Richard D North

Douglas Caldwell runs the Herefordshire Health Authority. A neat and forthcoming man, it is hard to see him as any sort of public enemy. Nonetheless, Health Secretary Stephen Dorrell has Mr Caldwell in his sights: "I am a bureau-sceptic," said the minister at the Tory conference, and embarked on a crusade to shed five per cent of the service's administration costs.

Mr Caldwell - the very image of a businesslike bureaucrat - is mildly optimistic that Mr Dorrell can achieve his savings. "It would help if the enormous burden of reporting to the centre could be reduced a bit," he says, wryly.

Working from conspicuously unpretentious premises, Mr Caldwell and his staff of 30 spend pounds 60m a year buying much of the good and cheap health care this county's 168,000 inhabitants enjoy. Herefordshire is perhaps too small to have its own health authority. But locals have fought to keep it, as we have fought to re-establish our county. Herefordians can argue that we are better able to watch Mr Caldwell's authority if it is small, just as it can watch its suppliers, being so close to them.

For a man who devotedly works them, Mr Caldwell is not gung-ho for the NHS market reforms: "I think it is extremely difficult, if not impossible, to say that they have achieved either the benefits or detriment claimed for them." Almost everything in health service provision has been changing simultaneously: we know we are getting a better service, but can't disentangle the effect of each bit of change.

In the old days, rationing was covert and largely undiscussed. Waiting lists were used to sort the "must-do" cases from the "can-waits". Now that Mr Caldwell and his like have virtually banished waiting lists, it is becoming clear that the buck stops with the purchasing authorities - the health authorities and the Department of Health. We can see that the Trusts which run the hospitals could, quite quickly, do as much as anyone is prepared to pay for. We can see the inability or unwillingness of health authorities to pay for this or that treatment, and blame ourselves - the taxpayers - for our lack of generosity.

We can now see that the health authorities represent the tax-payer and the patient. But we can also see that the Trusts - the providers - are only service companies. It doesn't matter who owns or runs them, as long as they attract great staff. In Herefordshire, there is talk among some doctors of running their own hospitals. They could do it with a hotel chain taking care of the beds. Where's the hang-up? It would still be Mr Caldwell's job, as representative of the tax-payer and of the patient, to get good value for money and to debate budget constraints.

In one sense, the management bureaucracy among suppliers on the "provider" side of the health service shouldn't worry patients, or even Mr Dorrell. Hospitals notionally compete for business, and we should no more worry about their management techniques than those of Ford. If their systems are bad, they will be out-competed. That's in the ideal market world. In the real one, the health service has to have stability as well as dynamism. Mr Caldwell, unlike a Branson, is building an institution as well as a bottom line.