For years in opposition, Conservative health policy has been something of a paradox. Policy papers setting out fundamental change in some detail (at least for an opposition) were accompanied by an almost boringly repetitive message of reassurance about the Party’s belief in the NHS and its competence to manage it. The reassurance achieved cut through but the radical change which was explicit in the policy rarely did. A cautious ‘hug them close strategy,’ which preferred tactical attacks on areas of perceived Labour failure to setting out clear blue water on the NHS, undoubtedly had political benefits: Labour’s historic advantage as the ‘party of the NHS’ has been close to neutralised in the polls – no mean feat on an issue which still ranks second only to the economy in voters’ priorities. However, the approach also left many commentators confused as to whether a Lansley-led NHS would be substantively different to that created by Labour’s reforms.
Andrew Lansley was always careful to make clear his support for healthcare which is free at the point of use, and based on need and not ability to pay. For commentators used to an ideological debate about how healthcare funding should be raised, this philosophical support for an NHS funded through general taxation drowned out the more radical ideas espoused by the now Secretary of State. Critics on the right, unhappy with his binning of the ‘patient’s passport’ policy, decried what they perceived as his lack of radicalism. Equally those on the left, mistrustful of Conservative intentions towards Labour’s most prized creation, argued that he was little more than a caretaker who would be swept away by those intent on destroying healthcare free at the point of need. Today’s White Paper provides an emphatic answer to this debate, reaffirming Lansley’s commitment to NHS values but fusing them with his own distinctive agenda. Repeated trails over the past few days and weeks, which should have conditioned the NHS for what was to come – do little to diminish the radicalism of the proposals.
There is no shortage of ambition in the new Secretary of State’s plans for the NHS. Today’s White Paper, Equity and Excellence: liberating the NHS, sets out one of the most significant reorganisations in NHS history. Though it has been described as the greatest change since the 1973 reorganisation, that one only went so far as structures. Today’s changes both structures and systems. It is truly a game-changer.
The White Paper not only breaks apart purchasing and provision, but to make this change permanent, it calls for the wholesale denationalisation of the provider-side (albeit with strong regulatory structures to make sure they behave), and the creation of an independent NHS Board responsible for commissioning alone (and ostensibly immune from the pressures of politicians to subsidise failing providers). To drive the market in healthcare provision, it calls for the further entrenchment of the ‘tariff’ into new areas – including community services and mental health (at last) – and it calls for local variations to the tariff to be permitted, exposing the NHS to a degree of price competition they have not known since the mid-1990s. To maximise the number of ‘purchasing’ decisions, it places the NHS budget virtually in entirety in the hands of GP commissioning consortia, and it does away with the Primary Care Trusts (PCTs) (or what used to be called ‘health authorities’) which have governed the NHS at the local level for the best part of 40 years.
What it does not do, however, is set out plans for how care should be provided: this is no Lord Darzi-style report on the need for ‘polyclinics’ in every locality, and certainly not a 1960s-style hospital plan.
None of this should, however, be surprising. Health policy geeks will know that these policies were first set out by Andrew Lansley in a speech to the NHS Confederation almost five years ago. An NHS Autonomy and Accountability ‘White Paper’ followed in 2007 and reiterated them all in entirety. In so far as the White Paper does contain ‘surprises’, they are those which have been inherited from the Coalition Agreement: the abolition of Strategic Health Authorities (SHAs) and the involvement of directly-elected representatives in determining health policy. Quite whether the White Paper holds true to the Coalition Agreement’s pledge to end ‘top down’ reorganisations is likely to be the subject of fierce debate for months to come, but in truth the move away from SHAs and PCTs was probably always a logical conclusion of a series of policies which would have left them little to do.
NHS Chief Executive David Nicholson has described the changes as ‘revolutionary’, which is certainly how they may seem today. But it is much more accurate to see them as being an evolution. ‘GP commissioning consortia’ bear a striking resemblance to the ‘total purchasing pilots’ which grew out of the GP fundholding model of the last Conservative Government (and, in truth, are the logical extension of ‘Practice-Based Commissioning’ introduced under the last Labour Government). And if their functions are similar to those of the old GP fundholders, the areas they might cover will probably be similar to Labour’s ‘Primary Care Organisations’ of the late 1990s. It also recognises the importance of specialist expertise in commissioning decision-making, by retaining the role of clinical ‘networks’ of commissioners and providers (such as cancer networks) to determine the best configuration of care services.
Although the White Paper is not clear on this, it is likely that proposals will be brought forward to move NHS Foundation Trusts off the balance sheet, fully realising the financial freedoms that were first promised by Alan Milburn in 2002. The application of the foundation trust model to the community sector is only an extension of Labour’s ‘Transforming Community Services’ agenda. And indeed, though this is certainly a ‘denationalisation’ – insofar as foundation trusts are likely to become much more independent of the state – it is certainly not a ‘privatisation’ because their assets are protected for NHS use.
The extension of the tariff to many more areas of healthcare delivery is only what was intended when Payment by Results was first introduced at the beginning of the noughties. And the White Paper explicitly rejects the pricing free-for-all which characterised the first ‘NHS internal market’ of the early 1990s, and which was responsible for its calamitous transaction costs.
If today’s White Paper feels revolutionary, it is because it blends the various reforming healthcare policies which have been driven forward by both parties’ governments over the last twenty years – on the commissioning, provision and marketisation of healthcare – and sets out their logical conclusion in one place. It also establishes a punishing (and much debated) timetable for getting there, even if it does not yet set out a clear path to the destination.
Collectively, these policies spell the end of what might be called ‘system-management’ in the health service. There will be no formal organisational links between purchasers and providers, nor between providers and providers (indeed, such links will be deemed anti-competitive) and so funding cannot be moved around the NHS to counter the shocks which the health care services might have to endure. It breaks apart the authority heath service managers have enjoyed to be able to ‘plan’ services in their area (and to instruct commissioners to commission care and providers to deliver it in accordance with their plan). And it proposes the elimination of all channels of control the Secretary of State has until now enjoyed over healthcare providers. In short, the reforms announced will decisively shift the basis of NHS decision-making from the system management which has characterised it in the past, to market management.
Although the proposals in this White Paper represent an evolution – a consolidation and projection of the policy aims ultimately shared by both Conservative and Labour governments over the last twenty years – the timetable for delivering them makes them truly revolutionary. Perhaps the White Paper should best be described as a ‘great transformation’ – an apt phrase since it was coined by Karl Polanyi in his book on the marketisation of society, which sets out many of the challenges which exist in economies which today’s White Paper attempts to address.
The vital role of regulation
Karl Polanyi wrote his book before the limitations of purely self-regulating markets were known: that if markets are incomplete (ie you can get something for free) or if the information about the market is imperfect (meaning that you cannot see if someone is behaving unfairly) then markets will fail. Today’s White Paper does at least appear to recognise these failures, and makes moves to address them.
First, it proposes a powerful system of regulation. On the one hand, there is an economic regulator – Monitor – whose job it will be to ensure that providers are not unnecessarily monopolistic (although this will be permitted in areas where there is no other alternative), and ensure that purchasers are not favouring incumbent providers or clubbing together to drive down costs, putting providers out of business. And on the other hand, there is a quality regulator – the Care Quality Commission – whose role it will be to ensure providers are not sacrificing quality for efficiency in the new market – a criticism of the internal market established by the last Conservative government. When the White Paper talks of a ‘strengthened’ quality regime, this is undoubtedly true: the Care Quality Commission will not only ensure that services are providing minimum standards, but – in an echo of the role the old Healthcare Commission played in assessing services against gold standard ‘developmental standards’ – will also inspect services to see whether they are adhering to NICE’s new ‘quality standards’.
Second, it sets out plans rather grandly for an ‘NHS information revolution’. Building on Sir Bruce Keogh’s work on cardiac surgery mortality rates, it sets out plans to collect information on the performance of named clinical teams – and to put these into the public domain. It calls for a huge expansion in clinical audit, and the collection of new ‘outcome measures’ – including patient-reported outcome measures (PROMs). And it centralises data collection in the hands of the NHS Information Centre, setting that body a duty to disclose information that it holds as far as possible. Again, some of this agenda has been tested in recent years – notably in cancer – but the White Paper heralds a radical extension.
Patient voice and political pressure
Importantly for all those who seek to influence the health service for the better, the White Paper does not seek to establish an NHS which exists in a bubble, immune from political and patient pressure. Though as expected, it sets out more plans for ‘choice’ in healthcare – as espoused by the last Government – it promises to go much further in terms of ‘voice’, entrenching the role of patient voice right at the heart of NHS decision-making. It combines the role of local involvement networks (LINks) into a national organisation – HealthWatch – whose role it will be to champion the interests of patients at every level of the NHS, from GP commissioners to national regulators. Unlike the now-extinct Commission for Patient and Public Involvement in Health, HealthWatch will sit formally on the board of the CQC, with powers to order investigations into services and areas it deems to be failing. This could potentially be a powerful weapon in the armoury of patient groups, but to work it will need them to truly understand their role in the system and to maximise the opportunities it presents. Expect to hear the Secretary of State’s mantra, “no decision about me, without me” to be repeated many times by charities in future months and years.
At other levels of the system, there is also the opportunity for engagement. It remains the Health Secretary’s role to determine the priorities of the NHS Board, and these priorities can be amended not only each year but also – note this section of the White Paper – in-year. The NHS Board’s role is to distil the range of outcome measures set for it by the Health Secretary into a range of performance indicators, cascading down from the national to the local levels. The ‘Outcomes Framework’, which sets out what the NHS will be asked to prioritise over the medium term, is itself being consulted upon. And NICE will be asked to set ‘Quality Standards’ across the vast majority of disease areas. These Quality Standards permeate every level of the system: the NHS Commissioning Board will be asked to task commissioners with setting contracts to achieve them; providers will be asked to publish information setting out whether they are meeting them; and the CQC will inspect service performance against them. Of course, all of the decisions informing these reforms will be underpinned by the health policy narrative prevailing at the time. Influencing at the national level will matter every bit as much as in the era of top-down national targets.
A great transformation?
Karl Polanyi warned that as market penetration increases, society spontaneously moves to protect itself. Rapid transformation destroys old coping mechanisms and old safety nets whilst creating a whole new set of demands before new coping mechanisms are developed. In the micro-society of the NHS, this is particularly relevant: for example PCTs, whatever their failings, have taken steps to address the weaknesses of the situation in which they have found themselves over recent years. In some areas, they have combined commissioning with specialist expertise from the provider side to inform their decisions. In other areas, they have merged back-office functions to reduce administrative costs. In yet more, they have formed close relationships with their [coterminous] local authorities to tear down the Berlin wall between health and social care – and one has even merged with their local authority into a single organisation. One of the challenges of the programme of reforms set out in today’s White Paper is to ensure that these gains are not lost in the turbulence created by the changes.
There are of course risks associated with the White Paper and we can expect to hear plenty about them in coming months. The details of how the failure regime for commissioners will work need careful consideration. Transitional costs associated with migrating to the new system will need to be kept to a minimum. The appetite of all GPs – and the willingness of the BMA – to take on new responsibilities will be tested. This is a White Paper of many moving parts – and with GP commissioners there are thousands of them – and they will all need to function correctly if Lansley’s vision is to be made real. New commissioning and regulatory structures, changes to the way in which NHS providers are governed and a new way of managing performance must all be implemented at a time of extreme financial pressure for the NHS. The constituent parts will all need to know their role and how to play it from as early as next year. That the new system will need to bed down without the old safety net of moving money round the system to smooth out financial wrinkles simply serves to raise the stakes still further.
Much of the detail still needs to be worked out and health stakeholders will need to play a big role in ensuring that the new Government gets it right. Equally, staying this particular course will require immense political will and restraint in refraining from interfering in areas which the White Paper has ruled out of bounds for politicians. The extent to which the Coalition can hold its nerve in this respect will go along towards determining whether 12 July 2010 is remembered as a great transformation for the NHS.