A dog’s breakfast or radical reform?

Civitas, 13 July 2010

Yesterday, Civitas released a brief commentary on the NHS White Paper published by the Coalition government.  I’m happy to repeat congratulations to the Coalition government on moves to introduce greater competition in the NHS by expanding choice and supporting a genuine ‘social market’ through the introduction of meaningful competition law.

Recent evidence on the impact of the competition that already exists in the NHS suggests this is the right course of action to drive value in tight financial times.

However, I want to devote the time and space of this blog to analysis of the more fundamental proposals on the purchasing side of things.  That is, moves to transfer responsibility for commissioning from PCTs to GPs.  A number of concerns:

1.What is proposed represents a huge structural change. The reality is that considerable resources will need to be devoted to the restructuring by: creating new organisations; laying people off in PCTs and recruiting new staff at GP consortia; working out the right blend of risk and reward for GP consortia; creating new accountability frameworks; and implementing new formulas for distributing resources.

All will take time, distract attention, and carry significant risks if got wrong. Evidence from past restructuring of commissioning in the NHS in 2006, compiled by researchers at Civitas, for example suggests a dip in performance of at least one year is likely.  What’s more, the NHS can expect to be set back at least three years relative to what could be achieved without any structural change, which would be ruinous for the service’s goal of making £20bn efficiency savings by 2014.

The NHS is facing the most austere times in its history, with a productivity imperative far in excess of that achieved across industries by the private sector p.a. over the past decade. Surely, in such tight financial times, the focus of the NHS should be on driving productivity (2-6 per cent p.a. to do little more than maintain standards of care) like never before?

2.The evidence supporting GP commissioning is uncertain. The bulk of evidence comes from GP fundholding in the 1990s. This suggests:

• GP fundholding was associated with improvements in speed, access and responsiveness of secondary care, reductions in waiting times, slight reductions in referral rates and costs, and widening the range of available services.

• A review by the King’s Fund think tank suggested GP fundholding was ‘the most promising’ of the 1990s market-based reforms.

However:

• GP fundholding failed to reduce costs as much as expected. Little effect on the rate of innovation was observed and fundholding was associated with lower patient satisfaction with services. Little research was carried out on the impact of fundholding on health outcomes.

• GP fundholders were self-selected volunteers for the programme, tending to be well-organised practices in middle-class areas, enthusiastic about taking on commissioning budgets. There is no evidence to draw on to support GPs across the country taking on commissioning as consortia, as is proposed by the government.

The fact is that commissioning requires particular skills set that most GPs will neither possess nor have any training in, such as procurement, contract management, benchmarking and review.  Moreover, many I have spoken to are not particularly keen on their attention been drawn from the patient in front of them.  Aggregating the health needs of a population is a different kettle of fish to assessing the health needs of the individual patient in front of you.

3.As forthcoming research by Civitas will show, there is significant potential within current commissioning frameworks to drive the productivity that is required.  In articles for the The Daily Telegraph, The Guardian and The Sunday Times, we have described a key weakness of the current structure is that PCTs – as the professor of healthcare management, Alan Maynard, put it – are, in effect, bank clerks.  Typically, they take what they are offered from providers.  They are afraid of exerting pressure on them to improve, or switching services where necessary to new innovative ones (NHS or non-NHS), for fear of backlash.  A backlash resulting largely from governments insistent on upholding the sanctity of local hospitals and the NHS ‘brand’ they fall under.

Another – as the Coalition proposals describe – is the lack of clinical input in PCT decision-making.   But this need not require ripping up existing structures and beginning a-new with all the risks entailed.  One PCT in London, for example, has GPs sitting on its board and involved in decision-making at every level of the organisation.  Here, GPs have overseen the moving of dermatology out of hospital to a higher quality provider at 70% of tariff price.

In other words, it seems possible to get the benefits of GP commissioning without radically changing structures and derailing current efforts to drive productivity by supporting PCTs as vigorous, impartial, purchasers of care, able to exert pressure on providers to improve, or to switch services where necessary to new innovative ones (NHS or non-NHS) without fear of backlash.

The reality is the detail of what is now being proposed – on the commissioning side – is currently a bit of dog’s breakfast.  The exact structure of the proposed system, the ways in which the new organisations will interact, lines of accountability, incentives for risk and reward, are up in the air to say the least.   There are so many questions without answers.  Here’s a few:

• What is the exact relationship to be between the government, the DH, the commissioning board and GP consortia?  How much control, for example, will the ‘accounting officers’ placed in GP consortia (at the behest of HM Treasury) have over commissioning decisions (quite a lot if assertions in the White Paper that the government and DH will maintain ‘financial control’)?  Will the commissioning board be able to veto consortia decisions made by GP consortia and on what grounds?  What happens if the government really doesn’t like something the commissioning board does (i.e. where’s the democratic accountability)?

• What happens if a GP consortium goes bust?

• More widely, what systems of risk/reward and accountability will be put in place for consortia?  How do we, for example, guard against GP consortia simply using money to develop more services run by them even where not cost effective?

• The success of consortia will not just be a function of how effective they are at the ‘hard’ parts of commissioning, such as procurement, but also how they manage relationships with other providers etc.  Where is the focus on developing these?

• How exactly will management costs be decreased by 45% at the same time as managing a far-reaching change of structure, introducing new performance measures such as the NHS Outcomes Framework, and having more than the 152 commissioning bodies (PCTs) that currently exist?

• Do we risk ‘brain-drain’ in PCTs that, in the transition period, will remain responsible for driving value and securing efficient use of resources?  If I was an effective CEO I’d be hunting for jobs sooner rather than later.

• How does patient choice of GP fit with consortia of GPs commissioning?  What if patients do switch and one general practice in the consortia is at risk of going bust?  It would cause significant amounts of tension.

• How exactly does the commissioning board propose to oversee the contracts (and procurement?) of all general practice in England?  Is a single national contract really appropriate given wildly different health needs in different parts of the country?  Given that many problems in the NHS are due to poor access to primary care, how active will this role be?  Or will it be left to consortia?

• There is a commitment to enforcing competition law under Monitor.  But does this mean the government is now willing to contemplate hospitals failing?

• GPs are fundamentally private businesses.  Will they be covered by EU public procurement law, which only covers public bodies?

• How will funds be distributed among GP consortia?

• How will GP consortia interact with new ‘Health and Wellbeing’ bodies rested in Local Authorities, now charged with public health?

• Relationships between certain neighbouring general practice are courteous at best… how are such general practices going function effectively as consortia?

• The Coalition government proposes capping ‘management costs’ at consortia.  How exactly are they going to decide where to set the limit?  This is not sensible – if they get it wrong it won’t be good news. GP consortia will only be successful if they build effective commissioning capability and, as the HSJ editorial says today, effective commissioning and effective health care requires good management.

To finish with… another interesting enigma highlighted by Andy Cowper at HPI.  Do patients, in fact, patients now have effective ‘choice of insurer’ (i.e. GP consortia) through the back-door, i.e. via the fact they can register with a GP anywhere (so long as the list is open)… This is potentially a very welcome means of empowering people and making consortia responsive to patients (so long as the means by which resources are distributed to consortia reflects such choices), but not exactly an explicit commitment… more an unintended consequence I would say.

There could be a good few more unintended consequences of the less pleasant variety if this lot gets through.  Here’s my bet: a few fantastic successes and more than a few fantastic failures.