Leading Article: The patient way to a better health service

You couldn't make it up. Hard-faced Thatcherite ideologue advises ministers how to bring in market reforms in the health service, "convinced that we had found the magic formula", until his aged father-in-law gets chest pains, starts babbling and goes to hospital. There he enters a Kafkaesque world of tests and referrals to disconnected units, each oblivious of his history, which fail to diagnose him and he dies. "My faith was misplaced," laments the crusader for the internal market. Eric Caines was a director on the NHS Management Executive and an architect of the Conservative government's reforms. Two weeks ago he recanted, in the New Statesman. It was an astonishing confession, and an important text for the incoming Labour administration.

Tony Blair and Frank Dobson, his surprise choice as Secretary of State for Health, face a daunting task in meeting people's expectations for the NHS, on the basis of too little hard thinking in opposition. Labour was happy to coast through the election behind the prejudice of the electorate that it was more likely to have the interests of the NHS closer to its heart than the Tory party. But, having helped whip up the wind through 18 years of a Tory government which increased health spending massively, Labour now has to dodge the tornado which is likely to be created when heightened expectations meet rigid spending limits.

Yesterday, Mr Blair played the one card which he clutched through the election campaign, the allocation of savings from "cutting red tape" to cutting waiting lists. As we predicted during the campaign and as we report today, much of this transfer of funds is being done with mirrors. There simply is no "paper chase" of unnecessary invoices in the health service. Labour is now on the more realistic - and more difficult - territory of comparing administrative budgets and trying to get the worst down to the level of the best. Mr Blair and Mr Dobson find themselves rapidly transported to the heart of the problem. They can only abolish the new systems of internal accounting if they scrap the separation of the health service into purchasers and providers. This they do not want to do, because splitting the two functions is efficient. The truth is that, before the Tory reforms, the health service was woefully under-managed. That had the advantage of being cheap, but it meant that provision was patchy and unfair because no one knew what the NHS actually did, and it relied on goodwill and idealism to work at all.

However, as the case of Mr Caines' father-in-law rather dramatically illustrates, the Tory reforms quickly lost sight of their purpose, which was to raise standards of care. The problem is only partly that there are too many bureaucrats in the health service; the bigger problem is that they are the wrong sort of bureaucrats, who indulge in too much managing for the sake of managing. The consequence is that there is no pot of gold for the new government to plunder, and so Mr Dobson is in at the deep end, trying to answer more fundamental questions of NHS organisation.

Mr Caines now believes that the power relationships in the NHS need to be "drastically readjusted" in favour of patient advocates, usually GPs. His recommendation is debased coinage, of course, but he happens to be right. The real problem is that health managers are too hung up on indicators and structures, such as "treatment episodes" and waiting lists, rather than seeing things from the patient's point of view. "The glaringly obvious problem was that nobody was in overall charge of the case," says Mr Caines. "My father-in-law was, in effect, treated as a number of patients, each presenting different problems and requiring different solutions."

What the health service needs, then, is effective case management. Many of the common grievances against the NHS are caused by bed management aimed at maximising throughput: operations cancelled at the last minute, trolleys in corridors, being pushed from pillar to post. Case management aimed at making patients feel better (not just physically) might use doctors and beds less effectively but might produce better long-run outcomes.

Here some of Labour's instincts pull in the wrong direction. It means ruthless redeployment of staff, but Mr Dobson went coyly Old Labour when challenged over job losses yesterday (in other words, he avoided accepting that job losses must be borne). It means direct accountability to patients, not loose talk of appointing local councillors to health authorities (although perhaps there could be experiments with directly-elected chief executives). And it means focusing on what the NHS should do and leaving other functions, notably long-term care of the elderly, to other agencies; by contrast, one of Labour's first moves was to widen the NHS's remit to public health.

Then, although the NHS probably needs more resources, the Government should not make an early decision to increase general funding. Yesterday's announcement of new resources specifically for breast cancer may draw funds from equally important priorities, but such step-by-step targeted increases are the correct approach while the service works out how to ensure increased funding will feed through to better services. When the constraints of Tory spending limits are lifted in 1999, the NHS must be ready to make its case for more money from a patient's-eye view.

Meanwhile, we should not underestimate the importance of Labour's rhetorical offensive. Part of the NHS's problem, as Enoch Powell realised as long ago as 1962, is that all who work for it have an incentive to do it down, so that the public thinks it is in crisis even if their experiences of it are favourable. Perhaps the relief with which Mr Dobson has been received by health staff will do wonders for public perceptions of the health service. But will making doctors and nurses feel loved be enough to get Labour through the next two years? Not likely.