David Hands Visiting Professor, The Welsh Institute for Health and Social Care

Introduction

Improved public services are a crucial part of the Welsh Assembly Government’s ambition for a Better Wales. The recent government initiative, Making the Connections, shows that Wales is particularly keen to ensure that services improve by working more closely together.

This paper is intended as a positive and constructive contribution to that debate. However, it suggests that there are issues within the current accountability structure of the National Health Service (NHS) in Wales which need to be addressed to enable it to function more effectively, both internally and in relation to complementary services run by other agencies.

Health and the NHS absorb approximately one third of the budget of the government of Wales. The optimal organisation of health services is therefore a critical issue in its own right. Whilst, from the perspective of many service users, the connections between health and related services (such as social services) are very important, for the majority of patients, the connections between the various components of the NHS are more significant. This paper therefore focuses on improving the effectiveness of the structure of the NHS in Wales.

Organisational structure is not an end in itself. A sound accountability structure is a necessary but insufficient condition for organisational success. Structure defines corporate and individual accountability and is therefore a fundamental requirement for the achievement of an organisation’s purpose and objectives. It is the architecture for behaviour and relationships, both internally and in relation to clients and the outside world. It provides the essential framework to support the systems, processes and activities upon which clients depend. Inappropriate structure obstructs optimum functioning. Whilst no structure is likely to be perfect for every possible purpose, the organisational anatomy must be carefully and optimally designed to achieve the organisation’s purpose: form should follow function.

This paper therefore suggests the principles which might guide the restructuring of accountability for Health and the NHS in Wales. It proposes modifications to the current structure which, it is suggested, would be likely to enhance both accountability and performance of the NHS and provide a more robust basis for collaboration with other agencies. It is based on British and international evidence and experience of the factors which influence the effectiveness of health services organisation.

The Purpose of the NHS

The legislation on which the NHS is based requires the UK Secretary of State for Health, and now the Welsh Assembly Government , both to promote the health of the people and to secure the provision of health services in accordance with the provisions of the legislation. The NHS therefore has dual (but not exclusive) accountability for both health and the alleviation of sickness.

The organisational arrangements for fulfilling these responsibilities have developed and changed over the years since the Service was created in 1948. Some changes followed careful evaluation of options and potential benefits. However, for the past seventeen years, most structural change has been driven more by political ideology than evidence. Change has also become progressively more frequent, erratic and inconsistent. Adjustments have frequently been made to one part of the structure without consideration of the implications for other parts and without consideration of a “whole-systems” perspective.

The NHS was founded on the values of comprehensiveness, equity, fairness and equality of access, free at the point of use and funded from taxation, regardless of ability to pay. These values are still widely supported throughout the UK, but particularly in Wales. The Service continues to enjoy widespread popular support although the pressures of responding to increasing demand with inevitably limited resources has promoted discussion of emergent values such as effectiveness, efficiency, acceptability, relevance and responsiveness .

In 1999, the World Health Organisation (WHO) published a set of principles (known as the Ljubljana Declaration) which member states (including the United Kingdom) agreed should govern the future development of health care systems across the world. The Declaration indicated that health care reforms should be:

  • Driven by values of human dignity, equity, solidarity and professional ethics;
  • Targeted on protecting and promoting health;
  • Centred on people, allowing citizens to influence health services and to take responsibility for their own health;
  • Based on sustainable finances to allow universal coverage and equitable access;
  • Orientated towards primary health care.

These principles have been broadly supported by the Welsh Assembly Government in a succession of policy statements and plans. Indeed Wales has an international reputation for its pioneering work on comprehensive health planning, particularly planning for health gain in individuals and communities. In 1989, the former Welsh Health Planning Forum published the innovative Strategic Intent and Direction for the NHS in Wales. This has been followed more recently by Improving Health in Wales and the latest, Designed for Life.

The international evidence clearly supports the continuation and development of a comprehensive health care system based on the values of the NHS. Wales has demonstrated its determination to plan for maximum health gain. The issue is whether the organisational arrangements established by the Welsh Assembly Government are adequate for the challenge.

Structural History of the NHS

The current NHS structure in Wales, and elsewhere in the UK, can only be understood by reference to a brief history of structural change in the Service.

For reasons of history, political compromise and pragmatism, the original 1948 structure of the NHS in England and Wales was established in three parts:

1. Family Practitioner Services, provided by independent contractors such as GPs, dentists, and opticians. These services were originally administered by Executive Councils, superseded later by Family Practitioner Committees and then Family Health Services Authorities. (Such separate bodies were not established in Scotland or Northern Ireland)

2. Community Health Services, Ambulance Services and Public Health: run by local authorities.

3. Hospital Services: originally run by Hospital Management Committees, Boards of Governors of teaching hospitals and Regional Hospital Boards.

Although this tri-partite structure was adequate to establish the Service, the consensus of professional and political opinion was that it created unnecessary boundaries for patients and inhibited the provision of seamless, patient-centred care. Professional, public and political opinion moved firmly in favour of creating a fully integrated, single authority structure locally which would enable services to be based on the needs of patients and communities. Various detailed options were exhaustively studied, tested and consulted upon in the 1960s but, finally, the new integrated structure, with detailed variations, was implemented in 1974 in all parts of the UK.

The post 1974 integrated structure in England and Wales was initially based on population-based Regional and Area Health Authorities. Most areas were sub-divided into operational districts based on populations of approximately 250,000. The function of the regional health authority in Wales was absorbed by the Welsh Office when the former Welsh Hospital Board was abolished. Following a review in 1982, Area Health Authorities were abolished and replaced by District Health Authorities (DHAs) based on populations of approximately 250,000 and the concept of the Comprehensive Health District . DHAs were expected to provide a broadly comprehensive range of all except the most highly specialised (tertiary) services.

Although initially established in England and Wales as sub-committees of Area Health Authorities, Family Practitioner Committees became increasingly separate because of political pressure from independent contractors. They were later reconstituted as independent Family Health Services Authorities (FHSAs).

In Scotland, Health Boards were established as the equivalent of Health Authorities in England and Wales. However, independent contractors did not have a separate contracting body: the contracts were held and administered by the Health Boards. Northern Ireland took a similar approach but, in addition, the integrated boards were given added responsibility for social services and were designated Health and Social Services Boards.

Structural change progressed smoothly in the early 1980s in all parts of the UK, based on integrated, population-based authorities. In the late 1980s it seemed likely that FHSAs would soon be integrated with District Health authorities but this was not achieved until 1996. However, this natural, evidence-based, structural evolution was rudely interrupted in 1990 by the unanticipated and ideologically driven introduction, by the Thatcher government, of the ill-conceived “internal market”.

The market model required the separation of responsibility for the commissioning and provision of services. Health authorities (and some GP “fundholders”) were established as the commissioning authorities for their areas. NHS Trusts became the secondary specialist care and hospital providers but most primary care continued to be provided by independent contractors. In addition to discarding the “comprehensive health district” and the evidence-based evolution of NHS structures, these “reforms” flew in the face of international evidence and experience that competition in health care drives up costs and compromises quality. They were subsequently described by a former member of the Thatcher cabinet as “a prime example of the subordination of experience to ideology”.

NHS Trusts were originally based on the concept of “self-governing hospitals”. Primary and community care providers were initially overlooked. In England, but not in Wales, the institutional emphasis has again been reinforced by the more recent development of “Foundation Hospitals” although the recently published White Paper on primary and community services has partly and belatedly sought to redress the balance.

The current Labour government’s “Foundation Hospitals” are essentially a re-run of the Conservative’s “Self-Governing Hospitals”. Both concepts reinforce the already powerful institutionalist hospital perspective on the provision of secondary care services. They perpetuate the separation of primary and secondary care services and have been described by a leading commentator as “a totem pole for the future of the public sector when, in reality, they are yesterday’s answer to tomorrow’s world”.

Wales has sensibly declined to follow this route. Indeed, the mid-1990s restructuring of NHS trusts in Wales ensured that they became “integrated” providers of both hospital and community-based services (excluding only independent contractor services).

In England, chaotic structural change has continued unabated in recent years without reference to any principle except counter-evidential ritual references to being “patient-centred” and that competition will promote choice and therefore automatic improvement. Responsibility for commissioning was first passed from health authorities to Primary Care Trusts (PCTs). Health Authorities were replaced by a smaller number of “Strategic Health Authorities” to manage both Trusts and PCTs. However, PCTs are now being merged so that they cover areas similar to the original health authorities and Strategic Health Authorities are merging to cover similar population sizes to the regional health authorities which were abolished in 1996.

In stark contrast, Scotland took a radical decision three years ago to abolish the internal market and all structures associated with it. Services are now managed by population based Health Boards which act as agents of the Scottish Government in fulfilling all of its NHS responsibilities in their respective geographical areas. Northern Ireland seems likely to follow a similar solution.

In Wales, the former five Health Authorities were abolished in 2003 and replaced by three regional offices of the Assembly Government, “Health Commission Wales” and twenty-two Local Health Boards (LHBs). On average, LHBs cover smaller populations than the original English PCTs and, because of their size, are obliged to work in consortia for commissioning purposes. The fifteen Trusts remain largely unchanged.

Current Structural Problems

Much of the current structure of the NHS in Wales, particularly the NHS Trusts, was inherited by the Welsh Assembly Government when the National Assembly for Wales was established in 1999.

Wales has sensibly emphasised cooperation and partnership and refrained from following the overt market model now being implemented in England. However, Wales has not been as radical as Scotland in abolishing the internal market. The distinctions between commissioning and provision remain. Although the five large commissioning health authorities were abolished in 2003 they have been replaced by twenty two LHBs, each with commissioning responsibilities. The internal market is therefore still alive, although somewhat confused and constipated. Furthermore, LHB’s are effectively a reintroduction of FHSAs and the unhelpful separateness of primary care services provided by independent contractors.

The principal current problems in relation to the organisational structure of NHS Wales therefore are:

  1. The current structures (and financial systems) are those created to serve the purpose of competition and the internal market. They are therefore not best suited to partnership and cooperation, the stated policy of the Welsh Assembly Government. The persistent divide between the commissioners and providers of services, and between primary and secondary care, continues to promote disharmony and inefficiency.
  2. There are too many separate NHS organisations for a country with a population of only 3 million people. There are 15 NHS Trusts (including the Ambulance Service), 22 LHBs, three regional offices, “Health Commission Wales”, a separate Public Health Service and various specialist and regulatory agencies. The structure is not easily understood even by those working in it. It is difficult to coordinate, accountability is confused and management costs are unnecessarily high.
  3. The large number of LHBs was not established primarily for health service purposes. This number was created for the sole purpose of co-terminosity with the geographical boundaries of the existing 22 Welsh local authorities, despite the widespread opinion that the local authority structure in Wales is ineffective and ripe for review. This politically driven imperative has over-ridden the more important requirements of designing a more effective internally-integrated NHS structure.
  4. The evidence suggests that, an internal market requires substantial, financially well-endowed and highly skilled commissioners. Otherwise, services will be driven by the interests of powerful providers. Commissioning in Wales is ineffective and inefficient. LHBs are too small to commission both primary and secondary care services competently. They are considerably smaller than their more powerful counterpart NHS Trusts and therefore obliged to work in insecure federations. The commissioning role of LHBs in relation to primary care is also compromised by the presence of GPs and other independent contractors as board members.
  5. The accountability of LHBs for the primary care services, provided mainly by GPs and other independent contractors, is separated from accountability for community and secondary specialist services provided by the, so-called, “integrated” NHS Trusts. These boundaries inhibit the development and implementation of innovative patient-centred and condition-based pathways of care across NHS organisational boundaries.
  6. The accountability structure at national level is confused. The National Assembly aspires to be a parliament for Wales yet is obliged also to act as a national Strategic Health Authority. Neither function is performed effectively. The NHS has no coherent and identifiable national identity. It is impossible to distinguish decisions made by the NHS and the Government. Accountability is blurred. Too many issues which should be addressed locally get drawn into the Assembly. Conversely, decisions which should be taken at national level are habitually fudged. The officers of the Assembly government have divided loyalties. They are primarily civil servants appointed to serve the elected government yet are also unreasonably expected to run the largest organisation in Wales. Both strategic vision and transparent accountability are lost in the confusion.
  7. The governance of NHS agencies (Trusts and LHBs) is unsatisfactory because it supports conflicts of interest and divided loyalties. The inherited structure of NHS Boards is partly based on an inadequate quasi-commercial model introduced by the previous conservative government, the membership of which includes both executive and non-executive directors. However, the more recent addition of members from local authorities and health-care professionals (including independent contractors) has further confused corporate accountability. The inclusion of independent contractors as members of boards, whose function includes the commissioning of services from the same independent contractors, or companies established by them, is particularly problematic in relation to the potential for corruption. This is unacceptable in the governance of public services.
  8. The representation of users of services is inadequately structured and supported. The evidence suggests that Wales was wise to retain Community Health Councils (CHCs) but their boundaries do not match NHS bodies. Their role, functions and membership also need to be reviewed in association with changes in the structure of the NHS. The arrangements for involving NHS staff in decision-making are also unclear.

Principles of an Effective NHS Structure

The history of structural change in the NHS since 1990, under both Conservative and Labour administrations, demonstrates the worst of ideologically driven political change without understanding of the values, purpose or complexity of health services and without reference to any evidence-based principles of effective organisational design. This contrasts sharply to the still imperfect, but much more measured, evidence-based and broadly consensual, major restructurings of 1974 and 1982.

The conservative government introduced the internal market in 1990 against the international evidence that competition and fee-based provision of health services inflate costs and reduce choice and cost-effectiveness. The return of a UK Labour government in 1997 raised expectations that the internal market would be abolished and a fundamental review of structures undertaken. This view was reinforced by the early abolition of GP fund-holding and the initial, but short-lived, requirement to base future planning on population-based health improvement programmes. However, subsequent restructuring, particularly in England, has been incompetent, erratic, inconsistent and grossly wasteful of money, skills and professional goodwill. The Welsh Assembly Government now has an opportunity to make a fresh start. What principles should guide its decisions?

Drawing on the best available experience and research within the NHS and internationally over the last sixty years it is suggested that the future structure of the NHS in Wales should be based on the following principles:

  1. To promote the health of the population at large as well as the provision of diagnostic, treatment and care services to individuals.
  2. To enhance the health status of both populations and individuals within clearly defined local communities.
  3. To provide diagnostic and treatment services which are patient-centred and supported by clearly defined pathways and structured vertical integration of primary, secondary and tertiary health services.
  4. To explicitly replace the internal market by establishing comprehensive and integrated operational management and strategic planning responsibilities at local and national levels.
  5. To create a clear national corporate identity for NHS Wales which is separate from, but more visibly accountable to, the Welsh Assembly Government.
  6. To promote lateral integration with other organisations, particularly local authorities, which influence community health or provide complementary services to the NHS.
  7. To redesign the membership of NHS bodies so that their structure clearly and appropriately promotes better governance in accordance with the most stringent requirements of public accountability.
  8. To provide explicit and specific mechanisms for public and staff participation in service development.

It may be helpful to consider each of these points in more detail:

Promotion of Health

The Welsh Assembly Government is clearly committed to promoting the health of the people of Wales. It is well understood that the determinants of health include environmental factors and personal behaviour as well as genetic predisposition and the provision of effective health services. Welsh initiatives therefore recognise the requirements for public engagement and collaboration between all stakeholders.

However, such initiatives are difficult to sustain without much more attention to the organisation required to achieve the aspiration. For example, there is no overarching governing organisation at national level to ensure the definition of positive health policies and the implementation of health improvement targets even within government, and between government agencies and local authorities, let alone the wider circle of stakeholders. There is no standing advisory machinery designed to harness the best evidence of the action which is likely to prove most effective.

The emphasis on NHS performance management continues to focus on hospital treatment of patients (particularly admission to hospital for surgery) rather than the stated priorities of prevention and primary care. Accountability for environmental health in local authorities has been diluted because most authorities are too small to justify a full complement of professional staff.

The National Public Health Service was established as a separate organisation in 2003 as an unintended consequence of the abolition of health authorities. It is probably best retained as a distinct part of a national organisation, with clear linkages locally, but it requires better arrangements for governance. It is bizarre that it should be accountable to an NHS Trust whose primary function is the provision of highly specialised cancer services.

Defined Local Communities

Wales appropriately attaches great importance to the retention, support and development of local communities. This was one of the better reasons for the establishment of LHBs for relatively small areas. However, the support of communities, whilst requiring appropriate NHS structures and services, does not necessarily require the establishment of a large number of individual statutory authorities.

The most important front-line building block of the NHS is the Primary Care Centre, usually in the form of a partnership of local GPs with supporting services. It is generally recognised that each GP can reasonably serve approximately 2000 people, supported by partner GPs and other health professionals, in primary care teams, serving approximately 8-10,000 people.

More needs to be done to define, develop and promote the full range of preventative and treatment responsibilities of these basic building blocks of NHS organisation, in relation to the provision of local services, the development of local health alliances and as gatekeeper to secondary care. After all, the basic model was defined as long ago as 1920. To achieve closer accountability of these services there is a long outstanding requirement for much better information to support comprehensive assessment of their performance.

Once this principle of the “basic front-line unit” has been reinterpreted for modern requirements, the organisation of other services can be designed to support them. Effective organisational design proceeds by first defining the role and function of the basic operational units, providing essential front-line services, and then designing specialist secondary/tertiary support and other services as required.

The populations required to support specialist services varies according to the nature of the specialty and local geography. There is a tension between the desire to provide a locally accessible service and the volume of individual cases required to ensure the maintenance and enhancement of specialist skills and quality. It is generally recognised that community hospitals/local specialist clinics require populations from 60,000 upwards and general hospitals a minimum of 250-300,000.

This is the reason the 1974 and 1982 reorganisations of the NHS were based on the concept of the “comprehensive health district” (sometimes described as a “local health economy”). These concepts represent the population required to support the secure establishment of an appropriate number of primary care units and a viable range of the most commonly required secondary specialist services, providing both elective and emergency services. Highly specialised tertiary services usually require larger populations of 3 millions upwards. These services therefore need to be developed on a national basis for Wales in cooperation with other UK countries.

Vertical Integration

As part of its Alma Ata declaration in 1978, WHO promoted a model of health services organisation based on the principle of successive levels of support to front-line prevention and primary care. The model emphasises the importance of ensuring that, consistent with proper consideration of safety and quality, as many interventions as possible can be undertaken at an easily accessible primary care level. However, the primary care front-line must be effectively organised and have appropriate specialist support.

These successively more specialist levels of response to illness are usually described as secondary and (super-specialist) tertiary services. No one level should dominate or determine the others. The balance of care between the services must be carefully designed to ensure seamless services to individual patients at the appropriate level. The boundaries between the levels are necessarily fluid as technology drives the development of further specialisation yet, simultaneously, becomes diffused into front-line services.

The Alma Ata model was broadly consistent with NHS philosophy until the internal market promoted competition within and between the different levels. It is much easier to promote the integration of services from the patient’s perspective if the governance and management arrangements are arranged to support this model within the boundaries of a local, population-defined “comprehensive health district” and accountable to a single governing authority.

Much has been done in recent years to develop protocols, pathways of care and “National Service Frameworks” (NSFs) to govern the relationship between primary and secondary care and the organisation of services within those levels. Definition of the optimum processes of treatment helps considerably in defining expectations for patients and enables quality and outcomes to be monitored.

Historically, referral and treatment protocols tended to be defined by specialists and imposed upon primary care to govern or limit access to specialist services. This practice tended to skew services towards the perspective of the specialist rather than the patient or objective evidence of effectiveness. In recent years, the involvement of GPs in commissioning has resulted in an appropriate shift towards a primary care perspective in accordance with the model.

However, the perverse financial incentives of commissioning have resulted in a process which, arguably, has now gone too far in the other direction. Although GPs appropriately now have greater influence in determining the patient’s requirements for specialist services, GP independent contractors are not synonymous with primary care. The relationship between primary and secondary care services should be based on evidence-based partnership and not simply GP opinion. Contrary to expectations, some GP-led commissioning seems to have resulted in inappropriate over-referral to secondary care. It is difficult to defend these decisions particularly if they are perceived to be driven by the financial and workload interests of independent contractor GPs rather than patient need.

The design of services requires a holistic, balanced and evidence-based assessment of services required across primary, secondary and tertiary care for each identified patient pathway as described, for example, in the better NSFs. For this reason, it is sensible to establish management arrangements which support the development of appropriate pathways (such as specialist networks and programme coordinators). It also ultimately requires a single corporate authority for both primary and secondary care within a population defined local area (as now established in Scotland) with the clout to determine the appropriate allocation of resources to each programme and level of service.

Tertiary services require special consideration. These are relatively rare and super-specialised services which usually require heavy investment in equipment, training, skills and quality control. For these reasons, even before the internal market, regional authorities in England and Wales had established processes for the designation, development and quality control of the centres from which such services were to be provided. It is likely that similar arrangements will be required in Wales in the future, building on the work of the former Welsh Specialist Health Services Commission and Health Commission Wales.

Finally, it should be noted that the specialist services do not all need to be hospital-based. Historically, secondary care services evolved mainly from hospitals. It is likely that those services which require the provision of highly specialist equipment or facilities (such as operating theatres), or the interdependence of different disciplines in the same time and place, will continue to be required in a hospital setting. However, many secondary care services, such as those supporting chronic disease management, children, the elderly and people with mental illness or disability, are more appropriately based in the community in close association with primary care.

Integrated NHS Authorities

The principal implication of the above analysis is the establishment of new, single, comprehensive and integrated health organisations (whether called authorities, boards, trusts of something else) to replace the existing confused and ineffective internal market structure at local level. Such integrated organisations would be given delegated authority by the national level and matching accountability to ensure the planning and provision of an appropriate and best possible balance of preventative, primary and secondary services in their designated geographical area within the resources provided to them.

Authorities would need to cover a defined population of approximately 250,000 people upwards. Between nine and twelve such bodies would therefore be required to replace 36 current NHS bodies (excluding the ambulance Service) and three regional offices of the Assembly. In 2002, during consultation on the proposed abolition of health authorities, the creation of this type of body was supported almost unanimously by all of the then existing NHS bodies in Wales.

The existence of such an integrated authority would not in itself threaten the existence of independent contractor services, a canard frequently promoted by some contract-based professionals. Contracts for the provision of services do not require a special authority to administer them. Independent contractor services have continued to thrive in Scotland where there have never been separate authorities for these professions.

The survival of independent contractor services depends on their continuing effectiveness and the nature of the contract, not the existence of separate authorities to manage them. These services need to be to be assessed on a similar basis to salary-based services. Indeed, it is not unreasonable for services provided by private, voluntary and independent contractors (in both primary and secondary care) to be considered for the award of contracts, as part of the network of local services, if such services represent good value for money and are judged to be appropriate by the local NHS authority.

A National Identity for NHS Wales

It follows from the case for the establishment of local integrated NHS authorities that this kind of structure should be mirrored at national level by the establishment of a single integrated strategic NHS Authority for Wales. This body would be accountable to the Welsh Assembly Government for functions similar to those being established for similar-sized populations in the new strategic health authorities in England. This would include the management and allocation of resources to the local bodies and the strategic long term planning of health and health services in Wales.

Such a body could also allocate resources for major NHS capital investment and commission tertiary care services both within and beyond Wales. It would be a suitable governing body for the National Public Health Service and other specialist national functions. It could also provide a useful base for the provision of non-clinical support services (such as financial and information services) but experience suggests that such services are better established on a federal basis and not as part of the authority’s core functions.

The establishment of a national NHS Authority would also clarify the important distinctions between the government of Wales and its operating agents. Wales’ biggest organisation, the Assembly Government and the Assembly itself each deserve their own unique identity and experienced specialist staff which would improve the effectiveness of their very different functions.

Such clarity would enhance democratic effectiveness and accountability rather than diminish it. The national NHS authority would be accountable, as an agent of the Assembly, to the Assembly Government Minister, for achieving the goals it had negotiated as part of a (preferably five-year) planning cycle. Government assessment of the performance of the NHS Authority would be assisted by national inspectorates which would need to be retained and developed. Government would be freed to consider the longer term health issues in relation to all of the other aspects of a Better Wales. It would have time to encourage better relationships between the NHS and other parts of the public, private and voluntary sectors instead of continually being weighed down by relative trivia. Civil servants would no longer have to sit on the fence juggling different loyalties.

The positive health aspirations of the Welsh Assembly Government could also be enhanced by establishing further machinery to ensure that the preventative aspects of the NHS were integrated at national level with other aspects of Welsh society. It is therefore suggested that, in addition to an NHS authority, a Health Development Council for Wales, consisting of people appointed on a personal basis, but broadly representative of stakeholders in Wales, be created to advise the Minister and the Government on health matters within Wales.

Lateral Integration

It has already been noted that health is not the preserve of the NHS. Health in an individual is influenced by a wide variety of environmental, inherited and behavioural factors, some of which can be influenced by governments and organisations other than the NHS. It is also important that the services provided by other agencies (such as social services) should be positively designed alongside NHS services to be mutually supportive to individuals. Explicit mechanisms and structures, particularly networks, need to be purpose designed at operational, authority and national levels to promote integration.

This is easier said than done. Co-terminosity of the boundaries of different organisations (such as health and local authorities) is generally felt to be beneficial but experience shows that this in itself is not a guarantee of cooperation. There are distinctive historical, cultural and professional differences between services which continue to impede progress, particularly when they are amplified and championed by a lack of “joined-up” thinking and action within the Assembly.

The problem cannot be resolved by simplistic panaceas. In particular, as the CHAIN and other projects have demonstrated, although it usually helps, it cannot be resolved only by co-terminosity of health and social services authorities. The NHS also needs to work constructively with, for example, social security, environmental health, housing, planning, education, leisure services, economic development agencies, local employers and voluntary organisations.

A sound and constructive link between health and social services is particularly important in relation to shared responsibilities for the care of the elderly and children and for those handicapped by a wide variety of physical and mental disabilities. Nevertheless, most people using the NHS do not use local authority social services. Conversely, social services authorities have responsibilities (such as child protection) which do not always impinge on the NHS.

The need for appropriate lateral integration of related services should not therefore predominate over the more fundamental requirement for vertical integration between the successive levels of the NHS. The key to collaboration between agencies is the careful analysis and matching of the need for specific services. Specific local and national liaison mechanisms at operational and authority levels are required to manage this complexity. Specifically, the role of local authorities as the obvious potential enabler of local community alliances, to promote overall community well-being, requires much greater emphasis and development.

Better Governance

The current membership of NHS boards reflects an uneasy compromise between various models which have been promoted and adopted over the years. It is time to return to first principles.

Any enterprise requires a competent and carefully designed governing board. The board, whether elected or appointed, is established to ensure that the interests of stakeholders is represented and upheld. The board is corporately and collectively accountable to the stakeholders for achieving the purpose for which the enterprise was established. In a private company, the stakeholders are primarily, but not exclusively, the shareholders. In a public enterprise, it is the general public whose interests are ultimately overseen by elected politicians at either national or local level.

The boards of public enterprises are generally appointed by ministers following public advertisement and/or consultation and nomination by relevant interested parties. The process is regulated by the Commissioner for Public Appointments and the Nolan principles for the conduct of public life. It is important that members are appointed because of their individual contribution and experience and not perceived to be representing some vested interest. It is also important that an appropriate blend of members is selected to ensure a spread of relevant knowledge and expertise is bought together for the benefit of the enterprise.

Until 1990, the boards of NHS bodies were appointed on this basis although local authority and some professional interests were given special consideration. However, after 1990, although health authorities and boards continued to be appointed in a similar way, the membership of all NHS boards, but particularly the boards of NHS Trusts, were adjusted to resemble the predominant commercial model. This involved the appointment of executive and non-executive members to NHS boards, thus admitting to public board membership the Chief Executive and other chief Officers who are appointed by the same board. This creates ambiguity in accountability and potential conflicts of interest.

This kind of board structure may be adequate for some kinds of smaller private company where, frequently, an entrepreneur has established the company and then requires colleagues to help him or her to run it. It may be argued that the governance structure of such companies is entirely a matter for the shareholders, although company governance is becoming increasingly regulated in the public interest. However, this traditionally British model is not the most common structure in the private sector in continental Europe where the so-called “two-tier” board, consisting of stakeholder and executive levels is usually preferred.

The mixed executive /non-executive model is inappropriate for public authorities where, to ensure proper accountability to the public at large, there needs to be a clear distinction between the corporate board which is accountable for the governance, strategy and policies of the enterprise and the officers who are accountable to the board for advising it and implementing its requirements.

In more recent years the waters have become even more muddied. The membership of LHBs in Wales and PCTS in England has been adjusted by adding a large proportion of currently serving independent contractor professionals, particularly GPs. In Wales, elected local authority members have also been appointed.

It is inconsistent with the generally accepted principles of sound governance in public life that independent contractors to an organisation should serve as members of the board of the same organisation which awards and monitors the performance of their contracts. Furthermore, it is inappropriate if those members, by being involved in the commissioning of secondary care services, are in a position to influence their own workload and income as independent contractors. This is not to argue that the vast majority of such members are not honest, hard-working and well intentioned: it should simply not be possible for public authorities to be exposed to any possible suspicion of corruption.

It is also not self evident that democratic election to a local authority is in itself a qualification for appointment to another public body. The appointment, as board members, of individuals who are elected councillors, or perceived to be representatives of external organisations, creates conflicts of interest for those individuals and tensions of loyalty within the corporate body. Such cross membership tends also to impede proper and better constituted inter-organisational communication and liaison mechanisms.

It is suggested therefore that, in the interest of the best possible governance, the boards of NHS authorities, at both national and local levels, should be comprised only of non-executive members (“governors”) who have been appointed by the Minister to those bodies for their personal characteristics and not because they happen to be members of external organisations or professionals employed by, or in contract to, those organisations. This would not preclude multiple memberships of different organisations although these interests would of course need to be declared.

It is proposed therefore that the overriding principle for appointment to an NHS body should be that the individual has relevant skills and experience and the capacity to apply them for the benefit of the NHS in the interests of the community at large.

Finally, there is an argument that the boards of NHS authorities should be elected rather than appointed. It is possible to have elected health authorities but this possibility needs to be considered in a wider constitutional context. In some countries, such as Sweden, this works well. However, such members stand for election specifically to those bodies and are only responsible for health matters. The balance of taxation is different in Sweden with the majority of resources being raised locally through a dedicated local tax levied by the elected authorities.

Health authorities in Sweden have established a federation to represent their interests nationally and, in particular, to negotiate with the central government the size of its annual subsidy to locally-raised funds. The constitutional arrangements and balance of power is therefore very different to that in the UK and Wales. If health authorities were elected in Wales, they would also need to have tax-raising powers and would need to establish a national federation (similar to the Welsh Local Government Association) to negotiate with the Assembly Government. In such a structure there would be likely to be differences of opinion (as currently between local authorities and the National Assembly) about democratic legitimacy and relative authority.

Public and Staff Participation

The interests of patients and the community at large are sufficiently important and divergent to require dedicated representative structures. The evidence suggests that purpose-designed mechanisms, such as Community Health Councils, if adequately supported, both financially and developmentally, are more effective in representing and reconciling divergent, but equally important, interests than the bodies established for the quite different function of governing the NHS.

Although there are well-publicised examples of conflict between NHS authorities and CHCs, the relationship is usually constructive. However, it is suggested that the constitution and membership of CHCs should be rethought in the light of modern requirements for public participation. Furthermore, for reasons of clarity of interest and because there are many thousands of groups representing patients, it is suggested that local authority councillors, who are more than capable of expressing their views through their own authorities, should not be appointed to CHCs.

Appropriately constituted machinery for consultation with staff and independent contractors is also required to ensure full participation of all staff and independent contractors, in service development. The structures must recognise and reflect both consultation and negotiation of terms and conditions of service and the legitimate expertise of the wide variety of different professional groups.

Conclusion

This paper has considered the opportunities now presented to the Welsh Assembly Government to reappraise the accountability structure of the NHS in Wales in the context of its wider review of public services. It has highlighted serious problems in the current structure and suggested the principles on which further necessary change might be based.

The effectiveness of NHS Wales is currently impeded by an organisation structure, at both local and national levels, which inadequately reflects its responsibilities and compromises its ability to promote health and provide comprehensive, leading-edge, integrated health services. Current structures were created to promote the competition of the discredited internal market. They contradict the dominant professional culture of cooperation in the interests of patients and the identical aspiration and policy of the Welsh Assembly Government.

The establishment of 22 LHBs in 2003 overemphasised the importance of lateral integration through co-terminosity with the geographical boundaries of social services authorities. This was at the expense of, much more important, vertical integration between primary, secondary and tertiary health care within the NHS. LHBs also perpetuate the discredited internal market and are inadequately positioned to be effective commissioners of either primary or secondary care services. LHBs also represent the revival of the outdated concept of a special authority to administer the contracts of independent contractors. Their constitution gives those contractors undue influence in the commissioning of services, including their own.

The evidence of NHS structural evolution between 1948 and 1989 demonstrates that a single integrated, population-based, local NHS authority is the most effective and robust option for securing the provision of effective, vertically integrated health services. It is suggested therefore that the Welsh Assembly Government should establish between nine and twelve such authorities in Wales. These authorities would be accountable for the planning and provision of high quality, comprehensive health services for their defined populations within their allocated budgets. They would also be accountable for collaborating with partner organisations in their locality in relation both to health promotion and the provision of specific services.

Accountability for the NHS at national level is confused, unclear and unfit for purpose. The NHS is a very substantial, sophisticated and complex organisation. It requires the very best governance and professional management. A national NHS authority is required to focus accountability and develop strategy for the NHS at national level. Such an Authority would be likely to attract the best of leadership talent to develop first rate health services for the people of Wales. This would free the Assembly Government and the Assembly itself to develop as a fully-fledged parliament and government able to represent the Welsh people more effectively in its quest for a Better Wales. It is suggested that a Health Development Council should also be created to advise the assembly on its wider health interests

The performance of the local NHS bodies would be assessed against their five-year plans by the national authority in a fair and open process, the results of which would be publicly available. The performance of the national authority would similarly be assessed by the Minister.

The chairs and members of both local and national authorities should be appointed by the Minister for a four-year period following public advertisement as part of a process regulated by the Commissioner for Public Appointments. Members should be appointed on merit for their personal skills and contribution to the NHS. No NHS employees (including chief and other executive officers, health professionals or independent contractors), or elected members of local authorities, should be eligible to be appointed to such bodies.

It is proposed that Community Health Councils should be retained but would need to be reconstituted to reflect the revised NHS structure. They should receive substantial and high quality support and their performance should also be carefully and sensitively assessed by a process involving the people whose interests they are appointed to represent.

Appropriately designed structures to enable full and proper participation by all kinds of staff and independent contractors should also be part of the internal management arrangements. Such consultative, negotiating and professional advisory machinery requires purpose-designed internal structures at appropriate levels.

Making the Connections and the associated review of local delivery of public services in Wales provides a unique opportunity for the Welsh Assembly Government to establish a new, evidence-based and more appropriate organisation structure for NHS Wales which would enable the Service to achieve its best in the interests of the health of the people of Wales. Nothing else is good enough.

DMH. April 2006

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