Gwyn Bevan of the LSE reflects on devolution and the NHS in his contribution to the devolution at twenty series.

What is the most effective way of governing a national health service? Devolution to countries in the UK, and the federal arrangements for the 21 regions in Italy, means we have two ‘natural experiments’ for researchers to undertake comparative analyses to examine how differences that have emerged have impacted on performance. But, there is a vital difference between the different constitutional arrangements. Evaluation in Italy can use data from each region to make comparisons because each is required by the central government to collect and report data on performance across a defined set of indicators following consistent definitions. In the UK, since the start of devolution, governments have changed definitions so basic data are not directly comparable: a recent study found that differences between countries in definition and measurement means there are no sound comparison, e.g.  for hospitals for such basic measures as staff, activity (and hence productivity) and waiting times. It looks as if governments in the UK are keen to undermine such evaluations because they would also enable their electorates to hold each government to account for its policies, and can do so, as the UK lacks any constitutional framework across its four systems of health care.

Since the 1990s, in the UK, and in the region of Lombardy in Italy, there are been attempts to improve the governance of health care from a model that assumes that all providers are ‘knights’ by quasi-markets in which ‘money follows the patient’. The promise of this model is that, as Professor Sir Julian Le Grand has argued, it both sanctions ‘knavish’ and rewards  ‘knightly’, behaviour by providers of health care. But, this model has failed to live up to that promise and has been found wanting by each government of the UK and the region of Lombardy. Professor Samuel Bowles argues that the fundamental weakness of applying market mechanisms to public servants is that they undermine ‘knightly’ behaviour. Dr Adam Oliver has proposed governance by reciprocal altruism, which has different processes for sanctioning ‘knavish’ and fostering  ‘knightly’ behaviour using ideas from behavioural economics of identity and reputation.

Governance by reciprocal altruism can foster  ‘knightly’ behaviour through celebrating high performance by ‘naming and faming’ in a process of collegial competitive benchmarking across a broad set of measures of performance. Evidence from Italy’s ‘natural experiment’ shows that the Performance Evaluation System developed by MesLab in Tuscany has delivered high performance there through a collegial system of competitive benchmarking, in which organisations can learn from each other, and celebrate high performance. Nine other regions have freely chosen to follow this approach in an Interregional Performance Evaluation System. Such benchmarking is likely to work best in jurisdictions with populations of about 3 to 5 million: hence could work in Scotland or Wales; but would be difficult in Northern Ireland, because it is small, and impossible for England as a whole, because it is too large.

But, without effective sanctions  for unacceptably poor performance, it will be hard to create the atmosphere required for the collegial competition that leads to high performance.   It is easier for large jurisdictions, such as England and Italy, to impose such sanctions by ‘naming and shaming’; with the sack as the ultimate sanction; and these governments have done so.  Evidence from the UK’s ‘natural experiment’ shows that the comparatively small devolved nations struggled to do so. Hence the constitutional arrangements for devolution in the UK suggest that England is best placed to impose sanctions on unacceptably poor performance, but not to foster high performance. And the devolved countries are too small to have effective sanctions for unacceptably poor performance, which is a prerequisite for competitive collegial benchmarking to foster high performance.  

For governance by reciprocal altruism to develop in the UK suggests the need for two radical changes in our constitutional arrangements. First, in England, recreating and devolving governance to regions subject to a system of central sanctions for unacceptably poor performance.  Second, coordinated development of consistent definitions of data and measures of performance to enable external comparisons of performance across English regions and the devolved countries of the UK against a defined set of standards. Without such changes, is each country of the UK condemned to governance with one hand clapping?

Gwyn Bevan is an Emeritus Professor of Policy Analysis at the London School of Economics & Political Science.

Photo by Adhy Savala on Unsplash