What does the white paper mean for the future of our NHS?

UNISON September 2010

Foreword – Dave Prentis, General Secretary

The NHS is our greatest national treasure. It puts patients and the public at the heart of all it does.

The coalition government’s health white paper represents a massive shakeup, with the potential to cause huge damage to patient care and waste vast sums of public money.

It is an £80bn gamble with no evidence base or electoral mandate, and presents a major threat to the future of the English health service.

Government plans will turn the NHS into a business where our taxes will increasingly pay for profit-driven companies to provide our healthcare.  There will be no limit to the amount of profit hospitals can make.

There is a risk that small and specialised services will be lost and that the quality of care we receive will depend on our post code.

We will all be affected by these changes that jeopardise the continuation of fair, free and high quality care for future generations.

The NHS has always been more than just a brand, but the white paper raises the possibility that in the future it will come to be seen as little more than a label attached to a variety of competing providers in a loosely coordinated system.

Recent outpourings of support for the NHS – on the occasion of its 60th birthday and when it came under fire from American Republicans during the progress of President Obama’s health reforms – demonstrate the immense pride and affection that people feel for their NHS – whether as patients, staff or members of the public.

This document outlines UNISON’s main areas of concern, and demonstrates the effect these proposals will have on patients and the NHS.

The changes proposed by the white paper are not borne of necessity; they are driven by ideology. Our NHS is our future. In the interests of patients, UNISON will not stand by and let our greatest institution be ruined.

NHS More than Just a Brand summary

The government’s health white paper for England, Equity and Excellence: Liberating the NHS, was launched in July 2010. Along with a number of consultation documents that give further details, the white paper proposes a major overhaul for the NHS.

UNISON has a number of major concerns relating to these proposals:

  • The failure to outline key proposals in manifestos or the early coalition programme raises the prospect that the health secretary knew his plans for the NHS would be unpopular with the electorate so he decided not to share them.
  • The fact that government plans appear to be based on neither evidence nor consultation, suggests that reform is being driven by ideology rather than a desire to improve patient care.
  • Forcing through so much change in such a short timeframe will produce instability for the NHS which could affect the quality of services and patients’ ability to access them.
  • The reorganisation will be very expensive and the new system is likely to increase the administrative burden rather than reduce it.
  • Intensifying the market will further destabilise the NHS and lead to taxpayers’ money being wasted on spiralling transaction costs.
  • A larger role will be created for the private sector despite a track record of proven failure in the NHS and despite concerns about conflicts of interest.
  • There are major question marks about how those responsible for buying in services will be held to account in the new system, and whether the new economic regulator will be up to the task.
  • Rather than boosting democratic legitimacy, the plans actually amount to a substantial downgrading of the role of democratically elected councillors in scrutinising health services.

For patients there could be a number of important consequences:

  • NHS patients could find themselves losing out to those that are prepared to pay for their care.
  • There are likely to be geographical variations in the level and type of service available to patients.
  • Mental health services and specialist services to treat patients with rare or complex conditions could suffer.
  • The white paper is a missed opportunity to promote integrated care and to develop the links between patient experience and staff development.
  • Initiatives that promote good practice and save the taxpayer money could be compromised, along with patient safety.

The plans are also likely to have a profound effect on the future of the NHS:

  • The government has not confirmed that the NHS should continue to be funded through direct taxation rather than by individual taxpayers.
  • If NHS patients lose priority to cash customers, the principle of care based on need rather than ability to pay would be undermined.
  • There is uncertainty in the government’s plans over whether the state will retain NHS assets. If it does not, publicly-owned hospitals could be sold off and lost to the taxpayer.
  • Once services have been fully opened up to competition, EU and international competition law make it very hard to bring privatised services back into the NHS.
  • Reforms to alter the funding of cancer care and to extend personal health budgets could lead to pressure for patients to “top-up” their free NHS care with their own money, which will be unfair for those that cannot afford to pay.

Introduction

The health secretary Andrew Lansley launched the coalition government’s health white paper for England, Equity and Excellence: Liberating the NHS, in July 2010. Along with a number of consultation documents that give further details, the white paper proposes a major overhaul for the NHS.

  • Strategic health authorities (SHAs) will be abolished during 2012/13, with primary care trusts (PCTs) set to follow from 2013.
  • In their place, the government wants to devolve power and responsibility for commissioning (buying in services) to local consortiums of GP practices who will take over the vast bulk of the NHS budget. These consortiums will be free to buy in support from private companies.
  • A statutory NHS commissioning board will be set up “free from day-to-day political interference” with a remit that includes allocating revenue to GP consortiums and designing the structure of the NHS payments system.
  • The existing regulator of foundation hospitals, Monitor, gains a far larger role as an economic regulator, with responsibility for promoting competition.
  • All NHS trusts should move to foundation status by 2013 or become part of another foundation trust (FT), with hospitals moving towards a social enterprise model of employee-led or community-based ownership. There are significant question marks about whether the assets of these new style hospitals will remain part of the state.
  • The government intends to lift the cap on hospitals’ private earnings, and will repeal the legislation so that failing hospitals are not taken back into the NHS. New regulations will be developed to enable an easier process for mergers and consideration is being given to removing controls over the amount of private money that FTs can borrow.
  • To build up greater competition the government has ditched the “preferred provider” (or “NHS first”) policy of the previous government, in favour of an “any willing provider” approach, which will subject more services to competitive tendering processes and create a larger role for non-NHS providers. Direct provision of community healthcare services by PCTs has been ruled out.
  • The existing regulator, the Care Quality Commission, will become a “quality inspectorate” but will be stripped of its role in regulating commissioners, a responsibility that passes to the new NHS board.
  • There will be a larger role for local authorities, including public health responsibilities, but health overview and scrutiny committees will no longer scrutinise services. A new public health service will be put in place, led by directors of public health based in local authorities.
  • A new body, Health Watch England, will be established to compile data on the performance of health providers and to act as a “consumer champion” with the existing system of Local Involvement Networks (LINks) becoming the local Health Watch.
  • Patients denied expensive cancer treatments on the NHS will be able to appeal to a new £200 million cancer drug fund from April 2011, with an interim fund of £50 million available before this.
  • The government will roll out personal health budgets in 2012.
  • NHS management costs will be reduced by more than 45% over the next four years.
  • In the longer term employers will be responsible for leading negotiations on new employment contracts. Employers will be granted greater local autonomy over training and workforce planning.
  • In addition, the report of the arm’s length bodies’ review recommended the abolition of a number of organisations, such as the National Patient Safety Agency and the NHS Institute for Innovation and Improvement, with functions moved elsewhere.

Aspects of the white paper build on the market reforms by successive governments in the 1990s and 2000s. But many other proposals are new and potentially very radical.

For example, the putative market system of the early 21st century has so far been kept in check by a number of important factors:

  • the cap on the amounts of money that FTs can earn from private patients and restrictions on the amount of private money that they can borrow;
  • these hospitals have remained NHS hospitals, a status that the new plans throw into doubt, with the suggestion that FTs may become social enterprises – there is a lack of clarity about whether the state will retains the assets of these new style hospitals;
  • decisions about which services the NHS buys in for patients remain overwhelmingly in the hands of NHS staff working in PCTs and SHAs;
  • the existence of a safety net in which bankrupt hospitals would be brought back into the NHS;
  • the failed experiment with private sector treatment centres (ISTCs) lost support in 2007 and was abandoned as a central government initiative;
  • the “preferred provider” policy ensured that all NHS providers were first given a chance to improve their services before they were subjected to tendering processes and more open competition; and
  • the devolved administrations, particularly Scotland and Wales, have managed to improve their own health services largely on the basis of integration and co-operation rather than the market.

Potentially all these checks and balances on the market system are under threat or will be directly removed by government plans for the NHS. Although the plans refer to England only, the devolved administrations may be tempted in future to import aspects of the reform agenda, as has happened in the past with PFI in Scotland, and with Northern Ireland attempting to bring in its own version of the English Payment by Results system.

The changes raise the prospect that in the future the NHS will come to be seen as little more than a brand name to be attached to a range of competing services within the health system.

Indeed, the accompanying Department of Health consultation document on regulating healthcare providers is explicit in its rejection of the cap on foundation hospitals’ private earnings because it leads to “the inability of the NHS to take advantage, for the benefit of this country, of the power of its brand abroad”.

The following pages analyse areas of major concern relating to these proposals, followed by an assessment of what the white paper means for patients and for the future of our NHS.

Lack of electoral mandate, consultation or evidence base

“We will ensure that there is a stronger voice for patients locally through directly elected individuals on the boards of their local primary care trust… The local PCT will act as a champion for patients and commission those residual services that are best undertaken at a wider level, rather than directly by GPs.” (The Coalition: Our Programme for Government, 20 May 2010)

“To realise administrative cost savings… the government will transfer PCT health improvement functions to local authorities and abolish PCTs. We expect that PCTs will cease to exist from 2013, in light of the successful establishment of GP consortia.” (Equity and Excellence: Liberating the NHS, 12 July 2010)

Prior to the 2010 general election, Liberal Democrat health spokesman Norman Lamb reportedly described the Conservative plan for an NHS commissioning board as “crazy” and “a nonsense”. Once in government in May, his party’s concerns about the board were apparently assuaged with the commitment to an elected element on PCT boards in the coalition’s Our Programme for Government. By the time the white paper was published in July, however, this policy was sacrificed as plans were announced to abolish PCTs once GP consortiums are set up.

This is symptomatic of a wider problem with the latest batch of reforms. In a number of key areas there is no electoral mandate for the changes being proposed. For example, neither the Conservative nor Liberal Democrat general election manifesto included any suggestion that PCTs would be abolished, nor anything about removing the amount of money foundation hospitals can make from paying patients.

The government radically altered its proposals in less than two months, prompting only two possible conclusions: either the white paper’s proposals were arrived at very hurriedly with little time to think through the implications, or the parties’ manifestos and programme for government were deeply disingenuous because such plans already existed.(Robert Hill) Neither conclusion engenders confidence in the government or its proposals.

Such democratic infringements would arguably be less significant if the government planned either to consult on the popularity and practicality of the reforms, or if it was able to demonstrate a convincing evidence base upon which to build the new reform agenda. Unfortunately neither is the case.

The government has been very confused as to whether it is carrying out a consultation with patients’ and staff representatives about the fundamental structure of the proposals and has sent out mixed messages. Health minister Simon Burns responded to a Parliamentary question after the release of the white paper by stating that “the government are now able to engage fully with all external partners on the detail of how best to implement these changes” Despite the fact that the NHS Constitution commits the government to consult on all changes to the NHS, this statement has been interpreted by the government’s lawyers as an explicit statement that the consultation process is not about whether the reforms are the right ones, but merely about how they should be implemented. This appears to UNISON to be an illogical approach because the union fears that the consultations will be limited to the best way to implement a system which has inherent conflicts and faults, and yet the public and staff will be prevented from having the chance to point that out to the government.

The reform process has been embarked upon with no feasibility studies and no plans for piloting or testing the major structural changes proposed. Consultation documents do indicate that the plans for the NHS commissioning board and for GP consortiums should first be set up in “shadow form” but there is no suggestion that the success or otherwise of these new structures will be assessed or evaluated. Patients’ groups have voiced their concerns with the Patients’ Association calling for “piloting and gradual introduction to protect patients from the consequences of failure”.

Scant evidence has been produced as to the anticipated benefits of the white paper, which includes a series of largely unsubstantiated statements about how its plans will improve productivity, lead to greater innovation or produce better care.

To take the most high-profile aspect of the reform package – GP commissioning – as an example, the evidence of the benefits experienced by patients of previous schemes such as GP fundholding and practice based commissioning (PBC) is very limited. In fact, a number of studies have revealed substantial drawbacks. For example, comparative studies by the likes of the Nuffield Trust reveal that previous forms of GP commissioning in the UK and elsewhere have not had the positive transformative effect that was anticipated, with a failure to produce expected cost reductions, little impact on innovation and even an association with lower patient satisfaction. Patients’ groups consider that Practice Based Commissioning “hasn’t proved very successful” and an August 2010 investigation by Pulse discovered the most damning evidence of all, suggesting that PBC “has cost hundreds of millions more than it has saved.”

Particularly worrying has been the initial response to the plans from GPs, who are expected to take on massive new responsibility. Two-thirds told doctors.net that they do not welcome the government’s plans and GP Newspaper reported that 63% thought their participation in commissioning should not be compulsory – the compulsion element being a key feature of the coalition’s plans.

UNISON’s main concerns

  • The failure to outline key proposals in manifestos or the early coalition programme raises the prospect that the health secretary knew his plans for the NHS would be unpopular with the electorate and decided not to share them.
  • The fact that government plans appear to be based on neither evidence nor consultation, suggests that reform is being driven by ideology rather than a desire to improve patient care. 

Top down change, instability and cost

“With the Conservatives there will be no more of the tiresome, meddlesome, top-down restructures that have dominated the last decade of the NHS… the disruption is terrible, the demoralisation worse, and the waste of money inexcusable.” (Speech by David Cameron, “Our health priorities”, 2 November 2009)

“There is a real risk that people will be distracted and preoccupied with this huge organisational change, just at the point where they need to be increasingly focused on productivity and efficiency.” (Chris Ham, King’s Fund, quoted in theFinancial Times, 17 July 2010)

The Conservatives, and to a lesser extent the Liberal Democrats, stood on a platform of no more top-down structural change at the 2010 general election. Once in power, the coalition’s Our Programme for Governmentconfirmed: “we will stop the top-down reorganisations of the NHS that have got in the way of patient care”.

Now that the white paper has been published, however, there is widespread consensus amongst commentators that the government’s plans represent the biggest upheaval in the history of the NHS. Even the executive editor of the Conservative Home website, former Conservative MP Paul Goodman, described these broken promises as “a staggering breach and a significant precedent”.

PCTs and SHAs will be abolished, with the vast majority of the NHS budget (possibly as much as £80bn) controlled by consortiums of GPs, who will be allocated money by a new super-quango, the NHS commissioning board. It is no surprise that the plans are being referred to as “re-disorganisation”.

The scale of change is such that doctors.net reports that 83% of doctors surveyed did not feel adequately equipped to make the planned changes to commissioning, with this figure rising to 93% amongst GPs who are at the forefront of implementing the reform.  Even the pro-market think tank Civitas launched a scathing attack on the restructuring plans, using an analysis of Healthcare Commission statistics relating to previous reorganisations to claim that the latest plans would set the NHS back at least three years in terms of quality of services and use of resources.

Forcing through so much change, and in a very short timeframe, is bound to produce instability. Something which NHS chief executive David Nicholson acknowledged in his letter to fellow NHS leaders following the publication of the white paper:

“Learning the lessons from past reorganisations, there is significant risk, during this transition period, of a loss of focus on quality, financial and performance discipline as organisations and individuals go through change.”

Prior to the publication of the white paper it seems that such concerns were not restricted to Mr Nicholson; the Treasury and the government’s coalition committee also reportedly had major qualms about the plans going too far too soon.

Previous reorganisations of the NHS – certainly those carried out under the previous government – have generally taken place at a time when financial resources are not being squeezed. This time, however, despite a lack of adequate explanation of how the figure was calculated, the NHS as a whole is expected to make savings of around £20bn over the next four years. The notion that the NHS will somehow be spared swingeing cuts is a myth. The white paper itself contains plans to make huge cuts of more than 45% in management costs, which is likely to mean fewer managers. So major structural change is to be achieved with far less money and fewer managers.

Those working for SHAs and PCTs will be expected to bring about massive change, despite the fact that their organisations are in line for abolition within the next three years. Other than problems with motivation or morale, there also appears to be a “troubling” lack of detail about what PCTs should be doing in the transition period. David Stout of the PCT Network suggests “there is also real risk of serious destabilisation of PCTs during the transition”.

The potential for instability is not restricted to the transition period. Consultation proposals that would ease restrictions on the amounts of money that hospitals can borrow in future threaten to create further areas of risk for patients and taxpayers. If hospitals run into financial difficulty, services could be cut or whole sites closed down, and there is the prospect of taxpayer funded property being sold off if a hospital defaults on commercial loans. As the consultation on regulation acknowledges, the existing limit “was intended to prevent them from borrowing irresponsibly”.

There will be a huge cost associated with the government’s plans, both in the transition period and once the new system is in place. The Department of Health has already set aside £1.7bn in 2010 for reorganisation, with other commentators suggesting the overall cost will be much higher. Writing in the British Medical JournalProfessor Kieran Walshe of Manchester Business School estimates that “the proposed NHS reorganisation will cost between £2bn and £3bn to implement at a time of unprecedented fiscal austerity”.

The next section will look in more detail at the waste created by the market in terms of transaction costs, but purely in terms of the numbers associated with structural change it is worth considering the impact of the NHS moving from a commissioning system of 152 PCTs and 10 SHAs, to a much larger number of GP consortiums, perhaps as many as 500. With more organisations responsible for buying in services for patients, red tape and administrative costs are almost certain to increase. Procurement experts suggest that every consortium will need to manage at least as many contracts as a PCT currently does, and will need to carry out at least the same number of procurement exercises – particularly with commissioners now bound to encourage “any willing provider” into service provision.

It seems that David Cameron was right: top-down restructures do lead to disruption, demoralisation and a waste of money.

UNISON’s main concerns

  • Forcing through so much change in such a short timeframe will produce instability for the NHS which could affect the quality of services and patients’ ability to access them.
  • The reorganisation will be very expensive and the new system is likely to increase the administrative burden rather than reduce it.

Markets and the private sector

“If reliable figures for the costs of commissioning prove that it is uneconomic and if it does not begin to improve soon, after 20 years of costly failure, the purchaser/provider split may need to be abolished.” (House of Commons Health Committee report on Commissioning, 2010)

Many of the concerns about cost and instability alluded to in the previous section will be exacerbated by the move to a more freewheeling healthcare market.

In terms of cost, the cross-party House of Commons Health Committee published a damning report on the failure of commissioning in the NHS just before the 2010 election.

  • The Committee uncovered a figure of 14% for transaction costs brought about by the split between purchasers (commissioners) and providers of care.
  • It suggested that the Payment by Results (PbR) system in which money follows the patient in the NHS market, also threatens to increase transaction costs.
  • With the NHS looking to save money by increasingly treating patients closer to home, PbR creates a perverse incentive for hospitals “to generate more activity to increase their income”.
  • In reference to the framework for procuring external support for commissioners (FESC), in which PCTs can use private companies to assist with commissioning services, the report raised major questions over whether “the taxpayer is getting real value for money out of this costly exercise”.

Despite recent market reforms, evidence shows that healthcare in the UK is still largely free of the costs associated with revenue collection and marketing that blight other systems such as the USA, where President Obama’s reforms have yet to feed through the system. The USA is estimated to have more than double the administrative cost of our NHS. If the white paper proposals are implemented fully, this position will be harder to retain. In addition to the increase in organisations responsible for buying in services, more services will be subject to PbR with a price tag attached, and it seems that rather than there being fixed prices for services as there is now, PbR tariffs may become the basis for negotiation – all with an extra administrative burden.

The white paper’s market logic will increase instability by creating a more cutthroat system in which GPs are encouraged to shift alliances more readily between foundation trusts, with “failing” hospitals no longer taken back into the NHS. There is not yet a coherent plan for what should happen to these hospitals and the services they provide. There are unanswered questions about asset ownership, that could also have profound consequences for the future of our publicly-owned NHS (see section, “What does this mean for the NHS?”). Referring to the new plans to free up hospitals’ activities, one chief executive was quoted as saying that chasing new markets might also see management “spread too thinly and lose clinical oversight”.

One undisputed outcome of the more marketised health system envisaged by the white paper will be a larger role for the private sector. Certainly key private sector players are waiting to pounce, with the likes of BupaHumanaCapita,AetnaMCCI and United Healthcare all likely participantsKingsley Manning of Tribal has gone as far as welcoming the “denationalisation of healthcare services in England”.

All of this despite a history of failure associated with private sector involvement in the NHS.

  • The use of the Private Finance Initiative to build hospitals has proved immensely costly and failed to deliver value for money
  • The introduction of compulsory competitive tendering in the 1980s led to a halving in the number of hospital cleaners and a surge in hospital infections that has only recently begun to subside
  • ISTCs have been derided by the new government as a waste of money; they are consistently revealed as cherry-picking less complex patients to treat than the NHS; and they have been associated with some appalling lapses in standards of care, such as the tragic case where a patient died after surgery at the Eccleshill treatment centre in Bradford, which did not even keep blood on site.

There are two main ways in which the white paper creates a larger role for the private sector in the health service. First, the government is insisting that commissioners should in future encourage “any willing provider” to deliver services to patients, which represents a shift away from Labour’s “NHS first” approach in which the NHS was effectively the “preferred provider”.

The move will have an immediate impact on community services, such as district nursing and health visiting, where the government wants to encourage a more diverse set of healthcare providers. In the short term this is likely to mean a larger role for social enterprises because most community services are not sufficiently profitable to entice large healthcare companies into the market. But it is quite possible in the future that a multinational might look to break into the market by taking over a successful social enterprise that started to make a good profit.

Social enterprises contain a number of risks in themselves. Under the so-called Right to Request scheme, social enterprises get a contract for three years, but after this there is no guarantee of what happens to the services they are delivering. Equally there is no guarantee that such organisations will survive for the full three years, particularly in a volatile economic climate in which “any willing provider” can now compete to win services away from a new social enterprise. The stated benefit of social enterprise – that employees have a greater stake in the organisation and therefore provide better service – is undermined by the fact that very few of the prospective social enterprises in the health service have actually been driven by a bottom-up demand from health staff; they tend to be management-led initiatives in which employee engagement is little more than an afterthought.

Second, the white paper states that GP consortiums will be free to buy in commissioning support from private companies. Given the novelty of the new system for most GPs, commentators suggest that doctors will need “a great deal of organisational support”. Some GPs have pointed out that “the responsibility involved in commissioning is huge and the training nonexistent” – again suggesting that support will be essential. As the chair of the BMA’s GPs committee has suggested they should, it is quite possible that many consortiums will want to bring in expertise from NHS managers at PCTs or SHAs before they are abolished. But not all consortiums will choose to go down this route and private companies can be expected to poach a number of NHS managers before they can cross directly to consortiums.Some PCT leaders wasted no time in considering setting up their own social enterprises to provide commissioning support to consortiums, but again there is no guarantee that such organisations would not be taken over by companies without a social base in the future.

As referred to above, the FESC framework does already exist and in effect the white paper would take this idea of private sector commissioning support much further, presumably without the list of preferred suppliers that the FESC framework currently uses. Even under the current system, in which few PCTs have so far chosen to use the FESC, there have been problems. Apparently the scheme’s suppliers have committed to guaranteed savings of £18m, but by the summer of 2009 £15m had been spent on the scheme with no discernible achievements. At Hillingdon PCT, where the first FESC contract was awarded to Bupa, the experience has not been a happy one: in August 2008 the chair of the PCT said he “could not see how these projects would result in value for money”. It was also revealed in August 2010 that NHS Northamptonshire had ended its FESC contract with United Healthcare a year early.

The government has published nothing alongside the white paper about how it will tackle conflicts of interest with private companies looking both to offer commissioning support and to deliver services. The existing FESC framework does at least attempt to address such matters, but even this falls short. For example, the majority of firms on the approved list of fourteen suppliers are consultancy groups, but the list does include organisations such as Unitedhealth Europe, that also deliver provider services in England. The Department of Health has attempted to allay fears by ensuring that commissioners are not working in areas where they also provide services. It is still possible, however, for a company to advise a PCT (or in future a consortium) on its commissioning decisions in advance of making a bid to provide services in that area. Moreover, once a commissioner has successfully recommended a service for outsourcing that service must be open to competition at a later date in order to abide by procurement and competition law (see section, “What does this mean for the NHS?”), thus opening up a healthcare market where these same companies can come back and provide services.

Some GPs have expressed concerns that with the white paper proposals we could end up with a private company advising a consortium to place contracts with sister companies that own hospitals, effectively putting commissioner and provider in business together.

Related to these concerns are more basic issues around fraud that demonstrate the dangers of the NHS working with such companies. In the USA the FBI has recently launched a campaign against healthcare companies that have sent phoney bills or provided excessive and unnecessary treatment. Similarly the Sunday Mirror has revealed that between 2000 and 2004 United Healthcare paid out £10m for offences including overcharging, denying treatment and fraud in the American insurance market.

Questions of probity have also surfaced closer to home, when it was revealed that the wife of John Nash, chairman of Care UK, had made a substantial donation to Andrew Lansley’s private office. Mr Nash has since been recruited by chancellor George Osborne to provide inspiration for the Treasury’s cuts agenda.

UNISON’s main concerns

  • Intensifying the market will further destabilise the NHS and lead to taxpayers’ money being wasted on spiralling transaction costs.
  • A larger role will be created for the private sector despite a track record of proven failure in the NHS and despite concerns about conflicts of interest.

Regulation, accountability and scrutiny

“There is a serious question of accountability. Who is going to scrutinise the work of GP commissioners? Who is going to step in if they aren’t doing a good job?” (Patients’ Association, response to report of proposals expected from health white paper)

In an increasingly marketised system with a larger number of healthcare providers – if patients are to be properly protected and to give the public faith in the system – there is a need for robust regulation, clear lines of accountability, and the ability for patients and public to be involved in scrutinising the commissioning and delivery of services. While the white paper guarantees to boost market forces, unfortunately the same cannot be said for regulation, accountability and scrutiny.

The white paper describes the existing regulator, the Care Quality Commission (CQC), as being strengthened into a “quality inspectorate”. In actual fact the CQC has been asked to drop its annual health check reviews of hospitals – an easy-to-use tool that patients have come to value – and will lose its responsibility to oversee commissioning, focusing purely on the provision of care. This has led to concerns that “further fragmentation” will be brought to the system.

The white paper gives sweeping new powers to the existing regulator of foundation trusts (FTs), Monitor, which will become an economic regulator with a remit that includes promoting competition. This immediately sets up the potential for conflict of interest because Monitor’s approach to FTs has often appeared to blur the lines between regulator and advocate. This will cause problems if, as the promoter of competition, Monitor deems the activities of a particular FT to be blocking the development of a wider market. In the increasingly competitive system envisaged by the white paper, there will be every incentive for FTs to bid to take on as much work as possible – this is already happening with many establishing themselves as providers of community services for PCTs under the transforming community services programme.

There are wider concerns about the conduct of Monitor to date as a regulator. For example, UNISON took out a successful judicial review in 2009 against Monitor’s failure to provide proper guidance to enforce the private patient income cap for FTs. In addition, it seems that the new chair of Monitor, Steve Bundred, is intent on exceeding his remit, having suggested that the NHS will have to make “much more” than the £20bn savings the Department of Health has deemed necessary (despite the fact that other organisations have suggested this figure is actually far higher than required).

There are further concerns about how Monitor will oversee providers of adult social care, given that it has little or no experience of the sector. The consultation on regulation gives no further details about how Monitor should approach its social care remit and none of the questions it is seeking responses to relate to social care.

In terms of direct accountability in the system, there will be no PCTs or SHAs to hold new GP consortiums to account. It remains to be seen how effective the new NHS commissioning board will be at this task, but given the huge range of responsibilities it will have, there must be a concern that this part of its remit could take a back seat.

The white paper and consultation on the new commissioning proposals refer to each consortium having an “accountable officer” but there is no detail on who this should be and what their responsibilities would involve.

Of course the vast majority of GPs will be committed to doing a good job for their patients regardless of the type of system they are operating in, but even now some rogue operators do slip through the net. For example, the GP run company Take Care Now was the subject of a damning report from the CQC following the death of a patient who was given an overdose of diamorphine by a locum doctor in 2008. Without strong accountability mechanisms, the new system could make it harder to isolate and punish rare cases of malpractice.

The white paper and accompanying consultation on local democracy legitimacy make much of government plans to bring democratic legitimacy to the NHS. On the face of it, this sounds like a positive move and there are certainly plans to bring greater local authority involvement into health services. Unfortunately the detail reveals a rather different picture.

The government plans to create new health and wellbeing boards within local authorities but these will be at the expense of health overview and scrutiny committees (OSCs), which have provided a valuable service to patients wishing, for example, to challenge local plans to close down wards or alter hospital services.

More significantly, health and wellbeing boards will actually lack the essential democratic ingredient of OSCs. OSCs consist entirely of democratically elected councillors, whereas health and wellbeing boards will only have to include one elected individual (likely to be the mayor or council leader). The rest of the board would be made up of unelected individuals, such as senior local government officials and representatives from GP consortiums. Although there will be local discretion as to the exact make up of boards, there need be no involvement from backbench councillors. Independent elected representatives should have the right to investigate commissioners and providers of healthcare, and to demand answers on behalf of the citizens they represent. As currently constituted, the plans represent a major downgrading of the councillor role in scrutinising local decisions.

There are also question marks about just how much influence health and wellbeing boards will be able to exercise over GP consortiums, particularly as consortium boundaries will not necessarily mirror those of the local authority – at the moment this is easier as PCT areas are largely coterminous with local authorities. Some commentators have suggested, with particular reference to public health, that this disparity could hamper partnership working across health and local government.

As with many of the other coalition plans, health and wellbeing boards also contain the potential for conflicts of interest. Local voluntary sector representatives can be invited to sit on the board, which could cause problems if the organisations they represent are also looking to break into markets as providers of health services – something which the government is keen to promote.

There are further concerns about plans for the new Health Watch, which as the “consumer champion” changes the health scrutiny emphasis away from citizen involvement and towards consumerism. The consultation document also proposes that local Health Watch should help individuals “exercise choice”, suggesting that these bodies could act as proponents of the market in addition to their role as scrutineers acting to improve services on behalf of patients.

This worrying approach mirrors suggestions contained within the review of arm’s-length bodies, in which those organisations surviving the cull are “expected to exploit commercial opportunities and maximise commercial discipline across the sector”. This ideological approach means that bodies that should be regulating the NHS and protecting patients have to spend their time making money as well.

UNISON’s main concerns

  • There are major question marks about how those responsible for buying in services will be held to account in the new system, and whether the new economic regulator will be up to the task.
  • Rather than boosting democratic legitimacy, the plans actually amount to a substantial downgrading of the role of democratically elected councillors in scrutinising health services.

 What does this mean for patients?

“With the prospect of a funding squeeze that will certainly have an impact on patients, this is no time to introduce an ideologically driven policy that forces GPs to become NHS managers.” (David Furness, Social Market Foundation)

Many of the changes in the white paper will not have an immediate impact on patients. At least to begin with, most will notice little difference when they visit their GP or go to hospital. But there are a number of issues that over time have the potential to alter dramatically the way patients interact with their NHS.

Most significantly, plans to ease the restrictions on the amount of money hospitals can make from private patients that pay for their care is a recipe for unfairness. The cap was brought in when foundation trusts were introduced by Tony Blair’s government because of a concern that NHS patients could find themselves pushed to the back of the queue.

This change will become all the more significant when combined with severe financial constraints and with the fact that the government has scrapped targets for maximum waiting times. The financial pressure on hospitals will encourage them to treat fee-paying patients first, which will have a greater effect on NHS patients now that there is no limit to how long they may have to wait for treatment. Inevitably some will then consider going private to pay for their care, potentially pushing those that cannot afford private healthcare further back in the queue. Since waiting times have reduced dramatically over the past decade, it has been noticeable how the number of people prepared to pay to go private also reduced.

Unsurprisingly, within three weeks of the launch of the white paper a number of hospitals were reportedly gearing up to entice more private patients from the UK and abroad. These plans included building new wings and wards for private patients, setting up hospitals abroad and luring medical tourists with airport-to-hospital bed services.  The health minister Simon Burns responded to this report by stating that: “Removing the cap will free trusts to generate extra income to improve existing services and develop new ones, resulting in better care for NHS patients.”

There is no evidence to support this, with FTs just as likely to use their private income to expand private services rather than improve those for NHS patients. This may explain why some FTs have been keen to conceal the amount of private income they have generated: the Health Service Journal revealed in 2008 that foundation trusts earned up to £70m more income from private patients than their accounts for the year showed. UNISON has called for the reinvestment of private income in NHS services to be made an explicit requirement of FTs in the guidance of the regulator Monitor, but this has so far been resisted. Until this guarantee is made explicit, the prospect remains of NHS patients being de-prioritised by hospitals, particularly when money is tight.

A further concern with private patient income was highlighted in 2009 when it was revealed that hospitals frequently undercharged private patients for their care – mostly unintentionally – with the upshot that private patients were effectively being subsidised with NHS funds.

Another issue likely to loom large for patients, and likely to figure prominently in the postbags of MPs, is variation in levels of service across different parts of the country – the “postcode lottery”. Part of the remit of SHAs is to provide a strategic overview and co-ordination of services within their region. The white paper suggests that there may be some form of regional outposts for the NHS commissioning board, but it is not certain how many there will be. With a lack of regional coordination it is possible that neighbouring GP consortiums could offer quite different services to their populations, a problem that Pulse has pointed out could be exacerbated by the fact that “some areas of the country are hugely more prepared for the challenges of GP commissioning than others”.

The government has said that overspending consortiums will not be bailed out, raising questions about whether patients could see particular treatments suspended until their consortium gets its deficit under control. The level of autonomy given to consortiums by the white paper includes encouragement for them to “strip out activities that do not have appreciable benefits” – but who decides what these are and does this mean that some patients could lose access to vital services?

With the profit motive set to become a more important consideration for those competing within the healthcare market, it is logical that providers will focus most of their attention on offering those services that make the most money, meaning that those yielding less cash may be ignored. This could have major consequences for patients suffering from rare and complex conditions who find they are increasingly unable to get treatment near to where they live. National and regional specialised services will be the responsibility of the NHS commissioning board, but the Specialised Healthcare Alliance has voiced “immediate concerns” about the need for regional structures to support specialised commissioning.

Similarly, charities have expressed fears that mental health services could suffer under new plans, with GPs themselvesexpressing concern about their ability to commission these services. A survey by Rethink found that only 31% of GPs felt equipped to take on the role of buying in mental health services for patients. This comes at a time when evidence shows that demand for mental health services is bound to increase as the effects of the credit crunch and recession begin to take hold.

End of life care is another area that charities are concerned for. An ageing population means that more people will be dying with more complex needs, and Help the Hospices have stated that “our biggest concern is that people will die badly if GPs are not supported to develop the knowledge and expertise they need to commission the best palliative care.” In order to preserve fairness and transparency for the vulnerable, services “need to encompass not only mainstream health services but also meet the social, emotional and psychological elements that are so central to hospice and palliative care.”

A white paper on public health is due to follow the main health white paper, but already organisations are expressing concern that the nation’s health could be affected as local authorities will increasingly be encouraged to focus on the delivery of actual healthcare services (through health and wellbeing boards and the local Health Watch) rather than wider issues of public health and prevention. Professor Steve Field of the Royal College of GPs has acknowledged that “there is a risk here, especially as not every GP has a great knowledge of public health”. Even those local government leaders who welcome their new public health responsibilities acknowledge that in the current financial climate there “may be a challenge that says, can we afford this? Is this our core business?”

Although the government claims its proposals will strengthen integrated working between health and social care, there is little detail in the white paper to back up this assertion and no meaningful health-local government interface. In fact, the accompanying consultation document on outcomes confirms that there will be separate outcomes frameworks for the NHS, public health and social care, which may inhibit integrated working. Speaking on behalf of providers of care, theEnglish Community Care Association voiced a “major concern” that the white paper “does not acknowledge strongly enough the pivotal role of social care in the development of an integrated approach to supporting citizens.”

There are wider issues around inequality. A report by the National Audit Office on health inequalities found that richer populations tend to have more GPs per head than poorer ones. It is doubtful whether the NHS commissioning board will be able to influence the distribution of GPs or whether councils will have sufficient power to affect a change that benefits the poorest.

The white paper will have a major impact on NHS staff. It threatens to end national pay bargaining and to undermine the NHS Pay Review Body. It also confirms the ongoing review of public sector pensions, of which the NHS Pension Scheme is one. Weakening the terms and conditions of NHS staff will obviously have an immediate impact on those that work for our health service. It will also potentially damage patient service as morale is affected and the NHS finds it harder to recruit and retain the best available staff.

Those that work for the health service are also patients (or potential patients), so the effect on them should not be seen in isolation from the effect on patients. Staff concern for the NHS is not merely based on “producer interest” as pro-market commentators assert, but also on a desire to see a system that will treat them, their families and their communities properly when they need to depend on its services.

Markets undermine staff: the white paper is based on the assumption that financial incentives and penalties are the strongest motivating factors for staff performance rather than professionalism, patient care or commitment to the NHS. Crucially, undermining staff will also have a detrimental impact on patients. Research by the Aston Business School for the Department of Health has established a definite evidence-based link between the experience of NHS staff and the patient experience of care. Findings include:

  • the more staff who have had health and safety training, the better the patient perceptions of greater conscientiousness and availability of staff;
  • organisations where staff have clear, planned goals are more likely to have patients who report positive experiences of communication, in particular around patients being involved in decisions;
  • patient perceptions of staffing levels and the respect and dignity shown towards them are correlated to employee’s feelings of work pressure and staffing levels;
  • high levels of bullying, harassment and abuse against staff relates to many negative patient experiences; and
  • staff views on the confidentiality of patient information are mirrored by patient views of the privacy they are given.

Such messages have apparently gone unheeded by the government. The white paper states explicitly that there will be less staff employed as a result of its plans, and the greater local autonomy permitted over training and workforce planning could affect staff development, meaning they are less well equipped to treat patients in future. Research byNursing Times suggests that only a minority of PCTs have ringfenced practice nurse education schemes, and there are fears that even these will disappear once PCTs are abolished. There is also virtually nothing in the white paper on the role that staff engagement can play in boosting productivity and efficiency in the NHS. This is despite the fact that theNHS social partnership forum – which brings together government, employers and unions – has demonstrated that savings can be made from partnership working at the local level.

Anna Dixon of the King’s Fund has suggested that “the government runs the real risk that these structural and organisational changes will distract from the real task of clinically led service change”. Good initiatives that have helped staff to provide better care for patients and more efficient care for taxpayers could suffer as a result of the review of arm’s-length bodies. The chief executive of the NHS Institute for Innovation and Improvement has stated that there “must be” some risk that the Institute’s work on quality improvement could suffer now that its remit will transfer to the NHS commissioning board.

There are particular fears that the impact of successful programmes such as the Institute’s Productive Ward series will be lessened. Evaluations of the initiative have found that it has “huge perceived value and local impact” as it seeks to free up nurses to spend more time with patients by streamlining processes such as handovers; it aims to help the NHS save £9bn. National Nursing Research Unit director Peter Griffiths said: “It does seem clear that it will be harder to develop, co-ordinate and marshal resources behind these sorts of developments in a more decentralised system.”

The review of arm’s-length bodies may also affect patient safety. The National Patient Safety Agency is to be abolished and its responsibilities will transfer to the NHS commissioning board. The board will be responsible for a huge number of other areas, including pharmacies, opticians, maternity and specialist services, as well as handling contracts with GP consortiums. Without a dedicated body to promote patient safety, will focus be lost at a time when fears are growing that new superbugs such as NDM-1 are on the rise?

UNISON’s main concerns

  • NHS patients could find themselves losing out to those that are prepared to pay for their care.
  • There are likely to be geographical variations in the level and type of service available to patients.
  • Mental health services and specialist services to treat patients with rare or complex conditions could suffer.
  • The white paper is a missed opportunity to promote integrated care and to develop the links between patient experience and staff development.
  • Initiatives that promote good practice and save the taxpayer money could be compromised, along with patient safety.

What does this mean for the NHS?

“No matter what individual patients want, profit-motivated firms will now have a huge say in what care is available and much of the fairness, value and public trust in the traditional NHS will be lost.”

(NHS Support Federation, white paper response: Lansley puts business at centre of NHS not patients)

In the short term it is unlikely that patients will have to pay to receive care on the NHS. The government commits to continuing to provide “a comprehensive service, available to all, free at the point of use and based on clinical need, not the ability to pay”. But the white paper also unleashes a number of powerful forces that could undermine these aspirations and irrevocably alter the public basis of the NHS.

To start with, the white paper omits from the above list of principles the fact that the NHS should be paid for by taxation. It does state that NHS services will be “funded by the taxpayer” but this is not the same thing; taxation is a system, taxpayers are individuals. The implication is that in the future taxpayers could potentially pay for services directly with their own cash rather than the NHS being funded from tax returns. The extension of direct payments into the NHS, in which patients are given a sum of money to spend on their care, adds to this sense of unease.

As mentioned above, if the removal of the private patient income cap leads to cash customers getting first attention in lengthening queues for care, then the principle of treatment according to clinical need rather than ability to pay will have been undermined, at least in terms of the priority accorded to patients. If patients are confronted with this “queue or pay” conundrum, over time the credibility of the NHS as a comprehensive service will be diminished.

The white paper means that staff will effectively no longer be employed directly by the NHS; their employment will pass to newly mutualised foundation trusts, GP consortiums or private companies. NHS trusts will no longer exist and the language of the document implies that FTs are no longer NHS organisations. It is almost certain that the government will continue to want to use the popularity of the NHS brand, but it is increasingly likely that the NHS will end up as little more than a label to be attached to the various competing providers in the new healthcare market.

Arguably the two most significant threats the white paper creates for the future of a public NHS are the fact that services will increasingly become subject to procurement and competition law, and the possibility that assets could be transferred from the state to healthcare providers.

First, the white paper’s proposals to encourage “any willing provider” to deliver services to patients will lead to greater contestability between providers. Over time GP consortiums may also decide to advertise to attract providers from the healthcare market. With an increasing number of private providers in the market, the extent to which NHS activity could be challenged under EU competition rules becomes less clear. There is a danger that if services are put out to tender it will be impossible to bring them back under an NHS umbrella without major challenges from private companies. Monitor, as the new promoter of competition, will be required to enforce this market as a means of blocking challenges to GP commissioners under EU law.

Second, it is unclear as to who will retain the assets of a hospital or health centre under the new plans. The recent revision of the Principles and Rules of Co-operation and Competition has led to the suspension of one of the principles from October 2010, pending further work. The previous edition of this document explains why:

“The Department of Health, with Monitor and CCP [the NHS Co-operation and Competition Panel], will be conducting a programme of work in 2010 on access to assets and the impact on choice and competition. The review will consider the full range of approaches to regulating access to assets including ownership models, access arrangements and competition rules.”

If the government decides that it is no longer necessary for the state to retain the assets, this raises the prospect of them being transferred to providers, who could do with them as they saw fit. This could involve selling off land and buildings to the private sector, or entire hospitals being sold off if they went bankrupt. There are other questions: if a company took on the assets while delivering a contract to provide NHS services, what would happen to the assets at the end of the contract? If such a company borrowed against these assets, would the NHS then have to take on any debt?

The white paper states that Monitor will have “powers to protect assets or facilities required to maintain continuity of essential services” but the definition of essential services will be down to Monitor. Until recently it had been assumed that private companies had little interest in running district general hospitals, particularly those with financial problems. But the fact that private bidders such as Circle and Serco are in the running to take on a franchise for the Hinchingbrooke hospital in Cambridgeshire is beginning to dispel such a notion.

There are other parts of the white paper that could serve to undermine the NHS remaining free at the point of use in the future. One is the establishment of a new cancer drugs fund to provide extra cash for those patients whose drugs are considered too expensive for the NHS to provide. This has the potential to undermine the National Institute for healthcare and Clinical Excellence (NICE), a world-renowned body that evaluates the effectiveness of drugs for use by the NHS. Although the fund will eventually rise to £200m, experts such as Professor Chris McCabe and oncologists such as Professor Jonathan Waxman have pointed out that, given the vast expense of many cancer drugs, this money will not go very far. The Rarer Cancers Forum suggests that the fund will be overwhelmed unless drug companies cut their prices.

People who are refused drugs are already entitled to appeal to PCT exceptional case panels, but the risk with the new plans is that unrealistic expectations will be raised for desperate or vulnerable patients. In the longer term this could lead to pressure for a greater level of co-payments in which patients demand the right to “top-up” NHS care with their own cash for conditions other than cancer. Commentators question why a “special case” has been made of cancer, suggesting also that: “You’ll soon have other lobbying groups knocking on the door asking for special treatment. It is a very difficult and controversial area.” Paying to top-up care will only be an option for those with sufficient funds and undermines the equality and fairness upon which the NHS is built.

An editorial in The Lancet was particularly scathing about the “political opportunism” of the new fund, which it claims will undermine “the entire concept of a rational and evidence-based approach to the allocation of finite healthcare resources”.

The white paper suggests that plans for personal health budgets, in which patients are potentially given a pot of money to buy their own care, will be extended without considering whether the existing pilot process has demonstrated their success: the pilots will merely be used “to inform a wider, more general roll-out”. Personal health budgets could also encourage pressure for patients to be able to top-up their care with their own money. Managers involved in the initial pilots have voiced such concerns, in addition to issues around equity, in a report on the early experiences of the programme:

“Personal health budgets should be compatible with the core principle of the NHS that care and support be provided based on clinical need rather than ability to pay… [A] number of sites were worried that the ‘more affluent individual’ will know how to play the system. One site questioned how they could stop ‘top-ups’ for this group: ‘If I picked my menu and my care plan and you told me my personal health budget is £2,000 but mine adds up to £2,300 – that’s fine I will put the additional £300 in myself. This isn’t supposed to happen and it is supposed to be so wrong – how are they are going to stop that happening?’”

UNISON’s main concerns

  • The government has not confirmed that the NHS should continue to be funded through direct taxation rather than by individual taxpayers.
  • If NHS patients lose priority to cash customers, the principle of care based on need rather than ability to pay would be undermined.
  • There is uncertainty in the government’s plans over whether the state will retain NHS assets. If it does not, publicly-owned hospitals could be sold off and lost to the taxpayer.
  • Once services have been fully opened up to competition, EU and international competition law make it very hard to bring privatised services back into the NHS.  
  • Reforms to alter the funding of cancer care and to extend personal health budgets could lead to pressure for patients to “top-up” their free NHS care with their own money, which will be unfair for those that cannot afford to pay.

Conclusions

The sections above have laid out the areas of concern around the new white paper and then described what impact these will have on patients and the future of the NHS.

  • UNISON believes that the current proposals represent a significant risk that future generations will not be able to benefit from the NHS in the same way as patients do today.
  • By focusing on massive and expensive structural reorganisation, the white paper represents a missed opportunity to target increasingly stretched NHS resources more directly on improving services during a period of major financial challenge.
  • The massive disruption and displacement of staff will divert the focus of the NHS from continuous efficiency improvements and will undermine the morale of the workforce – a critical factor in delivering high quality care to patients.
  • It is difficult to conclude that the motivation behind the white paper is anything other than an ideological drive towards an open market in which profits are taken out of the NHS by private healthcare providers.

The NHS is always in need of change to ensure that it keeps up with the challenges of the day. UNISON believes that reform should be based on the following key principles.

  • Quality: the quality of care received by patients is paramount.
  • Fairness: equity is best maintained by ensuring the NHS remains a free, comprehensive service funded by taxation, where access depends on need not ability to pay.
  • Democracy: commissioners and providers of NHS services should be properly accountable to local people.
  • Engagement: improvements in the quality and responsiveness of services are best achieved by involving and valuing patients, service users and staff.
  • Scrutiny: independent checks and ratings of all commissioners and providers are needed by an independent body that is free of dual or conflicting roles.
  • Public: public ownership and provision is the best means of ensuring the integrated delivery of services and geographical consistency.

Improvements that are rooted in these principles will provide an NHS that is fit for the future – our NHS, our future.

What do you think?

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 367 other subscribers

Follow us on Twitter

%d bloggers like this: