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This page examines the issue of quality and the market. It considers the different meanings attached to the word quality by different groups in different contexts. The use of the word "quality" is a problem in itself and symptomatic of something much deeper. The page points out that the only groups which have acquited themselves credibly in the face of severely dysfunctional conduct have been the patients, their relatives, the community, and a number of more junior employees. In the marketplace these people are powerless and lack credibility. If we are to design an acceptable health system then these people should be intimitely involved in all parts of the system.


Corporate interests have since the 1970's consistently claimed that the market and market competition improves care. Professor Arnold Relman first drew attention to the fallacies in this belief system in 1980 and has debated it publicly over the years. His arguments were lost in the rush to get rich by buying health corporate shares. He has been shown to be correct on multiple occasions. The great corporate empires have consistently maintained this mythical idea in the face of all the evidence. John Bedrosian (tenet/NME), Richard Scott (Columbia/HCA), Andrew Turner (Sun healthcare), Aetna Healthcare, managed care salesmen, Michael Wooldridge and of course Graeme Samuel. Ideology rides on -- triumphant in the looking glass world.

The corporate juggernaut

One of the prime proponents of this view was Andrew Turner. He believed that the competitive marketplace would correct all ills. The problem was government and they should butt out. Competition would then weed out poor performers and improve quality He arrogantly proclaimed his beliefs to the Albuqueque Business Journal in 1996.

How wrong Turner was is reflected in what has happened as a consequence of the intense competition in the age care industry across the USA and to Sun Healthcare in particular. It is now happening in Australia. This is another example of what I call NMEspeak. The assertion that competition improves quality in health care has been made over and over again, ever more dogmatically in the face of mounting evidence that market based competition has the very opposite effect in health care.

Sensible citizens and the medical profession realise that this is what you would expect. As Robert Kuttner indicated ideology cannot be challenged. If a particular market does not work then it is because it is not sufficiently market like. That the competitive market cannot work in health care is an unthinkable confrontation in the looking glass world.

The appalling things that happened in psychiatric care across the USA, in Columbia/HCA, the fraud by laboratories, and the emerging evidence from managed care are simply ignored by market theorists. Now we have aged care in Australia.

How do we measure Quality

"Quality" in health care is simply not something which is fully accessible to consumers and evaluable within a marketplace context. It is simply too easy to use words and process to create its form while neglecting its substance. As a consequence market forces simply cannot and do not work in health and aged care. Dr Peter Arnold chairman of the Australian AMA's federal council warned of this in a article in the Medical J of Australia in October 1996.

I know that this is very difficult for true market believers to accept. It is a challenge to a life's commitment when cherished principles simply do not work. It is like a religious conversion. This is why people who are very committed to something have so much difficulty with change. The fact that they are unable to accept that the market not only fails to promote "quality" but compromises it is a measure of their commitment to their beliefs. Kuttner has commented on this problem. In an earlier page I indicated why this was so.


This pattern of thinking and argument, ignoring the obvious is characteristic of what I called "NMEspeak". John Ralston Saul in his lectures "The Unconscious Civilisation" described exactly the same problem and was equally critical of the way words are used. He described how much modern economic and political ideology creates a new social reality which is based on words and has little basis in reality. It is built using words and jargon with strong associative meanings and little denotative content.

One of the first things sociologists teach students in introductory courses is that when something is considered to be real then it is real in its consequences even when it is not real at all. This is the problem. We are dealing with a number of assumptions about health and aged care which are considered by the market and even by many citizens to be real when they are not. The consequences are real.

Logical argument requires the linking of clear meanings and established facts using words which clearly denote a real situation to other words which clearly denote another real or potentially real situation. A central characteristic of NMEspeak is the development of arguments and assertions by using words which have strong associative meanings and then linking the arguments by using these associative meanings rather than clear denotative meanings. What emerges is a very impressive and logical sounding argument, arrogantly presented as self evident. It collapses when it is properly explored and challenged.

I suspect that NMEspeak has its origins in the public relations activities of the marketplace, where language has long been used to create an illusionary image. While the public tolerate advertising with scepticism, market advocates appear to have identified with it and accept the pleasing feel good images and the words as representations of reality. - a reality they are now forcing on to the rest of us.


"Quality" has strong associative meanings, and is useful in motivational activities. It has been misused to create an imaginary reality. It has becoem the buzzword of our times. It would be better abandoned, at least in health care. The older word "standards" which it has largely replaced has clear denotative content and the standards have to be defined. The scientific paradigm on which it is built recognises that not all aspects of care can be measured, clearly defined or "standardised". Unlike "quality" it recognises clear limits and cannot be used logically in situations where the limits cannot be defined.

Standards can therefore be used in real situations where their limitations are recognised. When asking about standards I expect someone to tell me what they are, where they are applied and what their limits are. I cannot ask "What is your quality" and get the same answer. It has a fuzzy all embracing feel good meaning which cannot be pinned down. We may use it in general terms to motivate people and create a desired image to aspire to. We cannot build a health system using it. It has no value in areas where insight and objectivity are essential.


Theorists like Wooldridge and Samuel claim that in the market health care decisions are based on improved outcomes. This is illusionary nonsense as the prime concern is profit. The material on this www site clearly shows that in a competitive marketplace decisions about care are made in board rooms. and are based on profit priorities and little else. Those who make them have little understanding of what the consequences are. This is not surprising as they work with "quality" rather than "standards". In the 1980's Lindorff described and criticised the way in which decisions which profoundly affected the care and welfare of patients were made in the board rooms by people primarily interested in profit and with little knowledge of health care.

Since that time we have seen how decisions claimed to be about quality of care and health outcomes have been made by many psychiatric chains (Tenet/NME is only an example), substance abuse hospitals, rehabilitation hospitals, Columbia/HCA, multiple aged care chains, and managed care corporations like Aetna and Kaiser. All of these have compromised care in one way or another. More than 10 years after Lindorff drew attention to the problem we still have the chairman of an Australian national body promoting the idea that decisions about "quality" should be made in the marketplace.


I have already drawn attention to the way Samuel's health care solution disempowers consumers by putting their economic power at arms length from the actual care they receive. In his model they will exert their shopping around pressures on the market through a filter of competitive buyers and sellers, each more interested in insuring commercial survival than in meeting consumer's expectations. The prime competition is for market share and for government contracts. Government is primarily concerned about cost. Experience from the US marketplace indicates that all of these groups will pay obsequious service to consumer choice but this will be more illusion than substance.

It is clear from experience of a similar system in the USA that in health care the health care consumer has little impact in the marketplace. The share market is about short term survival - keeping the share price up. If survival depends on it then they will squeeze the consumer.

The consumer can ultimately and with great difficulty exert influence through the courts and the ballot box. These are extremely crude and delayed forms of competitive pressure. The measures available to consumers are very blunt instruments and cannot fine tune a complex process. The delays in forcing changes to the health system are unacceptable, and the response is only to extreme dysfunction after it has occurred. Developing problems cannot be prevented or nipped in the bud at an early stage. The response to ballot box pressures has usually been to compound the problems and to create a situation which is even worse. As a regulatory force in the health care marketplace the consumer is expendable. The consumer's prime role is in marketing health systems and as a profit body -- the vehicle for making money.


I agree entirely with Samuel's claim that providers have not been responsive to consumers, but neither have the managed care purchasers, or for that matter goverment. If the US situation teaches us anything then it is that the large corporate chains providing care have been unresponsive to the real needs for care. Instead they have exploited the vulnerability of the health care situation and manipulated "demand" by creating false markets and a deceptive public image.

Managed care corporations, the purchasers of care have been more concerned with containing costs and surviving in the market than in responding to consumers. They have made their money by rationing the care which they had promised. The outcry in the USA is clear evidence of their failure.

The other clear lesson from the USA is that it is citizens, patients, their families and employees who have detected the problems in health care and done something about it. The market, competition, politicians, regulators and accreditation bodies have all been peripheral. At best they have responded to pressure. As often as not they have hindered exposure of dysfunctional practices. What is clear is that if health care is to work for patients and the community then it is the patients, their families, the community and the people providing care who must work together to run and control the health system.

CLICK HERE -- for another a page about quality and the health care professions. The page was written to follow the one above when addressing quality. The arguments flow on.

CLICK HERE -- to another page which examines aspects of "quality"

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This page created October 2000 by Michael Wynne