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The worst fears confirmed

Elizabeth McGuirk explains the key proposals of the Health and Social Care Bill

January 25, 2011
7 min read

In their Red Pepper article ‘Dismantling the NHS’ Stewart Player and Colin Leys highlighted problematic issues in the July 2010 White Paper ‘Liberating the NHS’. The dire consequences they foresaw were evident in the 19 January first reading of the Government’s Health and Social Care Bill. In the week preceding publication of the Bill, an NHS Confederation report claimed the expected reforms were ‘extraordinarily risky’ and warned that ‘hospitals will have to close’. A letter from six unions, including the British Medical Association and the Royal College of Nursing, was printed in The Times, raising major concerns about the speed and scale of reform and the introduction of ever more commercial competition. Their fears have been confirmed.

The legal instrument of the Bill, which at a lengthy 367 pages is longer than the legislation which set up the NHS in 1948, almost totally dismantles the current NHS infrastructure. It is a complete about-turn from the coalition’s promise that ‘there will not be a major reorganistation’. The Bill paves the way towards a regulated market in healthcare, where NHS, private sector and third sector compete for the provision of health services. Interpretation of its 281 sections will demand detailed, expert attention before the second reading on 31 January for opponents to the Bill to mount an effective counter-argument. Most important is that the population at large understands the reforms. The devil is in the detail.

The existing Primary Care Trusts (PCTs), who commission healthcare, will be abolished by 2013. The new NHS Commissioning Board and GP Consortia, who will purchase health care for their populations, will be the powerful players implementing reforms once the Bill is passed. The Secretary of State and Monitor, the regulatory body for Foundation Trusts – those high performing NHS hospitals given more freedoms and autonomy, including setting staff pay, under the Labour Government – are also set to take on decisive roles in driving the new agenda. By 2014, the Foundation Trusts will be regulated at arm’s length, putting them in the same position as the independent sector, against whom they will compete for services. All existing non-Foundation Hospital Trusts will either become a Foundation Trust, be absorbed into an existing Foundation Trust, or be managed by a private provider.

There will no longer be a cap on NHS Hospitals’ income from private patients, and no assurance that this private income will be re-channelled to the benefit of patients. The lengthening of waiting lists that is likely to result will push NHS patients towards private medicine, kicking into action a vicious cycle with the potential to create a two tier system, and herald the rise of private medical insurance providers. The Commissioning Board will performance manage the GP consortia as well as secure continuous improvement, public involvement and the quality of the patient experience. It will be headed by the current Chief Executive of the NHS, indicating that Secretary of State for Heath Andrew Lansley needs someone onside who can influence staff.

The actual role of the Secretary of State is more difficult to grasp. He will apparently have the power to by-pass parliament in shaping the ‘direction’ of the Commissioning Board, and will judge its success against the objectives he issues, altering who fulfills its functions should the Board be seen to fail. For Lansley, whose vision was that politicians should not ‘micro-manage’ and that the NHS should have more independence, this regulation seems to be at odds with stated beliefs. It is quite disturbing that the ideology of the Secretary of State can now interfere, and influence, what happens in the NHS more directly than ever before.

GP Consortia can be any size from two or more practices. Small consortia will result in higher transaction costs, so it is difficult to envisage that there will be many given the go-ahead. The Bill imposes bureaucracy and legal requirements that Consortia, irrespective of size, will find difficult to comply with while also commissioning for successful outcomes and focussing on patients. The majority have already recruited management expertise from Primary Care Trusts or, increasingly, from the private sector. The pilot Pathfinder Consortia, hailed by Lansley as evidence that doctors and nurses are enthusiastic about taking on commissioning responsibilities, cover just over half the population. Yet it is reported elsewhere that only one in four GPs are interested in commissioning as presented in the Bill.

As Consortia have to commission from ‘any willing provider’, where relationships exist with local hospitals we could see a private company challenging, under EU rules, for the right to outbid. Such a move will undermine clinical involvement and will, even if quality is shown to be improved, foster further mistrust in the system.

Although GP Consortia will be responsible for over 80 percent of the NHS budget (£80bn in 09/10), the Bill is light on governance. It is unclear what would happen if, say, there are differences of opinion between GPs and leaders over referrals or prescriptions. There must be a process for voicing concern otherwise patients will be put at risk. In financial management, potential for conflicts of interest has been ignored. The constitution has to make provision for dealing with such matters but, for example, how robust will this be should GPs commission their own services?

The Commissioning Board can award performance payments to Consortia, the ‘appropriate’ distribution of which is open to interpretation. The rationale for these bonuses may be to operate along the lines of incentive payments used in the USA, where GPs are rewarded for sending fewer patients to hospital. With savings of £20bn to be found, and staff redundancies and longer waiting times already likely, this section of the Bill is seriously worrying, yet has generally been skipped over in media coverage.

If the Bill is passed, all GPs will be legally obliged to be a member of a Consortia, akin to being employed directly by the NHS. Whilst there is merit in a move from them being independent practitioners, the motive does not appear to be based on improving patient care. Rather, if the new commissioning reform fails, as is broadly predicted, GPs will become the scapegoats for government ideology.

Monitor’s role will be to license providers, set prices, promote competition and support service continuity. As economic regulator, Monitor will be required to weigh up the balance between the public/private sector and particularly identify where the public sector has an ‘unfair advantage’. One area which is likely to be scrutinised is NHS pension rights, seen as more favourable than those in the private health sector. Any dilution of such rights will cause deep unrest in the majority of NHS staff.

The Deptartment of Health estimates that the cost of transition over the next 2 years will be £1.2bn. By 2014, it is estimated that there will be a £1.3bn saving. How non-staff savings are estimated is unclear. There is uncertainty about estates, training, equipment and IT. Unless these infrastructures are put in place, Mr Cameron will have to justify having created a second rate service.

These are not ‘austerity measures’. Andrew Lansley has promoted these changes since 1997, driven by his belief in giving financial responsibility and power to doctors, releasing hospitals from state-control, and promoting competition. Any suggestions from professional groups and experts that the pace is too quick, or that impact of reforms need to be thought through, are simply ignored. The Keep our NHS Public campaign recently demonstrated outside Richmond House. GP Ron Singer held high a banner reading: ‘They lied about health too.’

This campaign needs more publicity and higher profile, as there is nothing in the Bill to answer major concerns or quell the belief that we are seeing the beginning of privatisation of the health service.

Meanwhile, staff continue delivering high quality health care with the threat of redundancy and uncertainty hanging over them. And in the background, lengthening waiting lists, cancelled operations and hospital closures threaten to expose a stark reality.

Elizabeth McGuirk is a former Chief Executive in a Primary Care Trust.

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