The NHS, but not as we know it

14 Oct 05
NIALL DICKSON | The NHS in England has embarked on the most radical and far-reaching reform programme in its history.

The NHS in England has embarked on the most radical and far-reaching reform programme in its history.

Only now are the political class, the staff in the NHS and, to a lesser extent, the public waking up to the powerful forces that have been released.

At the heart of all this is a belief that unless the NHS becomes a great deal more accessible, efficient and responsive, it will flounder. And, crucially, that it will fail to meet rising expectations within the constraints of a tax-funded envelope.

As everyone knows, the government has provided unprecedented investment coupled with tough central targets and a national framework of regulation. While these measures have brought about some improvements, ministers have now concluded that more powerful and sustainable incentives are needed.

That is why we are now seeing the political volte-face that has brought about the re-introduction of market-style mechanisms, with more and sharper teeth than the last Conservative administration dared to contemplate. The NHS is going to move from being a state-run service populated by local monopolies to a range of competing providers, with the declared aim of devolving power and decision-making to patients and clinicians.

This is no small technical fix, although at times you might be forgiven for regarding it as such. The secretary of state, for example, says that the private sector will take up only 1% of total NHS spend. But the reality is that the government is breaking up the entire state-run system, not only by bringing in new independent providers but also through autonomous foundation trusts — and now by ordering primary care trusts to divest themselves of all their provider functions and create a new market for community services in every locality.

This is probably the right time to create something new. But make no mistake, if all this goes ahead it will be the end of the Bevan settlement of 1948 that created the NHS.

The number of reforms is formidable. But the questions now must be: are these changes the right ones, is the government and everyone else clear about what is to be done and are they being implemented at the right speed and in the right way?

To help us answer these, the King’s Fund is putting the new NHS market under the microscope with a major new programme this autumn.

Some of the challenges are already apparent. The first is the sheer volume of change that the service is expected to absorb. As well as the new market-style incentives, the NHS is having to absorb and meet the costs of new pay arrangements for staff while introducing the largest IT programme ever undertaken. And now every PCT and strategic health authority in the country is to be scrapped and reformed.

Secondly, it’s clear that the new incentives will be powerful drivers of change. The viability of parts of the system will come under threat.

This is not necessarily a bad thing. We should not be defending inefficient or ineffective services but we are heading for greater financial instability. Under the new system, hospitals will be financially dependent on the number of patients they attract. The old system of brokerage — whereby one part of the service bailed out another — has gone.

Last year, the NHS failed to balance its books, albeit by a modest amount, but that disguised areas of the country and individual services with large deficits. This will almost certainly worsen when the largesse of the past few years becomes the parsimony of the post-2008 settlement.

Thirdly, there is an extraordinary amount of confusion about how the new market will work. There are tensions between market incentives that encourage hospitals to treat as many patients as possible and a policy aim of reducing unnecessary hospital admissions; between the consumer model based on choice and the community involvement model of voice; between the competitive market and the exhortation to collaborate; between the demand for health and social care to integrate and their different funding mechanisms. The list goes on.

And there is another danger. The goals of faster access and greater convenience are becoming a reality, but the quality of care must be maintained as must a real determination to provide better services for those on lower incomes. Choice could help to liberate all those who use the NHS, reflecting wider changes in the relationship between professionals and patients. But it could also favour the more articulate and affluent.

To fail to manage the next couple of years effectively risks stalling or even reversing the reforms – before their value is known. And the success or failure of this endeavour will determine the future of the NHS, and perhaps even whether it has one.

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