lead to an
increase in resources and enhanced capability of the private health sector. Economies
of scale enable the private health to provide cheaper health care which is made
affordable for the general public over time. Therefore both the systems will run parallel
and in harmony enjoying comparable power. Drugs for non life threatening illnesses
will be available without prescription over the counter.

The patients will willingly use NHS for serious treatments like cancer but have no
option but to go for Private Health care for standard and less serious issues like hip
replacements as the NHS will simply not concentrate on the standard/ less serious
issues. NHS will concentrate on its core competencies, major life threatening operations
and diseases like Cancer, AIDS etc., Accident and Emergency cases and re-shift the
focus by completely eliminating treatment for minor ailments like colds, coughs, flus
etc.

VIII. IV. Inferences and Suggestions from Scenario Planning

   I.      The 4 scenarios have been used as a learning tool and a possible planning
           instrument for medium to long term planning for improving the problem of
           NHS Waiting Lists. Instead of using Scenarios as a forecasting tool, the aim
           is to illustrate the future risks and understand the uncertainties associated
           with the future of NHS.

   II.     Clearly some scenarios are better than the others from the patients and the
           social point of view. Others may be regarded as better from a political,
           monetary profit, bureaucracy and power aggression point of view by certain
           stakeholders.

   III.    The above exercise has illustrated that Scenario 1 is the most desirable state.
           However, the exercise also illustrates that this scenario will not be realised
           by itself. The achievement of this scenario will require the fulfilment of
           numerous conditions and more co-ordinated action from the Governmental
           Decision Makers. Pumping funds alone in to the NHS will „not‟ suffice to
           achieve this desirable state.

   IV.     Analysing how the current government polices regarding the NHS Waiting
           Lists fair against each scenario, it can be observed that in terms of further
           economic and managerial reforms within the NHS, much can be done to


                                           77
       prevent the „Hitler‟ and „Helter Skelter‟ scenario from occurring. Future
       NHS policies need to demonstrate commitment to directed reform,
       channelled funding and less confusion by frequently changing strategies and
       introduction of more layers of managerial hierarchy.

V.     Assuming the government follows through with its current pledged policies
       and irregular monetary injections then the NHS is likely to remain at the
       „Status Quo/ Sit Still‟ Scenario . The periodic injections will continue to
       cause only „temporary‟ reductions in NHS Waiting Lists.



10 years is a relatively short time for a colossal, policy resistant, bureaucratic and
complex traditional organisation like the NHS that has been unable to cope with
demand and mounting pressure in the 21 st century. A lot of changes will therefore
actually take place after 10 years. Uncertainty concerning NHS funding and NHS
waiting Lists is inherent across all the scenarios discussed above. It appears that
more can be done and should be done, to tackle the continual and ever present issue
of NHS Waiting Lists. Better co-ordination of policies, channelled and regular
funding , clear allotment of a higher percentage of GDP to health care that
comparable to other EU countries like France and Germany and understanding the
softer interconnected problems associated with NHS Waiting Lists is vital. The
scenarios have helped to visualise the different plausible futures that the government
should take in account to equip future policies to take advantage of the possible
future opportunities and prepare itself for prospective threats in the next decade. If
however they fail, then a contingency policy is required in the event of further
deterioration and complete overhaul of NHS.




                                       78
                                  Conclusions



NHS waiting lists in UK have emerged to be a complex political and economic
problem with no definitive, easy or quick fix solution. Aging population in UK,
changing demographics, low death rates combined with medical progress and
technological developments in medicine generate a higher ongoing demand on the
NHS.

Analysing the issue helped to establish and understand many interdependent
variables in the system, which influence and impact the NHS Waiting lists in
different ways. The causal loop diagram, the rich picture created under Soft
Systems Methodology and conceptualisation of the systems dynamics model
combined with further research helped me examine the NHS waiting lists and
understand their dynamics. Although, I am confident that the Systems Dynamics
model and the Scenarios presented here offer vital insights in to the NHS waiting
lists, they do suffer from some limitations.

The theory offered in this project (in the System Dynamics Section) -‘delaying
government funding to keep the waiting list lower for a longer period’ may not
entirely work in practice. This is because the results would however necessarily be
dependent on the variables and the strength of their interventions in reality. Also,
we were forced to adopt a number of assumptions in developing the model. For
instance, the acceptable waiting time was taken as 2 months. In practice the
waiting time ‘cannot be taken as a universal figure of 2 months’ and would depend
and vary according to the severity of patient’s condition, the patients’ financial
resources etc.

Public financing of the NHS by means of taxes and social security contribution,
leads users to perceive the services provided in the system as free. This in turn
induces the ‘side effect of over consumption. The NHS Waiting Lists are becoming
increasingly more interconnected with various other national and international
issues . The NHS is increasingly overlapping with the private sector, International
health care is merging with UK health care (i.e. hiring nurses from Germany to
make up for staff shortages in UK), development and maintenance costs within the
NHS are increasing, new institutional forms and policies are brought out at a
faster pace and the influence of different stakeholder groups is evolving rapidly.
Therefore, it is essential to understand these influences and formulate different
plausible futures of NHS before introduction of new complicated policies and
reforms and intermittent injection of funds.


                                        79
The Systems Dynamics analysis also does not indicate ‘delaying injection of funds
in to the NHS’ as the ideal or definitive solution to the problem. Nevertheless, it
brings to light mechanism that appears to ‘Stabilise the long Waiting Lists’. As
pressure on the NHS increases, the question arises as to what extent the
subcontracting to private sector and increase in government funds will be able to
lower the waiting list.



This dissertation has not assessed the success of the new reforms by concentrating
on Performance Management or concentrated on the change in the management
structure of NHS. These are perhaps some of the issues that could be looked in
further depth when I transfer to full time research MPhil in Management with
special focus on Health Care Management next year wherein I am interested in
furthering my research and understanding by learning and applying alternative
research methods, and theories to Health Systems Planning . The limitations of the
model could also be addressed by expanding and refining the framework of the
current model to offer a richer insight and possibly a solution for NHS waiting
lists.




                                        80
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   Interview notes - Interview conducted with Dr. Peter Mockel, Management
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   Interview Notes - Interview conducted with Mary McCabe, Waiting Lists
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   Ackere, Ann van and Smith, Peter C- ‘Towards a macro model of National
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   The NHS Explained, What is the NHS?


                                    81
    http://www.nhs.uk/thenhsexplained/what_is_nhs.asp

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   Hospitals        admit        to      waiting      list      manipulation
    The Guardian, Patrick Butler, Tuesday June 5, 2001
    http://society.guardian.co.uk/nhsperformance/story/0,8150,502016,00.htm

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   Actually, the health service is working

    Health Secretary Alan Milburn defends the NHS against Anthony
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    The Observer NHS debate
    Sunday October 21, 2001

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   Advantages of Private Medical Insurance - Written by John Illman,
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    http://www.netdoctor.co.uk/focus/pmi/advantages.htm

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   In 2050 every 3rd person will be 60 or older in Germany
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     http://www.destatis.de/presse/englisch/pm2003/p2300022.htm

   Health at a Glance – OECD Indicators 2003



                                      82
    Briefing note (Germany)
    http://www.oecd.org/dataoecd/15/30/16782333.pdf

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    http://www.oecd.org/dataoecd/20/47/16502649.pdf

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    BVMed – Bunderverband Medizentechnologie e. V. Publication
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   Germany's Bayer Wins Right To Limit Supply to Discounters
    JAMES KANTER / Dow Jones Newswires 7 Jan04
    http://www.mindfully.org/Industry/2004/Bayer-Limit-Supply7jan04.htm

   NHS to hire German surgeons - Teams to perform 'conveyor belt'
    operations
    Guardian, John Carvel, Friday February 22, 2002

    http://society.guardian.co.uk/nhsplan/story/0,7991,654246,00.html

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    David Batty,Wednesday September 5, 2001

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    http://www.nhs.uk/thenhsexplained/what_is_nhs.asp

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    http://society.guardian.co.uk/nhsplan/story/0,7991,946032,00.html

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                                      83
    http://www.nhs.uk/thenhsexplained/what_is_nhs.asp

   BBC Report - Nurses 'driven to work abroad'
    Saturday, 28 June, 2003
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   Influx of foreign nurses helps NHS
    The Guardian,
    John Carvel, Friday May 4, 2001

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                                    84
                                   APPENDIX


          Equations developed for the flow diagram

(01)   Acceptable Waiting Time = 2
       Units: **Month**

(02)   Arrival of Patients = 83+STEP( 25, 10 )
       Units: **undefined**

(03)   Average Cost per patient = 1
       Units: **undefined**

(04)   Average Waiting Time = Smooth3(Waiting Time, Time to Average)
       Units: **Month**

(05)   Change in Budget = Effect of Waiting Time on Bud*NHS Budget
       Units: **undefined**

(06)   Effect of Waiting Time on Bud = Table WToB(Waiting Time Index)
       Units: **undefined**

(07)   FINAL TIME = 100
       Units: Month
       The final time for the simulation.

(08)   INITIAL TIME = 0
       Units: Month
       The initial time for the simulation.

(09)   Monthly budget = NHS Budget/12
       Units: **undefined**

(10)   New patients = Arrival of Patients
       Units: **undefined**

(11)   NHS Budget= INTEG (Change in Budget,1000)
       Units: **undefined**

(12)   NHS Capacity= Monthly budget/Average Cost per patient
       Units: **undefined**

(13)  NHS treatment=
             IF THEN ELSE( Waiting list<NHS Capacity, Waiting list, NHS
Capacity)
      Units: **undefined**




                                            85
(14)   SAVEPER = TIME STEP
       Units: Month
       The frequency with which output is stored.

(15)   Table WToB([(0,-0.2)-
       (6,0.3)],(0.0181269,0.101316),(0.380665,0.072807),(0.634441,0.0442982),(1,0)
       ,(1.46828,0.054386),(2.24773,0.107018),(3.49849,0.170614),(4.53172,0.216667
       ),(5.92749,0.260526))
       Units: **undefined**

(16)   TIME STEP = 0.25
       Units: Month
       The time step for the simulation.

(17)   Time to Average=3
       Units: **Month**

(18)   Waiting list= INTEG (New patients-NHS treatment,166)
       Units: **undefined**

(19)   Waiting Time=Waiting list/NHS treatment
       Units: **undefined**

(20)   Waiting Time Index =
              Average Waiting Time/Acceptable Waiting Time
       Units: **undefined**




                                           86

								
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