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Hold tight: a bumpy ride ahead for the NHS

Published on 13/12/12 at 10:56am
Hunt image
Health secretary Jeremy Hunt was said to be confused about the government's NHS vision

The Wellards Annual Conference is an event where two worlds - the industry and the NHS - meet for a day in an effort to better understand each other - and usually they make useful progress.

On most occasions, the identities of the two worlds are clear: one world is the NHS and the other industry - pharma and medtech. But this year on one side it was those who had spent serious time working on the post-reform health service, versus the old world as represented by most of the audience.

One of the conference’s two chairmen, Wellards Conference regular Alan Jones fixed the industry element of his audience with a beady eye and asked how many of them could honestly say their organisations had prepared for the reforms. No one, not a soul put their hands up.

Even allowing for those who may have feared they might get skewered with questions from the chairman, given that April 2013 - the end of the old system and the real beginning of the new - is now just months away it was a worrying answer, and everyone in the room knew it.

The industry deserves at least a little sympathy on this one, for if it’s not clear to the experts how the new health service will shape up, or who in the new structure industry should be trying open talks with. Policy analyst Nigel Edwards, senior fellow with the Kings Fund, seemed to have his finger firmly on the pulse.

The day’s final speaker, he might be thought to have been handed the graveyard slot, but as he stepped up to the lectern, he made a string of prepared points calculated to jolt his half-despairing audience into wakefulness. 

“If you do not understand how the reformed health service will work, don’t worry,” he said. “You’re not alone.” On the evidence he had seen he was sure even the health secretary Jeremy Hunt did not understand how it was supposed to work either.

Again, on GPs he had this to say: “The government’s vision is lots of choice and competition, take out the bureaucracy, get the GPs off the benches and onto the pitch.

“Andrew Lansley said to me once that he was fed up with hearing the GPs whinge, and that it was time for them to get on with it and take some responsibility. I don’t know if the GPs knew that when they supported the policy.” If it all goes horribly wrong, he added, the secretary of state will be able to say: “It’s nothing to do with me - it’s the GPs.”

No clear answers

Edwards may have been introduced as the man with an NHS brain the size of Jupiter, but those who nursed hopes that after a confusing and puzzling day he would suddenly make everything clear were to be sadly disappointed.

Nevertheless, what he had to say about the development of the reforms, was entertaining and illuminating by turns.

Edwards is undeniably brilliant at the knockabout stuff, and many old NHS hands in the audience noticed that, free of the shackles of his old job at the NHS Confederation, he is greatly enjoying a new freedom to share anecdotes and speak his mind.

“The one thing that has become very clear to me over the last few months is that even people who are deeply embedded in the system are uncertain how it will work when it’s switched on. It’s made more complicated by the fact that there are the reforms Andrew Lansley had in his head, there are those that were put in the Bill, and there are those that David Nicholson implemented - and then there is what will actually happen.

“Somebody said it’s very difficult to predict the future, but just now it’s difficult to predict the present with these reforms.” Speaking of new secretary of state for health Jeremy Hunt he said: “It’s becoming very clear that the reformed architecture will start behaving in a very different way to what was expected, and I suspect he’s busy developing new levers and mechanisms to take back control of the train set again.

“The reformers aimed to break the system in order to change it. The question, did they break it enough to stop it reforming again? I’m quoted as saying that if there was a nuclear war, all that would be left afterwards would be cockroaches and regional offices of the NHS - they have an extraordinary way of reinventing themselves.

“So who oversees strategy in the new NHS?” There was another awkward silence.

“The answer is no one,” he fired back. “Because Andrew Lansley thought that strategy was bad - he thought there was a top-down Stalinist planning system and so primary care trusts and the strategic health authorities would have to go, and all the hospitals would become independent foundation trusts - though after seven years we’ve still only got half the trusts achieving foundation trust status.”

He pointed to a screen outlining the complicated management structure of the new health service, including local council health and wellbeing boards. “I don’t think this was one of Andrew Lansley’s intentions - it was an accident of coalition politics. It’s been a long-term interest of the Liberal Democrats to give local government greater power in social and healthcare planning.

“In their best incarnations Health and Wellbeing Boards are going to be a potentially quite powerful piece of the new machinery. But while power in healthcare commissioning has in theory been pushed down to CCGs, in public health and some associated areas including sexual health and health visiting, there has been a degree of centralisation, in the form of the central agency Public Healthy England.”

He said Monitor’s role as price and competition regulator within the new system also raises questions. “So Monitor sets the price. How they set the price is open to debate: do they take everyone’s price and set the average, or do they set prices to reflect value, do you set prices to reflect individual components of a care pathway or the whole care pathway? Or do you set a price for best practice, if you can’t get a value? They don’t have to take the average.”

Monitor and the Commissioning Board are people to watch closely, warned Edwards. “If they get the pricing wrong it will be quite important for you, because it looks like the tariff is going to be more enforced.

“The Board will also have responsibility for specialist services, which are being greatly expanded to include vascular and other types of surgery, some types of cancer and a whole load of other things which have traditionally not been part of specialist services. So after 15 years of things being moved out of specialist commissioning and into regional specialist commissioning or primary care trusts, we have things being centralised.

“For some of you that will be important because it’s where many of your high cost drugs sit.”

Another thing that will be important is increased enforcement of NICE recommendations and standards by the Commissioning Board down to the commissioning groups - and not just NICE technology assessments but NICE commissioning guidance as well.


“What’s supposed to be the main driver of this system? Choice. But the government’s notion of choice is limited in scope, as the DoH has produced a consultation on choice that is all about choice of provider, not choice of treatment.”

Meanwhile, he added, the CCGs have started to work out that the decision aids they are provided for use in helping patients considering elective surgery work out their preferences, are a useful tool that can be used to help reduce variation. Is the new system a bit like the old?

“Overall, the flow of funds is not that different to the old system, except for the Commissioning Board’s big say in primary care. With 28 local area teams and four regional offices, we have more layers of bureaucracy than were there before.” This, predicted Edwards, would create the impetus for the next round of health service reform.

Meanwhile, 12 strategic clinical senates will give advice to CCGs. “Potentially these are quite interesting,” said Edwards. “One of the good things about this reform is that it does put more people who know about the detailed business of healthcare in charge of making decisions about it.”

Much smaller budgets

CCGs have been given about a third less than the PCTs, a very significant cut in budgets. Also they are expected to work with commissioning support services, which are to take on contract negotiation, big database management and help with planning.

How will this work? From what Edwards understands it may not be a smooth ride.

“The CCGs have massively different attitudes to these people. They have a guaranteed place in the system until after the next election, and at the moment they have a monopoly. Some of the GPs hate that and will be trying to find ways of getting the services from elsewhere, or of doing it themselves.”

All in all, Edwards is sure that the original objective of ending central control is far from being achieved. “There are still a lot of [central control] levers here - they’re not the same as the old ones and there isn’t the patronage - but there’s a lot of influence and a lot of money.”

The academic science networks are an example. “They’re not technically part of these reforms but if you are the hub of one of these, something like 40% of your money comes directly from the Commissioning Board - so you might be inclined to listen to it when it says things to you.”

The Commissioning Board will also be responsible for all leadership development, which will give it another significant source of influence. CCGs will increasingly commission for bundled outcomes, said Edwards, drawing on an analogy to make his point clear.

“Imagine building a house from Yellow Pages, not knowing much about building, and then holding individual people to account for that when it falls down. It’s not going to happen. So you need contractors to be bundled, and we’ll see lead contractors and alliances of contractors. Frankly if you’re a CCG with only £25 per head, it maybe that managing bundled outcomes is about all you will be able to do.”

GPs thrust into political arena

And there were questions about the politics. “We talked to a GP about what he was going to do about communicating to the public about how his CCG was part of a plan to close two A&E departments and to downgrade three hospitals. He was surprised: ‘They won’t want to talk to me about that will they?’ They might and when it happens you will feel very exposed...” 

And on NHS the finances, Edwards said he believed that in two or three years the social care and health budgets will be merged, and health budgets would be helping pay for long-term care of the elderly.

He also predicted the rise of might be called a GP ‘super practice’, saying that patients go to A&E when GP colleagues fail them, and that this could encourage big practices to start adding specialisms such as diabetology, psychiatry and podiatry to their existing range of services.

GPs he said could build up a multi-discipline practices, adding things like diagnostics and looking nursing home provision. If they did, they would transform local healthcare provision using the practice as an engine. But they would also become a provider - which might have significant advantages if they GP concerned is also a commissioner.

Warm applause for Circle Health boss

The conference’s warmest applause was reserved - perhaps surprisingly - for a speaker whose message was that the healthcare industry is doing everything wrong and has to change to avoid going bust. That man was Dr Ali Parsa, chief executive of Circle Health, the private sector organisation now running Hinchingbrooke Hospital.

Drawing on the UK’s success at the past five Olympics, Dr Parsa said that like Team GB Britain should concentrate on the areas where it had an opportunity to be a world leader. One of these was healthcare. However, to succeed the British healthcare industry would have to leave its comfort zone and adopt approaches similar to those seen in the developing world.

“If we’re going to sell healthcare, we need to start inventing the kinds of healthcare the world needs, rather than the ones we can hardly afford ourselves. We need to fundamentally re-engineer the healthcare we have.

“For example, in America, Johns Hopkins does cataract operations at $2,000 a go. We in Britain charge $1000 a go. In India it’s $50. They aren’t undercutting us by 5% or 10%, but by 95 per cent.”

Those who say the Indians can’t be doing good quality operations at that price are wrong, he added, as the results say that they’re as good as anything we have here. The healthcare industry as it exists is economically unsustainable but could be re-engineered if entrepreneurs look at the value equation of quality over price and change it, as is happening in the developing world.

On Hinchingbrook Hospital, he said it had been a clinical and financial basket case when his organisation had taken it over. Since then the focus had been on quality, and he argued that the staff had done an amazing job. From being at the bottom of the pile and a hospital that some had wanted to close down, the Hinchingbrook was now ranked as the top general hospital in the East of England and Midlands, and a CQC inspection had found not a single area for concern.

He refused to be drawn on the hospital’s finances however. “We have only been there for six months - so we’ll see how it goes. But I hope it works.”

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