Healthy differences, by Noel Plumridge

31 May 07
The recent UK-wide elections have highlighted the fact that there is not one NHS but four. Noel Plumridge examines what binds the different health services and what sets them apart

01 June 2007

The recent UK-wide elections have highlighted the fact that there is not one NHS but four. Noel Plumridge examines what binds the different health services and what sets them apart

Legend has it that Tony Benn, when a Cabinet minister in Harold Wilson's government, equipped his office with a large map of the United Kingdom. Nothing unusual there, you might say. The map was, however, hung upside down… allegedly so the London-based minister would constantly remind himself of the existence of Scotland.

That was several decades ago, but the Anglocentric viewpoint remains powerful in public life, and a constant irritant for those who live and work elsewhere in the UK. It's an outlook that's sometimes rationalised by population statistics – most people live in England – and is unconsciously reinforced by language. Loaded terms such as 'the mainland', 'British Isles' and 'the Celtic fringe' are still used innocently. Many Londoners use 'England', 'Britain' and 'the UK' interchangeably.

Yet in recent months the political headlines in the English capital have been dominated by developments remote from Westminster. First, in March, came the election of a new Assembly in Northern Ireland, in which the Democratic Unionists and Sinn Féin share power. Then, following the May elections, a nationalist administration took office in Scotland for the first time since the Act of Union. Alex Salmond's Scottish Nationalist Party has no overall majority but, like Sinn Féin at Stormont, now has to engage with the day-to-day realities of public administration.

In Wales, too, the elections have brought about a significant shift. Labour no longer commands an overall majority within the Assembly government, and Rhodri Morgan's administration clings on to power only because the other parties failed to agree a coalition deal. So one of the new dilemmas the incoming UK prime minister must address is how to manage Westminster's relationships with devolved assemblies in Belfast, Cardiff and Edinburgh, which seem likely to differ markedly from London on key areas of domestic policy.

Gordon Brown is famously unionist by nature, and prone to advocating the virtues of 'Britishness'. So the next few years might prove rather stormier as the limits of devolved local powers and central bodies are tested, policy by policy: a process wearily familiar to many working in local government and other parts of the public sector.

Meanwhile, there has been much speculation on the policy preferences of the prime minister-designate. He says education is his 'passion', but the NHS is to be his 'priority'. However, apart from recent statements that GPs really should do more to earn their corn, it is still unclear what this might mean in practice.

So what is the post-election outlook for health policy, and health finance in particular, across the UK?

Anglocentrism often assumes that where England leads, Northern Ireland, Scotland and Wales will in time follow. In the crucial arena of health and social care policy, for some it is only a matter of time before other nations 'catch up' with England and adopt their own version of a market-based NHS, with clear separation of commissioners and providers, competition and tariff funding. But the first duty of any prime minister is to be re-elected, and there are few signs that the 'successes' of English health policy are doing much to support Brown in this endeavour, while May's electoral disappointment in Scotland and Wales tells its own tale.

The UK has not one 'national' health service, but four. Since devolution in 1998 there has been a steady divergence in health policies and priorities. England quietly maintained the purchaser-provider split inherited from the Conservative 'internal market', and since 2002 has become increasingly preoccupied with market-orientated models – foundation trusts, independent sector treatment centres (ISTCs) and payment by results. But the rest of the UK has used different approaches.

Both Scotland and Wales have emphasised integration and co-operation more than competition. Behind the different structural building blocks – all-purpose trusts, local health boards and regional offices in Wales, health boards in Scotland – lie radical differences in approach, with clinical networks and social care more prominent. Older 'NHS family values' survive, as does deference to doctors. A year ago, when the English press was full of stories of nurses facing redundancy so that hospitals could eliminate their deficits, NHS Wales made it clear that redundancy was not an option.

And devolution has resulted in very visible differences in the patient experience. Wales scrapped prescription charges from this April. In the rest of the UK, a prescription costs £6.85, an increase of 20p on 2006/07. Other Welsh policy initiatives include free swimming for the under-16s and over-60s.

Scotland has committed significant resources to free personal social care, an issue currently being debated in the Northern Ireland Assembly. And outside England, day case surgery remains much less common and the concept of a walk-in clinic is unfamiliar. Perhaps less tangibly, public attitudes to the NHS in Northern Ireland, Scotland and Wales are less tinged by consumerism: stoicism and appreciation of free care are still the norm in many places.

Difference is not new, nor is it simply a consequence of devolution. A comparative analysis by the King's Fund's Arturo Alvarez-Rosete and others, published in the British Medical Journal in October 2005, tracked the extent of divergence between the four countries. The authors noted that NHS spending per head already varied in 1996/97, ranging between £831 (England), £944 (Northern Ireland), £968 (Wales) and £1,047 (Scotland). Since the late 1970s, each nation had used a formula to guide resource allocation, aimed at equitable distribution, but no such process had been applied between the four nations. So, ten years ago, funding per head in Scotland was 26% greater than in England. The gap has now shrunk to less than 10%: £2,019 compared with £1,839.

Ironically, however, the biggest single divergence between the English NHS and the rest of the UK – the cut in waiting times – was, at least before the May elections, encouraging an alignment of funds flow systems. Since 2002, the once-serious problem of lengthy waits for hospital appointments and treatments in England has been gradually resolved. By the end of 2008, no English patient should have to wait more than 18 weeks from diagnosis to treatment: a standard of access that remains largely a dream elsewhere in the UK, despite some impressive improvements. Northern Ireland, for example, has managed to cut its waiting list for elective surgery down to six months. In Scotland, the Labour manifesto promised the same 18-week standard… by 2011.

England's success has led to some griping from surgeons about their disappearing private income. With short or non-existent NHS waiting lists, the 'lucrative private practice' has, for many doctors, become a fond memory.

Irrespective of ideology, England's achievement is the envy of the other nations. And despite evidence that this is essentially the product of investment and target-driven management, eliminating unnecessary waits has become widely seen as linked to that other English phenomenon: payment by results.

In Scotland a major review of health services by Professor David Kerr, published in 2005, effectively set a path towards tariff funding. Building a health service fit for the future prompted a set of reforms collectively known as Delivering for health, with tariff funding playing a pivotal role.

The Scottish tariff, like the English, is based upon the average NHS cost for each health resource group (HRG) episode of care. An initial objective was to use inter-provider comparisons as a lever to force trusts at the higher end of the cost spectrum to trim their operating costs; but the tariff is also being used for payments to trusts, although only where patients cross health board boundaries and are treated within a health board different from their own.

In some areas these are material. Net inflows to the Greater Glasgow Health Board in 2005/06 amounted to some £110m, with some £40m flowing into Lothian. Health boards with net outflows in excess of £30m included Lanarkshire, Argyll & Clyde and Fife.

Although there are some similarities between the Scottish and English approaches to using the tariff, the Scottish context has been very different. It is not a 'building block' for choice, or a lever for greater provider diversity, or the basis of a market system. And, although money does move on the basis of tariff prices, the volume of funds flow seems unlikely to force high cost providers into savings, in the way that payment by results has worked with some English trusts. Its main role, for the present, would appear to be to cap the income aspirations of major acute hospitals in the urban lowlands.

The Welsh approach has been rather more cautious. In December 2005, the Assembly published Spending by design, its financial information strategy for health in Wales. The title is an allusion to Designed for life, the ten-year health strategy for Wales published earlier that year, which envisages major shifts away from the acute hospital sector.

Spending by design is not, however, a Welsh equivalent of payment by results; Rhodri Morgan's insistence on 'clear red water' between Wales and England is unlikely to accommodate an NHS market. It is essentially about financial information rather than funds flow, with two main aims: improving the quality of NHS financial information within Wales and promoting the consistent and productive use of NHS funding. This in turn supports the three main health management processes of resource allocation, commissioning and performance management.

HRG cost returns in Wales have been of poor quality. Inconsistency, particularly in the way day-case activity has been counted, was severe enough to delay the publication of the 2004/05 provider efficiency indexes – the Welsh equivalent of English reference cost indexes. And without reliable information, planning becomes a nightmare. (One of the by-products of payment by results in England has been a marked improvement in the quality of costing data within the NHS; it is hard now to recall how poor reference cost returns often were before payment by results.)

It had seemed possible that new commissioning arrangements for elective care would use a tariff, but no definitive commitments have been made and recent statements have placed much more emphasis on benchmarking and programme budgeting. 'England is an excellent pilot for Wales,' said Christine Daws, director of finance for the Assembly Government, in 2006, 'and it has told us that it has lots of flaws'. The 'tariff' word is increasingly avoided. But in the field of performance management, the potential of HRG-based costings for benchmarking and calibrating provider efficiency is well understood, and Spending by design envisages the development of a 'financial toolkit' using HRG returns and other cost-efficiency indicators.

As in Scotland, the Welsh health policy context does not explicitly feature either provider plurality or patient choice, and Designed for life re-emphasises the links between health and social care.

In Northern Ireland, health and social care policy has, since 2002, been determined by direct rule administrations rather than by a devolved assembly. Developments in Belfast cannot be viewed in the same way as those in Cardiff or Edinburgh: inevitably they reflect English preoccupations and preferences. Policy has also, in recent times, been inextricably linked with broader political manoeuvres to restore power to an elected assembly.

The most significant recent feature of the NHS in Northern Ireland, as in England, has been wholesale reorganisation. This is the outcome of the 2005 Review of Public Administration, promoted by Peter Hain, although it has also leaned heavily on an independent review in 2004/05 by John Appleby, chief economist at the King's Fund health policy think-tank. Eighteen NHS trusts have effectively been merged into five new integrated trusts, organised to promote links between hospitals and community services, with an explicit purpose of saving significant amounts of management costs. An estimated 1,700 jobs will be lost. To say the dust has still to settle would be an understatement.

On the commissioning side, seven local groups are being created. There have also been attempts to introduce other aspects of the English NHS model, including targets and performance management disciplines, primary care-led commissioning, and tentative steps towards a tariff-based regime – and a similar process of unpopular hospital consolidation.

It is still too early to assess how far May's election results might change health policy. As Andrew McCormick, permanent secretary in Northern Ireland's health department, observes: 'The model [for health services] has been agreed with Peter Hain but it is not universally agreed here.'

Ministers across the UK are still learning their new briefs, and in England the new prime minister will shortly be selecting a new Cabinet, with all the potential for policy change that implies. But it is possible to identify a number of important themes.

One is that governments with no overall control tend towards policies that offer potential cross-party consensus. To work otherwise would be futile. So we might reasonably anticipate health policies that avoid conflict; or, if you prefer, allow tough decisions to be sidestepped. In Scotland an early test for Health Minister Nicola Sturgeon surrounds plans to downgrade the Vale of Leven Hospital, leaving it without emergency facilities. The SNP's election campaign emphasised reversing unpopular plans for hospital downgrading; but in government, these need to be weighed against patient safety and budgetary concerns.

Another is acceptance that, in spite of policy differences, there is still much that binds the NHS together across the UK. Cost structures from Cornwall to Kirkwall are set for the foreseeable future by the Agenda for Change staff pay system, the consultants' contract and the General Medical Services contract. Core values about health care free at the point of delivery remain intact. And national media drive user expectations. Scottish and Welsh residents buy English newspapers, watch English TV channels and increasingly absorb English consumerist values about access and choice. The Anglocentric perspective remains alive and well.

And a third is that relative population density can be as important for health care provision as national boundaries. Urban south Wales, the central lowlands of Scotland and arguably the Belfast conurbation might actually have more in common with one another, and with heavily populated areas of England, than with their country cousins. This applies both to the health needs of urban populations and, crucially, the availability of specialised clinical staff. The practical reality is that the NHS in Swansea, for example, probably has sufficient population to justify employing a variety of expert physicians – but residents of rural Ceredigion will need either to travel, or to rely on complex clinical networks that share the skills around.

This is where policy and practicality collide. Geraint Martin, former director of health strategy for Wales, argued last year that one should not expect consistent UK health and social care policy. Wales, according to Martin, has much in common with other Atlantic nations such as Portugal and the Scandinavian countries; whereas England is more akin to bigger western European nations such as France and Germany.

So perhaps, as well as wondering how soon Northern Ireland, Scotland and Wales will imitate the English NHS, there are other important questions. Which areas of England have more in common with Argyll and Tyrone than the West Midlands or the West Riding? What aspects of NHS care in the rest of the UK could usefully be imported into England?

These are questions Brown's new health secretary would do well to ponder. Now that NHS waiting times are no longer the prime public concern in England, has the pressing need for choice and competition also passed? If the NHS elsewhere in the UK can cope without foundation trusts and ISTCs, let alone private sector 'advice' to commissioners, why the apparent need for them in England? Especially if, by antagonising NHS staff who pass on the 'bad news' to circles of friends and relatives, they seem to be causing electoral harm rather than gain.

Noel Plumridge is a former NHS finance director and the author of CIPFA's Payment by results


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