By Philip Collins | 1 May 2012
Following a long and painful battle, the Health and Social Care Act finally made it on to the statute book. But after all that legislative surgery, the prognosis remains unfavourable for the NHS
So, after all that expenditure of political capital, what is the Health and Social Care Act actually for? In 1946, a representative of the British Medical Association wrote in the British Medical Journal that the establishment of the NHS ‘looks to me uncommonly like the first step, and a big one, towards National Socialism as practised in Germany’.
During the course of Health Secretary Andrew Lansley’s Bill, nobody quite attained that level of hyperbole but they certainly tried. Advocates proclaimed it as the saviour of the NHS. Critics decried it as the end of the NHS as we know it. The truth does not lie in the middle but somewhere else altogether. After the filleting the Bill received from the Liberal Democrats, the Act has no clear purpose at all.
The Bill that received Royal Assent is certainly different from its original, whose purpose was clear. The idea was that the NHS would be improved by giving control to clinicians, choice to patients and freeing NHS organisations from central interference. These aims were to be achieved by granting commissioning rights to consortiums led by GPs, replacing regional NHS administrative bodies with independent entities such as the NHS Commissioning Board and establishing Monitor as a regulator with a brief to promote competition between all willing providers.
The Act that has emerged through the parliamentary skirmishes is a lot less bold than this. The proposed power of the GPs has been reined back. The easy-to-understand GP consortiums have been replaced by more complex clinical commissioning groups, which will be subject to more scrutiny from the sinister-sounding health and wellbeing boards.
Although primary care trusts and strategic health authorities are in the process of being abolished, there are vague plans for the NHS Commissioning Board to fill the gaps with regional and local offices, thereby recreating quite a lot of the furniture that was earmarked for the scrap yard. Monitor’s functions have also been downgraded. It will now confine itself to looking at anti-competitive behaviour where it is clear that this is to the detriment of patients. The phrase ‘any willing provider’ has been redrafted as ‘any qualified provider’.
Quite how all this will work is still hugely questionable. The process starts, rather than ends, with the passage of the legislation. Strategic health authorities will continue until April 2013, when the NHS Commissioning Board, which now exists in shadow form, will take over. Until the new system settles down, there will be clinical commissioning groups, health and wellbeing boards, SHA clusters, PCT clusters, clinical senates and networks, all operating at regional, sub-regional and local levels. The roles of the many different bodies created by the Act are unclear, especially the function of clinical senates and networks. These are groups of experts that will be gathered together to discuss a particular condition, such as cancer. Organisationally, this is a mess and it leaves five big issues hanging.
First, it is not clear what approach the NHS Commissioning Board will take or how it will specify the results it is seeking. The central problem is: who is in charge – the board or the CCGs? Certainly, the board will be very powerful. The ‘lean and expert body’ envisaged in the white paper has long since been replaced by a centralised giant. Close observers of the system report the glee with which David Nicholson, the combative chief executive of the NHS, cheerfully admits that the main result of the listening exercise was to bring most of the power back to the centre. The original aim of the Bill, to encourage local innovation, is likely to be a casualty of the remarkable ability of the system to kick back and retain its power.
Second, the Act is unclear what should happen when institutions fail, as they are bound to do. One recent report suggested that of the 18 foundation trusts in London, only six will still be financially viable in 2014. The original Bill envisaged that failure would be one of the spurs to improvement in the system and that Monitor would let institutions collapse. The Act envisages a more managed form of competition but the extent to which Monitor will intervene is still unclear. We do not yet know which services will be deemed to be essential through a transition.
The third area of uncertainty is the great philosophical divide in health care. It is widely attested that there are benefits to competition and that there are benefits to integrated care. It is wrong to say that the two are wholly mutually exclusive but the practical tensions are frequent. Finding a system that marries the benefits of competition with the virtues of integrating services around the patient is the holy grail of a complex health system.
The first Bill had a gung-ho aspect to it on competition that has been somewhat reined in. Amendments have been added to outlaw price competition. New duties have been placed on Monitor, the NHS Commissioning Board and on clinical commissioning groups to promote integration of health services. Stronger duties have also been placed on health and wellbeing boards to promote integration between health and social care. The Act does extend the choice of provider beyond elective surgery to other areas of care but we still need to know whether, for example, the tariff will be changed to support integrated care. It is unclear whether the outcomes framework for the NHS will be revised to reflect the new emphasis. It is still less clear whether the professionals in the NHS will be able to overcome their historic enmities and start to co-operate.
The revised Act reflects the confusion of the argument. Some parts of the system will be subject to competition and some to the attempt to integrate the service from the centre. In the uneasy truce between the advocates of competition and the advocates of integration, it is not likely that the incentives are all in the right place. The Act will not be the final word in this argument, not by a long way.
The fourth unanswered question is the role of the GP, the most controversial part of the reform. Lansley’s original idea was not, on the face of it, a silly proposition. The idea was that the GP was to spend 60% of the NHS budget, while acting as the expert agent of the patient, making a reality of the latter’s wishes and ensuring the design of appropriate local services.
That original vision, which had something to be said for it, has not survived the revisions to the Bill. The GP consortium has been replaced by the clinical commissioning group, which will be required to include a nurse and a hospital specialist on its governing body. The uncanny ability of David Nicholson to wrest back control to the centre has meant that GPs might become beholden to the NHS Commissioning Board while all their patients blame them for the changes.
This might be just as well. The health secretary never made a convincing case that GPs were capable of handling the £60bn commissioning budget. The evidence from GP fundholding in the 1990s did show some efficiency gains with no loss of equity but that was a tiny reform next to the wholesale commissioning changes Lansley envisaged. Besides, the scheme was voluntary and was taken up only by the more innovative practitioners. It still seems that full statutory responsibility for commissioning was a peculiar thing to foist on GPs, the bulk of whom are happier providing services than they are purchasing.
Although the Act still seeks a radical role for GPs that many are unwilling and ill-equipped to play, the fifth and final problem with the legislation is that it is probably not radical enough. The NHS itself needs surgery and it is unlikely that this Act is what it needs. It has to find savings of £20bn by 2015 – the so-called Nicholson Challenge. Lansley suggests that his reforms will save £5bn by 2015 in staff reductions alone, as he seeks a 45% cut in management costs. Even if his optimistic figures turn out to be true, that is still only a fraction of the change needed.
The changing nature of disease in an ageing population – the prevalence of diabetes, chronic obstructive pulmonary disease and dementia, for example – means that Britain needs to spend a lot more money helping people with long-term conditions at home and a lot less on expensive and unnecessary acute care in hospitals. In the absence of adequate support for people with long-term conditions, there are too many costly admissions to hospital. As medical knowledge has advanced in genomics and stem cell research, costly new procedures have become available and, in a system with no rationing by price, are demanded by the public. For all these reasons, NHS productivity has been declining, by an average of 0.2% a year, since 1995.
The NHS needs a greater stress on preventing ill health than treating it. It needs a new pattern of specialist care, in fewer centres of excellence. With the abolition of the strategic health authorities, it is not obvious whose job this now is. It is hardly likely that the CCGs will have the stomach for this big fight, even if they have the capacity, which is also doubtful if they are to meet their stringent targets for management cuts. The health service also needs to reduce capacity in acute hospitals and increase support for people at home. It is not likely the CCGs are going to become advocates for the unpopular cause of closing down cherished local hospitals. But somebody will have to do it.
At a time when all of Whitehall is trying to do more with less money, £1.4bn has been found for Lansley’s unheralded reform programme. Whether he survives a summer reshuffle, to see through the reforms about which he is genuinely passionate, is by no means definite. The ultimate test of the changes will be whether the NHS can do at least as much at lower cost.
But the published Act brings confusion about who is in charge, introduces a complex system of regulation, places obstacles in the way of reconfiguring services and ensures that every time something goes awry in the NHS it will be blamed on the government.
Philip Collins is a columnist for The Times
This article first appeared in the May edition of Public Finance
Following a long and painful battle, the Health and Social Care Act finally made it on to the statute book. But after all that legislative surgery, the prognosis remains unfavourable for the NHS
So, after all that expenditure of political capital, what is the Health and Social Care Act actually for? In 1946, a representative of the British Medical Association wrote in the British Medical Journal that the establishment of the NHS ‘looks to me uncommonly like the first step, and a big one, towards National Socialism as practised in Germany’. During the course of Health Secretary Andrew Lansley’s Bill, nobody quite attained that level of hyperbole but they certainly tried. Advocates proclaimed it as the saviour of the NHS. Critics decried it as the end of the NHS as we know it. The truth does not lie in the middle but somewhere else altogether. After the filleting the Bill received from the Liberal Democrats, the Act has no clear purpose at all.
The Bill that received Royal Assent is certainly different from its original, whose purpose was clear. The idea was that the NHS would be improved by giving control to clinicians, choice to patients and freeing NHS organisations from central interference. These aims were to be achieved by granting commissioning rights to consortiums led by GPs, replacing regional NHS administrative bodies with independent entities such as the NHS Commissioning Board and establishing Monitor as a regulator with a brief to promote competition between all willing providers.
The Act that has emerged through the parliamentary skirmishes is a lot less bold than this. The proposed power of the GPs has been reined back. The easy-to-understand GP consortiums have been replaced by more complex clinical commissioning groups, which will be subject to more scrutiny from the sinister-sounding health and wellbeing boards.
Although primary care trusts and strategic health authorities are in the process of being abolished, there are vague plans for the NHS Commissioning Board to fill the gaps with regional and local offices, thereby recreating quite a lot of the furniture that was earmarked for the scrap yard. Monitor’s functions have also been downgraded. It will now confine itself to looking at anti-competitive behaviour where it is clear that this is to the detriment of patients. The phrase ‘any willing provider’ has been redrafted as ‘any qualified provider’.
Quite how all this will work is still hugely questionable. The process starts, rather than ends, with the passage of the legislation. Strategic health authorities will continue until April 2013, when the NHS Commissioning Board, which now exists in shadow form, will take over. Until the new system settles down, there will be clinical commissioning groups, health and wellbeing boards, SHA clusters, PCT clusters, clinical senates and networks, all operating at regional, sub-regional and local levels. The roles of the many different bodies created by the Act are unclear, especially the function of clinical senates and networks. These are groups of experts that will be gathered together to discuss a particular condition, such as cancer. Organisationally, this is a mess and it leaves five big issues hanging.
First, it is not clear what approach the NHS Commissioning Board will take or how it will specify the results it is seeking. The central problem is: who is in charge – the board or the CCGs? Certainly, the board will be very powerful. The ‘lean and expert body’ envisaged in the white paper has long since been replaced by a centralised giant. Close observers of the system report the glee with which David Nicholson, the combative chief executive of the NHS, cheerfully admits that the main result of the listening exercise was to bring most of the power back to the centre. The original aim of the Bill, to encourage local innovation, is likely to be a casualty of the remarkable ability of the system to kick back and retain its power.
Second, the Act is unclear what should happen when institutions fail, as they are bound to do. One recent report suggested that of the 18 foundation trusts in London, only six will still be financially viable in 2014. The original Bill envisaged that failure would be one of the spurs to improvement in the system and that Monitor would let institutions collapse. The Act envisages a more managed form of competition but the extent to which Monitor will intervene is still unclear. We do not yet know which services will be deemed to be essential through a transition.
The third area of uncertainty is the great philosophical divide in health care. It is widely attested that there are benefits to competition and that there are benefits to integrated care. It is wrong to say that the two are wholly mutually exclusive but the practical tensions are frequent. Finding a system that marries the benefits of competition with the virtues of integrating services around the patient is the holy grail of a complex health system.
The first Bill had a gung-ho aspect to it on competition that has been somewhat reined in. Amendments have been added to outlaw price competition. New duties have been placed on Monitor, the NHS Commissioning Board and on clinical commissioning groups to promote integration of health services. Stronger duties have also been placed on health and wellbeing boards to promote integration between health and social care. The Act does extend the choice of provider beyond elective surgery to other areas of care but we still need to know whether, for example, the tariff will be changed to support integrated care. It is unclear whether the outcomes framework for the NHS will be revised to reflect the new emphasis. It is still less clear whether the professionals in the NHS will be able to overcome their historic enmities and start to co-operate.
The revised Act reflects the confusion of the argument. Some parts of the system will be subject to competition and some to the attempt to integrate the service from the centre. In the uneasy truce between the advocates of competition and the advocates of integration, it is not likely that the incentives are all in the right place. The Act will not be the final word in this argument, not by a long way.
The fourth unanswered question is the role of the GP, the most controversial part of the reform. Lansley’s original idea was not, on the face of it, a silly proposition. The idea was that the GP was to spend 60% of the NHS budget, while acting as the expert agent of the patient, making a reality of the latter’s wishes and ensuring the design of appropriate local services.
That original vision, which had something to be said for it, has not survived the revisions to the Bill. The GP consortium has been replaced by the clinical commissioning group, which will be required to include a nurse and a hospital specialist on its governing body. The uncanny ability of David Nicholson to wrest back control to the centre has meant that GPs might become beholden to the NHS Commissioning Board while all their patients blame them for the changes.
This might be just as well. The health secretary never made a convincing case that GPs were capable of handling the £60bn commissioning budget. The evidence from GP fundholding in the 1990s did show some efficiency gains with no loss of equity but that was a tiny reform next to the wholesale commissioning changes Lansley envisaged. Besides, the scheme was voluntary and was taken up only by the more innovative practitioners. It still seems that full statutory responsibility for commissioning was a peculiar thing to foist on GPs, the bulk of whom are happier providing services than they are purchasing.
Although the Act still seeks a radical role for GPs that many are unwilling and ill-equipped to play, the fifth and final problem with the legislation is that it is probably not radical enough. The NHS itself needs surgery and it is unlikely that this Act is what it needs. It has to find savings of £20bn by 2015 – the so-called Nicholson Challenge. Lansley suggests that his reforms will save £5bn by 2015 in staff reductions alone, as he seeks a 45% cut in management costs. Even if his optimistic figures turn out to be true, that is still only a fraction of the change needed.
The changing nature of disease in an ageing population – the prevalence of diabetes, chronic obstructive pulmonary disease and dementia, for example – means that Britain needs to spend a lot more money helping people with long-term conditions at home and a lot less on expensive and unnecessary acute care in hospitals. In the absence of adequate support for people with long-term conditions, there are too many costly admissions to hospital. As medical knowledge has advanced in genomics and stem cell research, costly new procedures have become available and, in a system with no rationing by price, are demanded by the public. For all these reasons, NHS productivity has been declining, by an average of 0.2% a year, since 1995.
The NHS needs a greater stress on preventing ill health than treating it. It needs a new pattern of specialist care, in fewer centres of excellence. With the abolition of the strategic health authorities, it is not obvious whose job this now is. It is hardly likely that the CCGs will have the stomach for this big fight, even if they have the capacity, which is also doubtful if they are to meet their stringent targets for management cuts. The health service also needs to reduce capacity in acute hospitals and increase support for people at home. It is not likely the CCGs are going to become advocates for the unpopular cause of closing down cherished local hospitals. But somebody will have to do it.
At a time when all of Whitehall is trying to do more with less money, £1.4bn has been found for Lansley’s unheralded reform programme. Whether he survives a summer reshuffle, to see through the reforms about which he is genuinely passionate, is by no means definite. The ultimate test of the changes will be whether the NHS can do at least as much at lower cost.
But the published Act brings confusion about who is in charge, introduces a complex system of regulation, places obstacles in the way of reconfiguring services and ensures that every time something goes awry in the NHS it will be blamed on the government.
Philip Collins is a columnist for The Times
This article first appeared in the May edition of Public Finance
