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Decentralising the NHS could be a game-changer for the UK’s future health

Decentralising the NHS could be a game-changer for the UK’s future health

The NHS is a highly centralised organisation. During the Covid crisis, policy decisions have been made at the top and then passed down.  There has been little scope for showing initiative at a local level.

This dates back to when the NHS was set up in the late 1940s. Central planning was very fashionable at the time.

Yet as many have pointed out, no other Western health service has seen fit to copy the particular organisational structure of the NHS. There is, to varying degrees, more devolution of authority and decisions.

In normal times, the problems arising from a centralised, command-and-control system have become apparent over the years. Cancer survival rates, for example, are routinely lower in the UK than in other European health systems.

In a crisis, however, many economists and business school theorists have argued that a highly centralised structure works best. Decisive and coordinated action is needed, and this may be done more effectively from the centre.

There is a rival school of academic thought which takes a completely different view.

When a major shock such as a financial crisis occurs, decision makers face a highly uncertain environment. Local managers in a firm, for example, can understand their specific circumstances much better than can those in central headquarters. They are therefore better placed to make good decisions.

A timely paper in the American Economic Association’s Applied Economics journal examines the performance of firms during the Great Recession of 2008/9.

Nicholas Bloom of Stanford, along with his colleagues, analyse two large micro data sets of decentralisation in firms across ten developed economies.

Their conclusion is unequivocal. Companies which delegated more power from the central headquarters to local plant managers before the Great Recession happened outperformed their centralised counterparts.

The enhanced value of specific local knowledge during a crisis, when uncertainty is high, is seen as a key reason for the finding.

In the context of Covid and the NHS, the effectiveness with which the vaccination programme is being carried out appears to contradict this view.  But this did not need specific localised knowledge. It required the large-scale mobilisation of resources to deliver a very clear target.

Against this success, we can set the myriad failures of Public Health England. Its ability even to perform the basic task of collecting accurate data on the number of new cases has been brought into question.

Certainly, some local authorities embody the central planning mentality even more than PHE. But many could have used their local information about outbreaks to act much faster if the powers had been devolved to them. Local public health inspectorates, for example, have a lot of experience of practical tracking and tracing.

With decentralisation, different authorities would initially have tried different approaches. We would have had a natural experiment, as it were, into what sorts of things really worked. Successful tactics could then have been copied more widely.

One of the key lessons from the Covid crisis is the need to devolve powers within the outdated system of central planning on which the NHS is currently based.

As published in City AM Wednesday 20th January 2021
Image: CC0 1.0 Covid Vaccination via Rawpixel
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Our tech advances are difficult for productivity stats to compute

Our tech advances are difficult for productivity stats to compute

One of the most depressing aspects of the decade of the 2010s, well before Covid-19 struck, was the apparently very slow growth in productivity.

This is not a mere ivory tower issue.  It is only through increasing productivity that rises in living standards can be sustained. Productivity is the key measure of the efficiency of the economy.

On an everyday level, the previous decade seems to have witnessed a surge in innovative ways of doing things. Companies like Amazon and Netflix make life easier, more enjoyable. Computing power has made dramatic advances. In the past few years, there have been major new developments in the science of artificial intelligence.

But hardly any of this seems to be reflected in the official statistics. Between 2010 and 2019, these show that productivity in America grew by only 0.6 per cent a year. In the UK, growth was even lower, at just 0.3 per cent a year.

An important paper by Stanford’s Erik Brynjolfsson, in the latest issue of the American Economic Journal, goes a long way to resolving this paradox.

The analysis is based on the concept of what is known in economics as a general purpose technology (GPT).

GPTs are technologies which have a large and pervasive impact on both the economy and society. The steam engine was the first, during the first Industrial Revolution in the late 18th and the first half of the 19th century. Electricity was another, around a hundred years later.

Such technologies are far more efficient than the competitors which they replace. In 1830, for example, the crack London to Edinburgh stagecoach took 39 hours. By the middle of the century, it had been driven out of business by the railways.

They revolutionise many aspects of life. Steam power enabled factories to be built. These in turn led to huge shifts in population from rural to urban areas.

Computers have had a major impact since around 1980. But as economics Nobel Laureate Bob Solow remarked, “one can see the computer age everywhere but in the productivity statistics”.

Brynjolfsson and colleagues argue that GPTs need a lot of complementary investment in order to realise their full impact.

Computers, for example, require firms to develop new business processes, develop the experience of management, retrain workers and the like.

The key point is that many of these investments are intangible and do not appear on the balance sheet. They are particularly difficult for national accounts statisticians to deal with when they estimate the size of an economy.

The authors estimate that productivity levels in the US were 15.7 per cent higher in 2017 than the official numbers suggest. This means that the size of the American economy has been potentially underestimated by some 3 trillion dollars.

A similar exercise has yet to be done for the UK. But we can reasonably expect it will boost the numbers by between £200 and 300 billion.

So we are, in another piece of good news for the New Year, much better off as a nation than the Office for National Statistics says we are.

As published in City AM Wednesday 13th January 2021
Image: Numbers via Pixabay
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Covid-19 has shown it is time to invest in Britain’s scientists

Covid-19 has shown it is time to invest in Britain’s scientists

Let’s start the New Year with a very positive point.

The speed of scientific innovation seems to be accelerating sharply. And it is innovation which ultimately drives our health, wealth and well-being.

The types of problems which have previously taken years or even decades to solve are being cracked in record times.

The development of the vaccines is of course a tremendous scientific achievement. It is the one unequivocally Good Thing to come out of the Covid crisis.

The typical time scale from the initial idea to developing a successful drug has been around ten years. Yet the vaccines were created and licensed for use in less than ten months.

But 2020 saw an advance in science which is even more exciting and important.

Artificial intelligence (AI) has been getting a bad press lately. Stories proliferate of how “algorithms” have led to bad decisions. The fiasco over the A-level results in August for example.

It has streams of Luddite detractors at a more intellectual level. They assert, for example, that it can never really think like a human.

The Deep Mind team at Google are famous, in some circles at least, for having created AI algorithms which can wipe the floor with human world champions at both chess and Go. The game of Go is so complex that in comparison chess looks easy.

So what, many may feel. These are only games.

But at the end of last year, the team announced that AI had solved one of the great challenges of biology.

Their algorithm AlphaFold can predict how proteins fold from a chain of amino acids into 3D shapes that carry out life’s tasks.

Human researchers have made some progress in this area. But it has been slow, and many attempts have failed. Structures have been solved for only about 170,000 of the more than 200 million proteins discovered across life forms.

All very techie and incomprehensible to most of us. But tremendously important.

Science is one of the two top scientific journals in the world. The tone of its pieces is usually measured and guarded. The journal is certainly not given to hyperbole. But in Science, leading biologists have described the achievement as “fantastic” and one which will “change the future of structural biology”.

AlphaFold has not quite solved the problem completely, but it has advanced the science of this topic by decades.

In practical terms, it could, for example, enable drug designers to work out the structure of every protein in new and dangerous pathogens like SARS-CoV-2. This is a key step in the hunt for molecules to block them.

Crucially, the team has agreed to reveal sufficient details of AlphaFold for other research groups to re-create it. No wonder that biologists are excited.

Both the Astra Zeneca vaccine and AlphaFold are a particular triumph for Britain.

The Astra-Zeneca vaccine was developed in conjunction with Oxford University, and Deep Mind was acquired by Google from the computer science department at UCL.

The government must devote more resources to the world beating scientists in our top universities.

As published in City AM Wednesday 6th January 2021
Image: Laboratory by Belova59 via Pixabay 
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The Government scientists’ credibility is shot to pieces

The Government scientists’ credibility is shot to pieces

Imagine.  No, not the silly childish song by John Lennon.  Imagine there were no vaccines available.  What would Matt Hancock, the Secretary of State for Health, do?

He might ask people to pay more attention to the scientific advice.

But the plain fact is that the credibility of Chris Whitty, the chief medical officer, and Sir Patrick Vallance, the chief science officer, is shot to pieces.

They have cried wolf too many times and issued too many Project Fear-type projections for people to have any confidence in their pronouncements.

Without a vaccine, the government would have been forced to confront the single most damaging and destructive aspect of the whole pandemic.

Namely, the apparent inability of the ranks of epidemiologists and government scientists to understand the crucial need to alter behaviour, rather than to rely on lockdowns.

Lockdowns can only work in certain rather extreme circumstances.

They need to be harsh. They need to last for a couple of months. The country needs to seal its borders. And there needs to be a willingness to comply.

So-called “firebreak” lockdowns of a couple of weeks duration cannot work at all.

On average, Covid victims are infected for a couple of weeks. When a lockdown is imposed, many of  those infected at the time will be free of the disease when it ends. But not all. A small percentage will remain infectious.

More importantly, on day one of lockdown, other people will become infected, and still more on each subsequent day.  So a pool of infected people will emerge from lockdown, and the epidemic will spike up again.

Such is the deranged obsession with lockdowns that not only has the Labour leader, Sir Kier Starmer, been a strong enthusiast for firebreaks, they have been implemented in Wales and Northern Ireland.

But as a matter of simple logic, not opinion, they cannot work.

The same logic applies to all but the most rigorous and lengthy lockdowns.  Unless there is a fundamental shift in behaviour, the virus will simply spread again once lockdown is lifted.

A policy of successive lockdowns may very well change behaviour.  But for the worse.  With each one, the willingness to comply is reduced.

This is exactly what has been happening in the working class areas of the UK – the central belt in Scotland, the old mining valleys in Wales, whole swathes of the North and the East End plus its Essex and Kent extensions.

It is in these areas that infection rates have gone through the roof, even when lockdowns were in place. It is not that the rules were insufficiently strict. It is that people have paid less and less attention to them.

Government scientists appear to have no idea about life in these areas.  It is not an easy one.

People get a lot of pleasure from socialising with friends and family, who typically live close by. The longer the restrictions last, the greater the incentive to ignore them.

Imagine we had epidemiologists and health bureaucrats who understood that behaviour must change if a virus is to be contained.

Imagine we had politicians who were not in thrall to pseudo-science. At Christmas, is this too much to imagine?

As published in City AM Wednesday 24th December 2020
Image: Lockdown in Glasgow by Jxseph14 via Wikimedia  CC BY-SA 4.0
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Economics has a lesson for Remainers and lockdown-lovers who refuse to let facts change their minds

Economics has a lesson for Remainers and lockdown-lovers who refuse to let facts change their minds

Christmas is a time to be charitable.

So let’s spare a thought for those who fought against the referendum result.

Unlike the great unwashed, who simply didn’t understand the issues they were voting on, they had all been expensively educated at the right sort of schools and universities.

From the time the vote took place in 2016 right up until the day of Boris Johnson’s decisive victory in the election a year ago, a ruthless campaign was waged to nullify the vote.

How smart do they look now, all those Amber Rudds, Dominic Grieves, Gina Millers and Jo Swinsons?

They could have accepted the result and voted through one of the many versions of a deal proposed by Theresa May. Most of these involved a close and ongoing alignment with the EU.

Instead, they will end up with an arrangement which is the stuff of their nightmares.

Spare a thought, too, at this festive time for the hapless first minister of Wales, Mark Drakeford.

Towards the end of October, he placed Wales in a short “fire-break” lockdown to try to reduce its high infection rate. Sections of supermarkets were cordoned off by government diktat because they sold “non-essential”  items.

The seven-day moving average of daily new cases did indeed fall in Wales from around 300 per 100,000 to well under 200. But within a month of lifting the fire-break, it had risen even higher, to some 350. In the old mining valleys of South Wales, the new case rate is now 600 and rising.

Drakeford did what any self-respecting Corbynite would. He blamed the electorate.

On 10 December, speaking on BBC Breakfast, he remarked: “Not everybody has been willing to abide by the restrictions that are still necessary. We have seen people having house parties, people inviting large numbers of people back to their own houses when that is absolutely not allowed within our rules.”

His words recall the leaflets put out by the old East German Communist government in June 1953, after the workers’ uprising had been brutally suppressed by Soviet tanks. The people, they declared, had forfeited the confidence of the government. It could only be regained by “increased work quotas”.

The Welsh government followed the advice of experts in epidemiology, for whom no lockdown appears to be sufficiently strict.

But these experts did not anticipate that lockdown would make ordinary people less, rather than more, likely to behave in ways the experts deem appropriate.

These two vignettes — lockdown and the anti-Brexit movement — illustrate fundamental principles expounded by Friedrich Hayek and Herbert Simon, both Nobel laureates in economics.

They stressed the need to recognise the highly tentative, uncertain and experimental nature of successful decision-making. It is an evolutionary process, rather than one which can be optimised.

Good policy proceeds by trial and error. Rather than try and find the best possible solution — such as overturning the Brexit result — choose one which seems reasonably satisfactory.

Another key point is that failures need to be abandoned quickly. Lockdowns no longer seem to work, but experts continue to be fixated by them.

The works of Hayek and Simon should fill the stockings of Remainers and epidemiologists alike this Christmas.

As published in City AM Wednesday 16th December 2020
Image: EU flag mask by Ivan Bandura via Wikimedia CC BY 3.0
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Hurrah for a vaccine — but was lockdown actually worth it?

Hurrah for a vaccine — but was lockdown actually worth it?

The development of the vaccines has changed many things.

It has even influenced the opinion of the Prince of Lockdown himself, health secretary Matt Hancock. Life, he pronounced at the weekend, would be back to normal by the spring and the “blasted regulations” abolished.

But one thing has remained constant: the government’s continued refusal to publish a proper cost-benefit analysis of lockdowns.

A perfectly standard methodology exists to do this. It is used not just by our own National Institute for Health Care and Excellence (NICE), but across the western world.

In essence, this involves placing a monetary value on a human life.

Many may see this as a sinister and macabre thing to even ask. But it is, regrettably, something which has to be done.

To illustrate this, imagine a purely hypothetical scenario. Two people suffer from a very rare disease from which they will die within a month. Only one dose of the cure exists, but it is guaranteed to save the life of whichever gets it. One of the patients is 100, and the other is an otherwise healthy 20-year-old.

Who should get the medicine? For most, this choice would be obvious.

This is the quandary in its most basic and understandable form. Of course, people in health systems have to make much more complex decisions on which drugs should be bought and how many people can get a particular treatment all the time.

The key concept is what is known in the jargon as “quality-adjusted life years” (QALYs). Analysts then consider how many of these QALYs would be saved were a given amount of money spent in a particular way.

Like many policy-oriented metrics developed by economists (GDP, for example), the concept of QALYs is not without its critics. But, again like GDP, it is a useful and practical tool. We need a way to determine whether it is worth spending the money available on a particular course of action, and the only way to do that is with a metric to measure benefits against costs.

Armed with the concept of QALYs, it is easy to see why estimates of the benefits of lockdown do not yield huge numbers.

Many of those who have died from Covid-19 are very old — the average age of a coronavirus victim in the UK is over 80. Around 95 per cent of people who have died of Covid have had some serious underlying health condition, so the quality of their remaining life was not high.

In contrast, the costs of lockdown are massive, and impact everyone in the country. Just for starters, Rishi Sunak presented a plausible estimate of a loss of output in 2020 of over £200bn — nearly £3,000 per man, woman and child in the UK.

That is to say nothing of the economic impact of missed education, long-term unemployment, and negative mental health effects caused by lockdown policies.

The government refuses to crunch the numbers. But economists and medics have done it for them using the same approach that the NHS already relies on.

In June, David Miles of Imperial College, a former member of the Monetary Policy Committee, concluded that “the costs of continuing severe restrictions in the UK are so great relative to likely benefits that a substantial easing in restrictions is now warranted”.  In October, Barry McCormick, a former chief economist at the Department of Health, also showed that the benefits of lockdowns are greatly exceeded by the costs they create.

Hopefully the health secretary is correct and the problem will soon vanish as the vaccine is rolled out. But the government must be kept under pressure at every stage of the reviews of both Tiers themselves and the restriction system as a whole.

A well-established methodology, already used in our health service, shows the costs of lockdown far outweigh the benefits.

As published in City AM Wednesday 9th December 2020
Image: Nightingale Hospital  CC BY-SA 2.0 via Wikimedia 
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