Saturday 24th May 2003 Birmingham Council House

Are the Government’s proposals for Foundation Hospitals a return to the internal market or a real opportunity to give control back to the people?

Notes from the seminar:

Philip Hunt: Background problems: In 1997 Labour found an enormous lack of investment and capacity. Training programmes had been radically reduced. The BRI enquiry was of considerable political importance. It emphasised that a sticking plaster approach could not be effective, especially in the face of rising public expectations. The NHS plan laid down clear standards of care, a programme to increase capacity, a determination to tackle the problems of staffing and the pay structure, reduce waiting lists, introduce new services such as NHS Direct, reduce health inequalities and to roll out substantial investment.

Delivery by 2008 is of huge political importance. We must keep the middle classes on board. This requires an extension of choice. The lingering approach of 1948 when everything was rationed will no longer do. We need to consider what choices are available and how we can produce information about them. We want to see less monolithic provision and engage the voluntary sector. We need to see innovation and diversity of provision. Commissioning is hugely important. Choice will exert leverage on vested interests.

In 1946 Bevan defeated Morrison, which is why we now have a centrally rather than locally run service. That was probably right at the time, but now local accountability is preferable to ministerial accountability. Organisations should stand on their own two feet.

This is not intended to be a two tier approach. The intention is to shift all trusts to foundation status, but to roll out a programme over 5 years. We do not want to see staff poaching- it could happen now but there are cultural inhibitions within the NHS already. There is a cap on the extension of private work. We want to see Foundation trusts encourage a partnership approach. There will be an internal market of sorts but without competition on price. Two main problems: will ministers be able to refrain from interfering when things go wrong as they inevitably will? How can we strengthen the commissioning function, which is a very unequal battle at present?

Guy Routh (NHSCA): Ambivalent about Foundation Hospital proposal. Is Medical Director of one of the chosen 29 trusts. Anything which annoys the BMA can’t be all bad. However policy initiatives are excessively dominated by concentration on cold surgery. The service is deeply scarred by prolonged underfunding. Those who see this as a step towards privatisation seem to be conspiracy theorists. There is too much ministerial fanfare for new ideas which have not been properly worked out. The real problems are at PCT level and in public health. National pay rates are important especially for professional staff and help to keep pay rates down. Does not regard the new borrowing powers as terribly worrying.

Phil Green (Unison): This is a step along the road to marketisation. Unison is not just concerned about pay freedom as Agenda for Change ties Foundation Trusts into National bargaining but is concerned about introducing more diverse providers. The introduction of choice in schools has not been a success, especially for the poor, as it has widened inequity. The universal principle is important. The democratic accountability should be in commissioning. The return to social ownership is unconvincing and the democratic arrangements are open to entryism. What is the prudential code for borrowing? Local pay freedoms should involve the local health economy. The Government failed to consult either within or outside of the Labour Party.

Roger Seifert (Keele University): This is a fundamental shift in welfare provision, part of a broad international strategy. Health services are still staff intensive and locally delivered. The quality of jobs has been reduced and this will extend that process. Managers are employed to cover up what is really happening. Deprofessionalisation leads to discontent.

Public Choice theory: politicians make short term populist decisions. Senior civil servants are empire building. The right of managers to manage – see Enron, which was held up as an example to follow. We can rely on managers because of their incentives, and because of competition. Regulators don’t work. Why do we need them? Because markets lead to failure.

Neoliberalism asserts the supremacy of the market. Morrisonian nationalisation is not self-evidently discredited. Public interest companies are a hybrid. The new public management rejects the public service ethos. It employs flexible employment practices with a view to adjusting the skill mix and driving down costs, thereby creating competitive business units on the basis of worthless promises. Borrowing powers are very significant. There is great pressure for false reporting of success. Good practice and innovation will not be shared. Decisions will be taken on a short term basis so research and innovation will be neglected. In the end services will be more expensive. Planning should be revived instead.

Philip Hunt:

  • Nationalisation on the old model is no longer regarded as effective.
  • Multiple targets and pressure from the centre mean that the effective life of a Chief Executive is about 3 years
  • The accountability mechanisms we have are not effective
  • We have insufficient trained staff in medicine – partly because doctors like it that way. We should train more than we need so that we can select the best
  • Doctors resist innovation – for example diagnosis and treatment centres
  • Real markets are not effective in healthcare

An independent regulator would guarantee standards. Local democracy, even with the dangers of entrism, would be better than the present arrangements for government by the great and the good.

Christine Hay: Shouldn’t we start democracy with PCTs, much better suited to the purpose? Who would pay for the campaigning and the electoral process?

Gordon Will: There has been no consultation about the development of this policy -within the NHS or within the Labour Party. There has been too much reorganisation of the NHS. National provision is preferable to local arrangements. NHS Trusts are the wrong place to insert democracy. People are more concerned about capacity issues than about local autonomy. Why should ownership of facilities be transferred?

Peter Mayer: A return to the great voluntary hospitals is to be welcomed. More local accountability and borrowing powers will encourage innovation. Commissioning is central.

Judith Blakeman: The social ownership provisions are merely a veneer. Planning and patient involvement are more important than commissioning.

Guy Routh: The public service ethos is still important. There is an important element of competition between secondary care and primary care which biases the efforts of PCTs in commissioning. Involving staff in important. The Todd Report in 1968 called for the training of more doctors.

Steve Milford: Competition will increase disparities of provision, but be of no benefit to those who cannot travel (for example people who live on islands). Populist democracy might threaten specialisation.

Richard Humphries: Was formerly a commissioner of services. PCTs have too many other tasks to pay much attention to commissioning. It should be separated off. We need to look more to organisations outside the NHS and encourage the development of partnerships. Reorganisations are very disruptive to partnership working.

Phil Green: Why has there been no consultation over this? Why are we having this battle? Unison would like to be supporting the Government. Do we really want to give trusts more freedom?

Philip Hunt: There are lessons to be learned from voluntary hospitals. They varied. Foundation Trusts have to be part of the NHS. Democracy could come to PCTs later. PCTs and commissioning are crucial. If they cannot deliver perhaps they will have to act collectively, or give commissioning to the strategic health authorities.

Roger Seifert: Democracy will not really happen unless there is a countervailing power. Look at the lessons of the Oregon experiment. If you don’t have ownership democracy doesn’t matter. Does it make a difference whether services are publicly provided? It is the management systems which will be provided. Certain problematic patients or conditions will be excluded from the services in the interests of delivering success. Central control is a better guarantee for the excluded than local democracy.

Sally Brearley: Guidance on Foundation Trusts is just like that for the establishment of NHS Trusts under the Tories. The governance proposals seem to be that you make it up as you go along.

David Mattocks: Will the loss of star status lead to the franchising of the management?

Guy Routh: The NHS is demand led, not need led. Medicine performs less than it promises.

After lunch the notes are less detailed:

Why do we need Foundation Trusts to deliver these proposed benefits? They will cut the legs off the Patient and Public Involvement Strategy before it has even started.

Diverse providers – will patients not choose on the basis of prejudice as the choose schools? Will the same clinicians be employed by several providers to compete with themselves? Choice implies more travelling – who will pay for that. Patients are not customers and do not have the sort of information which is needed to make a market mechanism work.

Will ministers let Foundation Trusts make mistakes? Will they be allowed to fail?

Salaries for managers will go up and standards of honesty will go down.

Local democracy takes no account of cost effectiveness. Some services are sexy and attractive – others are not.

To whom will the regulator be accountable?

Commissioning needs to involve patients.

Full text: Health Select Committee report on Foundation hospitals

Government’s response to the Health Select Committee’s Second Report of the Session 2002-2003 on NHS Foundation Trusts.

Foundation Hospitals: a new direction for NHS reform. Kieran Walshe

Group Health Co-operative, Puget Sound

Reconciling Equity and Choice? Foundation Hospitals and the future of the NHS John Mohan

Health Select Committee evidence on Foundation Hospitals

SHA Policy Statement Feb 2003

Without foundation: Angela Eagle

Shifting the Balance of Responsibility – article by Judith Blakeman in Socialism and Health February 2003

Localism: From Rhetoric to Reality: Speech by Alan Milburn 5/2/03

A Modern Agenda for Prosperity and Social Reform Gordon Brown Feb 2003

What do you think?

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