Medical matters

[Dave Birch] In the UK, there's a tradition that when a new government takes office, the new minister for health announces a radical shake-up of the National Health Service (NHS) and so it was recently when Mr. Andrew Lansley presented a strategy called "Liberating the NHS". Now, I wouldn't normally allow medical matters (or politics) to intrude on this blog, but in this particular case, I think it worth reporting on sections 3.17 and 3.18 of the document.

3.17 The absence of an effective payment system in many parts of the NHS severely restricts the ability of commissioners and providers to improve outcomes, increase efficiency and increase patient choice. In future, the structure of payment systems will be the responsibility of the NHS Commissioning Board, and the economic regulator will be responsible for pricing. In the meantime the Department will start designing and implementing a more comprehensive, transparent and sustainable structure of payment for performance so that money follows the patient and reflects quality. Payments and the ‘currencies’ they are based on will be structured in the way that is most relevant to the service being provided, and will be conditional on achieving quality goals.

Whoa. Currencies? Yes, apparently so.

3.18 The previous administration made progress in developing payment by results in acute trusts. The mandatory scope has changed little since 2005/06, and has not incentivised results throughout the system. The Department will:

• implement a set of currencies for adult mental health services for use from 2012/13, and develop currencies for child and adolescent services;
• develop payment systems to support the commissioning of talking therapies;
• mandate in 2011/12 national currencies for adult and neonatal critical care;
• …
• accelerate the development of currencies and tariffs for community services;
• …

How interesting. So could it be the NHS that triggers the widespread use of a non-fiat (although not altogether private) currency? I was at a meeting recently where the subject of health currencies was being discussed and I thought that it was a fascinating topic — especially currencies for long-term health care in old age, currencies that we would need to begin accumulating long before we retire — but I had no inkling that the ideas were being discussed at such a high level and were so close to becoming government policy.

I am not alone in thinking that the idea of new currencies is one whose time has come in order to bring some stability to the world of money.

The more complex answer is: give a broader swathe of institutions the ability to compete for creating (different kinds of) money. That means, of course, next-gen currencies.

[From Next-Gen Currencies and Banks as Utilities – Umair Haque – HarvardBusiness.org]

Now, I've written before about the kinds of currencies that might make sense, but the truth is this is a new subject and still in such an early phase of development that it's really not clear what is happening.

I've already been approach by groups who are trying to get funding for systems to store value in renewable energy or local currencies. There's something going on here, and I'm a long way from understanding it

[From Digital Money: An eternal discussion]

As soon as you ask any "economics" questions about alternative currencies you can see there are interesting new ways of thinking. For example: why would "medical money" work in the UK or any other country where there isn't a free market in health care? In a free market, people would buy medical money throughout their lives to build up a big holding to use when they get sick or old. Why? Because, in theory, it would provide long-term stability. The argument goes like this: if you save fiat currency for your old age, you don't know what it will be worth, whereas if you save energy, health care and food for your old age you know exactly what you will get and therefore can plan more effectively. In other words, why save dollars to buy an uncertain amount of heating when you can save kilowatt hours instead and know exactly what you will get? There is a logic to this: there's no reason why your pension company couldn't deal with a portfolio of alternative and complementary currencies just as it deals with a portfolio of shares.

Many people in the UK will be (rightly) sceptical of giving the NHS to right to print its own money and I don't doubt that if it were allowed to do so then it would inevitably get it wrong — this, after all, an organisation that has spent tens of billions of pounds on IT under the previous administration for what seems like little return. That doesn't mean, however, that the idea of currencies for health is bad. We're going to have an expert panel on alternative currencies at the 2011 Digital Money Forum that will be held in London on 2nd and 3rd March, and I'm really looking forward to seeing how the field is evolving.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]