Policy Briefing: Reforming the UK Health Reforms

Policy Briefing: Reforming the UK Health Reforms

Ian Shaw

Back in 2011 there was thought to be a consensual political narrative on the NHS – no `pointless reorganisations’. However, David Cameron was soon persuaded by his old mentor Andrew Lansley to bring in market oriented reforms and, supported by the `orange book’ LibDems he did just that. However, the story of those reforms are not the focus of this article (see here for information on the reforms). The Health and Social Care Act of 2012, which was widely anticipated to be a disaster in waiting, has been a disaster in actuality.

The re-organization that has followed the Act led to an extremely complex organizational and governance structure which has been distracting to the NHS, to say the least. It has taken place during a period of financial turmoil resulting from a fixed budget and the Quality Innovation Productivity and Prevention Programme (QIPP), which is itself linked to cost and efficiency savings in the order of £20billion over the next parliament.

What’s more the leadership of commissioning was been stripped out at a time when major service change is needed. Things are so bad that even the King’s Fund (who were cautiously optimistic about its introduction at the time) have been critical of its outcomes. Lansley was reshuffled out of the job by September of 2012 and Jeremy Hunt was brought in to `steady the ship’. By 2014 it became clear that the Health and Social Care Act couldn’t be made to work so a face saving solution had to be found.

The incoming Chief Executive of the NHS, Simon Stevens has subsequently been quietly side- lining the reforms and Jeremy Hunt, seemingly bereft of ideas himself has been supporting him. This has taken place quietly, because politically the Government cannot openly accept the failure of the reforms.

The QIPP challenge has been redoubled and Stevens put forward a plan whereby if the Government funded £8bn a year then the NHS would reform to achieve the rest of the £20bn Government requirement. One of the first steps in the `Stevens process’ was to create `Units of Planning’ around each `health community’ in November of 2014. These new bodies (which have different names in different places) comprised of the CEO’s of all the NHS and local authority social services in each health community area and it has the job of planning health and social services and has the authority to make decisions on behalf of the individual health and social care organizations. It can make decisions that will be binding on all other health organizations. It’s very unwieldy and certainly has its own governance issues, but it’s there. This quietly sidelines the Health and Wellbeing Boards that are meant to be setting local strategy (though many of the same players are present).

A second change Stevens has brought in is to bring about `shared commissioning – between CCGs and Area NHS Teams – of primary care services’. In practice there is little `shared’ about the commissioning. I chair a Primary Care Commissioning Committee of a CCG and we are being performance managed by NHS England. This creates a conflict of interest issue within the CCGs as the GP membership organisation is now responsible for commissioning GP and community health services. In short, the CCG is increasingly taking on the roles that the old Primary Care Trusts (PCTs) used to do and the freedom of clinical commissioning groups is being `reigned in’ to an extent by the new developments.

However, it’s the Five Year Forward View (FYFV) (and the separate devolution agenda) that sets out the new direction and, yes, this is essentially reforming the reforms. The NHS budget as a percentage of GDP is set to fall from its high of 9% in 2009 to under 7% of GDP by 2021. Against this, the projected demographic related demand points to a £30billion funding gap by 2021 and when compared the EU average looks miserly. In a real sense FYFW was the NHS’s response to this funding reality with the government putting up £8 billion a year and the NHS finding the rest via reforming services. These reform models have very recently been put into operation as `Vanguard sites’.

The NHS has realized that the diversity and lack of system leadership brought about by the reforms is damaging to what really needs to be done to transform services and to increase efficiencies, which is to integrate health and social care services. The NHS itself is seen as too big to do this so responsibility is being devolved to local communities. The FYFV is essentially inspired by `the Valencia model’. In Valencia all health and social care services have been contracted to a single (private as it happens) provider who has taken on the management of all the services within the health system and it’s been heralded as a great success. The NHS is essentially adapting the model in its FYFV.

It proposes a small number of models, but essentially two stand out. The first one is the Primary and Acute Care Systems (PACS) where one organization will take responsibility for all services within a defined health community. This could be one NHS organization or a new organization that comprises all the organizations within that community. It can be pictured as the local District General Hospital running everything from the Hospital itself to GP services to mental health services and community care services within a single organization.

The other key model is the Multi-Specialty Provider Service (MSPS). Here groups of GP practices would expand, bringing in community health services and hospital specialists within a single organization within an area to provide integrated out of hospital care. The Vanguards are set to devolve their capitation funding to the new organizations (which they can’t legally do at present) – which will make the CCGs themselves redundant. So I would argue that CCGs are on their way out.

Indeed, the CCGs and Hospital Trusts were completely side-lined (and without consultation) when the whole NHS budget of Manchester was given to the Local Authority to manage from 2017 provided they elect a mayor. This was a surprise announcement by George Osborne earlier this year. I have heard from reliable sources that Simon Stevens wasn’t consulted when this decision was made. Cash strapped councils around the country are now clamoring to do the same and the Cities and Local Government Devolution Bill is currently wending its way through parliament to allow them to do just that.

If funding within the NHS is challenging, it is many times worse in the social care sector and there are no additional funds heading in that direction. However, the prospect is raised of the Local Authorities being able to raid the NHS budget to fund social care, as Roy Lilley has argued. There is already experience of the Public Health Budget (devolved to Local Authorities from 2013) being raided to fund core Local Authority services as long as some `health impact’ can be demonstrated. I’d expect to see this intensified once Councils have their hands on the whole of the local NHS budget for their area.

Certainly more needs to be done to protect social care services and there is an impact on length of hospital stay if a social care package takes time to be put in place prior to discharge. There is also their role in prevention – for example, of falls etc amongst the elderly in the community. But this won’t be `shared budgets’. There will be a raiding the NHS budgets in ways I don’t think envisioned by Simon Stevens in the FYFW. Indeed, indications from the National CCG forums are that there is already discontent and in-fighting in the Manchester devolution over proposed restructuring and budget reallocations – though nothing has hit the press yet.

However, the Stevens plan is running into other problems already. Hospital Trusts in particular are not performing as well as anticipated. The Kings Fund highlights that the Hospital sector has only made a 0.5% increase in productivity over the last 5 years. This won’t `cut the mustard’ and threatens the projections within the FYFW. What’s more these productivity gains have been made on the back of massive overspending by Hospital Trusts – up to £822m million deficit in the last financial year which is 8 times that posted in the previous year. The plan is therefore already facing challenges. Moreover, on the ground, it’s seen as yet another plan that’s been imposed from above with short timeframes and minimal consultation. In short it’s not `owned’ by the Trusts or the clinicians within them which will impact on the enthusiasm with which they are implemented. Even in the primary care sector `lean working techniques’ which may allow GPs to see more patients in a day (and reduce the number of A&E attendances in a PWC projection) are sometimes viewed suspiciously by overworked GPs as wanting them to work harder for the same money. Magnify this right across a reform weary health sector and a `what’s in it for me’ attitude may well arise especially as contracts and wages are themselves altered as part of the reforms.

There are other elements of Health Policy over the first 100 days since the election that are also impacting on the NHS. The Government’s commitment to a `7 day a week NHS’ and to run 8am-to 8pm GP services bring the Department of Health head on with the consultants the GPs and the junior doctors as they try to renegotiate their contracts. It is not just vested interest here as the Clinicians don’t see these 7 day working proposals as `evidence based’. No government has yet managed to successfully bring in new health policies when all three branches of the medical profession are aligned against them. But the 7 day working proposals pale almost into insignificance though when set to the backdrop of the FYFW and the devolution agenda. What is interesting is that the Government has decided to fight all these battles at once rather than pick them off one at a time. Machiavelli would have been shocked.

So there are definitely stormy waters ahead, but there isn’t a `plan B’. We live in an interesting time for health policy


Ian Shaw is Professor of Health Policy in the School of Sociology and Social Policy at Nottingham University. From 2002-2013 he served as a Non-Executive Director of NHS Nottingham City and as a Governing Member of the Nottinghamshire Healthcare Trust (the largest provider of mental health services in Europe). He also serves as a Lay member and Chair of a local Clinical Commissioning Group.