Merit Good - London Ambulance Service - Case Study Example

Merit Good Case Study; London Ambulance Service (LAS) Introduction Merit goods refer to the goods and servicesthat are provided free of charge to the society by government. The government feels that people may under-consume, hence they subsidize or offer for free to ensure that the consumption is independent of the purchasing power of the consumer. The private and public sectors have been involved in provision of merit goods in UK. Often, consumption of merit goods generates positive externalities, especially when social benefit exceeds private benefits. Government in this case acts paternally to provide the merit goods, and they believe that people may not act in own interest because of the imperfect information. Merit goods include education, health services, public libraries, children inoculations, work training programmes and citizen advice bureau (Halter et al, 2006). History of London Ambulance Service London Ambulance Service (LAS) refers to a National Health Service Trust responsible for responsing and answering medical emergencies in London. The institution has over 4500 staff, and forms the busiest ambulance service worldwide and in UK, serving over 7 million people working and living in London.LAS was established in 1965 by amalgamation of nine services in London. After reorganization of NHS in 1974, LAS changed the management from local government to the control by Regional Health Authority in south west Thames. By 1996, LAS left the control by Regional Health Authority to NHS trust (Halter et al, 2006). Roles of LAS LAS responds to their patients through “hear and treat, see and treat and see, treat and convey” methods. In hear and treat, at point of call taking, LAS receives approximately 100,000 callers having a presentation manageable through a telephone consultation by NHS or LAS clinician. After completion of the service, calls are normally closed with the pending cases for only those that require on-scene face-to-face assessment by a clinician. In see and treat service, LAS receives approximately 31 percent incidences requiring an on-scene assessment by an LAS staff. This aims at completing the case at that instant without extending it to the emergency department. Increased consistency of the calls may trigger an onward referral to community and local care services. In see, treat and convey service, LAS conveys its patients to specialist centers and other emergency departments across London. This depends on the present condition of the patient (Halter et al 2006, p.865). The institution has been delivering large scale health outcomes for cardiac problems, stroke and trauma among others. This also involves responding to emergency calls (999) and provision of medical care to patients throughout the year. The institution offers pre-arranged transport services for the patients and secures the hospital beds. Also, LAS works with fire service and police to deal with health incidences in London. For instance, in the year 2012/2013, the service received over 72, 070 alcohol patients. About one in five of the 999 calls received in a day are for alcohol. Most of such figures are gotten from the 999 control room, and the records indicate that the frontline staff record creates the need for treating an alcohol patient. The figures never contain records for small incidences like minor falls, assaults or other injuries. LAS structure LAS has over 5000 staff at various support offices and stations across London. The emergency response operates in three areas; West, East and South London, with each area under assistant director of operations. LAS has 70 ambulance stations in London sitting within the 26 operational areas referred to as complexes to enhance the management. An ambulance operations manager oversees a complex with the support of training officers, team leaders and station officers (Halter et al 2006, p.865). Fig 1: LAS Service Organization Chart The cost of the ambulance Most jobs in NHS have been covered by the pay scales outlined in Agenda for Change (AfC). The pay system covers all the staffs except dentists, senior managers and doctors. The job evaluation in NHS on basis of AfC scale determines points score used in matching the jobs to the nine pay bands as well as determine the basic salary levels. Every nine pay band comprised of several pay points where staff progressed annually from one point to the next until they reach top band. Extra pay was paid on top of the basic salary for staff working in high cost areas like London (Halter et al, 2006). The career in NHS started in emergency service or patient transport and progressed to other areas of higher responsibility. Below is a tabular representation of actual payments for bands 1 and 2. Table 1: Actual Band Payments Point 1 Point 2 Point 3 Point 4 Point 5 Point 6 Point 7 Point 8 Band 1 14294 14653 15013 Band 2 14,294 14,653 15013 15,432 15,851 16,271 16,811 17,425 However, for the supplements, those in inner London received 20 percent of the basic salary that was subject to minimum of £4,076 and maximum of £6,279. Those in outer London received 15 percent with minimum of £ 3, 448 and maximum of £4, 395. For those in the fringe, thy received 5 percent of the basic salary with minimum of £ 942 and maximum of £ 1,632. Top of Form Bottom of Form Externalities An externality refers to the costs that arise from falls and production on another person other than producer. It is a benefit or a cost arising from the consumption and the falls other than consumer. A positive externality of the London Ambulance Service provides external benefits. These could arise when private costs remain different from the benefits and social costs. Some of the externalities include the public provision where the government funds the organization and ensures that it has enough finances to execute the operations. The government regulates the prices to ensure that demand is supplied. The private subsidies is paid by the government to ensure the increased supply of services to cater for the demand. The government pays the private organizations to offer services at relatively reasonable prices. The government also uses vouchers to most households to enable them pay for the services by LAS. Voucher that is equivalent to the length of double headed arrow shifts the demand curve (Halter et al 2006, p.866). Role of the government The government has reformed the measurement performance regime for the ambulance services in recent times. This meant that the response time for category A was to remain in place while that for category B was cancelled. Category B response time was for incidences that were serious but not threatening. Also, the government has been pursuing the far-reaching NHS reforms in different ways. This process is accompanied by both risks and opportunities in development of new ways of working (Halter et al 2006, p.866). The government also proposes for the reforms for NHS. These include the strategic oversight, commissioning and the foundation trust status. In strategic oversight, the government monitors and supervises performance of commissioner and provides trust that enhance development and implementation of the health strategies in London. The PCTs acts jointly in commissioning LAS, with responsibility being delegated to each organization. The commissioning of LAS will continue with one consortium allowed the lead responsibility. The government emphasizes that the LAS should become a Foundation Trust to ensure a greater financial autonomy and the ability to retain the surpluses in budgets as well as borrowing money for investing in services. This also means the changes in governance structure to enable individuals become members of the LAS. The member majority elect the council of governors (Halter et al 2006). In every year, government contributes about £58 million to LAS for different goods and services. The government ensures that the organization complies with Public Contract Regulation of 2006. Also, the government must ensure that LAS Trust Board accord the organization the most appropriate leadership. The board comprises of the non-executive chairman, seven directors who are non-executive, as well as five executive directors for the service who include the chief executive. The office of the government treasury ensures that LAS delivers effective and high quality procurement in the public sector (Halter et al, 2006). Future plan The service aims at creating more freedom on use of money. At the moment, the residents pay £30 annually for the ambulance services. This is considerably lower than the payment made in other ambulance services in UK. In future, it is anticipated that LAS will provide better and quality services for lower costs. The private sector can be in a position to provide the ambulance services. However, some of the disadvantages of solely depending on private sector include problems in profit maximization where private sectors loosen quality so as to win higher profits. Also, most private sectors have probability of cutting jobs, hence creating high rates of unemployment and social pressure. Also, private sectors may compel every person to be insured, but it is unfortunate that not every person can afford. Despite of the above disadvantages, private sector have diverse capital avenues from entrepreneurs and government. The private sector also brings about the market competitions and boosts the economy, and is accompanied by high tax release. Free Markets In case the free markets were allowed to provide for the merit good, there is likelihood of government dispensing subsidiaries compelling people to pay for the service. This may be accompanied by longer hours of work with less pay due to increased competitiveness and need to make profits (Halter et al 2006, p.866). Conclusion LAS has been effective in providing high quality services which ensure that people are always safe in case of any emergency. There is projections of LAS being free in coming decades. Nevertheless, the costs for the services are relatively high making the financial burden obvious. As a result, there is low likelihood of privatizing LAS to avoid costs over-stripping the benefits. References List Halter, M., Marlow, C. T., & Ellison, G. (2006). Patients Experiences of Care Provided by Emergency Care Practitioners and Traditional Ambulance Practitioners: A Survey from the London Ambulance Service. Emergency Medicine Journal 23(11), pp. 865-866. Read More