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Mismanaged Nhs Reform Could Flatline Patient Services

PCT ‘meltdown’ threatens a return to rationing

The wholesale abolition of Primary Care Trusts proposed in the NHS White Paper could have a negative impact on patient care, and should be halted in favour of a more incremental approach to commissioning reform, according to a new report released today by independent think-tank Civitas.

A risky business: the White Paper and the NHS by James Gubb, director of the Civitas health unit, argues that the Government’s approach to the latest reorganisation of the health service could undermine hopes of making efficiency gains in many areas of the country, which are crucial if services are to retain the current level of provision.

The report is released ahead of the Coalition Government’s response to the consultation on the White Paper. It follows comments by Dr Sarah Wollaston MP, at a recent Health Select Committee hearing, that some PCTs are now ‘effectively in meltdown’. Sir David Nicholson, Chief Executive of the NHS, agreed with that description. Moreover, at a King’s Fund breakfast last week, Robert Creighton, CE of Ealing PCT suggested ‘this could be a bloody awful train crash’.

In response to concerns like these, Oliver Letwin MP, Number 10’s policy-fixer, has been brought in to scrutinise the new health policy. The Civitas report poses 12 big questions that Letwin should be asking of the reforms. The report argues it is ‘very uncertain’ that the wholesale abolition of PCTs by 2013 in favour of new ‘GP consortia’ will bring about significantly improved commissioning in the short, medium or long-term, compared with alternative approaches. This means that patients are likely to suffer delays to treatment while the reforms are carried out, and will not necessarily get improved care in the future as a result of the upheaval.

Tight budgets put squeeze on commissioners

The NHS will receive just a 0.1% real terms increase in funding per annum over the current parliament. In order to meet increased demand for care, this means the NHS will have to improve productivity by around 4% per year.

This productivity imperative requires the acute attention of commissioners who are in charge of the purse strings. In particular, increased productivity will not be achieved by merely driving efficiency in current systems of care, but through ‘disruptive’, innovative, and fundamentally different service models: service models that commissioners must commission. Many services will come from outside existing NHS providers.

The abolition of PCTs in favour of GP consortia is likely to undermine this focus on productivity in areas where GP-led commissioning is underdeveloped, distracting attention from the task in hand to structural and administrative matters: the redundancies, early retirements and redeployments resulting from closing down or merging organisations; and the recruitment, training, putting in place appropriate procedures and protocols, drawing up new contracts and developing relationships.

As Robert Creighton said to the King’s Fund: ‘[When doing this] I am not spending a moment thinking about patient care or money. It will be very difficult to keep everybody focused on the task in hand.’ For patients this means one thing: rationing and the return of long waits.

Reform ignores real barriers to commissioning better care

A recent publication by Civitas, Refusing Treatment: the NHS and market-based reform, documented the findings of an in-depth study of commissioning in the NHS. It pointed to a number of weaknesses:

  • The lack of a consistent vision and support on the part of government for PCTs as commissioners.
  • A lack of clinical input in commissioning and ability to influence primary care.
  • A lack of commercial skills on the part of PCTs and NHS providers.
  • A structural imbalance of power between PCTs and NHS providers in favour of the latter, explained among other things by a disparity in size, skills and political support.
  • Significant barriers to entry and exit.
  • The bureaucratic and overly-prescriptive nature of the tendering process.
  • Cultural reverence for the NHS as a system of nationalised provision, promulgated by politicians and the Department of Health. This has acted as a powerful break on PCTs’ ability to bring in alternative providers with new ideas to challenge NHS providers.

Most of these weaknesses could be addressed without significant structural upheaval. Aside from increasing clinical input, weaknesses could be more acute in GP consortia that are fragile than in PCTs. In particular: commissioning skills initially will be weaker in most consortia; consortia are likely to be smaller than PCTs; and the Government have yet to articulate a clear vision for what they mean by ‘commissioning’.

GPs that are forced into consortia will be unlikely reformers

Correctly, the wider focus of the White Paper is on increasing competition in the NHS. However, abolishing all PCTs and requiring all general practice be part of new consortia risks undermining this:

  • GPs will be commissioners as well as providers. Their interests will not simply coincide with those of patients and their accountability to patients will be weak. There is the obvious problem that some GPs could simply expand the services they offer in order to increase their income when there may be better options available, thereby dampening competition.
  • The British Medical Association, which negotiates the contract GPs operate under, has publically recommended their members give preference to NHS providers over others when tendering. If this advice is followed, it will be very difficult for the Government to enforce competitive tendering without recourse to expensive legal action.
  • The White Paper places a lot of weight on the immediate influence of extending patient choice to areas of care beyond electives. However, choice is only going to drive performance if there are alternative options to choose from: it is a gamble to expect new providers to enter a politically uncertain market, without the active encouragement of commissioners who are prepared to develop a supply base. It is questionable whether many consortia will have the skills or inclination to do this.

A better way

The Civitas report makes the case for an alternative reform of commissioning. Commissioning structures should be allowed to evolve locally subject to their ability to deliver, rather than according to a Whitehall blueprint. This would be consistent, in many ways, with the current ‘GP pathfinder’ volunteers.

Such a framework could entail:

1. Taking the shackles off PCTs, freeing them of interference from Strategic Health Authorities (which the White Paper is right to abolish); and assessing commissioners by the outcomes they achieve, not the processes they follow;

2. To increase clinical input, GPs could be given increased statutory influence over PCTs, including the right to to take them over following a rules-based procedure;

3. As part of this, there should be a rules-based failure regime for commissioners: a 90-day notice period in which other PCTs, entrepreneurial groups of GPs or other organisations have the option of taking over a commissioning organisation that is failing;

4. Commissioning organisations should be free to change organisational form and governance structures: to merge and de-merge and, more radically, form as mutuals or cooperatives. Further ideas, like allowing patients a choice of commissioning organisation could help shift accountability from the state to the individual.

James Gubb said: ‘The Coalition Government needs to stop repeating the mistakes of the past by mandating wholesale structural change. Instead, it should seek to build on the best of what currently exists in NHS commissioning while permitting entrepreneurial GPs to take over in areas where the desire is there or PCT-commissioning is failing.

‘The risks of ripping up the current commissioning structure in its entirety in favour of new, inexperienced, organisations at a time when the NHS must focus squarely on driving productivity like never before are unquantified and in all likelihood unacceptably high.’

For more information contact:

James Gubb on: 079 3024 3570

Civitas on: 020 7799 6677 or info@civitas.org.uk

Notes for Editors

i. James Gubb is director of the health unit at Civitas, a post he has held since 2007.

ii. Civitas is an independent social policy think tank. It has no links to any political party and its research programme receives no state funding. Civitas’s health policy research seeks to take an objective view of health care in Britain. It aims to offer an improved perspective on how best to deliver equitable and high standards of health care for all.

iii. The report, A risky business: the White Paper and the NHS, can be downloaded below.


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