The following piece of mine appears in The Spectator's supplement, 'Blair: A Modern Tragedy':

New Labour had its limits, even in 1997. Those limits were made flesh by the appointment of Frank Dobson as Tony Blair’s first Health Secretary. For all the changes which the NHS has seen since then, there has been an underlying Old Labour consistency to Labour’s approach to the NHS over the past decade: spend as much money as possible, fiddle with the management structures, and all will be well with the wonderful NHS.

But if that was the answer, then one has to wonder what on earth was the question. Tony Blair’s legacy, after a decade in charge of the NHS, is a false dawn on reform and waste on an unprecedented scale.

Much attention has focused recently on the chaotic £12 billion NHS IT project (projected by the Public Accounts Committee to end up costing £20 billion). But that is a pinprick compared with the overall sums thrown at the NHS’s fiscal black hole. By the end of this financial year, NHS spending will be £92 billion - a rise of over £50 billion a year since 1999. But to what end? Even the King’s Fund, one of the NHS’ stalwart defenders, has conceded that three-quarters of the increased spending disappears each year in costs rather than “activity” (the jargon for treating people).

One unglamorous branch of the NHS’s activity is typical of the failure to solve the fundamental problems. The latest survey into waiting times for hearing aids found that the average wait in England for someone needing their first had risen for the third year in a row, to between 45 and 48 weeks. There are wide variations across the country; patients in the South East wait between 73 and 74 weeks.

So much for more money being the answer.

When Labour took office, its belief in the NHS as the only moral method of healthcare delivery was exemplified by one of Mr Dobson’s first acts – ordering local health authorities not to talk to the independent sector, let alone deal with it, unless in the most dire of emergencies. His instruction was based on nothing other than a visceral loathing of the idea of non-state involvement in healthcare.

Mr Dobson’s successor, Alan Milburn, had a more grown up approach and by October 2000 had signed the ‘Concordat’, which contracted NHS work out to the independent sector. This was by far the most significant development of Mr Blair’s period in office. Even Baroness Thatcher had run scared of such an idea, fearing it would confirm fears that she wanted to privatise the NHS. But the plain fact was that the NHS’ capacity could not meet the demands of patients; why on earth would the NHS (ital)not(ital) want to utlilise the independent sector’s spare capacity?

There was, of course, more to it than that. At the launch of Labour’s 2001 manifesto, Tony Blair spoke of there being “no ideological bar” to expansion of the role of independent provision in the NHS. What this should have meant was that the NHS would become simply a purchaser of services - the logical extension of the Tories’ original purchaser-provider split, but with real, open competition for the provision of services, rather than the pretend competition between different branches of the public sector.

But it was the familiar New Labour story – much promise, little reality. Take foundation hospitals. In theory a fine idea with the power to transform the NHS, foundation hospitals would have been tax funded but free-standing, independent hospitals competing with traditional NHS hospitals on the only worthwhile basis: quality and price. After a mauling from the Treasury, they were then subjected to an even more mortal foe – Labour backbenchers wedded to the existing NHS dogma. When the first foundation hospitals arrived in April 2004, they were barely worth bothering with.

Eventually, both Mr Blair and Mr Milburn came to realise that competition was key. Last year, all patients were promised a choice for elective treatment between four providers, one of which had to be independent. The aim was that by 2008 patients should have an entirely free choice between any NHS, charitable or independent provider that met the required standard at a national tariff price. The 2008 target will certainly be missed, and there is no confidence among reformers that 2009 will be any better.

But even this mess comes only after a catastrophic error. The notion has somehow taken hold that a radical Tony Blair was, as in education and welfare, stifled by his Chancellor from making the necessary bold reforms to healthcare provision. But it was not Gordon Brown who, in January 2001, sat on Sir David Frost’s BBC1 sofa and announced that NHS spending would rise to the EU average. It was Mr Blair. In reality, the Prime Minister was the prime mover behind the idea that money was the real problem and bounced a horrified Chancellor into a spending commitment for which the word profligate does not even come close.

Between 1999/2000 and 2007/08, spending on the NHS will have almost doubled in real terms. In 1999/2000 spending was £40.2billion; in 2007/8 it will be £92.6 billion. But the result, far from curing the NHS’s ills, has been paltry. So where did the money go? In its 2005 review of the UK, the OECD found that although the NHS budget increased by half between 1999 and 2004, the number of doctors increased by only a quarter. And Department of Health statistics show that although there has been an increase in the number of operations, it is much slower than the increase in the number of doctors or spending. Productivity, in other words, has fallen. So it should come as no surprise to discover that 56 per cent of the £5.5 billion extra spending that went into the NHS in 2005 last year went on pay.

The think tank Reform has led the way in unearthing statistics which put the past ten years’ performance in perspective. As its latest survey puts it: “The current behaviour pattern of the NHS now resembles that of the British economy in the era of stagflation. An inflationary increase in costs and rise in money expenditure – go - leads to a drastic stop which threatens investment and innovation for several years. The sheer size of the increase – a three fold increase in cash funding and a twofold increase in real terms – has made it impossible to use the funding effectively and swamped the management capacity of a system which had become adapted to working on much smaller increments.”

Labour’s 1997 campaign song, Things Can Only Get Better, has an especially hollow ring with regard to the NHS. After years of madcap spending increases, the brakes will soon be applied. Having squandered the money and done little to reform the fundamentals, the next few years promise a return to the same ferocious headlines of waiting lists and rationing on which Labour capitalised so effectively in 1997. The biter, bit.

My friend and colleague Helen Evans, a former senior nurse, has started a new campaigning organisation, Nurses for Reform. Healthcare reform debates tend to centre on doctors and policy wonks, but the poor bloody infantry rarely get a look in. And when they do, via the dreadful Royal College of Nursing, it's to resist reform and entrech the worst aspects of statism. The RCN is a 21st centrury equivalent of the NUM.

So three cheers for an organisation which is run by and designed for nurses, and which exists, as the site puts it:

[T]o campaign for more consumer-oriented and sustainable healthcare systems in Britain and Europe.

Even better, NFR has started a blog which you can read here. This is from the first entry, which is spot on:

NFR believes it is no longer acceptable for nurses to sign up to careers in public sector healthcare only to find they are unable to access the resources and autonomy they need to do their work. NFR rejects bland egalitarianism in favour of contestability. Above all else we believe that greater partnership with the private sector is to be actively welcomed and that this sector’s contributions are good news for patients and healthcare professionals alike.

Today, too many nursing trade unions and representative bodies fail nurses because they invariably stick to old and out dated agendas. Instead of championing substantive reform - and in doing so, championing the rights of consumers - they default to short term platitudes such as demanding more tax payers’ money or new forms of legislative favour. Such an approach is not only disasterous for nurses but it is catastrophic for patients.

NFR believes in fundamental change. It believes that only by putting patients and consumers interests first will healthcare improve. It is only when healthcare is opened up to real consumers and trusted brands that nurses will find themselves working in a sustainable environment and with the incentives, resources and encouragement to deliver a responsive, popular and truly high quality service.

The following piece of mine appears in today's Times:

In Saturday's Times Lord Harries of Pentregarth gave an interview in which, as interim chairman of the Human Fertilisation and Embryology Authority, he argued that women in their fifties and sixties should not be banned from having IVF because of their age.

Lord Harries was addressing the ethics of IVF treatment and the notion of age and sex discrimination. It is wrong, he said, that the over-50s are denied a procedure available to younger women. After all, “men can conceive at a vast age”.

The former Bishop of Oxford might have thought he was dealing with the issue of IVF. In reality he was delivering a rapier thrust against the NHS itself.

According to its “core principles”: “The NHS will provide a universal service for all based on clinical need, not ability to pay; the NHS will provide a comprehensive range of services.” In other words: you will be able to get everything you need on the NHS.

And yet. The NHS does not even implement the guidelines on IVF by the National Institute for Health and Clinical Excellence (NICE), which say that three cycles of treatment should be available, but only to women under 40. In 2004 the Health Secretary, John Reid, said that only one cycle would be paid for.

Lord Harries believes that it should be left to doctors to decide who should and should not have IVF treatment, with no upper age limit: “I don’t think it should be mandatory, I don’t think it should be legal. I think it should be a clinical judgment.” That is a perfectly reasonable position. But it cuts to the heart of the problem of NICE, of tax funding of healthcare, and of the NHS itself. Because doctors don’t decide. Gordon Brown has decided who should have IVF treatment, just as he has decided who should get Alzheimers drugs.

Not because he isn’t spending enough of our money on health. As every passing day shows, he is spending unimaginably huge sums on the NHS. No; it’s because he is spending our money on a tax-funded system with the State, through NICE, deciding who gets what. It shouldn’t be called NICE, but NASTY: Not Available, So Treat Yourself.

Lord Harries’s remarks point to the fallacy of the NHS as a supposedly full healthcare provider. IVF is like any other treatment: not available to everyone who needs it, let alone who wants it.

...and if Tuesday's CSpan broadcast isn't enough for you millions of healthcare policy wonk groupies, a webcast of my Heritage/Galen/IPI Capitol Hill briefing will be available here on Wednesday at 3pm London time.

UPDATE: It's here. My bit starts at 44'34''.

If anyone's interested in such things, I'll be wearing my wonk hat and taking part in a seminar on Tuesday at the AEI:

The Business of Health: How Does the U.S. Health-Care System Compare to Systems in Other Countries?

I gather that it is being shown on CSpan (although don't take that as gospel).

Daniel Finkelstein makes the critical point about Gordon Brown's silly NHS plan:

The NHS is not like the Bank of England. The Bank is setting the price of money. The NHS has an output not far off that of Portugal. It handles something like 10 per cent of our national income. It employs thousands and thousands of people. It is a very different animal.

There are two ways of holding such a body to account. The first is through voice — the right to protest to a political representative who depends on your vote. The alternative is exit — the right to take your custom elsewhere, with the seller dependent on your patronage in order to thrive.

Mr Brown plans to remove both these forms of accountability. When he describes the new board as independent, you just have to ask: independent of what, exactly? And the answer, it turns out, is independent of you and me.

As I point out on my CNE Health blog, none of Labour's reforms amount to anything beyond making the best of a fundamentally flawed model.

We have tried 'voice', and it doesn't work. In fact it has made things worse, with the government responding to voters' concerns by spending billions of pounds more as a supposed cure for the NHS' ills.

The government thinks it has introduced 'exit', by planning for a measure of choice amongst the providers of a service. This has an upside and a downside. The downside is that it is not real exit or real choice, since the choice to be made available is a limited one at the discretion of the authorities.

The upside, however, is that once patients start excercising choice of any sort, even on this limited scale, the genie will be out of the bottle and the issue of a wider, more genuine choice will arise. Patients will demand not just the limited choice they are to be given but the ability to decide for themselves where and by whom they will be treated. And that means not just within a tax funded NHS brand, but from any willing provider they wish. And once that happens, why would they want to carry on handing over taxes for the government to allocate on their behalf?

The NHS may not be dead yet, but it's only a matter of time.

It ain't my fault, guv...

Evolution and the environment, not just gluttony, has led to a global obesity pandemic, with an estimated 1.5 billion people overweight -- more than the number of undernourished people.

Here we go again.

I've just seen this excellent article by Melanie McDonagh in the Sunday Times, which is spot on:

...I do know the cause of obesity: we’re eating too much and exercising too little. Especially in Britain, which is, apparently, the fattest nation in Europe.

So far so straightforward. But the moment you suggest that fat individuals bring their fatness upon themselves you enter the minefield that is obesity politics, which has a language all of its own.

The World Health Organisation calls obesity a “rising epidemic”, which is fine if you think of the term simply as meaning a common condition. But the word is normally used about disease. And fatness is quite unlike most diseases in that it doesn’t fall impartially on the just and unjust alike.

There are any number of diseases occasioned by fatness, but the condition itself is brought about by your own actions. Or inaction. It’s not a contagion like measles. You don’t catch it like the plague. It’s even unlike those diseases that you do bring on yourself by bad behaviour— syphilis, say — in that it’s not transmitted by bacteria. To talk about an epidemic of obesity is like talking about a plague of inactivity or a contagion of overeating.

Which brings me to Anne Diamond, the formerly skinny television presenter who has shared her weight troubles with interested television audiences for about a decade. Now, by dint of weight-loss surgery, she is down to a respectable size 14. Her essay this week in Hello! magazine about the way society stigmatises fat people is a model of the sloppy thinking that characterises much of what passes for debate on the subject.

“We [viz fat people] are normally considered to be lazy, slobbish and lacking in moral fibre,” she declares. “Yet nothing could be further from the truth . . . it can happen to anyone . . . We’ve somehow been caught up in an epidemic.”

Don’t you love that word “somehow”, which suggests that there could be some mystery about cause and effect? Normal people attribute extra fat to the fact that they’ve eaten their body weight in Mars bars or never go out on two feet when they can use four wheels instead. Celebrity obesity victims take a different view. “Fat isn’t a sin,” says Diamond. “and it doesn’t demand punishment.” Well, no, fat isn’t a sin, but gluttony and sloth are. As St Thomas Aquinas, no lightweight himself, put it, “gluttony denotes inordinate concupiscence in eating”.

So Diamond has set up a website called Fat Happens! to enable overweight people who want to become slimmer to share views and find supportive friends. The aims are admirable and the means exemplary; it’s the underlying premise I take issue with. Fat doesn’t “happen”; you bring it on yourself.

I used to be fat. Genuinely obese. A porker. Now I am merely overweight. The reason: nothing to do with genes, with circumstance, or with any external factors. It's because I changed how I behaved.

The change came when I was, wearing my think tank hat, writing a pamphlet about adult onset diabetes in the US. As I was researching it, the penny dropped: I was a classic case. I was fat, I had a sedentary lifestyle and I had a family history of diabetes. If I didn't change, I was a slam dunk to become diabetic.

Now that's what I call motivation. So I did what anyone with half a brain would do: I changed. I went on a diet and lost weight, and I started excercising again. Why had I been fat before? Because I ate too much, and of the wrong foods. Whose fault was that? Society's? My friends's? My genes's? Uncle Tom Cobbley's? Nope. My own. No one else bore the slightest responsibility. Not advertisers. Not restaurants. No one.

I was approaching 17 stone when I started to be sensible (I can barely write that without going red with shame, since I'm hardly a strapping 6 footer on whom it might have been ok). Within eighteen months I was down to under 13 stone. And that's where I hover now (and have done for the past 3 years). It's more than it should be - my ideal weight, I am told by the experts, is about a stone less. But that is partly compensated for by the fact that I run three times a week (if I'm being wholly honest sometimes it's only twice) for up to an hour each time. And I box for half an hour once a week.

I write all that only to show that if I - Mr Couch Potato - can do it, anyone can. And if you don't, and you're overweight, there's only one person to blame. And you'll find him (or her) when you look in the mirror.

Wearing my policy wonk hat, my latest paper - Cholesterol:The Public Policy Implications of Not Doing Enough - is published tomorrow and launched at a seminar in Brussels.

To quote the abstract:

The purpose of this paper is to consider the implications for public policy within Europe of a continued lack of attention to the impact of high and rising levels of cholesterol between now and 2020.

Rather than dealing with the purely medical impact, it will concentrate on an area of public policy of universal concern, namely, the impact on Europe’s welfare systems and the knock-on effect on national budgets and economic growth.

After examining the likely state of play in future years, it will show how cholesterol levels will make the situation far worse and threaten to undermine proposed policy solutions. Finally, it offers non-medical policy solutions which might be adopted as a means of averting such problems.

Told you it was an insomnia cure.

As I say, it's launched tomorrow in Brussels. But you can download it here, today. Wow. Never say this site doesn't offer stunning opportunities to readers. I doubt the server will be able to cope with the rush.

One doesn't often learn much about political strategy and health care reform from a horse. But if David Cameron does not know the story of Norton’s Coin, he may find it useful.

The horse, trained by an obscure Welsh hill farmer, was entered for the blue riband of horse racing, the Cheltenham Gold Cup, in 1990. Up against the best steeplechasers in the country, not least the odds-on “people’s favourite”, Desert Orchid, Norton’s Coin was “more a candidate for last than first”, as the race card put it on the day. Norton’s Coin’s odds were 100-1. No serious observer expected him even to be placed.

You know what I am about to write: Norton’s Coin won. The received wisdom was wrong.

The received political wisdom is that the Conservative Party’s supposed hostility to the NHS is its Achilles’ heel and the sooner it is neutralised as an issue by Mr Cameron, the better. Thus his speech yesterday, in which he expanded on his weekend advertisement, which stated that: “We believe in the principles and values of our NHS.”

Until yesterday, the Conservative leader had not put a foot wrong. His broad strategy of moving the party — and, crucially, its appearance — to the centre is the only sensible option. Whatever one thinks of Tony Blair, his strategic genius is indisputable. Labour has won three elections in a row because Mr Blair has taken hold of the centre and pushed the Conservatives away from it. It is easy to sneer at the involvement of Bob Geldof and Zak Goldsmith but no party has ever won in Britain without being seen as centrist. Until Conservatives no longer seem in the eyes of the chattering classes like emissaries from Planet Zarg, the party will forever be doomed.

But that raises a fundamental question: where does the centre lie? The centre ground in the 1950s — Butskellism — was very different from the centre in the 1980s, defined by Thatcherism. It moves as circumstances and voters’ views move.

Clearly, from the 1950s, when a cross-party acceptance of the NHS emerged, the NHS was bang in the middle of the political centre. Even the Conservatives’ attempts at limited reforms in the late 1980s and 1990s — the internal market — were regarded by many otherwise sensible people as a form of ideological extremism. So it is understandable why the otherwise sensible Mr Cameron is keen to establish that the NHS is, as Margaret Thatcher felt the need to put it, “safe in our hands”.

But the centre is moving. Attitudes are changing. For decades, the alibi for the NHS’s failings was its supposed underfunding. Now spending is greater even than the sums demanded by those who argued that underfunding was to blame.

The result? The Office for National Statistics found in 2004 that productivity had fallen by about 1 per cent per year since 1997. And both the Prime Minister’s Strategy Unit and the Organisation for Economic Co-operation and Development went further, measuring falling productivity of up to 20 per cent since 1997.

David Cameron’s response to the disappearance of billions of pounds into the NHS black hole is to argue for improved management and more fiddling with structures, but to run a mile from questioning the system itself. The Conservative solution is: we’d do it better than they would.

But he is walking away from real reform at the moment when its need is at last becoming understood by voters. In a poll for the think tank Reform in February 2004, 69 per cent agreed that: “The NHS was the right idea when it was introduced in the 1940s, but Britain has changed and we need a different healthcare system now.” Only 40 per cent agreed that: “The Government is right to rule out alternatives to the taxpayer-funded NHS.”

In nailing his colours so firmly to an exclusively tax-funded NHS mast, Mr Cameron is making a huge mistake, both politically and for the good of the country. Labour’s policy of spending as much money as possible and fiddling with the system is a form of controlled experiment to discover if that is indeed all that is needed. The answer is now becoming clear: it isn’t.

For years, those of us who have argued that it is the very notion of an entirely tax-funded system that is the real problem were dismissed as ideologues and lunatics. Now, with the evidence showing that the NHS cannot deliver even with massive funding, real reform has at last entered the realms of acceptable debate.

That is a huge transformation in the political landscape. Yet just at this moment, Mr Cameron has chosen to cut off all such talk, neutering his attacks on Labour with his “me too” policy, and destroying any prospect of the reforms that might actually give us a system to deliver the best healthcare.

His speech included a litany of what the NHS does not provide. Indeed. But where does he think the money is coming from to pay for the extras? Even Gordon Brown’s massive cash injection — which is anyway about to come to an end — isn’t enough to cope with today’s demands and, as Mr Cameron rightly pointed out, they will be even greater in the future. How much more than Labour is he proposing to tax us to pay for it all?

We have to move to a mixed economy of healthcare funding. On the one hand Mr Cameron complains that we are so far behind the continent and, on the other, he explicitly rules out — indeed, condemns as unBritish — those very mechanisms that have made their resources possible.

Instead of betting the Conservative Party’s political fortunes on Desert Orchid — the NHS — he should notice the widely dismissed 100-1 outsider accelerating up on the rails.

Samizdata flags up a typically stupid piece by John Sutherland in the Guardian.

I've really come to loathe John Sutherland, who appears from his columns suffused with anti-Americanism and a clearly ill-merited sense of intellectual superiority. Take his piece today:

But the runaway success of Natural Cures also bears witness to genuinely troubling aspects of the American healthcare system. It has been estimated that some 50 million citizens have no health insurance. For these desperate people, who fall sick like everybody else, "natural cures" are all they can afford. "Socialised medicine", as the Clintons learned the hardway, has no place in America. Capitalistic medicine does. What John le Carré calls "Big Pharma" has made America the most drugged nation in history.

As the Samizdata post points out:

Which "explanation", unfortunately fails to account for some important facts: (1) the purportedly natural non-cures offered by quacks are not generally cheaper than the products of Big Pharma, even at US prices; (2) the most drugged nation in history, is on average (i.e., including all those without health insurance) rather healthier than Britain if you look at survival/recovery patterns for pretty much any disease; (3) The European quack industry is also fabulously successful, and expensive, despite the subsidised competition from socialised medicine.

There's a further point, which is my bete-noire. Sutherland writes:

It has been estimated that some 50 million citizens have no health insurance.

Er, no. It hasn't. Not accurately, anyway. The figure is around 44 million (which itself is hotly disputed for being way too high). Let's ignore his casual inflation from 44 million to 50 million. This is my real bug bear: to cite that figure as evdidence that even 44 million are "desperate people, who fall sick like everybody else" and that "natural cures are all they can afford" is utter rubbish.

That figure is a snapshot of the uninsured at any one time, which includes all sorts of people, from those between jobs, those who are unemployed and those who do not want insurance. The people who have a problem are the chronically uninsured - those who can't get insurance. And although the number of chronically uninsured is way too high, and needs to be dealt with, it is around the 8 million mark.

So Sutherland is wrong by around 42 million. Quite an achievement.

Three cheers for Patricia Hewitt, the Health Secretary. In a revolutionary break with the past, she has made clear that she wants to launch a “national debate” on the importance of introducing charges into the health service.

It is important, she says, that something is done before the entire system collapses under the weight of patient demand. She points out that it is only because GP visits are free at the point of use that so many frivolous visits are made.

She sees her job as to start “building a political consensus”, while winning the acceptance of 28 million patients on the merits of charging. “We need to decide in the course of this Parliament whether this is going to be feasible.”

Although there are some minor examples of charges, such as for dentistry and ophthalmic treatment, Ms Hewitt points out that: “Nothing on this scale has ever been attempted.” But the ever-greater demands placed on the NHS mean that “going on as we are is not going to work. Too often in the past, governments have concentrated on fixing the problems of the past 20 years. We must concentrate on dealing with the problems of the next 20 years” — a clear reference to the demographic changes that will make the existing method of NHS funding unsustainable.

Oh, hang on a minute. I have got my wires crossed. The Health Secretary said nothing of the sort. The quotes above are not from Ms Hewitt but Alistair Darling, the Transport Secretary. It is not Ms Hewitt who wants to launch a national debate about charges, but Mr Darling. And it is not NHS charges to which he is referring but road pricing.

How silly of me. It is the Transport Secretary who believes that the solution to too many car journeys is to put a price on them (typically, his idea of a market price is one set by Whitehall). As for the existing charges, he means the congestion charge, not NHS dentistry.

When Mr Darling came out with this yesterday, the thought crossed my mind that such an approach might be considered by other ministers responsible for public services that are funded by the taxpayer but free at point of use.

As if! How absurd of me to think that joined-up government might mean something.

There's a compelling piece in today's Guardian about an all too illustrative example of the state of today's NHS.

As the (German) victim puts it:

"I can't understand at all why people tolerate a health system like this one, but go demonstrating in front of Westminster because of foxhunting. There's violence over foxhunting, but there are no riots because of the NHS. I don't understand that and I don't find it funny. In Germany, there's always this view that the English are so eccentric, they're cute in a way. But I don't find that cute or funny."

Indeed.

But things are on the move. The NHS is bust, and neither this government nor any other can fix it. The more of our money the government throws into the black hole of a broken health system, the sooner the public will start to protest.

And then we will start moving towards a health system which is not a moral outrage.

Very funny piece by Roy Hattersley. Do read to the end. The pay-off is terrific.

Very funny line in a typically excellent column by Alice Miles, on her positive experience this week with her daughter in the NHS:

Our exclusive experience with the NHS is available to Michael Howard for use at Prime Minister’s Questions next week if he gives me a ring. Equally, if Labour would like to put us on an advert under the heading “forward not back”, it would particularly suit my daughter who can, in fact, only walk forward and not back.

Sky's headline today:

MRSA bug at lowest level since records began.

Sounds great. And it's true.

Just one thing: records began in 2001, and these are the 2004 figures. Lowest level for all of three years, in other words. Not that impressive when you realise that the MRSA problem took off long before records were kept.

And even in the past three years, today's figures hardly merit popping the champagne. The first set of figures, from April to September 2001, recorded 3,598 NHS patients infected with MRSA. The 2004 figures (also April- September) found 3,519.

Hardly a triumph. More like a disaster, albeit marginally less of one than in 2001.

Should you be so minded, you can read my written testimony to the Senate here

And you can see pictures of the hearing here!

I must apologise for the sporadic postings over the past few days. I've been swamped with work. I am about to testify before the US Senate Committee on Health, Education, Labour and Pensions (the hearing is on Thursday 17th February: Drug Importation: Would the Price Be Right?; I gather it will be live on CSpan) and so have been preparing myself.

(Wearing my non-blogging, non-journalistic think tank hat, I specialise in health policy, in particular in the very issue which is now raging in US politics over the re-importation of pharmaceuticals from Canada.)

I'll try to post this coming week, but don't be surprised if there's nothing up until after the hearing.

In the wake of Chris Smith's recent announcement that he has been HIV positive for the past 17 years, there's an excellent post on CNE Health, the site I edit, on how the private sector and the profit motive is critical to the advances in treatment. As a colleaague of mine always says, the only innovation made by the Soviet Union was weaponising anthrax.

Each of the EU’s health systems is in varying degrees of crisis. There is nothing new about that. It is the nature of the beast that there can be no such thing as a fully-functioning, economically- efficient, technologically- advanced mechanism which fulfils patient expectations, meets medical demands, and is fully affordable by all. Whatever the system and however much is spent on it, at least one of those functions will not, at any given moment, be met. Dealing with health policy is like pushing sand uphill: you might well get most of what you want, but you will never get everything.

To put it another way: there is no such thing as a perfect healthcare system. At the very least, member states have their own cultures and their own traditions, and what is acceptable in one may be viewed as a political or medical disaster in another.

But some are much more perfect than others – while others are more imperfect. So what matters is the balance that is struck and the immediacy and potency of the crisis.

Take the French system. It has immense strengths: patients can choose their physician and consult specialists as they wish; they can see their contributions on their payslips; and there is some co-payment. But this comes at a cost: it is now in financial crisis. The deficit of the compulsory health insurance fund is increasing by €21,000 a minute and now stands at a total of €11.9 billion. The Health Minister, Philippe Douste-Blazy, rightly said last year that “health insurance is bankrupt”.

The German system is also in the midst of a crisis and the UK system is soaking up vast amounts of tax revenue to little noticeable effect.

Although the symptoms may vary, the disease which is crippling healthcare systems stems from the same root across almost the entire EU and can be summed up in two words: state control.

We know from all the evidence that, as people become wealthier, they choose to spend an increasing proportion of their money on healthcare, whether indirectly through gym memberships and such like or directly through cosmetic surgery and procedures which are not vital but which can improve the quality of their life. When people spend their own money, that is not a problem. Far from it; it is all part of economic growth.

The problem arises when health spending is directed through the state, or is funded by taxation. Take pharmaceutical spending. Almost all the ‘reforms’ being adopted and considered across the EU have the same thing in common: cost containment.

Leave aside the economic stupidity of failing to consider the global savings to health budgets of reduced hospital stays which many new drugs can bring about.

Think instead of why increased spending on heath care is seen as a problem in the first place. It is because, funded out of taxation, budgets have to be capped lest tax rates shoot up to cope with the spending.

Yet the evidence shows that, when left to decide for themselves how they wish to spend their own money, patients choose their health.

So why is there a funding crisis in the first place? Because funding is directed through the state, rather than left to patients themselves.

Healthcare is not in crisis. The crisis lies in the means by which it is funded.

Moving 15% of procedures to private sector will wreck NHS

And the problem is?

Here's a first: the Guardian has a superb piece - nuanced and thought-through - on vivisection and pharmaceutical research.

I don't fit easily into the animal rights lobby's stereotype of a sadistic pro-vivisectionist: I don't eat meat, and when I was studying for a molecular biology degree I opted out of animal experiments knowing my future career would not be spent in medical research so I couldn't justify my participation. And as someone who cares about animal welfare, I am horrified by the way in which violent animal rights protesters are dominating the vivisection debate. If experiments are banned out of the UK, as they hope, it would not only hinder the development of new and effective treatment for human disease, but animal welfare will also suffer.

...The Home Office guidelines on how to keep laboratory animals are detailed to the point of pedantry on the temperature, the amount of animal/human contact, the provision of swings for primates, and so on. In my experience, albeit limited, animals in labs are happy to see humans and show no fear.

In the UK, scientists have to justify doing an experiment that causes suffering, and the numbers approved are small. Just over 2% of animal experiments are classified as causing death or severe pain; just over half are classed as "moderate", where pain would be mediated by anaesthetic; and 39% are classed as mild.

Undercover footage at Huntingdon Life Sciences found abuse by staff and illegal practices, prompting a sustained campaign of violence against the company. Such cruelty to animals is indefensible, but we should keep it in perspective: a proportion of pets also suffer abuse, but the average household isn't subject to the spot-checks or undercover investigations that animal research labs are.

Pharmaceuticals companies are profit-driven; they don't like wasting money. Keeping animals and doing the experiments are expensive, so they would only use them when there is a clear objective - either finding new drugs, or when they are required by law. The animal rights lobby argues that new drugs usually just mimic existing ones; there is some truth in this, but it is nonsense to imply that all new drugs on the market are similar to existing ones.

Ask the rheumatoid arthritis patients on Remicade, who have been released from a life of pain, or the cancer patients who took Glivec, literally life-saving for those with a certain type of leukemia. One "scientific" animal rights activist told me that Glivec was developed without the use of animals, and showed that vivisection is unnecessary. This betrayed a total lack of understanding of how the drug was developed. First, scientists had to understand the disease, and animal experiments were vital in this process. The choice is clear: no dead mice and no Glivec; no dead mice in the UK, but more animal suffering overseas and Glivec; or well-regulated vivisection in British labs and Glivec. You decide.

There are two words that, when taken in tandem, are almost guaranteed to induce narcolepsy. Those words are "parallel trade."

They may seem dull, but they go to the heart of how the EU single market operates and what it is supposed to achieve. And a new report (of which I am a co-author) calculates that parallel trade in one sector, pharmaceuticals, puts over 42 EU citizens per hour at risk of death.

Step back for a moment. The financing arrangements for health care across the EU may differ but all face funding problems. To deal with those problems, some member states impose price controls on the pharmaceuticals sold within their boundaries. Because health care is dealt with at member state level, those controls -- and thus the prices charged -- vary. A drug that is available in one country for £2 a pill might be available in another for £1 a pill.

The single market ensures that that whatever may be freely bought in one member state must be allowed into any other. Hence an opportunity for the easy money of parallel trading. Buy that drug for £1, take it across the border to the country where it costs £2 a pill, sell it for £1.50 and make an instant 50% gross profit. By the end of 2001, the parallel trade in pharmaceutical products had reached $3.3 billion in Europe and is calculated to reach $7.4 billion by 2006.

None of this is the result of costs being driven down by competition. Lower prices in the exporting countries simply reflect greater regulatory leverage. Prices are lower in countries like Spain than in Britain simply because the Spanish government has decreed that they be lower. And because the rules of the single market as applied by the European Commission do not allow companies to protect themselves by restricting supply to those member states with the most severe price controls, we are now entering a world in which whatever country has the most restrictive price-control scheme will become the largest exporter of pharmaceutical products through parallel trade.

There is some hope of sanity. In January 2004, the European Court of Justice annulled a fine levied against Bayer by the commission. Bayer had been found guilty of preventing parallel imports of the heart drug Adalat into Britain from France and Spain. Between 1989 and 1993, Adalat was sold in France and Spain at prices 40% below the price in Britain. French and Spanish wholesalers simply ordered extra supplies from Bayer and resold the surplus stock to British buyers.

Bayer was unhappy at the wholesalers' assault on its British margins, denying the German company 230 million marks in U.K. sales. Because Bayer could not ask its wholesalers not to sell in Britain, it restricted supplies of Adalat, ensuring that continental wholesalers had no surplus to export. The wholesalers complained. The commission fined Bayer but the ECJ disagreed. It could find no evidence of an agreement to restrict competition. Bayer may have restricted competition, but it had acted unilaterally.

The commission, however, is determined not to allow any limits on parallel trade. It issued a statement saying after the ECJ ruling saying that it would "continue to monitor carefully the behavior of the industry, which is of unparalleled importance to consumers/patients, for government finances and for completion of a European single market." The consequence is obvious, and is already happening. Some drugs are simply not being made available in the EU market.

Now for the added twist. More than 140 million medicines move around the EU every year. Invariably, they need to be opened, the blisters removed and the patient information leaflet exchanged. As such, it is not surprising that the unintended consequences of these arrangements are that product expiry dates are often wrong or missing. Batch numbers on the box often fail to match those on the blisters. And patient-information leaflets are go astray, are out of date, or are simply wrong.

Products marketed by the manufacturers can be tracked through the entire chain from factory to patient by means of elaborate computer systems. Defective products can be identified and recalled with very little difficulty. This is not the case with parallel imports.

Then there is the problem of counterfeiting. The World Health Organisation estimates that at least 7% of pharmaceuticals sold world-wide are counterfeit.

In 1990, it was estimated that an average of 20% of the population of a developed country are on some form of prescribed medication and that half of this figure covers medication that is required for the continuation of life or to avoid a catastrophic decline in quality of life. This being so, we can calculate that 37 million people (in the 15 member states before the May accession) are in more or less desperate need of their medication. The number of people known to have died or been seriously inconvenienced by incorrectly labeled or counterfeit pharmaceutical products in Europe is not significant. However, the numbers of people alarmed by media reports of these problems into suspending use of their medication are very significant.

Assuming, conservatively, that at any particular moment, 1% of patients heavily dependent on their medication are worried into not taking their medication as recommended by their doctors, one arrives at a figure of 370,000 people throughout the EU at any particular moment at risk of death or serious decline in their quality of life. That works out at over 42 people per hour who are at risk because of some of the problems raised by attempts to reduce the price of pharmaceutical products within the EU.

These are conservative assumptions. But even making them more conservative still and confining the populations at risk to the main destinations of the parallel imports -- Britain and Germany -- is worrying. Their population is around 140 million. Further reducing the figure of those not taking their medication as prescribed from 1% to 0.1% still gives us a figure of 14,000 per year -- or a potential death rate of 1.6 per hour.

Maybe these figures are too conservative. Maybe they are too high. Whatever the true figure, the facts cannot be denied. For the commission to defend parallel trade is not merely economically bizarre; it is life threatening.

If you're so minded, you can read a new paper I've co-written (The Human Cost of Pharmaceutical Price Controls in Europe: A Case for Reform), here.

The paper argues, in brief, that on the conservative assumption that one per cent of patients heavily dependent on their medication are worried by well-founded reports of counterfeiting into not taking their medication as recommended by their doctors, 370,000 people throughout the European Union are at any particular moment at risk of death or serious decline in their quality of life.

Taking this figure and averaging it throughout the year, over 42 people
per hour can be seen to be at risk of death because of some of the problems raised by attempts to reduce the price of pharmaceutical products within the European Union.

Confining this to the populations most at risk as the main destinations
of parallel imports – Britain and Germany (140 million) – and further reducing the figure of those not taking their medication from one per cent to 0.1 per cent, the figure is 14,000 per year – or a potential death rate of 1.6 per hour.

Go cure your insomnia...

Mike McLoughlin has an interesting take on obesity:

The best way to address the current obesity crisis - in men at least - is to publicise one of its most unpleasant side effects: excess fat in men converts testosterone into oestrogen which is a female sex hormone, thus reducing the size of the penis. Those comforting themselves by thinking it "appeared" smaller as it was getting lost in the folds of flab will have to think again.

I can't say I've noticed it working in reverse while I've been losing weight.

The coverage of the ‘obesity epidemic’, which has dominated the newspapers and radio this morning, misses the point completely. It’s not, as the coverage suggests, a problem for the NHS and government to deal with. It’s a problem which is caused by the NHS and government.

Yes, it’s right to be worried at yet another example of the ‘nanny state’: what possible business is it of government if I want to eat doughnuts for breakfast, lunch and dinner? If I eat stupid food and get fat, it’s not Krispy Kreme’s fault for making such heavenly doughnuts. It’s mine alone.

And that’s what I used to do, until I realised – I realised, not the government or the NHS – that I needed to lose weight or have a heart attack or diabetes. So I did and lost 4 stone. No one - other than the tiny number with a relevant medical condition - needs to be overweight. It is entirely a matter of personal choice. Rich or poor alike, we all have choices, and it is up to us how we excercise them. Eat too much and you'll end up a porker - and you alone are to be blame. Not McDonalds, not Mars, not Pizza Hut. You.

But the real issue is not the nanny state but the NHS. In a health system paid for by the government then, yes, it is the government’s business what I eat, since my obesity costs money.

The problem is that we have things the wrong way round, and that leads directly to the obesity epidemic. Although it is my responsibility what I eat (and as for the 3 year old girl who died of heart failure, whose fault is that but the parents?) the NHS system of taxpayer funding blunts the critical element of individual responsibility.

In a system where it wasn’t the state which funded healthcare but individuals, whether through insurance, medical savings accounts or another method (when people have, in other words, direct control of their health care funding) then people have an incentive to look after themselves.

That’s why obesity is so much less of a problem on the continent, where healthcare is insurance-based. (And as for the US, obesity is primarily a problem for the poor, and they are covered by the state funded Medicare, which has a similar impact on incentives as the NHS.)

So the solution is not to impose rules which deaden the role of individual responsibility even more by restricting our right to eat what we want, but to construct a health system where the incentives point to taking responsibility for our own health.

There’s a very important piece in today’s Telegraph by Roger Bate which shows how wrong-headed much of the WHO’s efforts are in tackling AIDS in Africa.

Here are the key points:

A recent article in The Lancet medical journal alleged that the World Health Organisation (WHO) and the Global Fund for Aids, Tuberculosis and Malaria are implicated in the wastage of taxpayers' funds intended for malaria treatment in Africa.

…The Lancet authors are angry that these two UN-affiliated agencies in 2003 approved and then funded applications from poor countries for two obsolete malaria medicines (chloroquine and SP) which, because of massive drug resistance in the deadly malaria parasite, fail to treat up to 80pc of patients who take them.

The WHO and Global Fund provided these obsolete medicines in stark violation of their own policy. Both say they give priority to a new sort of treatment, known as artemisinin combination therapy (ACT), but as the experts discovered, the agencies "routinely approve and finance inferior [medicines]" and violated their policy more often than not.

The obsolete medicines were supplied to countries where drug resistance is known to be rampant, and where child mortality of malaria is shown to be up to 1,100pc higher because of this. As a result, tens of thousands of children died of malaria - and continue to die - needlessly.

…These facts are hard to face for those who think the UN can do no wrong, but if their concern for patients in poor countries is genuine, the realities must not be ignored. About 7pc of the Global Fund's budget (over £65m) originates from the UK, and 60pc of its grants flow to Africa.

That means that, when the world's top experts condemn its decisions as medical malpractice, both British money and African lives are being wasted.
In 1998, the WHO launched a flagship campaign to "Roll Back Malaria". The goal they set was to halve the number of malaria deaths by 2010.

...So in 2004, at the halfway mark to halving malaria deaths, what has happened? Malaria has indeed "rolled back" with a vengeance. Rather than declining by 50pc as the UN promised, or even 5pc, malaria deaths have risen.

…All this leads to a fascinating question: if the WHO fumbled it so badly with Roll Back Malaria, which was their poster child campaign of 1998, why should they be trusted in the pole position of the latest global campaign, to treat three million Aids patients by 2005?

There is a direct link to the whole AIDS issue, and the grotesque attacks by anti-capitalist, anti-intellectual property, anti-pharmaceutical company activists whose campaigns are, in effect, campaigns to ensure that Africans die of AIDS. By pressing the WHO to endorse generic HIV drugs that are of lower quality and unproven safety and efficacy than the alternatives, or – even worse – the potentially harmful "Fixed Dose Combination" (FDC) 3 HIV drug, none of which have been approved under the necessarily rigorous standards applied by the US FDA, European or Japanese agencies and which would almost certainly not be approved for sale in Western markets, but which are somehow deemed good enough for Africans.

The hidden story here is that activists who proclaim their moral righteousness by appearing to champion HIV positive Africans are in fact foully cynical. Their real agenda is attacking capitalism; so consumed with hatred are they for the pharmaceutical companies, whose achievements stand as a glorious demonstration of what can be achieved, that they would rather Africans had sub-standard treatments than concede the need for the innovative and effective treatments which can only, and have only, come about through capitalism.

In many ways the WHO’s behaviour is worse. By issuing a disclaimer for the use of these drugs as coming under their "pre-qualification program”, they shunt responsibility for their quality, safety and efficacy to local drug regulatory authorities, which do not remotely possess the resources and capacity to do the necessary rigorous testing. As if Benin is really in a position to test these products according to proper international standards.

Feeling lonely? Call the NHS.

Anthony Browne has en excellent piece in The Times on how health care can be provided:

I was recently walking down a London street on a Sunday afternoon, when I decided to have a medical problem dealt with. I dropped into a medical centre I happened to be passing, which was open, and asked to see the specialist, who attended to me there and then with a smile. In a sparkling clean clinic packed out with a vast array of brand new medical equipment that seemed like something out of a science fiction film, dozens of tests were quickly done, which, as well as diagnosing my medical problem, checked out a range of other conditions from brain tumours to diabetes. The specialised medical apparatus that was prescribed for me was manufactured instantly.

I know you think that I am making this up, just teasing you, that it is too good to be true, but it is not. I promise you, within an hour of walking in without an appointment on a Sunday, I walked out of the optician with a pair of bespoke spectacles for my myopia and astigmatism, and a dream that one day all healthcare in Britain would be this way.

Of course, opponents of health service reform did not predict this when the General Ophthalmic Service was effectively privatised by Margaret Thatcher in 1989. They said it would ruin the service, when in fact it has turned it into by far the most successful sector of the medical service.

Health Secretary John Reid’s announcement today that ‘health tourists’ are to be charged in advance for treatment on the NHS has profound implications – and not just for the NHS.

As the NHS operates at the moment, anyone can turn up at a hospital and expect to be treated. That means that they do – and this includes some people from abroad who come here specifically to take advantage of a free NHS. Mr Reid calculates that this ‘health tourism’ costs the NHS £200 million a year, and his announcement today is designed to plug that leak.

But money is not the real issue. In terms of the NHS’ £68.7 billion budget, £200 million is, after all, chicken feed. And there is little evidence that ‘health tourism’ is any worse today than in previous years. What has changed is that, in the past, the idea of an NHS which was free – to everyone - was so widely shared that we put up with what we now think of as abuses, such as health tourism.

Indeed, the real waste is not these headline grabbing issues but more prosaic problems such as bed-blocking, when the elderly are forced to stay in hospital when they are medically fit to leave. Every day, more than 3,500 older people remain in hospital simply because no follow-up care is available outside. Around one-third of those are stuck in hospital for over a month. This bed blocking accounts for 1.7 million lost ‘bed days’ every year. Even with the reforms which the government has already introduced to deal with this, the Department of Health does not expect to be able to reduce the number of people delayed to less then 2,500 by the end of 2005.

So Mr Reid is looking to the US, where elderly patients of Kaiser Permanente, a not-for-profit health insurer in California, spend a third of the time in hospital that NHS patients spend for such problems as asthma, bronchitis and strokes, and yet achieve far better clinical results. That is also why he has decided to give foreign health care providers most of the £2 billion programme to build fast-track treatment centres to cut the NHS waiting list.

Times have changed since the days when no one really cared whom the NHS treated. The government is now ploughing so much money in - money which it has taken at our expense through tax increases - that the public is no longer prepared to put up with paying for the treatment of foreigners who come to the UK to mend their health on someone else’s money.  Mr Reid well knows that if he doesn’t demonstrate that he is alive to such concerns, he risks undermining Labour’s entire case for taxing and spending.

Once, however, we accept that health care should be made available not on the principle that everyone is always treated, but only to those who qualify for it then we transform the entire debate about the provision of health care. The Conservervatives brought this onto the agenda with their "Patient's Passport" proposals. Now New Labour is taking up the baton. And that means that although the sums involved in today’s announcement may not be that large, the implications are huge and their consequences range way beyond the NHS.

David Blunkett may have based his case on the introduction of ID cards on their use against criminals – and especially to deter terrorists – but Mr Reid has also become a strong supporter of the idea. If we had to carry ID cards then, of course, it would make it much easier to determine who should, and who shouldn’t, be billed for their treatment. It is one of the most controversial ideas dividing Cabinet: but Mr Reid's determination to act on it is a sign that it won't go away.

A lot of people got to feel good about themselves this week. World AIDS Day on Monday gave all sorts the opportunity to show just how much they care about the 42 million HIV positive men, women and children across the planet.

For most, that amounted to little more than wearing their red ribbon. For many of the most committed campaigners, however, it meant chanting a familiar refrain: the evil of the pharmaceutical industry. They charge so much for their drugs, so the story goes, that poor Africans don’t have a hope of treatment. And, to make matters worse, they refuse to allow generic (cheaper copied) versions of the drugs to be distributed. All they are interested in is making a profit over the bodies of the dying.

It’s a seductive argument. But it is dangerous nonsense. The real problem is not the pharmaceutical companies, without which none of the drugs would even exist, but the activists themselves, who are the ones really responsible for prolonging the misery of AIDS sufferers.

The only means by which AIDS will be cured is profit. Without profit, there will be no research, and without research there will be no drugs. It is that simple, and it is the activists who are campaigning, in effect, for an end to research.

The activists’ success has been entirely perverse. Today, around 30 per cent fewer companies are doing research into AIDS than were five years ago, and there is about a one third decline in the number of new products in the pipeline – and this in the context of a steady increase in overall research spending over the same period.

The money involved is mind blowing. In 2001 alone, the pharmaceutical industry spent $30.5 billion on research, and the average drug costs $802 million to research. But the consequence of the anti capitalist activism is that drugs companies now face an uncertain environment for their property rights and potential profit. Why, they ask, should they invest more resources, if the return is non-existent or marginal? And with every less dollar committed to research, the chances of a breakthrough diminish. That is the grotesque responsibility of many of the AIDS activists, who with their every campaign condemn more to die of AIDS.

But the real motivation of many of the activists is not helping AIDS victims, but destroying capitalism. Organisations such as the AIDS Coalition to Unleash Power (ACT UP), the Treatment Action Campaign (TAC) and the Consumer Project on Technology (CPTech) campaign on AIDS, but their agenda is much broader: they are classic anti-capitalist groupings. There are, of course, few more towering examples of capitalism’s success than the giant pharma companies. So the call comes out from the activists for their patented drugs to be released to generics manufacturers who will charge a fraction of the price.

Yet again, though, the consequences of this are dire. If the pharma companies cannot recoup their investment, they will not invest. The generic manufacturers are simply leaches – hugely profitable ones - on that investment. They fork out almost nothing in costs, and reap huge returns on someone else’s intellectual property. And have a guess from where many of the activists get their funding. Spot on: the generics manufacturers. It’s a fabulously poisonous cocktail of supposed angels who behave like devils.

Since 1998, the evil pharma companies – the ones who don’t care about Africa - have given the continent some $2 billion in products and cash. More, that is, than many African states’ entire health care budget (but a lot less than their arms budgets).

Work by Prof Amir Attaran of Harvard shows that most of this issue is a red herring, anyway. As he reports: “...essential medicines are rarely patented in developing countries”. 98.7% of the time, there are no patents on any of the World Health Organisation's list of 325 essential drugs. In other words, the fulminating over pharma companies’ patents concerns 1.3 per cent of the real issue.

That real issue is, as the Director-General of the WHO, Dr. Jong-Wook Lee, has said, when discussing the WHO's goal of providing antiretroviral drugs to three million HIV-positive people in developing countries by 2005, rather different:

“It is not just the issue of money, because clearly if all the money and all the drugs were available today, I doubt whether we could implement it right now because of the weak infrastructures, such as the shortage of nurses and doctors. It is more than just a funding issue”.

But you don’t get win emotional arguments for the anti-capitalist cause by talking about infrstatructure. You do it by blaming evil pharma companies. And prolonging the misery of AIDS sufferers in the process.

Some important truths in the fight against AIDS are spelt out by Roger Bate in today's WSJ:

Yes, to be sure, there is good news in the fact that the pharmaceutical industry has so far won approval for 80 drugs that fight HIV and the opportunistic infections that thrive alongside it. The latest figures from the U.S. industry group, PhRMA, showed another 83 drugs or vaccines in development. But AIDS drugs development is trending downward.

This is due to continuing attacks on drug patents and prices. This trend must be reversed if AIDS is to be conquered in the next 20 years, and that will only happen if AIDS research can pay for itself.

...The seemingly infinitely adaptable HIV side-steps therapy with appalling speed and every year new drugs must replace obsolete ones just to maintain a steady state.

A successful AIDS drug costs hundreds of millions to bring to market. The chances of a company recouping that kind of money are further reduced by factors other than resistance; notably, companies can no longer rely on full patent protection. Many governments around the world claim the right to override U.S.-style licensing laws, which allow the inventor a period of marketing exclusivity. And even the staunchly pro-property-rights Bush administration is likely to buy generic versions of patented HIV drugs from Canada, India or elsewhere.

AIDS claims more victims every year. Sooner or later, says Mr. Eberstadt, it will take hold of China and India. Perhaps only then will corporations be able to make enough money from the disease by having enough moderately wealthy customers. For now the hundreds of millions some big pharma companies are spending on HIV vaccine and drug research every year is economically unjustifiable and probably not sustainable.

The anti-globalisation activists who protest against patents and such like are, in a very real sense, ensuring that AIDS remains such a scourge. As patents and and intellectual property are weakened, so is the incentive for pharmaceutical companies to pour in the billions of dollars which they spend on research. (The average new drug costs $802 million to bring to the market). And anyone who thinks that research can or will be done elsewhere is living in la-la land. There are only two options: pharma company research or nothing.

Instead of protesting against patents, as the likes of Jamie Love and his fellow wreckers do, they should, if they really cared about medical breakthroughs, be protesting against those countries which ignore IP and which thus contribute to the many further millions who will die of AIDS and other illnesses.

...to be had with this.

For anyone interested in healthcare, this conference in Stockholmat the end of next month should be fascinating. Hosted jointly by the Stockholm Network and Institute for Public Policy Research, it covers most of the critical issues.

If you fancy a day or two in Stockholm, you can also register at the site.

The weekend's reports that NICE - the National Institute for Clinical Excellence - is considering recommending that IVF treatment be made available throughout the NHS to all infertile women under 40 must seem the ultimate paradox.

NICE was set up with one of the most misleading launch promises in history: spreading excellence throughout the NHS, ending ?postcode prescribing? and ensuring that all patients received access to the ?best? treatments available.

In reality, NICE was set up by Frank Dobson in 1999 to provide an independent, expert justification for the rationing which has always been fundamental to the NHS? modus operandi. It was a thinly veiled attempt to provide medical cover for intensely political decisions. Not so much NICE as NASTY ? not available, so treat yourself.

If the NHS was what some would like it to be ? a monopoly healthcare provider ? then the case for including IVF would be much stronger. But it has never been a monopoly. The de facto arrangement since 1948 has been that non-essential procedures are available either spasmodically on the NHS, or privately. Whether or not IVF treatment should be made more widely available is not, as NICE would have it, a question of doing the maths. It is about two fundamental issues: what the NHS is for; and whether there is any ?right? to children, the absence of which is something which the state, through the NHS, has a duty to rectify.

Eighty per cent of the 27,000 current annual IVF attempts are done privately. That's because the existing consensus is that there is no such right, and thus no such NHS duty. Forcing health authorities to provide IVF treatment means, in effect, redefining the purpose of the NHS to include the provision of all treatments, rather than just those which are clinically necessary. The NHS website defines its aims as being ?to bring about the highest level of physical and mental health for all citizens, within the resources available, by: promoting health and preventing ill-health; diagnosing and treating injury and disease; caring for those with a long-term illness and disability, who require the services of the NHS.? That begs more questions than it even begins to answer: what is ?the highest level of physical and mental health for all citizens, within the resources available?; what are ?the resources available?; what if ?the resources available? are not enough; what is ?health?; what is ?disability?; what?(fill in your own question here ? the list is endless)?

It's certainly true that, as new medical technologies emerge, so too our definitions of healthcare change. Viagra is perhaps the most obvious example. Erectile dysfunction can, in some men, have debilitating consequences across many other aspects of their lives, and a ?cure? can certainly be a clinical need. For others, of course, it is merely about pleasure. Again, cosmetic surgery can often be frivolous ? excessively so, as in the recent reports of some women having their toes shortened to fit in to fashionable shoes. But it can also be one of the most wondrous and necessary of treatments.

IVF falls squarely within these ?what is health? and ?what is disability? questions. The draft guidance says that three attempts with fresh embryos, and three with frozen, offers the best chance of pregnancy. NICE also says ? this is the nub of it ? that treatment will be most effective and offer best value for money if limited to women under forty.

NICE, you see, employs a deeply flawed methodology known as ?economic analysis? in reaching its decisions. Economic analysis compares the costs and consequences of alternative treatments for any given condition, and is promoted as a rational, scientific means of allocating resources and containing costs. But in reality it is little more than a spurious justification for imposing value judgements which are hidden from view and thus discussion.

Indeed, the very purpose of basing rationing decisions on the outcomes of economic evaluation is to provide an apparently objective alibi behind which intensely difficult, and usually unpopular, political decisions ? what, and how, to ration ? can be hidden. Subjective choices about which treatments to deny, and to which groups of patients, are thus disguised as objective decision-making, and given entirely bogus credibility, when in reality they are no more objective than any other political decision.

The chances of successful conception over forty are indeed small, and the amounts of money which would need to be spent to make such attempts possible on the NHS may well be a ?waste? of scarce resources. But be clear what NICE's guidelines mean: an issue which is fundamental to the critical questions of what we expect from the NHS, and what we mean by health, is being tackled not as the result of a national debate, not as the consequence of individual medical consultations, and not as part of a wider discussion of what we expect from the NHS.

Instead it is being dealt with by sham concepts such as economic analysis, without any consideration of the broader context of how such new medical technologies shape our ever-changing understanding of healthcare and good health.

The IVF controversy is but one, albeit stark, example of how incremental reform of the NHS is bound to fail. Until we realise that no nationally determined, state funded, state implemented healthcare system can deal with such pressures, we will never cope.

Have you had your copy of the now infamous pirated Jamie Oliver cook book, ?The Naked Chef 2?? Recipes from ?Monkfish wrapped in banana leaves with ginger, cilantro, chilli and coconut milk? to ?Roasted sweet garlic and thyme risotto with toasted almonds and breadcrumbs?, all with a fetching picture of Jamie on the front.

It turns out that the whole thing is a hoax. There's no new book on its way, and it's merely a compilation of his already published recipes.

But fun as it might seem ? and who wouldn?t want a free recipe for 'summer fruit and prosecco jelly? ? the circulation of this apparently harmless prank is based on an idea which threatens to condemn millions more AIDS sufferers to death, and which undermines efforts to cure cancer.

The idea is that intellectual property doesn?t matter. The spoof book is, after all, theft ? of Jamie Oliver's ideas. Those ideas have made him a very rich man for one simple reason: they are popular. When he publishes a book, its success stands or falls on whether people like what he has to offer. No one is forced to buy anything he writes. If they choose to, he makes money. If they don?t, he doesn?t.

Clearly, they do. And that's why he comes up with new recipes: to make more money. If, on the other hand, everything he wrote was handed over for free ? either stolen from him, like the current hoax book, or because intellectual property was no longer be protected by law - we would almost certainly have seen the last of Jamie Oliver. There?d be no incentive for him to keep inventing new recipes.

If you don?t like the Naked Chef, that may be no big loss. But what if that logic was applied to something where the choice is less frivolous ? AIDS cures, or other medicines?

Next month in Cancun, Mexico, the World Trade Organisation is meeting to discuss precisely that proposal. At the last such meeting, in Doha, two years ago, there was a declaration that the world's poorest countries should be allowed to ignore patents when they were faced with epidemics such as HIV, malaria and TB. Who, after all, could stand by and watch in such emergencies? Certainly not the drugs companies, who backed the proposal ? hardly surprising since they already gave away many such drugs when the need arose.

It's not. however, that straightforward. The anti-globalisation movement has long targeted intellectual property as representing all that they wish to destroy. On their own, the arguments they advance are easily refuted. They say, for instance, that the real problem in the developing world is that essential medicines are patented, the costs of which deny the poor access. Yet almost none of the relevant medicines are patented. At last month's global AIDS conference in Paris, Amir Attaran of Harvard published a report which found that ?...essential medicines are rarely patented in developing countries?. His paper shows that. 98.7% of the time, there were no patents on any of the World Health Organisation's list of 325 essential drugs. In other words, the fulminating over patents concerns 1.3 per cent of the real issue.

The Director-General of the WHO, Dr. Jong-Wook Lee, has pointed to the real problem when discussing the WHO's goal of providing antiretroviral drugs to three million HIV-positive people in developing countries by 2005: ?It is not just the issue of money, because clearly if all the money and all the drugs were available today, I doubt whether we could implement it right now because of the weak infrastructures, such as the shortage of nurses and doctors. It is more than just a funding issue?. Many poor countries lack the health infrastructure to distribute medicines or even diagnose disease, which is why numerous attempts by pharmaceutical companies to provide them with cheap drugs have found few takers. The anti-patent lobby has nothing to say about the real problem.

But those arguments are not the only game in town. Since the Doha Declaration two years ago, the negotiations have seen the list of supposed justifications for ignoring patents growing longer almost by the day. The reason: countries like Brazil, India and Argentina do not respect patents and have large pirate pharmaceutical industries looking for new markets. They have been pushing for countries to be able to declare self-determined epidemics, however ridiculous - erectile dysfunction, for instance - and then to be able to import generic (copycat) drugs.

The two wings of the anti intellectual property movement are joined together, because these industries fund the anti-globalisation activists.

These are not arcane, technical issues, but arguments which will have a direct bearing on our ability to conquer illness. It's already possible to see what will happen if intellectual property protection is destroyed. India's 20,000-plus drug makers churn out cheap copies of Viagra and Rogaine for rich city dwellers while treating less than 1% of the country's 4 million HIV cases.

The pharmaceutical industry spends unimaginably vast sums on research and development - $30.5 billion in 2001. Without the protection of patents, which make possible a return on such investments, that research simply would not happen. The losers would be the millions of AIDS and cancer sufferers who would no longer have the hope of a cure. Poorer countries would also lose any incentive to develop research-based drug industries of their own, and the Indian model would prevail.

Today's crusade against drug patents is just the sharp end of a broader assault on intellectual property and global capitalism in general. The hoax Jamie Oliver book may seem like a wheeze, but taken any further it will kill millions.

This is an English version of my piece today in the FAZ:

There is a golden rule in public policy: the name of a body is, almost always, the exact opposite of its real effect on the world. The UK's National Institute for Clinical Excellence ? known as NICE ? is a typical example of this phenomenon. Hailed by the Labour government, which set it up in April 1999, as a means of promoting excellence across the National Health Service, its real effect ? one might say its real purpose - has been rather different: to restrict the variety of treatments available to patients.

The parallels with the proposed new Center for Quality Medicine are uncanny. Its proponents argue, as did NICE's creators, that its concern will be to ensure that all Germans receive access to the best medicines. By examining the effectiveness of different treatments, the members of the Center for Quality Medicine will be able to issue guidance to doctors across all of Germany, ensuring up to date knowledge of the latest research and that the most effective medicines are used on patients.

It sounds wonderful in theory. But the practice, as NICE shows, is rather different. In reality these decisions are about not widening the range of treatments but narrowing them; not increasing the options but restricting them. They are, in short, designed to ration health care, and to do so in the most misleading manner possible ? on the pretext of rationality.

The rationale behind such a policy is clear. The healthier we get, the more we spend on healthcare. Demand for healthcare seems to rise inexorably, driven by a cocktail of demographics, new technologies and expectations. Across the globe, those responsible for the delivery of healthcare strive to find ways to limit the rate of growth in spending. These have taken a variety of forms, from HMOs in the US to restructuring of some social insurance models. Whatever other merits they have, they all have this same overriding concern as a driving force.

When the Labour government set up NICE, the National Institute for Clinical Excellence in April 1999, it heralded it as a body by which excellence could be spread throughout the NHS. As one of its main decision-making tools, NICE employs economic evaluation, a method which is becoming increasingly required by healthcare decision-makers. Economic evaluation involves the comparison of the costs and consequences of alternative treatments for a given condition. It is promoted as a rational, scientific means of allocating resources and containing costs. In reality, it is a spurious justification for rationing drugs which would have a significant impact on spending.

The crucial words are ?clinical excellence?, and how they are defined. The unavoidable truth, which will apply to the Center for Quality Medicine as much as it does to NICE, is that such decisions cannot be value-free. The decision making process ? which drugs to allow, and which to bar, represent a set of value judgements which are hidden from view and may not reflect the values that the general public would like to use in the allocation of healthcare resources. Such decisions go to the heart of economics ? and of politics. Indeed, the cynic's view of NICE is the only plausible view: the very purpose of basing rationing decisions on the outcomes of such evaluation is to provide a supposedly objective alibi behind which intensely unpopular political decisions ?rationing healthcare ? can be hidden. Subjective choices about which treatments to deny, and to which groups of patients, are thus disguised as objective decision-making, and given entirely spurious credibility, when in reality they are no more objective than any other political decision.

Even the most cursory look at NICE's methodology and purpose shows precisely how it ends up denying treatments to patients which they would otherwise have had. The list of drugs which NICE now refuses to sanctions is almost endless:

Last year NICE said that irinotecan and oxaliplatin should not be used as first line treatment for advanced colorectal cancer, even though they are licensed for this in the UK with an established drug 5FU. They added that a third drug, raltitrexed, should only be used in clinical trials. The real reason? The newer drugs cost £1,200 per patient a year, compared to the £70 of more traditional treatments.

Later in the year NICE said that there was ?insufficient evidence? to recommend the use of a new cancer medicine which has clearly proved its efficacy in the treatment of patients in two of the three phases of chronic myeloid leukaemia. The medicine has been licensed for all three phases in 65 countries around the world ? but not, thanks to NICE, in the UK.

Relenza for influenza, beta interferon for multiple sclerosis, herceptin for breast cancer: on and on the list goes, all on the basis of supposed ?clinical excellence? ? and all, in reality, based on a desire to save money.

If the Center for Quality Medicine is indeed established, Germany will end up with exactly the same deceptions, and the same problems. Do not be seduced by the rhetoric. The reality is not excellence, but rationing.

Here's a piece I've written for the current National Review, about the NHS.

Although Alan Milburn's resignation came as a complete surprise, some Westminster watchers had been tipping Mr Milburn for a move. The word was that he wanted to escape getting ?bogged down? in his NHS reforms.

Yesterday morning, less than an hour before his resignation, I was speaking to a senior NHS consultant who told me how important it was that Mr Milburn stayed in post. As he put it: ?It took him two years to begin to understand what we need. He's almost there now. Give him another year and he?ll see what more he needs to do ? and he?ll be able to sell it to the Labour Party. If he goes, it?ll take whoever succeeds him at least another two years to draw the same conclusion. We?ll be back to square one in the meantime.?
Quite.

But such is the money now being spent ? squandered, to be more accurate ? that the country cannot afford to wait while John Reid learns on the job. In 2007 we will be spending, on Derek Wanless? projections, £105.6 billion on the NHS. Most of it will disappear into the NHS equivalent of thin air.

Mr Milburn was tantalisingly close to being the right man at the right time. Having started out as a decidedly Old Labour Secretary of State, he transformed himself ? and his policies ? over the past four years. With his depth of understanding of the NHS, and his developing grasp of the wider context of a consumer-driven society, he could, over the next couple of years, have been the man to force Labour, and the country, to face up to the changes required.
Instead, it is back to square one.

There is no doubt that something changed in Alan Milburn's outlook. When, in April, he gave evidence to the Health Select Committee, chaired by the paleo-Labour MP David Hinchcliffe, he was withering in his dismissal of the objections towards Foundation Hospitals. Indeed, his manner implied that he thought his opponents were not merely wrong but stupid. It showed how far he he has travelled since becoming Health Secretary. In December 1999, after taking over the job from Frank Dobson in the summer, he gave a speech to the IPPR in which he said that ?an expanded private sector can only mean a contraction of the public sector?. The NHS was engaged in a battle with its sworn enemy ? the private sector. Mr Milburn's task was to win that battle and see off the nasty independent providers.

He learnt fast that such an approach was self-defeating and that, whilst Labour would never like private medicine, it could use its capacity and specialisms to the benefit of the NHS. So in October 2000 he signed the ?Concordat? with the private sector, a giant step beyond anything the Conservatives dared to introduce.

The Alan Milburn of 1999 had thus already changed ? so much so that by the launch of Labour's manifesto in 2001, he was nodding vigorously in support of Tony Blair words that there was ?no ideological bar? to expansion of the role of private companies in the NHS.
But even the Milburn of 2001 would not have come out with so potentially revolutionary an idea as his promise in February of this year, when he said that ?from December 2005?patients needing elective surgery will be able to select from at least 4 or 5 different hospitals?including both NHS and private sector providers.?

The thrust of policy will clearly not change under John Reid. Foundation Hospitals will indeed come into being. Diagnostic and Treatment Centres (the small, specialist units which Mr Milburn has pushed for, some of which will be run by the private sector) will be set up. Patients on the worst waiting lists will be given a choice of treatment abroad or in the private sector. And the NHS voucher ? the effect of Mr Milburn's February pledge to give all elective patients a choice of treatment centres ? will, in some form or another, happen.

But it's the ?in some form or another? which is critical. Nothing the government has yet said ? and certainly nothing it has actually done ? is remotely sufficient to grapple with the fundamental problem of a taxpayer funded service which will, by 2007, be responsible for consuming 0.35 per cent of the entire planet's measurable GDP.

The hope Alan Milburn's presence offered was that, having passed already along such a steep and swift learning curve, further reform was likely. The Alan Milburn of 2001 would have been impossible to predict in 1999, just as the pledge in February to give all elective NHS patients the choice of private provision was impossible to predict in 2001. With Mr Milburn still in charge, the likelihood was that by next year, when it becomes clear that the billions being spent are producing very little in return ? since 1997, spending on the NHS has risen by well over 40 per cent, yet activity has increased by only 6 per cent ? there would be a Secretary of State with the intellectual, political and administrative clout to lead the push for the bolder, more challenging reforms which are really needed.

John Reid has many talents. But he is only human. He is going to need to time to learn, and time to draw his own conclusions. Time, though, is money ? and, in the case of the NHS, it is lives, too.

It seems Tony Blair forgot a critical sentence in his foreword to the NHS Plan. From the NHS's creation in 1948, he wrote, ?no longer would wealth determine access to healthcare; need, irrespective of ability to pay, would be the criterion?. What he should have added was this: ?None of this, however, will be available to you unless you have muesli for breakfast, grilled Dover Sole and broccoli for lunch, and tofu and bamboo shoots for dinner.?

As The Times revealed yesterday, Labour policymakers plan to force all patients to sign a ?contract? with their GPs, under which they will pledge to lead healthy lifestyles. The overweight would have to diet and smokers to quit. If they break their ?contract?, they will be denied free care.

You have to hand it to the masterminds who came up with this one. The NHS can?t cope with the demands made on it so (it's a masterstroke, it really is) let's tell the very people who cost the most ? people who don?t have perfect lifestyles, perfect diets, and perfect bodies ? that they can go jump in a lake. You don?t feel well? Tough. You should have eaten some cabbage instead of that egg and chip butty.

As the document puts it: ?The concept of reminding patients about the limits of the NHS and about their responsibility in using its resources sensibly is one we want to take forward.? Indeed. We wouldn?t want anyone who isn?t healthy getting involved with the NHS, would we? What a waste of precious resources that would be.

So if you?re overweight, don?t even think about bothering the doctor. He's got far more important things to do than waste time on porkers. There are decent people out there who deserve to be treated: people who know how to look after themselves properly; who were brought up in good middle-class families and spend their money on organic salads. Not those wretched poor people who eat their horrid burgers and clog up doctors? surgeries with tiresome heart problems and diabetes, and who wouldn?t know a papaya if it popped out of the back end of their flabby, heavy, colonically unirrigated bodies.


Has there ever been a more grotesque example of the blinding stupidity of juice-bar lefties, who begin their day with a shot of carrot and wheatgrass and think everyone else lives next door to a health-food shop?

The average GP consultation lasts seven minutes. Add in the ?contract? paperwork and that leaves about a minute, if you?re lucky. Just when we?re supposed to be cutting needless bureaucracy, here's a wonderful opportunity for an entire new army of vegetable inspectors. How else are these contracts going to be enforced? I suppose that there will soon be chip detector vans prowling the estates for contraband fries.

There is a direct link between obesity and poverty. Charging those who break their ?contract? means, quite specifically, charging the poor ? the very people who most need access to their GP because of the effect of their diet.

But the brains of Britain behind Labour's new ?ugh, poor people, how perfectly horrible? NHS plan have done us all a favour. They have shown the inevitable path down which a state-funded, state- delivered healthcare monopoly ends up travelling, with a rationale at once totally logical and totally surreal. If demand for a service is too high, bar access to those who use that service most. Even if they use it most because they need it most. It's genius. It really is.

And the policymakers have also revealed in its full, blazing glory the contempt in which they really hold their fellow citizens. If you don?t measure up, ship out. If you aren?t living up to expectations, you don?t count.

I have only one query. What did John Prescott have to say?

Depending on which estimate you believe, on Wednesday the Government will suffer its largest rebellion since - well, since the last one. In February, more than 120 Labour MPs voted against war in Iraq. They seem to have got a taste for trouble; this week, between 80 and 120 are expected to vote against the Second Reading of the Health and Social Care (Community Health and Standards) Bill, which gives effect to foundation hospitals.

So far 134 Labour backbenchers have signed a Commons motion expressing their horror at the idea. That is well over half of those MPs who are free to express an opinion, since the rest have, as members of the Government, their opinions decided for them.

If you stopped 134 people in the street, I doubt more than half a dozen would even have heard of foundation hospitals, let alone know whether they are a good or bad thing. Indeed, if you asked those 134 Labour MPs who have signed the motion against foundation hospitals, you would be lucky to get anything more detailed from them than an expression of their opposition to those two familiar bogeymen, "a two-tier NHS" and "creeping privatisation".

But that, you see, is precisely the point about the row. It is only superficially about foundation hospitals, which are no more than a proxy for a much wider conflict within the Labour Party. Last summer, Alan Milburn made explicit the disagreements even within the Government, let alone the party at large.

Referring to "transformers" and "consolidators", he laid out two possible routes ahead: "We could choose a strategy of consolidation - accepting the reforms made so far and relying on increased public expenditure to deliver an expanded service but one whose culture remains essentially unchanged. Or, as I believe we must, we could choose transformation, recognising that extra spending alone is insufficient to deliver improvements in public services."

Foundation hospitals were to represent transformation par excellence - the means by which entrepreneurialism could be introduced into a Stalinist NHS. Hospitals would be "set free", free to expand in areas in which they had expertise and a competitive edge, free to set their own priorities, free to set their own wage rates and employment terms, and free to respond to patient demands as they best saw fit.

Mr Milburn made clear at last year's Labour Party conference that "we want the NHS not to be owned by me but to be owned by the local community". An NHS of one million employees - the largest organisation in Europe, after the collapse of the Red Army - could not be run from a desk in Whitehall.

Fine words - so fine, in fact, that they were taken by many in the party as code for the break-up of the NHS, with lots of self-governing individual hospitals competing against each other, and ownership by "the local community" heralding a form of privatisation.

But look at what is actually proposed in Wednesday's vote and it is clear that the "consolidators" have beaten the "transformers" to a pulp. As is almost always the case with this Government, a promising idea has been so neutered by battles and compromises that it has lost most of its original purpose. For foundation hospitals to be truly independent, and truly entrepreneurial, they would need to be able to set their own wage rates and employment terms, and to be able to borrow - the means by which any business is able to expand. They will be able to do none of this. Any borrowing will have to be approved by a regulator - in effect, by the Treasury.

Ah yes, the Treasury. The words "transformer" and "consolidator" are, of course, code for familiar adversaries. The transformers are Mr Milburn and the Prime Minister. The consolidator is the Chancellor. Indeed, as Mr Milburn was delivering his thoughts in Blackpool last year, Gordon Brown was speaking in the next room, explaining precisely why he was going to destroy Mr Milburn's vision of foundation hospitals.

"What we've got to watch is that we don't have a situation emerge where commitments are made by organisations that are not the Government . . . and we have got to meet all those commitments," the Chancellor said, conveniently ignoring the fact that universities can already borrow off the balance sheet. But his is not an argument about facts, inconvenient or otherwise, but about ideology. For Mr Brown, the idea of competition - and, heaven forfend, entrepreneurialism - in health, even within a state-funded system, is anathema.

As he has put it: "What we say and do about the NHS is not just about the future of our public services, but about the character of our country. It is an affirmation that duty, obligation, service, and not just markets and self-interest, are at the very heart of our idea of society - at the heart of what it means to be a citizen of Britain."

Foundation hospitals are probably worth having - they do offer some independence, however limited - but they pose no threat whatsoever to the sort of NHS envisaged by the Chancellor. In this aspect of the battle between transformers and consolidators, the consolidators have won. End of story.

But in any war over ideas, symbols matter as much as practicalities and foundation hospitals have thus become totemic. Mr Milburn has been deliberately confrontational (in his evidence to the Health Select Committee last month, for instance, he effectively accused his opponents of being stupid) and has ramped up the argument to force a confrontation on Wednesday.

The vote that day is, indeed, about foundation hospitals. But it is also about much more. Mr Milburn and the Prime Minister have picked a fight almost for the sake of it, since the foundation hospitals on which the Commons will vote are a pale shadow of the original idea. If there is any hope of Labour carrying through any worthwhile reforms, the transformers need to show the chief consolidator, Mr Brown, that he hasn't won. He may have won a battle and destroyed foundation hospitals but if he wants a war - take it from me - the transformers will give him one.

I don't make a habit of linking to CNE Health, the site I edit, but I think the site has been in stonking form in recent days, and I urge anyone with an interest in healthcare across Europe to have a look. I've blogged today on some scintillating remarks by Henry McKinnell, the CEO of Pfizer, who has an admirably straight approach to the issues - he really doesn't mince his words in the usual corporate-speak.

I wonder when Gordon Brown last spoke to Alan Milburn. The Chancellor could barely contain his ideological triumphalism as he came to the end of his Budget speech: "To those opposite, who have advocated vouchers, fees, new health charges for medical services or basic accommodation, this is the Government's answer: we have not only rejected these charges but are abolishing hospital accommodation charges, not just for pensioners, but for all who have charges imposed on them through the social security system."
There's just a slight problem with that thrilling reiteration of Mr Brown's hatred of such nasty ideas as giving patients the power to decide how, where and by whom they are treated (the very meaning of vouchers): two months ago, in a speech which no one seems to have noticed, the Health Secretary announced he would be doing just that.
On 11 February, Mr Milburn said: "From December 2005, by when extra capacity will have come on stream, choice will be extended from those patients waiting longest for hospital treatment to all patients. They will be offered choice at the point the GP refers them to hospital. Patients needing elective surgery will be able to select from at least four or five different hospitals, again including both NHS and private-sector providers."
Nowhere in the speech did the word "voucher" appear. You wouldn't expect it to ­ look at the withering way in which the Chancellor referred to the idea yesterday. Labour hates the word, which it regards as a horrible, right-wing construct. But think for a moment what Mr Milburn's words actually mean, if they do indeed come to pass. All patients are to be able to choose where they are treated, and by whom, including private hospitals. The cost of their treatment will be quantified and made available to competing healthcare providers, who will then be free to offer an equal or better service than their rivals. The patient, not a bureaucrat, will decide who carries out the treatment.
I wrote here after Mr Milburn's declaration that it was astonishing how little attention was being paid to an announcement that heralded the most revolutionary reform to the provision of health care since the introduction of the NHS in 1948. I didn't realise until yesterday that that ignorance extended to the Chancellor. He may have "rejected" the idea but the same, clearly, does not apply to Mr Milburn.
Mr Brown likes to portray himself as a man above the knock-about battles of political hacks. He deals only with issues of substance. But read his words again, and a certain cynical sophistry emerges. Mr Brown lumped together "vouchers, fees [and] new health charges". He is not stupid. He is a policy wonk to his core, more well-read in policy ideas than almost any of his colleagues or predecessors.
He surely knows that vouchers ­ or the extension of patient choice ­ are not the same as charges. Charges are little more than a rationing and revenue-raising device. Giving patients the power over the purse-strings necessitates a fundamental change in the structure of the NHS and in the provision of health care. It means patients are not a cost to be avoided but a vital ­ indeed, the only ­ source of revenue.
Could it be, then, that the Chancellor was being deliberately misleading ­ that he was lumping vouchers and charges together specifically to obscure what is now underway in the Department of Health ­ a fundamental rethinking of the role of the NHS? Heavens above! That anyone might even think such a thing of him!
Mr Brown confirmed yesterday that the NHS would be receiving the "extra" £40bn by 2008 first announced in last year's Comprehensive Spending Review. By then, spending on the NHS will have risen to £110bn. In other words, spending on the NHS will then amount to 0.35 per cent of the entire planet's measurable GDP. That Mr Brown considers it desirable, or even possible, for one man to sit at a desk in Whitehall and be responsible for assigning 0.35 of world GDP is almost beyond belief. Put like that, it's little wonder that the Department of Health is taking a different tack, and is seeing how it can shift that spending away from Whitehall and into the hands of patients.

Interesting post on a site I edit, CNE Health, by Helen Govett:

The officials of the European Commission have taken the first steps towards the introduction of a pan-European Health Identity Card. Wrapped up in the rhetoric of reducing paper work and providing a more seamless system for individuals to receive health care in member states, this piece of legislation is a move towards the erosion of privacy in health care matters between the doctor and the patient.
For if, as is eventually planned, they become computer readable 'smart cards?, it is inevitable that someone will suggest that they should contain the actual health records of an individual. It is not just medical staff that will have access to this information, but any official that can justify their need for access and push through the appropriate laws to achieve this.

For the insomniacs amongst you, my latest piece on parallel trade within the EU is out now in the February edition of the Fraser Forum, the monthly journal of the Fraser Institute, the Canadian think tank.
The argument, in brief, is that although the words parallel trade may seem boring, the mplications are far from boring. They are, in fact, potentially cataclysmic on what is left of the EU pharmaceutical industry and health care more generally.

You can always rely on Frank Dobson. Whatever the issue, whatever the facts, the former Health Secretary has a wonderfully consistent ability to hone in on precisely the wrong end of the stick. Speaking on the BBC yesterday, he described the Government"s plan for "hit-squads" of managers to take over failing NHS hospitals as "shameful . . . the beginning of a slippery slope". The slippery slope leads, one assumes, towards the dreaded p-word: privatisation.
If only, Mr Dobson; if only. The truth is that yesterday"s announcement that three failing hospitals - in Bristol, Bath and Birmingham - will have new management teams drafted in is no more the end of the NHS than it is a worthwhile initiative. It is the latest gimmick designed to disguise the fact that the Government has no better notion how to "save" the NHS than to spend as much money as possible and fiddle around with ideas for increased efficiency.
Yes, it"s possible that by replacing managers with a new team, drawn from yesterday"s list of 71 approved organisations, standards will improve. It"s a staple of management theory that any change of managers will have some immediate benefit. But to think that this will somehow help to "transform" the NHS is startlingly naive.
This naivety is typical of a Government which, in its dealings with businessmen and "successful" managers, has all the zeal of the convert, and none of the scepticism of the realist. It thinks the mere stamp of "outsider" status is enough of itself to confer astonishing insight. Remember Derek Wanless, the NatWest banker appointed to look at the NHS, who managed to examine almost every health system across the globe and concluded that we had nothing to learn from any of them? Or Martin Taylor, the Barclays banker commissioned to look at taxes and benefits? His report gathers dust as the benefits system becomes ever more complicated.
There is nothing intrinsically wrong with appointing new management to failing organisations. The Government is, however, trying to dress up what is basic common sense into something that Tony Blair would no doubt describe as bold, radical, and even transformational.
And it doesn"t even work. First, because the best hospital managers are already . . . guess what? Managing - in the best hospitals. As one senior NHS executive, in a thriving hospital, put it to me: "Why would I want to leave here to go and run a failing hospital in the middle-of-nowhere?".
Secondly, because there isn"t any spare managerial expertise just waiting to be tapped. Look behind most of the supposed "outsiders" on yesterday"s list and they turn out to be something rather different: ex-NHS managers who have discovered that if they clothe themselves in the suits of the private sector they can earn far more money for doing the same job - though no better.
Thirdly, on the whole the private sector doesn"t know how to do it either. How does anyone imagine that a management consultant would suddenly acquire the expertise to run a large acute hospital with a £500 million turnover? But they do want to learn. For what the private sector is after is the inside track.
The private sector views any hospitals it takes over as, in effect, loss leaders. It wants to be in position for the real changes, when it finally becomes obvious - even to Alan Milburn, the Health Secretary - that the NHS is not the solution, but the problem. The private sector wants, in short, to be in the operating theatre when it is not private managers to whom the Government turns, but private hospitals.

I try to keep my Centre for the New Europe work separate from this site, but I'd like to make an exception here. I've written this paper on what seems like a dull, techincal issue but which turns out to have profound implications for the future of healthcare in the EU.
It arises from the report of the so-called "G10", set up by Commissioners Liikanen and Byrne in December 2000 to analyse the state of play within the EU in innovation and the provision of medicines. The report makes 14 recommendations; one of them - Recommendation VI - is of key significance to the very future of any semblance of an EU pharmaceutical industry.
This is the text of Recommendation VI: "That the Commission and Member States should secure the principle that a Member State's authority to regulate prices in the EU should extend only to those medicines purchased by, or reimbursed by, the State. Full competition should be allowed for medicines not reimbursed by State systems or medicines sold into private markets."
What that means is that Recommendation VI, if it is implemented, makes possible the setting up of a policy framework by which products can be separated out via their distribution mechanisms between those sold, country by country, for people's use within the respective national reimbursement systems; and those sold into parallel trade. In other words, where governments set a distorted price for products used by their own patients, that"s fine - as far as it goes. What they cannot do is insist on that regulated price being the same for patients outside of the system. National healthcare regulations should not cause trade distortions beyond any specific reimbursement conditions set up by healthcare payers. A Member State's authority to regulate pharmaceutical prices should extend only to those medicines purchased or reimbursed by the State.
You can read the 'White Paper' here, or see some context at the CNE Health website, which I edit.

Have a look at my feedback page for a a letter from Jessica Lawrence, about whose case I wrote in Tuesday.

I have no idea if Jessica Lawrence, who is suing the National Hospital for Neurology and Neurosurgery to have her medical records altered, is "hysterical", "depressed" and suffering from "psychological problems", as the medical records put it. For all I know, this 39-year-old "girl" - another label applied in her records - could be a nutter, to use the technical term favoured by we non-medics. But her case matters to all of us, irrespective of her mental capacity. She is a victim of the insouciant medical arrogance which is endemic in a health service which views patients as annoying disruptions to the smooth running of officialdom"s days.
Ms Lawrence, who has symptoms which resemble a stroke, has served a Data Subject Notice on the hospital, after first having to force it to hand over her records under the Data Protection Act. She is adamant that her records are simply wrong, and that they make it almost impossible for her to get appropriate treatment.
Whether or not they are the correct diagnosis is not the point. The hospital couldn"t care less. Its response is classic: "We are sorry that Ms Lawrence is unhappy with the information in her medical notes, but . . . hospitals have a policy not to alter medical records." Well that"s OK then. They have "a policy". It might be the wrong policy. It might mean treating patients with contempt. But, heh, it"s "a policy". And as such, it is utterly typical of the NHS"s attitude to its customers - a patient is just a patient (if only they wouldn"t get in the way of the efficient operation of the consultant"s research), a policy - well, just that, a policy. No matter that it might destroy your life; no matter that it operates against your interests; no matter that it embodies a complete disregard for the rights of you, the patient and the NHS"s wagepayer - it"s a policy, OK?
Imagine if your accountant sent you a tax return which included a few incidental expenses which werenot in fact yours. Or if your lawyer went to court on your behalf with a case which included snippets of evidence entirely unrelated to your case. "My client, your honour, was, as you see, only employed by, er, the CarDrive company for a period of fewer than . . ." "I"ve never worked for the CarDrive company - and this is a case about my dead father"s probate." "Right, right . . . so that"s wrong. But we have a policy of not changing anything, you see?"
There is, of course, one critical difference. I pay my accountant and my solicitor directly. They provide a service to me, the customer. If I don"t like what I receive, I can take my business elsewhere. The only choice I am given over the NHS is to pay my taxes or go to prison.
The NHS is, in theory, owned by all of us. But as we long ago learnt with other nationalised industries, the larger the theoretical pool of owners, the smaller the influence they exercise. The NHS - which is, of course, neither national (vast swaths of the country are forced to put up with second and third-class treatment), healthy (hospitals are now the biggest source of disease, killing more than 5,000 people a year through infection), or a service (when was the last time any contact you had with the NHS was designed to suit you, rather than the bureaucracy?) - is no different.
By 2007, if the Chancellor carries on throwing money at the NHS at the rate suggested by the Wanless report, the NHS budget will account for a third of 1 per cent of the entire planet"s GDP. It is, by a country mile, the largest such enterprise in the world. But Mr Brown could spend double what he is planning, or even treble, and it wouldn"t make the least bit of a difference to its culture. Despite the Health Secretary Alan Milburn"s talk of allowing local communities and patients to "own" the NHS, despite Treasury talk of saving the health service "for the nation", taxpayers, consumers, patients - call them what you will - aren"t even allowed automatically to see their own medical records, let alone to correct them, or even (whisper it) own them.

Let's say you are the benevolent dictator of the world. You have two choices: spend billions of dollars researching cures for cancer, AIDS, Alzheimer's and all the other diseases for which cures must be found or you can say "Stop everything now - let's not bother with any more research."
Doesn't seem like a tough call, does it?
And yet it seems that the international trade bureaucracy may at this moment be choosing the latter over the former. Decisions are being made at the World Trade Organization's negotiations on intellectual property rights and medicines for the developing world that could have the affect of shutting down medical research around the world.
Provisions agreed to at the Doha WTO meeting to help the world's poorest countries cope with epidemics of HIV/AIDS, malaria and tuberculosis have been hijacked by a set of ideological and commercial interests.
They are being used in an underhanded fashion, as leverage to undo patent protection for medicines. The latest language being discussed would allow almost any country to declare a "public health crisis" for any disease, thus gaining the ability to suspend patents on the medicines used to treat the specified disease. The result could be worldwide destruction of the intellectual property protection on which medical innovation depends.
It seems obvious: the best way to help the sick in poor countries is by letting them the best drug for almost no money -- except that those gouging pharmaceutical companies are standing in the way.
There is, however, much more to it than that.
The basic premise is badly flawed if not completely wrong. There are few medicines used to treat diseases like malaria, tuberculosis and polio that have patents on them now. For those that do, they are heavily discounted -- and sometimes simply given away free -- by their manufacturers.
If they are not available where they are needed it is almost always because governments of developing countries are obstructing, actively and tacitly, their distribution.
Wiping out drug patents, especially through such haphazard and unpredictable methods, is a tremendous disincentive to those who fund and research new treatments and medicines.
Respect for intellectual property should command worldwide support. Both the United States and the European Union countries benefit from patent protections; information-sensitive industries like pharmaceuticals, software and the creation of cultural products flourish in the west because such
protections exist.
Not everyone agrees with this however.
The chief dissenters in this debate are the anti-globalization activists, most of whom approach the issue from the left, and the generic drug manufacturing industries in India and Argentina.
It is a strange alliance -- linking profoundly anti-capitalist activists on one side with hyper-capitalist manufacturers on the other -- that is nevertheless showing signs of success.
In the 1980s, US trade negotiators led the way in adding intellectual property rights to the world trade system in order to protect the premier US industries -- software, entertainment, pharmaceuticals -- all information industries. Other countries benefited as well as respect for intellectual property became an important part of international trade agreements on trade.
The anti-globalization left, which abhors property rights of any kind, loathes patents and quickly found a weak spot in the case of health.
People respond emotionally to the idea that "poor people are dying because of patents" -- even though there is no evidence supporting this assertion. The far-left globalists also found powerful commercial allies, and funding, in the Indian and Argentinean generics industries, the great potential beneficiaries if the war on patents succeeds.
This alliance of commercial and ideological interests is on the verge of overturning pharmaceutical patent protection across a wide swathe of the globe.
Instead of pursuing the course agreed upon at Doha - that the poorest countries would be allowed to declare a "public health crisis" and suspend patents in the cases of HIV/AIDS, malaria and tuberculosis - the language now being negotiated at the WTO would open the door to allowing a large
group of countries to use this loophole to ignore patents for drugs in virtually any disease category.
The WTO TRIPS Council will meet and vote early next week. US and EU trade negotiators in particular should think hard about what will happen to their economies - which have long rested on scientific discovery and innovation - if hard-won patent protection is tossed away at WTO.
Will it really benefit the world, particularly the poor and the sick in developing nations, if ill-formed emotionalism wins out over facts? We do them no favors if the world trade system kills medical and pharmaceutical innovation.

Maybe Tony Blair's experiment with creating a modern British party that is free from the old shibboleths of the left is not doomed after all. The question, ironically, might be decided on health, one of the crucial battlegrounds for state spending.
Giving hope that this is the case is a dispute between the Health Secretary Alan Milburn and one of the most powerful Chancellors of the Exchequer in modern times, Gordon Brown, the man often seen as CEO to Tony Blair's Chairmanship of the Board.
Mr. Brown last year woke up the world to the fact that New Labour might not be that different from the Old, when he confirmed that the decision had been made to leave health care entirely free at the point of use. This year he revved up spending in the public sector. Old Labour is back, cried all.
Then last week Mr. Milburn suddenly made things interesting. Writing in The Times, Mr. Milburn said that Labour couldn't just be satisfied with the reforms it had already made. And, no, increased spending was not the whole answer. The government, he said, must not allow cautious "consolidators" to prevail over ministers seeking to transform state-controlled public services into consumer-driven organizations.
"There is a choice," Mr. Milburn wrote. "We could choose a strategy of consolidation -- accepting the reforms made so far and relying on increased public expenditure to deliver an expanded service but one whose culture remains essentially unchanged. Or, as I believe we must, we could choose transformation, recognizing that extra spending alone is insufficient to deliver improvements in public servicesÖ There is no automatic correlation that tax-funded healthcare has to mean healthcare run simply by central government."
Moreover, he went on, New Labour should take over, as its own, traditional Conservative ideas of choice -- in precisely the way in which it took over the once-Conservative areas of the economy and crime. If it didn't, he continued, it risked losing the next general election.
The piece was astonishing not simply for its policy implications, which are in themselves enormous. It was also a not-even-thinly-veiled attack on Gordon Brown, and pinpointed the real battle lines within the government -- that between the "transformers" (of whom Mr. Milburn is a leading example) and the "consolidators" (who are led by Mr. Brown).
Mr. Milburn, today the very model of the market-friendly, choice-worshipping, private-sector-hugging New Labour minister, has come to blows with the Chancellor over plans to turn the best-performing hospitals into "Foundation Hospitals." These would be freed from central control and able to act almost as if they are independent businesses -- and thus, crucially, be able to borrow money to finance expansion. Next month, with the introduction of "Health Resource Groups," a price is being put on all NHS treatments, so that hospitals up and down the country can, if they have the capacity, negotiate contracts to perform operations for patients beyond their local catchment areas. This introduces competition.
But Mr. Brown is refusing to allow them to borrow, which undermines at a stroke their very purpose -- and also kills off the chance of competition working its benefits on the NHS. The decision condemns them to never being more than a lumbering public-sector monopoly.
Mr. Milburn's piece last Wednesday was thus a battle in this war. But the clash between transformers and consolidators goes much deeper than that.
Tony Blair is relatively easy to understand: he wants to take Labour to the middle. There are, however, just two or three people on the planet who have any real understanding of where Mr. Brown wants to take the party.
He is a contradiction: he makes grand, philosophical speeches, but keeps his own counsel. He is seized with radical passions, but is fiscally orthodox. He has extended the clutches of the Treasury beyond its already massive powers, such that nothing in the government happens without his involvement. He is one of a handful of genuine progenitors of New Labour. But his refusal to allow Foundation Hospitals to borrow is typical of his more general rejection of genuinely radical -- transforming -- public sector reform, and thus of the frustration he engenders in Labour's most innovative policymakers.
That frustration with Mr. Brown has now spilled out into public. In this sense, the contest between transformers and consolidators is merely a version of the battle royal between No. 10 and No. 11 Downing Street -- the offices of the Prime Minister and Chancellor.
The Health Secretary's policies are far from enough, to be sure; by committing itself only to tax-funded healthcare Labour is still making a fundamental mistake. But little by little, it is beginning to chart a course that might indeed transform the NHS. On July 1, a pilot scheme was introduced for some heart patients who have been on a waiting list for over six months. They now have a choice either to stay on the same list with a promise of quicker treatment, move to another hospital, or go abroad. It is, in essence, a health voucher (although Labour goes into apoplexy at the accusation that it has resorted to such a Conservative tool).
Extend the idea, couple it with independent Foundation Hospitals, which could (along with private hospitals) offer their services directly to the voucher-enabled patient, and it's possible to see genuine choice emerging. And why stick with patients who are on a waiting list; why not give everyone a voucher, equivalent to the cost of their treatment?
This is why this mock battle between the chancellor and the health secretary is worth following. It is but a thin veil to a much more important ideological war.

(This was posted on 8th July, so apologies if you've already seen it.)
It may be a clichÈ to point out that what happens in the US happens here about five years later but, like most clichÈs, it's true. Education vouchers, for instance, which give parents a sum equivalent to the money spent on sending their child to a state-run school, to be spent where they choose, are usually dismissed in Britain as the obsession of a few boggle-eyed free marketeers. But they have had a very different history in the US and, thanks to a decision a fortnight ago by the US Supreme Court, are now poised to transform American schools. Give it a few years and the same may well happen here - not least because, although few people have noticed, the government has already introduced the voucher principle into the NHS.
Although the mainstream American left, such as the teaching unions and the bulk of the Democratic Party, oppose school vouchers as firmly as their British equivalents, by far the most vocal advocates are the poverty lobby - and especially the black poverty lobby. The Joint Center for Economic and Political Studies, an African-American think tank, for instance, found in a poll in December 2000 that 75 per cent of blacks under 35 support vouchers. The Black Alliance for Educational Options, an umbrella group for black poverty groups, began a pro-voucher campaign in the autumn of 2000. It's the poor, of course, who most need an escape route from sink schools and there are few more concrete examples of the left's favourite word, empowerment, than the voucher.
For many years, Joe Lieberman, Al Gore's running mate in the 2000 Presidential election, fought a lonely battle in support of vouchers amongst his fellow Democrats. Now he is beginning to find allies. Last year, Robert Reich, Bill Clinton's former Labor Secretary and Democrat candidate for Governor of Massachusetts in November, wrote in the Wall Street Journal that: "The only way to begin to decouple poor kids from lousy schools is to give poor kids additional resources, along with vouchers enabling them and their parents to choose how to use them".
Even Al Gore, who has long been in the pocket of the teaching unions, has remarked that: "if I were the parent of a child who went to an inner-city school that was failingÖI might be for vouchers, too". (But, in a wonderful piece of hypocricy, since he isn't such a parent he still opposes vouchers.)
The US Supreme Court's decision on 27th June in Zelman, Superintendent of Public Instruction of Ohio v. Simmons-Harris overturned an Ohio Supreme Court ruling which had banned the Cleveland voucher scheme as unconstitutional on the grounds that, by allowing tax money to be spent in a variety of schools, some might go to religious schools. That ban stalled the introduction of other schemes across the country. The lifting of it will give a corresponding boost.
Three days later, on 1st July, Alan Milburn introduced the first British voucher. He doesn't call it that, but a pilot scheme which allows heart patients who have been on a waiting list for six months to opt to have their treatment in a private hospital or, if necessary, abroad, is based on precisely the same principle.
Both No 10 and the Department of Health are fascinated with the Danish health service, which has much in common with the NHS - including waiting lists - but which they argue is far more efficient. Earlier this year, the Danish government announced the introduction of an all-embracing health voucher. All patients on a waiting list of any sort for more than two months are to be given a voucher which can be used anywhere - including outside the state system. The idea is not simply to pacify patients; it is also designed introduce a competitive pressure into a state monopoly.
The heart patient pilot scheme is clearly designed to prepare for a much wider Danish-style NHS voucher which the government is planning. When it comes, it will be by the far the most important change in health provision since the creation of the NHS in 1948.
The heart voucher shows we're not even waiting the usual period to copy the US: it's here already. First health; education to follow.

However popular the Budget may be with voters at the moment - as our poll shows, a large majority support Wednesday's National Insurance rises - both the Prime Minister and the Chancellor know that, as Mr Blair put it on Friday: "If it doesn't work, people will judge me harshly - I carry the can." The sums involved are simply enormous. When, back in January 2000, the Prime Minister first spoke about his desire to increase spending on the NHS to European levels, he implied, without spelling out precise figures, raising the NHS's budget from £45 billion a year to around £60 billion. The reaction was overwhelmingly cynical. Few thought he would do even that. Yet on Wednesday the Chancellor announced that spending in 2007 would rise to £105.6 billion - a doubling in real terms since Labour took office.
It is, to say at the very least, bold. We are now in the middle of a sort of controlled experiment. For the first time in its 53 years, the NHS has the money which its cheerleaders have always said it needs. It is kill or cure both for the NHS and for the Government's reputation. If money is indeed the answer to the NHS's problems, and we start to see clear, tangible evidence of improvements, Labour will reap the political rewards. But if, after two or three years, no one notices much difference then the electorate will soon decide that, as Mr Blair put it on Friday, someone has to carry the can for an extravagant waste of billions of pounds. And, perhaps still more importantly, some thing will also have to carry the can - the NHS itself.
The reason why this is such a gamble for the Government is because the evidence points to the latter. Since 1997, spending on the NHS has (even before the Budget's increases) already risen by 40 per cent. Yet activity has increased by a paltry 6 per cent - a pretty awful return on any investment. Between 1999 and 2000 alone, spending rose by 9.2 per cent, but the number of cases dealt with increased by only 1 per cent.
The Scottish experience ought to keep Messrs Blair and Brown awake at night. Despite NHS spending levels 20 per cent higher per person than in England, with more than 30 per cent more consultants, nurses, GPs and acute beds (relative to the two populations), waiting lists in Scotland are far longer than in England, waiting times are getting worse, and death rates for heart disease, cancer and strokes are among the worst in the Western world. So much for money being the answer.
Although their plans are the very opposite of cynical - the money is real, and they genuinely believe that they can transform the NHS - Mr Brown and his next door neighbour are also too shrewd not to have come up with a strategy for mitigating the effects of failure. That strategy has become clear since Mr Brown's closing remarks on Wednesday. The Budget, he concluded, is designed "to make our NHS the best insurance policy in the world". The key word is "insurance". It is no mere coincidence that the bulk of the revenue raised will come from National Insurance. It's critical to the Government's approach, which is to argue that the extra tax revenue will not disappear down a black hole but that it is, in effect, a premium which we pay for the NHS. On Friday, the Trade Secretary, Patricia Hewitt, gave a foretaste of the argument which we are going to hear repeatedly over the next few years: National Insurance funds the NHS, a giant insurance scheme.
If the Government wants us to look at the NHS as a form of insurance, let's do just that. The NHS is paid for by the 27.4 million taxpayers. At the moment it receives £65.4 billion a year. That works out - the "premium", if you like - at £2,387 per taxpayer. By 2007, with NHS spending having grown to £105.6 billion, the premium will have risen to £3,854 per taxpayer. These figures are, of course, rough guides, but they serve a purpose. In Ireland and Australia, patients are now given the choice of opting out of their NHS-style healthcare systems in return for a rebate. Just as in Britain today, they all used to pay the same sort of notional premium because they were all supposed to receive the same level of care. Now they can get a rebate from their taxes and turn to a wide range of alternative providers who have sprung up to cater for this new market. Even those patients in the state-funded system benefit because the Government has far more options to choose from when it needs to contract out treatment for its own patients to the private sector. More money flows into healthcare because opted-out patients tend to choose to spend more. Everyone wins.
If the Government's gamble fails, their talk of insurance and premiums will boomerang back at them. We may soon start to ask why we have to hand our dramatically increased premiums over to the Government to spend for us, and why we can't spend them where and how we would like.

After a year's travels across the globe looking at alternative health systems, the conclusion reached by Derek Wanless, and endorsed by Gordon Brown, is - wait for it - that "the UK must expect to devote a significantly larger share of its national income to health care over the next 20 years". Well, yes.

Of course we spend too little on health. But as Mr Brown himself put it yesterday: "The question is not whether we need to pay more but how." And on that, Mr Brown and Mr Wanless are clear: we have nothing to learn from anyone else.

Indeed, Mr Wanless's conclusion could have been written by Bevan himself (if you ignore the mandarin prose): "The current method by which health care is financed through general taxation is both a fair and efficient one, with no evidence that any alternative financing method to the UK's would deliver a given level of health care at a lower cost."

Yesterday we got the familiar line from the NHS cheerleaders: any other system is wasteful; the problems are all because of under-funding; and once the NHS gets more money, there will be a marked improvement. Mr Brown's pledge to double health spending in the 10 years from 1997, to £105.6bn by 2007 (9.4 per cent of GDP), will end any doubts one way or another about that idea.

Spending on the NHS in Scotland has consistently been among the highest in the EU, some 20 per cent higher per person than in England. The Scots have, relatively, 30 per cent more consultants, a third more GPs, 30 per cent more nurses and a third more acute beds. Yet far from outperforming the rest of the country, waiting lists in Scotland are even worse. And in terms of health outcomes, death rates for heart disease, cancer and strokes are worse than in any other Western country.

The problem has not been that the NHS has been under-funded, but that we have a system which only permits tax funding, and which thus rules out any of the gains of competition, innovation and consumer responsiveness. In 1998, the latest year for which comparative figures are available, the Netherlands spent 8.7 per cent of its GDP on health, Italy 8.2 per cent, Austria 8 per cent and the UK 6.8 per cent. But those figures are for stateandprivate spending; in tax-funded spending alone, the Netherlands spent 6 per cent, Italy 5.5 per cent, Austria 5.8 per cent and the UK 5.7 per cent - all much the same. These other countries do not fund health care through a state monopoly, but through social insurance, and both bring in more money and spend it more efficiently. The underfunding has been private, not public - and that has been because of the NHS, not in spite of it.

Ah well, you see, says Mr Wanless: "Success or failure will ultimately depend on how effectively the health service uses its resources." In other words, the NHS isn't properly run. It's a familiar argument. It's a line we have heard from Tony Blair, Gordon Brown and Alan Milburn almost every day since the launch of the NHS plan in July 2000. So let's get this right: until now no one gave a second's thought to making the NHS more efficient? How inconvenient that, as Mr Wanless writes later: "The health service has been through many reorganisations over the past 20 years." The truth is that, over the NHS's 54 years there have been constant attempts to make it work, and none has cracked it. Between 1999 and 2000, for instance, spending rose 9.2 per cent but the number of extra cases dealt with rose less than 1 per cent. Again, between 1995 and 2000 the number of consultants rose 20 per cent, yet the number of day cases rose only 5 per cent. Such examples - plucked at random - are the antithesis of efficiency. They represent productivity chaos. The reason is that there is a basic flaw in the model.

Which is why it is bizarre that Mr Wanless has returned claiming not to have found anything which we can learn from any other system. If we do have the best system, flawed only by a lack of resources, where's the clamour from everyone else to copy us?

Just over two years ago, I was at a party stuffed full of New Labour types. One of Tony Blair's most trusted advisers sidled up to me and asked me a question. "How about this for an idea: do you think we should pledge to increase health spending to the EU average?" I told him that, although it would no doubt be greeted with hurrahs, that was the last thing the Government should do. It would effectively be throwing billions of pounds of taxpayers' money into a money pit, since it would have little worthwhile effect.

It was not the answer I was supposed to give. "But that's what it needs, isn't it? Lots more money," he replied. I pointed out that the rest of Europe spent so much more than us on health not because of any extra tax spending but because of their extra private spending. The adviser started to get tetchy: "Well, Tony's been looking at this, and he's realised that the only way to save the NHS is with an enormous dose of money, and a complete change in its working methods."

I realised even as we were speaking that the venue where our conversation took place would eventually come to seem appropriate: the Dome.

A week later, the Prime Minister made exactly that pledge on Sir David Frost's sofa and it has formed the backbone of the Government's entire political strategy ever since. Barely a day has gone by without either Mr Blair, Mr Brown or the Health Secretary, Alan Milburn, repeating the mantra that extra money, plus managerial reform, equals NHS bliss. So it comes as no surprise that that is precisely what we heard again today from the Chancellor - and, indeed, from Derek Wanless, appointed by Mr Brown to look at and learn from other health systems. As the Wanless Report puts it: "Both additional resources and radical reform are vital: neither will succeed without the other." We have, literally, heard it all before.

But despite the mythology of massive state underfunding of the NHS, the line peddled today by Messrs Brown and Wanless, state spending on health care in Britain is much the same as it is on the Continent. In 1998, the latest year for which comparative figures are available, the Netherlands spent 8.7 per cent of its GDP on health, Italy 8.2 per cent, Austria eight per cent and the UK just 6.8 per cent.

But those figures represent state and private spending; in state (tax-funded) spending alone, the Netherlands spent six per cent, Italy 5.5 per cent, Austria 5.8 per cent and the UK 5.7 per cent - all pretty much the same. The difference is that our neighbours spend more money as individuals rather than through the state, and that they do not provide health care through a tax-funded monopoly but through a mixture of competing providers - what they call social insurance. They manage both to bring more money into health care, and to spend it more efficiently.

The NHS was introduced in 1948 into a system where open rationing was the norm, where doctors were demigods whose word was taken as holy writ, and where we humble patients were grateful for whatever we were given. Today, if Dixons told us we'd have to wait a year for a TV we'd go somewhere else. But the Government proclaims, as if it is something to be proud of, that it has a target of a maximum 15-month wait for an operation.

The reasons why we have such a shameful system are relatively straightforward. One, which does need to be confronted, is that we have so few doctors. We have 1.7 per 1,000 people; Germany has 3.4, France 2.9 and even Poland 2.4. For that, we have the British Medical Association to thank.

Decades ago, the BMA put a cap on the number of trainees to ensure a permanent shortage, and thus everhigher wages. But even if we were to have the same number of physicians, the structure of the system would mean that we still lagged behind. Continental social insurance, where individuals pay into one of a number of competing insurance funds, puts the patient in the driving seat. Hospitals are a mix of state and privately run. But because it is the patient, via his or her insurance fund, who is in control, rather than the state, hospitals compete, invest and innovate. And that means patients are also preparedto spend extra money topping up their services, which adds to the ability of the system to deliver care.

The frustration is that, as today's events show, the debate in the UK is so warped by ideology. On any rational analysis, politicians would have turned to alternatives years ago. But the NHS is, as Nigel Lawson once called it, the English religion, and Labour remains too tied to its ideological past to see that time has left the NHS behind.

IN almost every other area the ultra-moderniser, on health the Prime Minister remains defiantly Old Labour. Because he is never one-dimensional, that's sometimes easy to forget. The idea of standing up and saying: "Money, that's the answer, lots of it, and quickly" is anathema to him. He loves to sound modern, so he has to have an extra tune - managerial reform - to sing.

And so we are stuck with a health care system which is, at best, 30 years out of date. The tragedy is that for an answer to our problems, all we need do is cross the Channel.

You can tell when a politician knows he is on shaky ground - out comes the smear.
Last week, Tony Blair and Alan Milburn informed us that anyone who suggests that too many NHS patients are suffering at the hands of the NHS is engaged on a cynical, underhand attempt to undermine the service and blacken the name of all NHS staff to further their nasty political ends.
Try telling that to the many doctors within the NHS who despair of ever being able to deliver the quality of care available abroad.
As Dr Colin Brown, a consultant physician at the Sheffield University Medical School, wrote to yesterday's Daily Telegraph: "The NHS . . . is now in its death throes. The quicker it is buried, the better for all of us - the patients, the health staff and the public."
The truth is, none of us really knows what happened to Rose Addis in the Whittington Hospital. But so what? What did or did not happen to Mrs Addis makes not a jot of difference to the general point about the capabilities of the NHS.
I'm perfectly prepared to accept that the hospital's version of events is entirely correct. What on earth does that prove: that there are no problems? The real point is that no one who heard the Addis family's account was in the least bit surprised by it.
The question that needs to be asked isn't what happened at the Whittington Hospital, but what's so wrong with the system that such stories are entirely plausible. It's not the NHS's critics who are cynical but the Government, whose members trot out manipulated statistic after meaningless report, supposedly to show that everything is for the best in this best of all possible health systems.
The fundamental reason why health is in such a mess is because we have a National - for which read state - Health Service. A week ago, nine NHS patients were sent to La Louviere Hospital in Lille for treatment.
Why is it that almost every other Continental system can look after its own patients and we can't? Two main reasons: competition, and funding method. Continental systems have a variety of different types of hospital - some state-run, some private, some profit-making, some not.
They bring all the benefits of competition. Just as a monopoly state-owned grocer would cause chaos - just ask any Cuban for proof - so competition between Sainsbury and Tesco ensures that there is a sufficient supply of food, and that times of huge demand (such as Christmas) are not a problem, as they are for the NHS, but an opportunity.
To be fair to Mr Milburn, just under a fortnight ago he spoke of the possibility of giving some hospitals a new status as self-governing organisations, letting them decide how best to run their affairs - the best being rewarded with what the NHS Plan calls "earned autonomy", and others being run by local trusts.
Such ideas are fine as far as they go. Indeed, last week the King's Fund, an NHS think-tank, came out with a similar proposal, arguing that the running of the NHS as a whole should be transferred from Whitehall to an independent body.
However, both Mr Milburn and the King's Fund ignore the vital second reason why other systems work so much better: the funding method. In Continental systems, the patient pays for the service, either directly or via his insurer. In the UK the Treasury pays.
And he who pays the piper calls the tune. An independently managed NHS would not alter that. Most MPs' jobs depend on the performance of the NHS. While health remains entirely tax-funded, it's simply unimaginable that they would tie their hands behind their backs and hand over all say in the running of the system.
But even if they did, that would still not give the patient the power of the purse string, which is what makes other systems so much more responsive.
And that's where ideology kicks in. Tony Blair, Gordon Brown, Alan Milburn and the Wanless Report have all made plain that the Government has ruled out any reform of the funding method. It's tax, tax, and nothing but tax.
One senior Government adviser asked me plaintively a few weeks ago if I could think of a way of giving the patient that same, Continental, degree of control in a tax-funded system.
I couldn't, because that's the whole point: if I wouldn't hand over my money to the Treasury to buy my groceries, why would I choose to for health care?

The nine patients who arrived yesterday at La Louviere hospital in Lille may well turn out to be the most important patients in the NHS' 53 year history. In as short as five years time we will, quite possibly, look back at their cross-channel hop as marking the beginning of the end of the NHS. Not because of the numbers involved, which are never going to be more than a few thousand, but because of the impact their trip will have on the way we look at our beloved NHS. Soon we will all know of someone who has benefited. And we will all be asking the same question: how come the rest of Europe can do it, and we can't?
Just as it makes perfect sense for the NHS to buy surplus services from the private sector, so too it is sensible for patients who can't be treated in the UK to go abroad. Ignore for a moment the national shame implicit in yesterday's development - that we are reduced to exporting patients, so enfeebled is the NHS. To see how devastating such journeys abroad may turn out to be for future of the NHS, we need to look at the reasons why we can't treat our patients, and continental systems can treat not only their own, but ours too.
The answer is straightforward: the NHS is a monopoly, and continental systems are not. That matters not just in terms of the provision of services, but also in the way they are funded. Alan Milburn is right to try to open up the NHS so that, as on the continent, services are delivered by many different types of organisations, from mutuals and charitable trusts to profit making companies. But it's missing one crucial part of the equation to look at the continent, see that they use all sorts of providers, and think that if we did the same, and increased spending, everything will come right. The differences in the two funding methods is equally critical. Instead of the NHS method - tax, which involves money being handed over to the government for it to spend on our behalf - continental systems (known loosely as ësocial insurance') evolved with responsiveness to the patient at their heart. Sometimes services are paid for directly and then re-imbursed, sometimes they are paid for via the insurer. The point is that if they don't attract patients, they don't get revenue. Mr Milburn talks about the need to make the NHS more responsive to patients, but needs them have a real choice. And that means that they control where their money is spent.
It's no accident that continental systems have more money and more resources: patients choose to spend their money on health because they can see that it is put to good to use. Just as a state-run, state-funded grocer would never be able to provide the same level of service as a Sainsbury or a Tesco, so a state-run and state-funded health service cannot match what is provided by continental systems.

Has the pharmaceutical industry gone suicidal? After a year that, in the battles over HIV-AIDS treatments in South Africa, already seemed like one ongoing PR disaster, the industry has now decided to throw down the gauntlet over European drug prices.
In what amounts to a high-stakes gamble on the future shape of the drug business in Europe, big pharmaceutical companies are making it clear they've had enough of Europe's price-fixing ways. At the beginning of December, Hank McKinnell, chief executive of Pfizer, went on the attack over the pricing arrangements insisted on by many EU governments, arguing that their logical consequence is that Europe is denied access to new treatments. Mr MicKinnell's remarks were directed at France, which has an especially poor record for making new medical technologies available to patients. Even after they are approved by regulators, their availability becomes bogged down in negotiations on price. "These talks can take two to three years longer in France than in any other country," he said. And, he went on, the discounts pharmaceutical companies are forced to give in France affect the prices they can charge elsewhere. Japan, for example, bases its prices on a weighted average of prices in other markets. By keeping a new drug off the market in France, companies can thus earn more for it elsewhere. "In Austria the pharmacists earn more than we do," Mr. McKinnell lamented.
It's not just Pfizer. Tom McKillop, chief executive of AstraZeneca, was also recently quoted as saying, "Europe has got to get its act together. I think all the major pharmaceutical companies are making decisions not to launch products [there]."
The crux of the matter is this. European governments demand severe discounts on pricing. With a base price of 100 in the U.S., the average French price for a drug, for example, is 42. With research and development funded by profit, the pharma companies argue that the Europeans are in effect after a free lunchóaccess to innovation without having to pay for it.
A report published earlier this month by the Tufts University Centre for the Study of Drug Development found that the average cost of developing a new prescription medicine is $802 million. The cost is so high because, in addition to the usual research and development costs in other industries and the heavy capital investment required, only one in five medicines that enter clinical trials ends up being an approved drug, and development takes on average between 12-15 years. The Tufts figure is similar to the estimate in a report released this summer by the Boston Consulting Group, which calculated $880 million.
The industry umbrella group, PhRMA, has released figures showing that the total sums being invested in R&D are staggeringly high, and increasing: $30.5 billion in 2001, 18.7% higher than the amount in 2000, and over 300% more than the investment made in 1990.
The two issues of European cost-cutting and increasing research budgets are, of course, deeply entwined. As Steve Slovick, senior vice president with the Cambridge Pharma Consultancy in New York, put it in The Wall Street Journal Europe on Dec. 12, "The U.S. ends up funding all the research and development". European countries aren't "paying their fair share."
The industry's line is clear: such sums have to come from somewhere, and one place they are not coming from is Europe, which by forcing down prices is refusing to play its part. As one senior industry figure put it to me: "It's as if every month we get another set of measures put forward, all with the same aim: cutting our profits, which means cutting our research, which means cutting back the level of innovation, which means cutting the number of patients who can be helped." In recent months further cost-cutting measures have been announced in Germany, Italy, Spain and Sweden.
In September, for instance, the German government began the process of cutting back on so-called me-too drugs: the shorthand for new medicines that deal with a problem for which an existing medicine is already available. But limiting these treatments cuts a swath through the basis of almost all scientific innovationóinnovation by increment. Revolutionary new treatments are rare; most new medicines do a little more to help, and it is only over time and with a full body of clinical evidence from the different drugs available that real transformations in medicine happen. Moves to block "me too" drugs are thus profoundly short-termist, and threaten the very basis of innovation.
It's not just the now mainly U.S.-based pharma companies that are pointing out the growing problem. A year ago, the European Commission itself published a report by Professor Fabio Pammoli on "Global Competitiveness in Pharmaceuticals: a European perspective," commissioned to look out how far and why the European pharmaceutical industry was losing ground to the U.S. Even the most superficial glimpse at the industry can see that previously EU-headquartered companies, such as SmithKlineBeecham, have moved to the U.S., in the form of GlaxoSmithKline. As one key player put it to me: "The environment is becoming steadily more inhospitable." Put simply, the eighty pages of the Pammoli report concluded that the EU pharma industry was uncompetitive and that governments needed as a priority to rekindle investment in R&D. Yet far from doing that, their price-control policies are undermining research.
Novartis AG Chairman Daniel Vasella told The Wall Street Journal Europe on Dec. 12 that still more investment will go to the U.S. unless something is done to stem the tide. "Money goes where money flows. If you have a more attractive market in the U.S. [than in Europe], you will go there."
Prospects for the short and medium term may not be especially good, but in the long term something has to give. If pharma companies do not find the EU "hospitable"ófor which read profitableóthen there is nothing to force them to stay or, perhaps still more importantly, to offer their latest treatments to European patients. The EU will be the loser. But in the long term it is difficult to see prosperous patients settling for second-class status. Once they realize what they are being forced to settle foróand withoutóthey will surely push for changes which will give them access to new medicines. The rise of vocal patient groups is merely the beginning of this. Governments may be the cause of the problem, but the solution is almost certainly out of their hands.

As a general rule, my approach to life can be summed up thus: if Polly Toynbee is for something, I am agin it. Well, rules are there to be broken. On Friday, in a piece headlined ëNew Labour has expired', the Guardian's in-house moral conscience summed up this past week's frantic series of NHS announcements thus: "No sooner does a clarion cry for more taxes go out, than the old panic sets in. No, no, old Labour is not back in the saddle! Cue Milburn's rapid announcements with a rightwing flavour - Bupa to run a hospital, long-waiting patients to go private or abroad, an internal market is re-established."
Ms Toynbee and I may take rather different approaches to the NHS, but we are as one in our scorn for the inanity of the government's - that spending money is the answer, but that in order to pretend there's more to it than that, money is coupled to so-called reforms. Tuesday's agreement with Bupa, for instance, for it to run an "express surgery" unit, had all sorts of ideological frissons - it is, when you think about it, pretty sensational that a Labour health secretary can, from a party which despised them for decades, now describe private providers as "a member of the NHS family", as Mr Milburn did on Thursday. But for all that, the agreement is nothing more than a contract for the supply of services, which was no more nor no less significant than any other contract between the NHS and any other of its suppliers. It makes not the slightest difference to the big questions: how do we fund healthcare, and how do we structure its delivery?
The reason the government is reduced to eye-catching initiatives rather than genuine reform is that, as I wrote last week, the Prime Minister is genuinely convinced that money is the answer and that the NHS is the best model. On Thursday night he summoned the press to Downing Street to launch an attack on the French (and, by implication, any alternative) system. "Those who sing its praisesÖdon't tell you that working families in France spend on average 20% of their gross income on health, including insurance contributions". Well, actually we do - that throwaway "including insurance contributions" is precisely the point. They reason they spend so much more than us is because they choose to - and the reason they choose to is because they do not do it via the tax system but via their own, independent health funds. The extra money spent in continental systems is never seen by the government. It goes directly to their health fund, which is subject to real competition and directly accountable to them - and thus literally, and genuinely, consumer-focused. They don't spend more than we do on health care because they are nicer, more generous people who happily pay a little bit more for the common good, but because they choose to do so for their own benefit. It is simply wrong to equate money contributed through social insurance with money contributed through taxes.
In trying to convince us that this week's various announcements are building genuine choice into the system and amount to real reform, Messrs Blair, Brown and Milburn are either being deliberately misleading or simply don't understand the most basic principle of continental health care systems. Or, more likely, both. Like too many of this government's initiatives, as soon as you start to examine the details gaping holes emerge. Take one of this week's wheezes, allowing patients who have waited six months for an operation to go private or travel abroad for treatment. Let's ignore the poverty of that ambition - that six months is somehow an acceptable wait. (Try explaining that to a continental doctor or patient who simply doesn't understand the concept of a waiting list.) On Wednesday, Mr Milburn trumpeted the plan as proof that he is introducing real choice. On Thursday it emerged that only a tiny minority of the quarter of a million affected patients will benefit from the idea, since it won't properly come into effect until 2005. Until then there will be merely pilot schemes, and they won't even begin until next July.
The truth is that government hasn't got a clue. It can come up with as many so-called reforms as it likes but it is doomed to failure - and wasting billions of pounds - until it realises that the NHS model is fundamentally flawed. No one suggests that the most sensible way of supplying the population with food is for us to hand over our money to the government as extra taxes, let it decide what food we should be given, and then decide who should supply it to us. So why should it work for healthcare?

I have faced few more daunting prospects than sitting in the Prime Minister's study and being asked by him what I think of his health policies - not least because I think they are wrong.

I have been a supporter of Tony Blair since I first met him in 1989. I spent four years working in the early 1990s to change Labour into precisely the sort of party for which Mr Blair was striving.

But not only has he wasted nearly five years in which he could have reformed health care, it is obvious from every conversation that I have ever had with him that, even if he stays in office for another five years, nothing is going to change.

The Prime Minister is not just going through the motions when he says that the NHS's fundamental problem has been a lack of money. He means it. On and off the record he says the same thing: the NHS really is the best system of all.

Just as the defenders of socialism used to say that the catastrophes of countries such as Russia, North Korea and China in no way proved that their creed was bankrupt - real socialism had never been tried - so Mr Blair believes that the NHS just hasn't had the opportunity to prove itself.

It was, after all, Mr Blair who was responsible for the biggest ever funding increase when, in January last year, during a winter which seemed to bring a different NHS crisis every day, he sat on Sir David Frost's sofa and promised that he would increase health spending to the EU average.

The week before, I was at a party with lots of New Labour types. One of the Prime Minister's closest advisers asked me what I thought the reaction would be if the Government was to make such a pledge? I pointed out that, although he would no doubt get hurrahs from the NHS establishment, he would effectively be throwing away billions of pounds of taxpayers' money; it would have no worthwhile effect.

The adviser was nonplussed: "But that's what it needs, isn't it, lots more money?" I reminded my friend that the reason why the rest of Europe spent so much more on health was because of their extra private spending, not any more tax spending.

The adviser got twitchy: "Well, Tony's been looking at this, and he's realised that the only way to save the NHS is with an enormous dose of money, and a complete change in its working methods."

I had a sense at the time that the party venue where our conversation took place would one day seem appropriate: the Dome.

As the Government is now preparing to admit, the surge in NHS spending to meet that target means tax rises, and the news has been full since Tuesday's Pre-Budget Statement of the supposed splits in the Government to which this has given rise.

On Wednesday, the Health Secretary, Alan Milburn, made clear his view that the extra money should be raised by a hypothecated NHS tax, as a way of bridging the gulf between taxpayers and the service. The party chairman, Charles Clarke, also reminded us that "I have argued for hypothecation and it's certainly true that health is the most obvious example."

Then on Thursday, Peter Mandelson, the Prime Minister's representative on earth, said there needs to be a "contract" with the public so that voters see the link between taxes and services - and that could mean hypothecation.

The Chancellor, on the other hand, has made clear that the NHS should only ever be funded out of "general taxation". The Government is thus, apparently, split asunder.

Would that it were. That would mean that someone was questioning the fundamentals. Yes, there are differences within the Government about how best to raise taxes.

But no one is arguing about the need for tax increases, or the destination of the money raised - throwing even more into the NHS money pit. As a minister put it to me a few weeks ago: "That's what we're here to do. That's why people vote Labour."

The problem is that the fountainhead of all developments in this Government is 10 Downing Street, and with the Prime Minister wedded to the idea of an exclusively tax-funded NHS, nothing else will ever be on the agenda.

Mr Brown, who is taking the flak for the sterility of the Government's approach, is merely doing Mr Blair's bidding, just as he was last January, when the Prime Minister determined that the NHS's budget would go through the roof. Mr Blair doesn't appear as Old Labour on health as he really is because he is never one dimensional.

The idea of standing up and saying: "Money, that's the answer, lots of it, and quickly," is anathema to him. He loves to sound modern, so he has to have an extra tune to sing.

Because Mr Brown is singing only the one - tax - it looks as if the Prime Minister is striding ahead of his Chancellor. He isn't. Mr Blair's current extra tune is the creation of a "consumer-led NHS".

And what could be more modern than that? The NHS may be a public sector monopoly, but if it is consumer focused, who cares? So we'll reform it. How will we do that? An NHS Plan! Yes, a Big Plan. And we'll make sure it changes by doing it ourselves, running it from Whitehall.

We'll set up Boards, full of people who know about these things, and we'll give them tough names, like Modernisation Agency, and that'll show how serious we are.

The NHS "reforms" are, of course, New Labour in microcosm - oodles of style, very little substance and, even worse, very little real thinking. On Wednesday I was at a private seminar on health funding hosted by the Institute for Public Policy Research. Even among these newest of New Labour thinkers, there remains a dogmatic reverence for a state-run, state-funded system.

But it doesn't matter how much you talk about management incentives and the importance of "consumer focus", or how many businessmen you ask to conduct "reviews" (the latest, Adair Turner, is now beavering away in Number 10): the NHS was created to serve a society where rationing was the norm and the state was viewed as the ideal engine for growth.

The rest of us have moved on. Labour's language may have changed, but when it comes to the nation's health, its mind is stuck in 1948.

Well there's a surprise. Asked by Gordon Brown to "identify the key factors which will determine the financial and other resources required to ensure the NHS can provide a publicly funded, comprehensive, high-quality service" Derek Wanless has done just that. What else was he going to say, since his terms of reference from Mr Brown specifically instructed him only to look at such a system?

The Chancellor has spent the past two days trumpeting Mr Wanless' report as conclusive proof that the NHS approach - exclusively taxpayer funded and state run - is the only sensible method. Mr Brown might care to look at another report which came out only hours before his own. The "World Health Report 2000 - Health systems: Improving performance", published by the OECD, has a rather different tale to tell, stressing the critical importance of a mixed economy of healthcare, with public provision being improved by working in tandem with additional private provision - exactly the sort of systems which work so well on the Continent, but which Mr Brown doesn't want us to dirty our minds thinking about.

The health debate is nothing if not ironic. Europhile Labour says we've got nothing to learn from those Continentals, whilst the Eurosceptic Tories go off on their Grand Tour and return with tales of wonder of how well the Europeans manage their affairs.

The facts of the matter are these. No one disputes that we need to spend more money on health care. On the latest figures, health spending in Britain will rise to 7.6 per cent of GDP by 2003-4, compared with an EU average of 8.9 per cent But in terms of state spending, we spend almost the same (about 0.1 per cent of GDP less) than our neighbours. Almost all of that 1.3 per cent gap in total health spending is made up of the money which they spend in addition to tax.

So this is the real question: should we do what they don't, and close that gap by increasing taxes to pay for spending ever-greater amounts of public money; or is there a better way to fund - and run - our health system?

Hypothecation, which is fast becoming flavour of the month, is a red herring. If we're talking about the most sensible type of health system, arguments about a political device designed to get the public to pay more taxes miss the point. The issue isn't how to find ways of making tax acceptable, it's whether relying solely on tax funding is the best approach.

The Government's stated aim is to make the NHS more responsive to consumers. Hurrah. But there can't be many people who seriously think that the most efficient, most convincing way to do that is by strengthening a public-sector monopoly. And that leads on to the other main difference between the NHS and other European systems. The reason why they aren't exclusively tax funded is because they aren't state-run systems.

There are characteristics common to all the most successful systems.

First, there is a large measure of taxpayer funding. No one seriously proposes ending it. Accusing anyone who points to European models of wanting "privatisation" might score some cheap debating points, but it's nonsense. Even in the US, often cited as the most lunatic free market model, 45 per cent of healthcare is tax funded.

What make other systems different - and vastly more successful at delivering healthcare - are the final two common threads. First, there is a much larger degree of private, non-tax, non-compulsory insurance spending than in the UK. And second, but in reality the same point, instead of a state monopoly, the NHS, there is competition between providers - some state, some private, some profit making, some not-for-profit.

Most European systems are based not on paying taxes into a vast pool to the government, which then decides how your money is spent, but on "social insurance", in which compulsory contributions (effectively tax) go to independent sickness funds which are directly responsible and accountable to you, the payer. Depending on the country, there is a greater or lesser degree of choice as to which fund you join. Switzerland, for instance, has a system of competing insurers with an almost totally free choice. Far from this meaning the poor suffer, Switzerland has far better health outcomes than we have, despite (ignore the mythology of Switzerland) a greater proportion of poor amongst the population; and the concept of waiting lists is unknown. If your premium exceeds between 8-10 per cent of taxable income you are entitled to a subsidy from the state.

In Ireland, where one can opt for private cover, there is an equally successful method of guaranteeing good treatment for the poor. Insurers have to offer "open enrolment" where anyone can join a scheme, regardless of pre-existing conditions, with lifelong cover so that, as people grow older and pose a greater cost threat to the system, they are not cut off. Risks are spread among pools of insured people so that premiums for individuals are not unaffordable. And insurers in Ireland have to offer a minimum level of benefits to ensure that private patients are no worse off than the NHS patients.

In the same vein, Germany is steadily increasing the degree of choice of sickness fund available to patients, but to prevent cherry picking by the funds it has introduced a risk-adjustment formula to make those funds with healthier members transfer revenues to those with a greater share of more costly members.

In July, I fell and broke my wrist in France. Within 10 minutes of arrival at a busy A&E room, I was being treated. I was out within an hour - and was offered a CT scan on the spot, for which my British surgeon told me there was so long a wait at home that I would not have been able to have one before the bone set weeks later. I'm not the first patient to come back with such tales and now, thanks to a European Court of Justice ruling, I won't be the last. In July, having had his hand forced by the ECJ, Alan Milburn agreed to let patients be treated abroad.

We are now living through a controlled experiment. For the first time, the NHS is getting the money its defenders have always said it needed to work (although they are already saying it needs more). Is there anyone who really thinks that in two years time, when the extra £19bn from last year's Comprehensive Spending Review has been spent, anyone will notice a real change for the better? What they will begin to notice is patients coming back from treatment on the Continent and wondering this: if they can do it there, why can't we do it here?

Four days before Tony Blair appeared on Breakfast with Frost in January last year, and revealed a one third increase in spending on the NHS, I had been talking with one of the tiny number of people who can genuinely claim to be one of his closest confidants. The government was in the middle of a battering over the latest NHS 'winter crisis'. Headlines such as "Elderly patients left starving to death in NHS", "Consultants fear crisis over NHS bed shortage" and "Flu cases soar" were appearing daily.
Before turning to journalism, I had a background in health policy and advising the Labour Party. "What if we were to increase the NHS budget by a third; would that do the trick?" my companion had asked me. I wondered what 'trick' meant - dampening down the NHS as an issue, or genuinely improving the system? "Won't it do both?", came the reply.
I could, I suppose, have launched into a detailed explanation as to why simply throwing money at the problem was not the answer. But to be honest, I was sick and tired of trying. For years, when Labour was in opposition, I had been trying to persuade its senior figures that the problems with the NHS weren't 'Tory cuts' (there weren't any - only annual increases in spending), the internal market or bureaucracy (managers make up just 2% of the NHS' workforce - if anything it is under-managed) or sundry other explanations. The problem was fundamental: the NHS - any exclusively tax funded, monopoly provider of health care - is incapable of delivering what the public wants from it.
But try telling that to a member of the Labour Party and you soon begin to learn the meaning of the phrase 'banging your head against a brick wall'. There is no need to recite once more the NHS' litany of failure; there can be few of us who still don't know that on almost any measure of acceptability, from cancer survival rates to hospital cleanliness, the NHS forces us to accept conditions which would shame any of our neighbours. In a report for the World Health Organisation published earlier this month, the NHS came 24th, behind such giants as Andorra and Malta, as well, of course, as almost all our European neighbours. And Switzerland, which has a fully private system of competing insurers, beats the NHS hands down in its treatment of the poor.
Nigel Lawson once referred to the NHS as 'the English religion'. It is not merely a religion to the Labour Party; its principles are a catechism. That is Labour's fundamental problem when it comes to dealing with the NHS: it regards anyone who questions the ability of the NHS to do the job required of it as a blasphemer. Cold, hard facts are thus dismissed. By definition, anyone who questions the success of the NHS is right wing and so, of course, their arguments are unworthy.
To understand why Labour Party members are so dogmatic in their attitude to the NHS, think about the effect of having had to renounce almost everything in which they believed. Of all of their core beliefs, perhaps the two deepest attachments were to comprehensive schooling and the NHS, the two most perfect examples of socialism in action. It was bad enough to have to acquiesce in the government's rejection of the 'bog standard' comprehensive; to be forced to confront the failure of the NHS would be just too much.
Not that there is any real parallel. The chief force behind the critique of comprehensives was Mr Blair himself. In this, as in so many other areas, the Prime Minister has had to force his will on a resistant party. Although Mr Blair has been behind attempts to work with private hospitals - and faces severe political problems in getting his plans through - these are precisely the opposite of an attempt to destroy the NHS, as the unions would have it. The reforms are designed to save the NHS, not to scrap it, by supposedly making it more efficient and taking advantage of the benefits of private sector efficiency. The patient, in theory, should notice no difference other than a better service.
But private sector involvement is an irrelevance. There is nothing in the NHS Plan, the hymn book of Labour's NHS reforms, which will make the slightest difference to the fundamental problems. The NHS was conceived in 1948 in a society where open rationing was the norm, where doctors were regarded as awesome figures, and where the population felt grateful for anything it was given. We live in a different world today. In almost every other walk of life we are assertive consumers who regard the money we pay for a service as giving us a right to a say in, and control over, that service.
Even the logic behind the NHS' funding method is now flawed. In 1971, 13 per cent of the population were over 65, and 900,000 people over 85; by 2041, 25 per cent of us will be over 65, with 3 million over 85. Thus, at the very time when the costs of looking after so many more elderly are rising, so the proportion of the population of working - and so tax paying - age is shrinking.
It is not all doom and gloom. Although the government is effectively throwing away the extra £19 billion in NHS funding over the next three years, it is best to look at this as a controlled experiment. For the first time, the NHS is receiving the funding that its defenders have always said it needed. Instead of its 1997 tactic of dampening down expectations, Labour spent the last election building them sky-high. But is there anyone who genuinely believes that by the time of the next election we will have an NHS which works as we need it to? If it does, wonderful. If not, we will at last be able to say for certain that the problem is not money but the NHS itself.
Because despite the mythology, state spending on healthcare in Britain is much as it is on the continent. In 1998, the last year for which there are figures, the Netherlands spent 8.7 per cent of GDP on health, Italy 8.2%, Austria 8% and the UK just 6.8%. But those figures represent state and private spending; in state spending alone, the Netherlands spent 6%, Italy 5.5%, Austria 5.8% and the UK 5.7%. The difference is that our neighbours both spend more money as individuals rather than through the state, and that they do not provide health care through a state monopoly but through a mixture of competing insurance schemes. They manage both to bring more money into healthcare, and to spend it more efficiently.
Last month I proved to myself that the French system works. I fell and broke my arm and wrist. Within ten minutes of arrival at a busy city hospital I was being x-rayed; within twenty minutes of that I was with the consultant. If producing a satisfactory health care system was a problem beyond the wit of man then the continued existence of an NHS might be defensible. But it isn't. We only need to cross the Channel.

HThey say nothing beats a dose of practical experience. The 50 West Sussex NHS patients who are being sent to Germany for hip- and knee-replacement surgery are about to find out for themselves just how Third World our own healthcare system is, and how much better our continental neighbours are able to run things.

When they return they will doubtless have tales of wonder to tell - of clean hospitals, appointments and surgery carried out at the promised time and without delays, of staff who aren't hassled to within a breath of exhaustion and of a system which seems able to take any demands in its stride. They will most likely bore their friends rigid with their discovery; I know that's what I've been doing since I was treated last week in France.

In typical silly season fashion, the reaction to the news that other health authorities are also considering sending patients abroad for treatment has been to bark up completely the wrong tree. If, as the Government made clear in its Concordat with the private sector last year, it is sensible for NHS patients to be treated in British private hospitals that have spare capacity then, surely, it is just as sensible for them to be sent abroad to take advantage of the same thing. But it's not the rights and wrongs of being treated abroad that we should be spending our time on; it's asking why, in the first place, every one of European neighbours is able to put together a healthcare system that works, which treats its patients efficiently and with dignity - and why we can't. As they all prove, it ain't rocket science.

For years I have run my own cottage industry, lecturing on the respective merits and drawbacks of different countries' health systems. But until last week my knowledge has been entirely theoretical. I've never before had any direct experience.

Last Tuesday, I was changing trains at St Gervais, en route to Annecy, when I tripped on the steps getting off the train and went flying. Fearing that my head was about to smash onto the ground I put out my wrist to break my fall. One arm broken. One wrist broken in two places. Remember Dave Busst, the Coventry City player whose leg snapped at 90 degrees a few years ago? That was my wrist. I was in the middle of nowhere, so I somehow clambered on to the train. After an agonizing hour-and-a-half journey I made it to Annecy.

Since I had a seven-hour wait the last time I needed to go to an A&E unit, a few years ago, I was not expecting what was to happen to me. Back then, I had stabbed my hand with some glass, was bleeding profusely and repeatedly fainting but, even though the ward was not all that busy, still it had taken seven hours for me to be treated. But that, of course, was in Britain.

Last week I wasn't bleeding, I had stopped fainting on the train, and the ward, in the only hospital for miles around, was packed. So, even though I have made part of my living describing how amazing is the speed and clinical efficiency of the French system, I nonetheless assumed I was in for a good few hours waiting.

But the French system is everything I have always been told it is. Within 10 minutes of my arrival at the hospital I was being X-rayed. Within 20 minutes of that I was being examined by the consultant (who I have subsequently discovered is one of the world's leading shoulder surgeons). The break - a multiple fracture - was bad and I needed a CT scan to determine the extent, and then an operation. I could have them there and then, or go home if I felt more comfortable.

Fool that I am, I opted to come home. Back in Britain, even going private, I have only just, as I write, managed to have a CT scan - six days after the event, after it was offered to me on the spot in Annecy. When I asked my British surgeon how long the wait would be on the NHS, he laughed. "No wait at all. Since it would take weeks, and we have to operate in days, we just wouldn't give you a scan."

There's no magic secret that the French, the Germans, the Dutch, indeed everyone else except us has. Those countries just understand that the state is about the least capable organisation to provide healthcare, and that competition (la mÈdicine libÈrale - the freedom to choose between providers - as the French call it) is as important a factor in driving up standards and keeping costs down in healthcare as it is in any other walk of life. In France, compulsory health insurance (around 20 per cent of pay) covers 99 per cent of the population. Patients pay up front for their care and are then re-imbursed in part (the amount determined by various factors). As not everything is included in the insurance (it excludes, for example, visits to dentists and opticians) some 80 per cent of the French population spend a further 2.5 per cent of their pay on voluntary mutual funds.

The competition means that costs to the patient are kept low. My X-rays cost 236 francs, my treatment 286 francs. Here they would be at least four times that. Cataract surgery, costing up to £3,000 here, costs £1,000 in France. Hip replacements are £2,000 less expensive. Varicose vein surgery and hysterectomies are about half the cost. Heart bypass operations are a third cheaper.

According to one recent survey, there were 74 patients who had been waiting six months or more for bypass surgery in East Kent at the end of 2000. In France, the average wait for the same operation is two days. And while there is a two-year wait for a hip or knee replacement in Britain, two weeks is excessive in France.

Why the idea of private provision of healthcare should be so controversial in Britain is a mystery to anyone who has looked at the continental systems - let alone been treated in them. Just as we look in wonderment at what they consider normal, so they consider us to be living in the Third World. As my French surgeon put it to me: "Don't they realise Stalin is dead?"

Forget Africa; Europe is the continent where drug-price regulation threatens to shrink the supply of new cures.
Investors and executives - and the governments responsible - need to take a hard look at the market distortions which are steadily undermining the economic rationale behind research and development and retarding the inward investment in Europe by major pharmaceutical companies.
Europe, both within and without the EU, comprises one of the world's largest markets for pharmaceuticals. It is hardly surprising that they base much of their research in Europe-Pfizer, for instance, is the second largest inward investor in the U.K, behind Ford.
The heralded expansion of the EU, and thus of the European market, should see ever greater investment by drug makers.
Yet, within the EU, the delays between new medicines being authorized for use and their being made available to patients are now so great that, far from increasing their involvement and commitment to Europe, the pharmaceutical companies are now questioning what sort of future role they ought to plan for. The situation is nearing a crisis point.
Both the consumer and the supplier are on the same side: The patient clearly needs access to the most innovative and effective medicines, just the pharmaceutical companies need an efficient market to generate earnings to pay for past research and invest in promising new treatments.
There are two immediate causes behind this "drug lag." First, individual countries have different methods and time-scales for reaching their own decisions about the safety and efficiency of new medicines. Secondly, the time taken to agree either the price at which a drug may be sold or the level of re-imbursement varies from country to country.
The deeper cause, however, is not this understandable and in some ways important national retention of a decision-making power; it is a much more straightforward, and grubbier, cause: cost containment.
In 1995, new procedures were introduced to do two things: strengthen the role of "mutual recognition", by which companies with permission to market their drug in one country could apply for this to be acknowledged across the EU; and introduce a complementary, formal structure under which a drug could be approved centrally with so-called "Community Marketing Authorization" for use across the EU by the European Medicines Evaluation Agency, based in London. According to the EU directives, mutual recognition status should take no longer than 90 days beyond the date of application, and pricing and reimbursement no longer than another 180 days.
These new arrangements can hardly be described as a blinding success. The most extensive study of delays in access to new medicines was published in 2000 by Europe Economics, an international consulting organization. Looking at the varying methods of approval - both the new arrangements and the existing separate national approval system - the analysts found astonishing variations within an overall picture of heavy delays. Among those drugs sent for approval at national level, patients in the countries with the longest delays finally got access to new drugs four years after patients in the quickest countries. The worst countries were France, Greece and Portugal, with Belgium, Germany and Austria not far behind.
Europe Economics then looked at all 24 of the medicines sent for the new system of central approval between 1995 and 1997. Delays between approval being granted and their appearance at pharmacies were longest in Portugal (nearly two years), Italy (twenty months) and Spain (eighteen months), with significant delays also in Greece, Belgium, France and Ireland of almost eighteen months. 20 of the 24 drugs were not on the market in Portugal by the time the survey stopped at the end of 1998. Even in Germany, with a relatively good record, 6 of the 24 were still unavailable. Belgium, Greece and Portugal were the countries with the worst delays in patient access for those medicines approved under the new mutual recognition procedure. Europe Economics only examined seven countries' records here, but in every one of them the delay far outstripped the 90 days permitted in the regulation.
The leading cause of this crisis is hardly a revelation: cost containment. An array of highly pointed and effective cost containment measures are becoming increasingly successful at limiting pharmaceutical spending within EU Member States. As a result, just 15% of patients in Germany and the UK receive the latest, most effective and safer COX2 pharmaceuticals for their pain and arthritis - compared with over 50% in the US. The same trend is true in cardiovascular medicine, where so high are the hurdles for reimbursement (in Italy and Belgium the threshold is a cholesteral level of about 290, plus proof of family history of heart disease, even though established medical opinion holds that 190 is the appropriate level) that the most innovative and effective lipid-lowering therapy is only available to heart attack sufferers.
Even in countries which once had a relatively good story to tell, cost-containment is now beginning to undermine patient access: the British government's establishment of the National Institute for Clinical Effectiveness is a thinly-veiled device for restricting patient access.
Europe is beginning to be merely an afterthought for pharma companies. Several, for example, are launching superstatins-new versions of drugs to lower cholesterol levels-in the U.S. In Europe, we do not even have widespread use to first-generation statins.
Cost-containment can be self-defeating. While many new drugs are indeed expensive, these pharmaceuticals often take the place of ever-more costly therapies. In most cases, it is simply cheaper to give someone a pill than to put them under the scalpel. Many also save many times their own cost by cutting out the need for hospital or other lengthy and expensive treatments. The treatment of ulcers is a perfect example. Until the last decade, the only cure was thought to be expensive hospitalization and surgery, bed rest, the prescription of special bland foods and, in more recent years, antacids and medications that blocked acid production. The treatment was expensive and ineffective, with a high recurrence rate. The discovery that the bacterium Helicobacter pylori is a major cause of ulcers has transformed treatment, with a combination of an antibiotic, such as Tetracycline, Metronidazole or Biaxin, and an acid-blocker, such as omeprazole or Pepto Bismol, proving effective in 80 to 90 percent of cases. But supposed cost-containment prohibits the use of some of these treatments in some public sectors, meaning that less effective and globally more expensive hospital treatments are still sometimes persisted with. Governmental behaviour in the particular example of ulcer treatment is also true for the pharmaceutical industry as a whole: long term benefit is being sacrificed for short term cost savings.

Here's a surprise: the trade unions, and much of the Labour Party, are kicking up a fuss over Labour's plans to extend the involvement of the private sector in the running of the NHS. So we've started to hear the 'P word': Unison, the public sector union, has been screaming 'Back door privatisation', with David Hinchcliffe, Labour Chairman of the Health Select Committee falling in behind.
But privatisation it ain't. Labour's policy amounts to nothing more than pouring in as much money as possible, fiddling around with the management structures and hoping that everything comes right. Contracting out the supply of some NHS services may be a bold step for Labour, given the party's previous ideological opposition to private healthcare organizations, but in reality it is simply an attempt to make the existing NHS work a bit more efficiently.
Nothing the party has said begins to deal with the fundamental problems. The truth is that neither Labour nor the Conservatives have anything worthwhile to offer on healthcare, just their own combinations of distortion, visits to cloud cuckoo land and wishful thinking.
The real problem is that the NHS is broken and can't be fixed. On some measures - heart disease and cancer to take just two of the most obvious - we have third world health provision.
Ever since the NHS' creation in 1948, health economists have argued that it is underfunded, and that if only it was given more money it could do the job expected of it: providing "a comprehensive service covering every branch of medical and allied activity", free to all at the point of use and to the highest possible standard, as the original White Paper put it in 1944. At no point has it succeeded in that aim, but in recent years it has fallen further and further behind.
The cause is not money. In all but two of its 53 years, its funding has risen in real terms. However many times the figures are given, it seems few people are prepared to look at them. The UK spends 6.8% of GDP on healthcare, compared with an EU average of almost 9%. Case proven, you might think - an underspend of over 2%. No wonder the NHS is in such straits. Except that the figures are more complicated than that. The amount we spend on state-provided healthcare is much the same as in the rest of the EU; the UK figure is less than half a percent below the EU average. The difference is made up in private spending, where our figure is tiny.
The NHS is simply not underfunded compared with the other European systems. And yet on almost any measure of success, the NHS disappoints.
Three new factors have all fed off each other to undermine for good the foundations of the NHS. Demographic change means not only that the tax base is shrinking but also that the demands placed upon the NHS are ever greater. In 1971 just 13 % of the population was over 65; by 2005 it will be a sixth and in 2041 a quarter. The cost of constantly developing and improving medical technologies puts ever greater pressure on centrally controlled and funded budgets. And, in some ways the most important of all, the rise since the 1970s of a new and strident consumerism means that the public is no longer prepared to put up with failure just because it likes the ideological cuddliness of the NHS.
If you are looking for an example of financial mismanagement on a colossal scale, forget about the Dome. The government is preparing to throw an extra £19 billion away over the next four years stuffing the NHS with extra cash - like trying to run a bath with the plug out. Is there anyone who really thinks that by the end of the four year spending bonanza the NHS will be working as we would like it? Just, it seems, the Liberals, who want to spend even more on it than Labour - and without even the efficiency savings of contracting some services out to private providers.
The Conservatives at least understand that the problem is not a lack of state spending, and point to the need for more private spending. But their ill-thought through ideas are such a caricature of selfish conservatism
that they threaten to put back the cause of reform by years. Conservative policy amounts to saying that anyone who can afford private insurance should take it out, and they will be helped with tax breaks. So those who are already able to escape the worst of the NHS' problems will have life made a little easier for them. As for the rest, they can go hang.
If the Conservatives had been canny, they would have focused on the 2005 election by which time it will be apparent that, despite the extra money, little has changed. And so they would have used this election to begin leading a debate on alternatives to the NHS. They'd take a hit this time around - as yesterday's Independent survey showed, four out of five voters oppose Labour's ideas, let alone bolder reform. But the gains next time round of 'We told you so' would be enormous.
It's not as if providing an adequate, functioning health care system is beyond the wit of man. We only need cross the Channel. There, a variety of different systems work to varying degrees of success, involving a mix of state funding, a choice of competing private providers and extra private spending where affordable. No one system can work everywhere and, given British traditions the most sensible model would probably involve a core package funded, like the NHS, out of taxation but supplied by a variety of competing providers, with extra services funded by private spending.
Forget about what's on offer this time around. We need to move on.

Britain's state medical program, the National Health Service, is held in such esteem by so many Britons that former chancellor Nigel Lawson once dubbed it "the English religion." Increasingly, however, it is becoming clear that it does require a profession of faith to believe that the NHS functions properly. Lines are long, and when you do get a hospital bed you risk dying through negligence. This would be great fodder for an opposition party preparing for elections. Alas, the opposition party in this election year is the Conservative party.
One of the iron rules of British politics is that whenever the subject of the NHS comes up, Tories keep quiet. Whatever they do, whatever they say, whatever they spend, the electorate is convinced that all Conservatives really want to do is close the NHS down.
Whatever Labour does, on the other hand-no matter how bad the state of the service-the public knows in its heart that Labour only wants the best for the NHS. That means that, even when the Conservatives have something to say, they don't say it. But even worse, it means that what they do say-they do, after all, have an election campaign to get through-is often worse than useless.
But by remaining on the defensive, the Conservatives not only give themselves a self-induced handicap; they also end up, in a self-fulfilling prophecy, guaranteeing that very poor public impression that they were so desperate to avoid in the first place. Even worse, the absence of a democratic debate is hurting the NHS itself.
A prime example is the current state of the debate on healthcare as Britain approaches an election. In every one of its 18 years of government, the Conservative Party increased spending on the NHS in real terms. Labour's response to this largesse was to allege that the country had only a few "hours to save the NHS,"-which would, of course, be accomplised by voting in Labour. Now, after almost four years of Labour government, the NHS is widely recognized-certainly by voters, as every poll shows-as being in a worse state than it was under the Conservatives.
Labour's response in last July's Comprehensive Spending Review was to pledge to spend add more than £5 billion to its already enormous spending plans over the next four years. When Prime Minister Tony Blair first revealed this extra spending, he pointed out that health spending as a proportion of GDP in Britain is below the EU average. Although the figure is constantly shifting, the EU average stands at almost 9% of GDP, while the UK spends only 6.8% of GDP (the US, dwarfing all EU members, spends over 14%). The pledge-or "aspiration," as it later became-was to increase UK spending on healthcare to the EU average.
But there really are lies, damned lies and statistics, as XXX GLADSTONE??? said. It is quite true that total British state spending is some 2% of GDP less than that across the rest of the EU. But almost all of that difference is made up by private spending. In terms of money spent on healthcare by the state, Britain spends only a tiny amount less than the EU average HOW MUCH???. The crucial difference-and this is not merely a statistical argument; it goes to the heart of the problems with health care delivery in the UK-is that almost all health care in Britain is delivered by the state, through the NHS.
Across the rest of the EU, however, patients are able to make use of private provision and to contribute not just through their taxes but through additional private spending (HOW'S THIS DIFFERENT IN THE UK??? PEOPLE CAN GET PRIVATE CARE IN THE UK TOO IF THEY WANT, RIGHT??). To give the Conservatives due credit, they cottoned on to this fallacy in Labour's argument straight away. The Conservative health spokesman, Dr. Liam Fox, a former NHS doctor, immediately decided that this was where Labour was vulnerable. It was aiming at an extremely misleading figure for average spending across the EU, and intending to make up the private spending gap through extra public spending.
But then the Conservatives' instinctive caution on saying anything to do with the NHS took over. Dr. Fox could have used the government's confusion over the real meaning of the EU average spending figures to open the door for a fundamental rethink of health policy and a debate on whether or not the NHS remains the most appropriate vehicle for the delivery of healthcare today. Instead, Dr. Fox chose the single worst option open to him.
You can imagine his thought processes. Given the Conservatives' unpopularity over the NHS, the last thing he must have considered doing was arguing that the NHS was indeed fundamentally broken. That, he must have thought, would only confirm the public's view of his party as hated opponents of the NHS. So how best to use the government's confusion? Well, since the real message of the figures is that other countries spend more private money on healthcare, why not simply advocate that? Bingo!
That, in one sentence, became Conservative health policy: persuade as many people as possible to take out private health insurance and offer tax breaks to those that do. You can see the attraction and the logic of it. But you can also see just how wrong headed, and self-defeating, it became as a policy.
If anything was designed to confirm the public's view of Conservative attitudes, it is a health policy offering tax breaks to those already better off. It was seen as a policy designed only to-in that phrase which says so much about why the British have put up with the creaking NHS for so long-queue jump. Nothing could also be more damaging to the cause of healthcare reform in the UK, making it appear as if the only role for private provision is to make life a little better for the wealthy.
What Dr. Fox should have done was to ask why the British spend so much less on non-state funded healthcare. The reason is simple. It is because the NHS is so different from the systems on the Continent. Other Europeans have a mixed economy of healthcare, with private providers working alongside state providers, with private funding joining together with public spending and with arrangements which draw on public and private approaches.
If Dr. Fox had been canny, he would have recognized that his party is not really campaigning for the 2001 election, but for the 2005 election, and that in three or four years' time it will be obvious to everyone that the government's extra billions have made precious little difference. The extra money will go down the drain.
After all, in all but two of the NHS' 52 years, its income has risen in real terms, and it has nonetheles never been able to cope. The country needs, Dr. Fox should have said, a "fundamental debate" on how to structure health care delivery in the most equitable and efficient manner.
So he could have prepared the ground for the Tories to reap the political rewards in by arguing today that the NHS is no longer able to cope with demands made on it. He could, in plain language, have put the Conservatives in a position to be able to say in 2005 "I told you so" and to reap the benefits of foresight. Yes, he would have had to endure jibes that such an approach was all that could be expected of a party opposed to the NHS in principle.
But he is suffering them today, with no possible gain, and certainly no long term strategic benefit. Instead, he has simply positioned the Conservatives as the party that really does seem to care only about helping the better off.