Liberating the NHS – A perspective

The White Paper, ‘Equity and excellence:  Liberating the NHS’, published on the 12th July is perhaps  the most important redirection of the NHS in more than a generation: which is paradoxical given that virtually all its key elements have been core components of healthcare policy for more than 20 years.  Patient empowerment through information, the reform of commissioning and increased competition between provides, all working with an a regulated framework, have all featured in NHS plans over the last decades, but none have been pursued to their logical conclusion. 

The areas of the White Paper are therefore, familiar to any observer of NHS policy in England since at least 1990.  At its centre is the patient but now a patient empowered by a tidal-wave of information and presented with real choices from an increasing range of diverse and innovative service suppliers.  On either side are the columns of the purchaser provider divide, but now strengthened and reinforced.  Commissioning is to be kick-started by handing it over to the GPs, who may well come to wonder at what they have wished for.  Providers are to be freed from the shackles of state interference and staff are to be encouraged to take over their organisations but working within an open and increasingly competitive market.  Overarching everything is strong regulation;  Monitor as the economic regulator, CQC looking after quality, the new NHS Commissioning Board overseeing GP consortia and the role of NICE reinforced.

The immediate challenge, however, is cash.  Even on the most optimistic assumptions the reforms set out in the White Paper will take three to four years to implement and their impact on system performance years further.  The Secretary of State clearly recognises the central importance of improving productivity, of reducing the unit cost of service sand his reforms may well deliver over the longer term.  But in many local healthcare economies the financial crisis is already upon us.

Even with the promised, if undefined, protected increases in NHS funding, perhaps a third of England’s local health systems will run out of money over the next few years without major changes in service configuration.  The White Paper provides the longer term framework for tackling these immediate issues but it is less clear whether or not it provides support for their early resolution.

Patient Power Unleashed

The individual patient is absolutely central to the vision set out in ‘Liberating the NHS’ enhancing the role and power of the patient is the leitmotif that runs throughout the White Paper.  As informed, empowered patient will take greater responsibility for their own care and can be trusted to make sensible, if shared, decisions about the care that they want the NHS to provide for them.  And in making those decisions they will collectively transform the NHS to become more responsive, to deliver better outcomes and greater productivity.  If patients better understood the comparatively poor clinical outcomes that the NHS too often delivers, then they would rightly demand improvements and make their choices of service provide appropriately.

The White Paper’s core principle is, therefore, that it is the service user in partnership with their clinician, not micro-management by the Secretary of State that will drive up standards.  The role of the state is to pay for services to maintain a regulatory framework and to hold the NHS accountable for how it uses tax-payers’ money.  In this future, there is little role for management or managers, who barely get a mention.

To fulfil their role, patients need to be empowered and information is power.  The Government’s intention is therefore, to publish pretty much everything that can be published.  Service providers, including GPs will be contractually obliged to collect and return clinical outcome data, Patient Report Outcome Measures (PROMS) and will be expanded and quality accounts will be extended and required from all NHS providers.  The Health and Social Care Information Centre will have an expanded role to centralise and standardise data and assure its quality but crucially the market will be opened up to third parties to analyse and interpret the data.  Patients and professionals can look forward to a wave of new websites providing comparative information on every provider, down to named consultant-led terms.

Patient power is expressed through choice.  Many NHS professionals have been sceptical about patient choice ever since it was introduced, often arguing that all patients want are convenient, local services.  There is however, good polling evidence that patients value choice.  There is also reasonable empirical evidence, that when patients have hard information, for example when things are going badly for a provider or when they have to make a planned decision over elective interventions, they want to be able to make meaningful choices.

If patients have better information to underpin their choices, they also need to be presented with meaningful alternatives.  So, wherever possible, there will be choice of Any Willing Providers, with multiple suppliers drawn without differentiation between the NHS, voluntary and independent sectors.  Those suppliers will be encouraged to offer patients choice, not just in the limited area of cold elective surgery but in mental health, maternity care, diagnostics, long term conditions, end-of-life care and of course, the right to choose your GP.  Given the devolution of commissioning to GP consortia, that choice of GP, perhaps the most important choice a patient makes will now be underpinned by hard information on just how well they are performing as commissioners.

By April 2011 patients will not only have a choice of a provider but also choice of a named consultant-led team.  Going further, the White Paper proposes to examine the possibility of giving patients a choice is to cover the vast majority of NHS-funded services.

GPs and Commissioning

The most striking structural shift within the White Paper and the development which is likely to cause the greatest concern for many within the NHS is the creation of GP consortia to take on the role of commissioning.  These are to be established in shadow form during 2011/2012 and to have full financial responsibility from April 2013, from which date Primary Care Trusts (PCTs) will cease to exist.

The argument appears powerful:  GPs make the key decisions which determine to a great degree how NHS resources are spent, so those decisions should be aligned with real money and crucially with corporate responsibility for how it is used.  The sub-text is that for years GPs have argued that NHS managers – the system, the PCTs – have stood in their way; stopping them innovating, inhibiting their ability to redesign care pathways to the real needs of their patients.  Whilst Practice Based Commissioning (PBC) was a step in the right direction, it was ill-thought out and subject to interference from PCTs; it simply didn’t go far enough.

So, although PBC provides a precedent, there are very important differences.  Although, budgets will be calculated at the level of the practice, the budget will be allocated to and held by each consortium, which will also hold the contracts with providers.  Membership of a consortium, established initially at least with a geographical focus, will not be an option.  If a practice does not volunteer then the NHS Commissioning Board will have the powers to assign a practice to a consortium and the consortium will hold its member practices accountable for the achievements of its objectives.

The Government has already announced its intention of renegotiating the GP contract and, as part of that renegotiation,  it will doubtless seek to define the GP’s individual responsibilities with respect to consortia.  So the quid pro quo for gaining real commissioning power is the mandatory acceptance of managerial responsibility for the local health system.

The consortia, reportedly between 500 and 600 of them organised predominantly on a geographical basis, will have an average budget of more than a £100m and will together manage some £70 billion of NHS funds – of tax payers’ money.  They will be responsible for commissioning and contracting for the majority of health services – although ophthalmology, dentistry and community pharmacy will be excluded and consortia will have the freedom to work collaboratively, for example to establish a lead commissioner role.

To help consortia, NICE will be developing 150 clinical quality standards, which consortia will be required to use for commissioning; so local freedom will not be unlimited.  The formation of consortia does however, implicitly accept and at least in the short term reinforce local differences.  Given the size of consortia, they will have very different and distinct characteristics – of wealth and poverty, of ethnicity and religion and of competency and capability.

An individual’s choice of GP is already amongst the most important healthcare choices they make and that choice, often made casually and with no appropriate information, will now become even more important.  As the public become aware of the difference and as the information becomes available, individuals may well begin to move, favouring GPs and consortia that have a demonstrable track record of success.  Or perhaps favouring consortia that differentiate themselves by specialising in particular areas – there is certainly a market opportunity for a consortium that specialises in the problems of middle-aged men heading for retirement!

The NHS Commissioning Board

If the development and oversight of GP consortia is to be the central role of the autonomous NHS Commissioning Board, it will not be the only function of this ‘.....lean and expert organisation’.  With no role in managing providers the Board is to provide national leadership for quality improvement, exercising that leadership through the commissioning activities of the 500 plus GP consortia.  Where it is inappropriate for GP consortia to commission services directly, for example national and specialised services, this will be undertaken by the Board.  For some unspecified reason, maternity services, the most local of services, where choice is arguably most appropriate, will also be commissioned nationally.

In addition, the Board will have a responsibility for tackling health inequalities and for promoting patient choice and involvement.  Again, this is a responsibility it will fulfil through the autonomous GP consortia.

An expanded role for local authorities

With the abolition of PCTs local authorities are to have an expanded role, taking on responsibility for public health and health improvement and will be the employer of the local Director of Public Health, appointed jointly with the new Public Health Services.  Presumably, the LAs will get funding to carry out these functions from the Commissioning Board and if it were on a similar level to current PCT spending this would amount some £20 million for each authority.  The separation of public health, particularly, health education and improvement programmes, from service commissioning, is however, disappointing, as it will decouple the incentives to invest now, to reduce service demand later.

Reflecting the influence of their coalition partners, there will be new statutory arrangements to establish ‘health and wellbeing boards’ within local authorities, which will replace the Health Overview and Scrutiny Committees.  It is not clear from the White Paper whether the desire to achieve democratic legitimacy, extends to having directly elected members of these boards, though local patient representatives will have a ‘formal’ role.

The purpose of these new boards is to allow local strategic co-ordination across health and adult social care and children’s services however, there is to be no further integration of health and social care budgets.  Whilst joint budgets and commissioning.  Whilst joint budgets and commissioning, between PCTs and Las has made at least fitful progress, it is difficult to see how three times as many GP consortia are going to work more closely or more effectively with their local authorities.  Particularly, as the White Paper suggests joint commissioning arrangements will require the agreement of both parties; the GP consortia and the local authority.

Similarly, the overlapping interests of the GP consortia and local authorities with regard to service changes and priorities will obviously take some working out.  The White Paper is clear that local authorities will not be involved in day-to-day interventions in NHS services and that NHS commissioning is the sole preserve of GP consortia.  But the boards will have a role in considering commissioning plans and in any resulting changes in services, with the Secretary of State remaining as the final arbitrator on service reconfigurations.  Not surprisingly, the Government is to consult fully on the details of the new arrangements.

Opening up the Market

Whilst previous governments have embraced tentatively the market, the Coalition Government is intent on ensuring that there really is a level playing field for all providers, whether from the independent, voluntary or not-for-profit sectors.  For this government, whilst the market will be a regulated, social market, it will deliver innovation, spur productivity and, crucially, make patient choice a reality.  As NHS providers gain greater freedoms, perhaps as employee-led organisations and control and commissioning decisions have passed to local, clinically led commissioners, the daunting difficulties of dealing with provider failures are substantially reduced.  In any event, as we shall see, the Government has neatly passed to Monitor the responsibility both for dealing with failure and for ensuring service continuity.

Crucial to making the market work will be a shift to an Any Willing Provider (AWP) model for contracting for services.  In effect, this model is already in place in mental health services and elective surgery, with any appropriately regulated supplier, prepared to work to NHS terms and conditions, being able to supply services.  From April 2011, the Government intends to adopt progressively the same approach for an increasing range of community services.  In due course, multi-year block contracts will disappear to be replaced by an increasing range of suppliers contracting and selling directly to GP consortia on a case-by-case basis.

To underpin the development of the market, the Government appears intent on removing many of the barriers that have so far consigned non-NHS providers to supplying less than 3% of NHS services.  However, there is no commitment on the subject of NHS-pensions portability; this awaits the outcome of Lord Hutton’s review.  For the independent sector, it will also be important to see what safeguards are put in place to limit the ability of GP consortia to buy services from favoured suppliers, doubtless including those where their members might have a financial interest.

A key component in making all of this work will be a reinforcement and extension of Payment by Results (PBR) and therefore, of Tariffs.  Although the structure of Tariffs will be set by the NHS Commissioning Board the actual prices will be set by Monitor.  Tariffs will be developed for community services and mental health and there will be national currencies for critical care and specialist palliative care; pathway tariffs will be developed, which will support commissioners and contracting on a risk-transfer basis for an extended and complex package of care.  With a shift to Best Practice Tariffs, an increasing proportion of payments linked to quality, rising competition and increasing local flexibility over local marginal rates, there is only one way that NHS prices are going: down.

Contact Us

If you would like to find how Acquisita can help your organisation please telephone +44(0)161 605  0810 to arrange a discussion or email contact@acqusita.com

Frequently Asked Questions

White Papers

Liberating the NHS - White Paper complete  Equity and excellence: Liberating the NHS. July 2010

White Paper Special bulletin  Supplementary management bulletin. 19th July 2010

Case Studies/Presentations