Administration

Coalition Agreement:

We will cut the cost of NHS administration by a third and transfer resources to support doctors and nurses on the front line.

Where does all of that administration come from? Well David Cameron will insist that it is targets. Lansley has now abolished the 18 week target (well, abolished performance monitoring hospitals against it, the NHS constitution gives you a right to treatment within 18 weeks) so surely the NHS administration problem has been fixed? No, of course not. The Tories are not that logical.

Undoubtedly targets do add to administration, but they are not the source of excessive administration. Anyway, targets deliver benefits, notably that patients actually get the treatment within an acceptable amount of time. Since targets deliver a benefit, then surely we should be willing to pay something for it?

I am currently reading a rather depressing book: NHS plc by Allyson M Pollock. Great book, but you get a sinking feeling as you read it (buy it, I do not know Prof Pollock nor do I have any financial gain from you buying the book). Anyway, in the context of this blogpost Prof Pollock says:

The number of general or senior managers in the NHS rose from 1,000 in 1986 to 26,000 in 1995, and the proportion of total NHS spending consumed by administration more than doubled, from 5% to 12%.

The Internal Market was introduced in 1991. Get the message? The rise in administration is due to the marketisation of the NHS and fuckall to do with targets.

I cannot find a table of the cost of administration since the 80s (which would prove the point conclusively) but the nearest I can get is this from Hansard:

	96–97	97–98	98–99	99–00	00–01
Admin costs	2,020	1,963	1,935	2,158	2,166
NHS Budget	32,997	34,664	36,608	40,201	43,932
Adimin %	6.1	5.7	5.3	5.4	4.9
	01–02	02–03	03–04	04–05
Admin costs	2,565	n/a	3,345	3,412
NHS Budget	49,021	54,042	63,001	69,706
Adimin %	5.2	n/a	5.3	4.9

It certainly looks like Labour had got administration under control.

It is interesting to see that Prof Pollock also cites some evidence about the US system (remember, a system that is based on competition). She said that in 1994 administration was 22.9% for public sector hospitals, 24.5% for independent not for profit hospitals and 34% for for-profit hospitals.

Marketisation clearly puts up admin, so will the pledge to cut admin by a third be yet another Coaltion Agreement pledge to be boken?