The White Paper Reforms – The end of the NHS?

Steve Baker, Imperial College School of Medicine

The coalition government’s white paper ‘Equity and Excellence: Liberating the NHS’ (1) is the first step along the road in their vision to majorly reform the NHS; harked by many as the biggest overhaul in NHS structure since its conception in 1948. Its strongest critics say that it is flawed, under tested and will lead to the destruction of the NHS (2). But are their concerns unfounded?

The white paper

The white paper has put forward several proposals aiming to extensively alter the current NHS structure. The 151 primary care trusts (PCTs) as well as the 10 strategic health authorities will be dismantled and their roles and responsibilities distributed to several new structures. These roles include: holding the majority of the NHS budget and using it to procure health services (particularly from NHS hospitals); public health initiatives; and development of NHS services (3).

GP consortia and the independent commissioning board

In the proposed system, procuring health services and holding the NHS budget will be carried out by newly developed GP consortia and an independent commissioning board. The consortia will consist of GPs and will bear the responsibility of purchasing health services using NHS funds. The number of GPs in a consortium as well as the total number of consortia is difficult to estimate due to the huge amount of flexibility in the proposed system. The GP groups will be able to vary and change in size as preferred, as well as form new and dissolve old consortia. Unsuccessful consortia would be therefore dissolved and taken over by more successful ones. Consortia will also be able to team together when needed in order to increase purchasing power, particularly for low frequency services, the financial burden of which would be uneconomical for individual consortia.

The independent commissioning board will be responsible for allocating the budget to consortia and will fund specialised services, like paediatric ITUs, only found in major hospitals. It will procure GP services, thereby avoiding the conflict of interest that arises from GPs purchasing their own services. It will also regulate the consortia and will ensure that adequate services are always provided despite a particular consortium’s failure and consequent dissolution. This board will be given greater freedom from the government’s influence in order to prevent so-called “political micromanagement”, an accusation directed at the previous government.

A major focus of the NHS reform, and current responsibility of PCTs, is public health. This has its own white paper – “Healthy lives, healthy people” (4), a noteworthy topic in its own merit. Suffice to say the Department of Health will have a greater role and will likely change its name to the Department of Public Health, and will be supported by local authorities.

The “healthcare market”

By far the most controversial part of the paper is that private companies will now be able to compete with foundation trusts for provision of publically funded healthcare, hence creating a “healthcare market”. All NHS trusts currently without foundation status (meaning they have the ability to function independently and govern themselves) will be accelerated towards it, with the government aiming that all trusts have established foundation status by 2014.Greater freedom for development will be given, and the cap on private patient income will be lifted allowing them to supplement their funds more. This will put them in direct competition with private companies for both publically and privately funded patients.

“Monitor”, the board that currently regulates foundation trust and awards them that status, will have its role changed to that of a market regulator. This role involves issuing licences to healthcare providers allowing them to sell services to GP consortia. They will also maintain fair competition and regulate the prices that can be charged.

The Care Quality Commission (CQC) will work closely with Monitor in a role very similar to its current one. It presently regulates, inspects and reviews all healthcare in order to maintain a high degree of standards and quality. In the reformed “healthcare market” it will continue to act as quality control by establishing that both NHS foundations and private companies meet assessed criteria in order to provide services.

Boundaries, targets and patient choice

The white paper also includes a large number of proposed changes which, although they will have less impact than the ones described above, are worth mentioning:

GP boundaries will be removed allowing people to sign up to GPs in any location. This, in conjunction with the new consortia, may eliminate the infamous “postcode lottery” of PCT service distribution. This will, however, depend on how the system is finally set up. If the GP consortium responsible for your funding is allocated based on the GP you have signed up for then you could change your GP rather than move house in order to get certain services. On the other hand, if consortia are allocated based on postcode then the increased number of them compared to PCTs could even make it worse!

The target setting system introduced by the last government for enforcing performance in areas of healthcare will be abandoned in favour of an as yet undeveloped system of measuring outcomes for patients.

More patient choice is to be established. This is largely a catchphrase policy with the slogan “No decision about me without me”. Patient involvement in choice has already been a key part of GMC guidelines and the evolution of healthcare for many years. However, to support this, local healthcare watchdogs will be established and known as Healthwatch. These will help patients decide between services based on user’s experiences. They will also integrate Local Inclusion Networks (LINks) into their structure. LINKs are independent groups made up of members of the community that obtain and then pass on feedback to healthcare providers with the aim of improving services.

So will these reforms work?

Many of the reforms aim to address known issues with current policies. Issues such as the previous government’s target setting have been widely criticized and will now be tackled. It should be noted though, that despite target setting’s unpopularity they have had some success, particularly in reducing waiting times. This is the likely reason why they are being replaced with measuring patient outcomes rather than complete removal. However, it is unknown how these outcomes will be measured, whether it will be feasible, or whether they will end up being very similar to, and equally unpopular as, the very targets they’re replacing.

The reforms will especially target the management structure of the NHS. The previous government largely separated clinical practice from the management of the NHS. This produced a large, expensive and overly bureaucratic management structure that oversees clinical practice. Despite making decisions that directly impact clinical practice, managers had little clinical expertise and were not in a position where they could truly identify benefits and consequences at a practical level. Ironically, this situation could be likened to governmental decisions and reforms regarding the NHS!

Thus there is movement already in the NHS, supported by these white paper reforms, to give clinicians and healthcare workers more managerial responsibility. The reforms will strip a proportion of the current management and bureaucracy away, placing the duties on clinicians – particularly the GP consortia, leading to an estimated saving of 1.9 billion pounds a year by 2014/15. (1,2)

Too much, too fast?

It is well-known that predicted figures are often notoriously inaccurate and generally underestimate costs. The major changes in NHS structure will lead to considerable expenses, albeit one-offs. It is extremely difficult to predict the effects, requirements, and yearly costs of a largely untested proposal. The government assumes that a smaller number of managerial staff will be hired by GP consortia to help carry out their new duties than are currently employed by PCTs. It is possible that management costs and staffing may even be increased as there will not be the inherent savings of a centralised body. Added to this unpredictability, we have the current economic situation where the NHS is already trying to make huge savings in an unstable financial market. And this is not all; the sheer pace of the reforms (likely with the aim of getting results before the next election!) will make things even more jeopardous. It seems that it may be the case of too much, too fast, and at the wrong time – bringing the risk that these reforms may sink before they’ve had a chance to swim.

The consortia

Will the concept of GP consortia work? As healthcare professionals will persevere to make reforms work, irrespective of what they are, there is unlikely to be a major failure. GPs’ lack of management training has been raised as an issue, but GPs often already have some experience from running their practice; and further managerial training is not difficult to introduce. Current preliminary testing of consortia in parts of the country is showing that GPs are very keen to be involved in this new aspect of their practice.

The biggest strength of consortia is the huge amount of flexibility incorporated into their design. This, together with their greater financial accountability and consequent ability to fail or thrive, means that poorly run, inefficient consortia will disappear, replaced by successful ones. However, it is hard to see failing consortia not having an impact on the essential services they are responsible for, for example accident and emergency. Despite the commissioning board’s role to ensure these services remain unaffected, this may not be enough. This flexibility also gives the consortia the ability to tackle any issue that arises; and to find the right balance to best make the proposals work. Particularly the teaming up of consortia gives them the tools to act with the benefits of both large and small organisations when the need arises. However, the lack of defined structure and instructions could also potentially result in varying methods and design, leading to consortia that communicate and work inefficiently and ineffectively with each other, never quite settling into a consistent structure that can be developed and improved, or allows forward planning.

Will opening public healthcare to private providers end the NHS?

Although there will still be universal free healthcare, there is a very real risk to the NHS as we know it. Following a GP visit, you may be referred to a private hospital, which will be offer similar services to the NHS ones and will be paid for by the GP consortia. Alternatively you could privately fund yourself at either to get the additional benefits associated the current private patient system. The question raised by this question is one largely of definition. Is the NHS the provider of healthcare or the funder? As funding goes it will remain largely the same. As a provider, however, there are fundamental changes. A significant fraction of people will not be treated by an NHS hospital (assuming that private healthcare gets some proportion of the market) and thus it could be said the NHS.

There are also big risks to the survival of the NHS foundation trusts as they will lose the proportion of public funding that private hospitals manage to gain. This could be significant as increased patient choice may result in a preference for private hospitals due to the connotations that private healthcare currently has as a premium service. This reduction in funds will have a knock on effect on the amount of staff hired by trusts. For example, there will likely be fewer doctors and nurses working for the NHS. This will have little impact on jobs as the growing private sector would be hiring more. However this raises a lot of questions about training new staff and NHS pensions. Will private hospitals be responsible for training junior staff and should they be? Most higher education healthcare training is currently subsidised by the NHS, is it right that the recipients may never work in an NHS hospital? If you are not working for the NHS how does the NHS pension work?
Competition may increase efficiency and drive down costs, but it’s hard to see how it can achieve more than the constant attempts to reduce costs are already doing.

Concluding remarks

Whilst the white paper contains many good proposals, and GP consortia potentially could work very well despite the speed and poor timing, the opening of provision of public healthcare to private companies has many people worried for the future of the NHS. Part of NHS funding will now go to private companies looking for profits instead of NHS foundation trusts. The part the private companies take, the NHS will lose. The private share will grow only at the expense of NHS providers. Is it unreasonable to think that if the private share grows too much then the NHS could no longer be a healthcare provider?

References: 

1. Department of Health. Equity and Excellence: Liberating the NHS [Internet]. 2010. [cited 2011 Feb 13]. Available from: http://www.dh.gov.uk/prod_consum_dh/groups/dh_digitalassets/@dh/@en/@ps/…

2. Department of Health. Liberating the NHS: legislative framework and next steps [Internet]. 2010. [cited 2011 Feb 13]. Available from: http://www.dh.gov.uk/prod_consum_dh/groups/dh_digitalassets/@dh/@en/@ps/…

3. NHS choices. About the NHS – Authorities and trusts [Internet]. [cited 2011 Feb 13]. Available from: http://www.nhs.uk/NHSEngland/thenhs/about/Pages/authoritiesandtrusts.aspx [Accessed 10th November 2010]

4. Department of Health. Healthy lives, healthy people: Our strategy for public health in England [Internet]. 2010. [cited 2011 Feb 13]. Available from: http://www.dh.gov.uk/prod_consum_dh/groups/dh_digitalassets/@dh/@en/@ps/…