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NHS sustainability: there aren’t always more fish in the sea


With the Spending Review fast approaching, most things currently written about the NHS begin by saying that the system is running out of money (which it is). They go on to say that social care and other public services are in an even worse state (which they are), and call for a combination of more money and greater efficiency.

But more money and using existing resources better – while both needed – won’t be enough to meet the challenges facing the NHS: we also need to think differently about who governs NHS resources, and how.

The basic problem is easy to diagnose but much harder to manage. Put simply, the NHS only has a limited pot of resources to meet increasing demand for care. To use economic jargon, NHS services are ‘common pool’ resources – things that are more or less available to everyone, but where what we use in effect ends up taking away from others. Easy examples include things like fisheries or forests: if a fisherman catches a fish, another fisherman can’t catch it again; if too many fisherman catch too many fish, the common pool of resources is used unsustainably (think cod in the Atlantic).

While health services aren’t as simple as fish, the same principles broadly apply. Providers of NHS services in any given area have a limited set of resources – their staff, machines, buildings, and so on – and these services are paid for from a limited pot of money allocated to health care from the national budget. The public draw on these resources every time they come into contact with the health system. If too many resources are used by one set of providers, or one set of patients, there will ultimately be less money available to fund other services (think money for acute services versus money for mental health care, for instance).

The problem with common pool resources is that they can run out if they aren’t effectively managed – what Garrett Hardin described as the ‘tragedy of the commons’ in 1968. If individuals (or organisations) act independently of others, there’s a risk that the resources will be used unsustainably. In the end, of course, this is worse for everyone.

But the tragedy doesn’t have to happen. While traditional policy responses to the problem involve turning to the state of the market, research by Elinor Ostrom and others shows how the tragedy can be avoided by local communities developing their own arrangements for managing common pool resources. In many examples across the world, resources such as irrigation systems, forests and fisheries have been successfully governed by communities who define their own rules and approaches to how resources will be used.

Based on her analysis of cases that worked well, as well as ones that failed, Ostrom’s work identifies a set of principles that characterise successful approaches to governing common resources. Might there be something in this for the NHS?

Chris Ham and I recently published a report calling for providers of services to work together in ‘place-based’ systems of care. This means organisations working together – in partnership with local people – to improve health and health care for the population they serve, collectively managing the common resources. Drawing in part on Ostrom’s work, we set out 10 principles for how these systems could be developed – such as setting up an inclusive governance structure, putting in place new forms of system leadership, involving local people in decision-making, and creating a new way of paying for services.

The alternative to place-based systems of care is for each NHS organisation to adopt a ‘fortress mentality’, fighting for its own survival regardless of the impact on others. The fortress mentality is a logical response in the existing NHS environment, where provider autonomy, competition and regulation feature prominently. Organisations serving the same population end up competing in a zero-sum game, where winners co-exist with losers and local priorities become distorted in the battle for resources.

But we know that the major challenges facing our health and care systems – such as improving care for older people, or managing demand for urgent care – require collaboration across services and communities. Collective action is also needed to address the wider social, economic and environmental determinants of health.

The NHS is relying on the government to provide enough funding in the Spending Review to keep the show on the road. If this doesn’t happen, there’s no doubt that patients will suffer. But as well as calling for more money, NHS leaders also need to think differently about how these limited resources are governed. If the existing fortress mentality prevails, the major challenges facing NHS services and the populations they serve are likely to go unmet.