The Law of Unintended Consequences at Staffordshire hospitals

Government intervention is carried out with the best of intentions, but can result in unintended consequences with resulting government failure (a deepening of the market failure or even worse a new failure which may arise). The case of the failures at the Staffordshire General Hospital reported yesterday gives a tragic example of this. A report by the Healthcare Commission, which is a regulator for the NHS, said there were deficiencies at “virtually every stage” of emergency care at the hospital, and up to 400 patients died as a result. This BBC report highlights a dreadful list of errors at the hospital’s Accident and Emergency department from the use of receptionists to carry out initial checks on patients to heart monitors being turned off on wards because nurses did not know how to use them. Various factors are identified as having led to this failure, the government’s target for patients to be seen within four hours at A&E which meant patients could be taken to “dumping grounds” to avoid breaching the target. The situation was only recognised after complaints from residents were backed up by statistics showing a high death rate.

Nigel Edwards, director of policy for the NHS Confederation (an organisation that represents more than 93% of NHS organisations in the UK) was interviewed on the Today programme yesterday morning along with health expert John Heyworth, and the effect of this 4-hour target was discussed in detail. Mr Edwards said that “We don’t evaluate things in public policy in this country” – a pretty stunning statement, given the number of regulators and governing bodies that are operating around the NHS. Clearly the intention of the target is to ensure that A&E departments deal quickly and efficiently with patients who need attention, but the Unintended Consequences of this government target have been for this hospital to find other ways of dealing with patients, rather than record them as still in the department, before the 4 hours are up. The case has such a high profile that both Alan Johnson, Secretary of State for Health, and Gordon Brown issued public apologies about it yesterday. There will now be inquiries into how the situation arose in the first place, and went uninvestigated for a long period of time, hopefully in order to ensure that it won’t happen again. The case is a very sad one, but worth considering from the point of view of economic theory.

Questions to consider:
Is A&E a pure public good? Explain your answer

What market failure is the 4-hour target intended to correct?

Evaluate any alternatives you can think of for the 4-hour target which may help to correct the market failure with less risk of government failure.

More reading about this issue
Times Online
Daily Telegraph
The Guardian
Follow up story on Friday - Birmingham Childrens’ Hospital