While reforms to the health system set out in the government’s Liberating the NHS white paper have received relatively little attention, they are the most radical part of the government’s agenda. In essence, the NHS, an economy slightly smaller than Ireland’s, will have its balance of power and accountability fundamentally altered. This completes a journey started by the previous government and aims to remove the state from the direct day-to-day management of the NHS.
There are huge risk associated both with the design of the new system and the transition to it. How tightly to manage these risks is one of the most important policy questions facing the coalition government.
The centrepiece of the reforms is the handing over of decisions on care, treatments and spending to GPs. The government sees GP practices as a natural place to put this responsibility because so much healthcare cost is driven by decisions that GPs make. There is evidence that health systems work better where budgets and spending power are moved as close to patients as possible.
Freeing up GPs to take control of budgets and buy services for patients from any willing provider will create a regulated market for healthcare similar to those for utilities or telecoms. Innovation, quality improvement and increased efficiency in these types of market have often been driven by new entrants. In order for these new entrants to come in, however, unviable local services – even those that are much-loved – will have to shrink or close down.
This regulated market will have a powerful economic regulator to promote competition and an independent National Commissioning Board, which will hold GPs to account for the outcomes they achieve for patients. At the local level, new health and well-being boards will have powers (as yet undefined) to ensure the GP groups meet the needs of local people. In doing this, the government will take a big step back from the day-to-day running of the NHS. This is even more the case with hospitals and other providers which will be out of the reach of government interference. This is much more like health systems in other developed countries but a long way from what the public, the media and politicians have been used to. The NHS will no longer be an organisation, but a system, and politicians will no longer be able intervene in each scandal, hospital closure proposal or local issue.
Many analysts feel that they have been presented with the blueprint for a very complex machine, which they can visualise but have no idea how it will work once it is switched on. There are some concerns about how some of the components work together. The system could produce much more variation than the public is used to and there are questions that must be resolved over how accountability will work. In particular, there are questions about what powers the commissioning board and councils will have over GP groups and healthcare providers. At all levels, the NHS needs answers about how people are going to be held accountable.
There is huge potential for GPs, as the starting point for so much NHS care, to create genuinely integrated care. However, all parts of the system must be encouraged to work together as the tensions in a market can drive participants into conflict rather than collaboration. Interestingly, the White Paper talks about improving integration but fails to acknowledge the role of hospital consultants or social care in achieving this. An insistence on a rigorous split between purchaser and provider functions could also undermine the integration that many patients need.
The reforms will mean an enormous change programme and massive reorganisation. GPs will have to create new organisations and learn new skills. Healthcare providers could find themselves in a much more competitive market. At the same time, the NHS also faces the need to make major savings of £15-20 billion over the next four years. Moving to the new system, maintaining control of day-to-day services, and implementing these savings is going to require skilled management. This at time when the NHS is shedding much of its management workforce – and when managers have been under political attack.
Unlike the previous government’s approach to reform, which tended to dictate not just what was required but how it should be implemented, these changes have the advantage of allowing much more scope for local adaptation and innovation. Another strength is that the government has learned the lesson that healthcare reform is at least a 10-year process. These are also potential weaknesses. It is hard, for instance, to give a simple account about how the system will work and how the policies translate into outcomes. This means people may not be ready for the turbulence, hospital closures and other effects of regulated markets. If the transition is rough, the promise of a system that is better in the long term may not be sufficient recompense.
So here is the dilemma. If too much effort is put into managing the risks associated with switching on the new machinery, nothing much will change and we will have wasted huge amounts of time and effort. If too little attention is paid to the risks or the problems of transition, the machinery will be switched off or reformed again before we find out whether it works.
Nigel Edwards is acting chief executive of the NHS Confederation
