Andrew Haldenby: Market forces will make us a healthier nation

Andrew Haldenby is director of the think-tank Reform and co-author of Fit for Recovery, a report it is publishing today which concludes that since a healthy society will be an essential component of a swift economic recovery, both Government and the private sector must tackle public health issues. You can download the report here.

The task of improving the nation’s health has almost been forgotten in the last six months, submerged under the daily headlines of economic and financial woe.  But a new Reform report argues that better health is already part of the story of economic recovery, and has lessons both for the NHS and for the wider effort to improve the health of the nation.

Quietly, businesses are driving what amounts to a revolution in UK healthcare.  Both large and small employers are helping their employees exercise more, eat better and stay mentally fit.  They are providing services that are still years away from standard NHS practice, such as free health checks on demand and immediate treatment at the first signs of poor mental health.

They are doing so for many reasons but not least for their bottom lines.  Better health means greater productivity via increased revenues, reduced costs and lower absence.  Without fanfare, market forces are driving a major part of society towards better health.

There are a number of positive ideas here.  The first is immediate – better health will help the recovery because greater output from experienced staff could be the difference between a firm’s success and failure.  The second is longer term – that efforts by business will open up a new flank in the nation’s health effort, complementary to efforts by individuals and government, and without any drain on the public finances.

There are also wider lessons.  The NHS – Europe’s biggest employer, employing 1.3 million people in England alone – sets a poor example in regard to the health of its own staff.  The report estimates that if the NHS followed the example of the best profit-making companies, it could save £1 billion of its annual £3 billion cost of sick leave – a substantial gain given the forthcoming years of austerity in the public sector.

Most importantly, this effort points towards the road to success in public health, which has moved to the centre of the health policy debate.  Andrew Lansley and Alan Johnson speak as much about obesity, alcohol and teenage pregnancy as they do about competition and choice.  Andrew Lansley has repeatedly said that he would turn his department into the “Department of Public Health” if elected – with the aim of a complete reorientation of policy towards health and wellbeing.

What employers are doing suggests that it is personal responsibility that counts – in this case, businesses taking responsibility because of the profit motive.  But incentives are typically financial.  So any shift to a health service that encourages good behaviour means opening up the health funding debate, something that neither main party is yet willing to do.  Health insurers such as PruHealth or UnitedHealthcare are already reducing the costs of their health premiums if their customers take more exercise or improve their diets.

Lib Dem Norman Lamb has been bravest in opening up the new territory, drawing attention to a Canadian scheme by which citizens get a reduction in taxes if children enrol in sports or activity clubs.  (In general the Liberal Democrats have led the debate in health funding reform, for example being the first party to campaign for top-up payments in the NHS.)

But in the absence of funding changes, in the end governments have to rely on the old-fashioned methods of legislation and command-and-control.  This was the underlying message of Andrew Lansley in a speech to Reform last August and Alan Johnson two weeks ago.  While both men spoke of personal responsibility, they both concluded that legislation would be needed if people did not do the right thing.

The major parties can have the courage of their convictions.  Clear incentives will encourage people and businesses towards better health.  New ideas on NHS funding will accelerate the process – and support economic recovery as well.