Tag Archives: GP consortia

NHS reform – the politics is a smokescreen

Ever since the NHS was formed over 60 years ago, politicians have struggled to manage it.  Assorted ministers and policy wonks have dreamed up elegant reform plans, while the NHS’s insiders have undermined them in a bid to carry on much as before.  The NHS does change, but never quite along the path that the politicians have in mind.  That is as true now as ever.  The difference is that NHS management is promoting reform rather than resisting it; but they are going about it in their own way.  The fire and fury of the current political debate is mostly irrelevant.

I have already posted some thoughts on the NHS.  I considered the question of the timing of the reforms, alongside the £20bn cost-saving challenge posed by NHS Chief Executive Sir David Nicholson (referred to alternatively as “the Nicholson challenge” or “the QIPP*programme”).  My conclusion was that the main organisational damage has already been done, so we do not have much choice but to follow through.  I left aside the question of whether the reforms are wrong-headed.  I would like to consider this, before coming to an equally pragmatic conclusion.

What is being proposed?  A continuation of the big idea of the last 20 years or so: to create a purchaser/provider split, and to use this to introduce market mechanisms, under the banner of improving choice, to help ensure that the NHS is effective and efficient.  The problem that these reforms are supposed to solve is that the NHS is too dominated by hospitals, and the doctors who run them, who do not have enough incentive to change to meet new needs or to become more efficient.

In this latest incarnation, the purchaser element (now usually referred to as commissioners) of this set-up will be a combination of consortia of general practitioners (GPs), and an arms-length NHS Commissioning Board operating at national level (i.e. for England – the reforms don’t cover the other parts of the UK).  The intermediate commissioners under the current system, regional Strategic Health Authorities (SHAs) and district Primary Care Trusts (PCTs), are to be phased out.  On the provider side (i.e. the hospitals and other facilities), the idea is that all NHS facilities should be run by more or less independent Foundation Trusts, but that the commissioners will be allowed to secure services from “any qualified provider”, which will not be restricted to these trusts.

These reforms are a natural, if rather accelerated, continuation of the previous government’s NHS reforms.  Commissioning by GPs was already being piloted, and the idea of moving all hospitals to Foundation Trusts was the previous government’s idea too.  What is newer, and perhaps more radical, is the proposed regime of accountability that is being imposed on this.  Previously the NHS was run by the Secretary of State for Health, with very little restraint or accountability.  Now a complex framework of powers and accountabilities is being imposed, giving both parliament and local authorities a greater role.

The government argues that this is just evolutionary change.  But there has been vehement opposition from people who think that the new regime will end the NHS as we know it.  One problem is the commendable desire by the government to establish much of the framework in parliamentary law, rather than simply letting the minister rearrange things by fiat.  People now have the opportunity to project all their worst fears into the legislation on the basis that it does not specifically ban them.  In fact we are still being asked to trust ministers to do the right thing, only with more accountability.

Two lines of criticism that I can see have some kind of traction.  First is that the framework will open up the health market to competition law (and specifically European law) in the same way as for gas and electricity.  This means that the NHS trusts and the private sector would have to compete on a level playing field – and this might literally drive some NHS trusts out of business.  A lot of what NHS hospitals do is a natural monopoly (accident and emergency work, complex surgery, etc) , like the railways.  The fixed costs are so high that the market cannot sustain competition in most localities.  However, so the argument goes, these fixed costs also support activities where private sector competitors could undercut the NHS; if these are competed away then many hospitals would cease to be viable, and so the service on core activities would deteriorate.

Frankly I’m not stressed by this.  If a train wreck is on the way, it will be in very slow motion, giving time to take corrective action if need be.  More to the point, NHS professionals are masters at keeping the private sector at bay (except for NHS doctors doing private work on the side…), and they will only be seriously vulnerable in places were the service offered is ludicrously bad.  And as for European competition law, judging by its impact (not) on the French and German energy markets, there shouldn’t be anything that the politicians can’t handle.

The second criticism is more cogent.  It is that the rules for setting up GP commissioning consortia are a bit vague.  They could be set up in such a way that makes them very difficult to hold to account, or to act in partnership with other agencies.  For example, they may not be geographically coherent, cross local authority boundaries, and so on.  This does need some more thought – though again the worry is the direction reforms could take, rather than what is actually likely.

Personally, I don’t place a huge amount of faith in the purchaser/provider split and the marvels of choice anyway in this context.  There are two big problems: that the buyers (you and me) don’t know enough about what they are buying, and have to rely on intermediaries, whose incentives distort the picture.  The second is that so many providers are natural monopolies.  After decades of reform, the NHS does not remotely resemble a market economy.  It reminds me of a large company trying to introduce market-style rules for internal transactions; these systems never achieve as much as their proposers hope, since everything is trumped by politics in the end.  There have been two big achievements of the NHS reform process.  First is that hospitals are gradually being forced to be more efficient and accountable; this has mainly been achieved by good old-fashioned management, of which the “Nicholson Challenge” is but the latest example.  The second is that commissioning processes have forced NHS managers to address the question of what society actually needs, and then try to reorganise the service to meet these needs.  This last development is the more recent, and the the reorganisation of PCTs has interrupted it – but the new arrangements will probably be more effective in the long run.

The big prize to be won from the current reforms is hardly spoken of at all.  It is that GPs will start to come under the same sort scrutiny as hospitals have.  The consortia themselves will do some of this; the NHS Commissioning Board, which must authorise the consortia, will also be on the case.  The PCTs were supposed to be doing this, but were mostly pretty ineffectual.  The important point is that we should be in no hurry to authorise the consortia, to allow this scrutiny process to have real bite.  This seems to be exactly what Sir David Nicholson (who will chair the NHS Commissioning Board) has in mind.

Meanwhile the over-large number of PCTs has been reorganised into a more manageable number of “clusters”; these and the SHAs will no doubt live on as embodiments of the Commissioning Board.  The NHS will become much more centralised in the short term.  With some very sharp minds at the centre, including Sir David, this doesn’t have to end badly.  But the politcal arguments are mostly a smokescreen.

*QIPP stands for Quality, Innovation, Productivity, Prevention