The withdrawal of NHS Direct from providing the 111 helpline doesn’t necessarily mean the market for public services is failing. But there are serious issues raised and lessons to be learnt for government
NHS Direct recently announced plans to pull out of all 11 of its regional contracts providing telephone triage services for the government’s new 111 non-emergency NHS number. The Royal College of Nursing, the British Medical Association and much of the press lined up to denounce the ‘chaos’ and branded the policy a ‘failure’. But is it? What are the lessons for government’s approach to public service markets?
NHS Direct used to be the monopoly state provider of the NHS Direct helpline (the precursor to 111), but the coalition put the service out to contract in 2010/11 hoping to find efficiencies. NHS Direct, which is now an independent service provider, won 11 of the 47 new contracts but is now pulling out of those deals, calling them ‘financially unsustainable’ and prompting press claims that the whole 111 service is on ‘life support’.
But the fact that NHS Direct cannot make a profit does not necessarily mean that the public service market is itself in trouble. In fact, unless any of the other providers pull out, you could argue that the market has just ejected the inefficient incumbent provider.
The claim that the market is in ‘chaos’ might also be overblown, since NHS Direct has agreed to operate the services until replacement providers are found. As with Southern Cross care homes, as long as the contracts can be provided at a profit, they are likely to be taken on by other, more capable, providers.
There are also reasons to believe that the underlying 111 market may not be ‘failing’. A good part of the dissatisfaction is with the 111 service itself, rather than the market.
The predecessor helpline service used (relatively expensive) trained nurses to provide medical advice and triage. The 111 number is designed to do a different job. It provides a single point of contact for all non-emergency NHS services and uses ‘lay operators’ and a computer programme to route callers to the most appropriate service, or escalate the call to a trained nurse.
Much of the opposition from the medical community is rooted in concern over the use of lay operators, and there is anecdotal evidence that they have made some poor referral decisions. But this is not necessarily a problem with the public service market; with markets, you generally get what you pay for.
Newly established public service markets often go through a temporary performance dip as staffing and capacity issues are resolved, as happened with the recent outsourcing of court translation services.
One of the primary faults with 111, exposed by the Dispatches investigation, is a failure to recruit enough nurses to handle the more complicated calls. These teething problems should, however, be resolved as the providers refine their recruitment processes and training is completed.
So, are ‘failure’ claims all overblown? Not quite. When NHS Direct lost its position as the sole provider of the NHS Direct telephone service it had two choices: win the 111 contracts or make a lot of staff redundant. With new-found freedom as an independent NHS Trust it unsurprisingly bid aggressively for the available contracts, even when the price per call was slashed by commissioners.
In the Work Programme, this same ‘must play’ mentality, sometimes combined with completion bonuses for bid teams, has resulted in many providers offering drastically reduced services to the hardest-to-help clients in order to break even.
If the other 111 providers were also approaching the bidding with a ‘must play’ mentality this could have serious implications for service users. If providers are badly overstretched then they may (advertently or inadvertently) shunt workload, and costs, onto other parts of the NHS.
The Dispatches investigator heard about ambulances being called out inappropriately (paramedics rated only 73% of call outs through the service as ‘appropriate’). Institute for Government research found evidence of similar behaviour in care markets where some care homes struggling to cope can develop a mentality of ‘just ring 999’.
This is part of the reason government has just announced additional money to shore up over-stretched A&E departments. In the medium term, if multiple providers were to withdraw from contracts at once then this could cause serious disruption to the 111 service.
More forethought could have helped. If some in-house provision had been retained, commissioners would have been able to assess whether 11 providers were putting in unrealistically low ‘must play’ bids. Similarly, a well-designed and proportionate failure regime, such as the one currently being developed for the care market, could also help reduce the risk of serious disruption to an important service.
Only time will tell if the NHS 111 market is in serious trouble, or if this is just a case of growing pains. But, either way, there are lessons to learn for government.
Sam Sims is a researcher at the Institute for Government and co-author of Making public service markets work: professionalising government’s approach to commissioning
