Spending reductions, not fancy ideas, are likely to drive the debate about future health reform, suggests Dan Corry.

We may despair at or enjoy Andrew Lansley’s attempts to reform the health system but, right or wrong, he is coming up against an almost universal truth – reform of the NHS is very tough.

Ask most people whether they think their health service needs change to keep it up to date, to be efficient, to give a decent service and to cope with the costs of rising old age and more expensive treatments and they will agree. Try to do anything much about it and you take your political life in your hands.

'Andrew Lansley is coming up against an almost universal truth – reform of the NHS is very tough.'

But not only is the health service facing reform, it must manage significant cuts over the next three years. It is these cuts as much as theoretical arguments that are likely to drive the reform debate in the next few years.

The reasons for the resistance to change in the NHS are numerous. Some will be familiar to anyone who has tried to introduce change in local public services and some are unique to health.

Firstly, this is a very personal service that people have strong emotions about. Even when dissatisfied with aspects of the care they or their loved ones have experienced, they are full of respect for the nurses, doctors and even the hospital and tend to defend the system.

Muck about or even threaten to muck about with something they have got used to, something that works for them even if not perfectly and conservatism will out.

That, as successive Governments have found, makes it hard to do even sensible things like reorganise the numbers, type and location of hospitals: its libraries times ten. There is no reason that the factors that led to the configuration of hospitals decades ago should be relevant now.

But trying to close a general hospital or maternity unit, even if you can show a lower death rate will arise from a move to a spanking new facility, is very difficult in practice.

And that leads to the second problem – which is that the experts do not agree on what beneficial reform would look like. GPs differ from consultants and GPs differ with each other. And still other non-clinical experts warn against the power of the medics favouring policies that suit them rather than what produces good and efficient outcomes for patients.

Health service managers have different perspectives again, and many experts like the Kings Fund, feel the NHS is in fact under rather than over managed. Some politicians say we need more competition, others believe that that would ruin things.

And in my own profession – economics – the debate ranges widely too, not least because there are many reasons why the health market does not work like many other markets. Some of the usual certainties like more competition being good may or may not apply here. The grandly named asymmetric information lies at the heart of much of this since the suppliers (medics) know so much more than us (the ‘consumers’ or ‘patients’).

The third factor links to this. Most people do want a bit of a choice in the health system just as they do in schools and local services. They want to be able to choose their doctor or at least have the option to change if they are not happy with their current one; they want the option of not going to the local hospital if it has a bad reputation; and they certainly want more choice on when they can see the doctor.

However, choice is rarely top of their wish list. And if one of the ways to give them more choice is to bring in private companies, then they get very suspicious indeed, much more than private involvement in many other services.

Now lots of that is irrational. Nobody worries that the vaccines injected into their blood stream, the pills they take, the stethoscopes and MRI scanners are all produced by for-profit companies.

Nor have patients worried that private providers have been doing some standard operations like hip replacements in the so called Independent Sector Treatment Centres. But they do worry that full out competition may end up being bad for them. And if someone tells them that health is just another utility they will panic.

And they have at least some economic theory behind them, for in the health market competition on price can lead to a fall in quality, and if not done well, to an undermining of cooperation between different health bodies.

Vitally too, if patients ever thought that their GP or consultant was deciding their treatment not purely on what was best but on the basis of costs or profits, then the trust between patients and clinicians would go fully out of the window.

The job of Government is therefore to find ways to harness the power of choice and competition without undermining cooperation and trust. As the current health debate shows, that is not easy.

Lastly, if you really do want to change things in major ways then you have to convince people that it is really, really needed. And that is hard when opinion polls at the end of the last government’s period in office, showed satisfaction by those who use the NHS was at a record high.

Certainly if you think the system is not sustainable, that just carrying on as we are will not work then you need to find ways to prove that to the public. And you need to have the doctors agreeing. Strangely the thing that may lead to this consensus is not what ministers say but the severe cuts in spending that the NHS is currently carrying out.

Whether needed or not, these cuts are likely to lead to longer queues, poorer service, more opting out and then people saying we cannot go on like this. For some that will be where they want to get to – with the veil they believe was created by high spending in the NHS over the last decade, finally lifted.

Others will see the cuts as a cynical attempt by free marketers to get support for a privatisation agenda that they could not achieve otherwise. A right royal argument may then break out making current disputes look tame.

Health systems the world over need reform to keep them up to scratch. Finding the right reforms and ones that the public will support remains a fundamental challenge. And as ministers have discovered, plucking a reform plan out of the hat with no pre-warning is a method guaranteed to fail.

Dan Corry is at FTI Consulting and was a former economic and policy adviser at the Treasury and in Downing Street.