Re-disorganising the NHS yet again

The NHS consumes over £100bn, and nearly twenty per cent of public expenditure. Despite being ‘soaked’ in money during the last decade, the service continues to exhibit failures common to all health-care systems, public and private — as example, large un-evidenced variations in clinical practice, failure to deliver to patients ‘what works’, medical errors and an absence of measurement of whether health care improves patients’ health.

The response of the new government is familiar: re-disorganise the structure of the system radically despite pre-election pledges of structural stability. Primary Care Trusts (PCTs) have generally been weak purchasers of care and poor guardians of their patients’ interests. Strategic Health Authorities (SHAs) have allegedly been toothless bulldogs in managing PCTs and hospitals.  Consequently PCTs are to be replaced by consortia of GP purchasers, probably numbering some 500. SHAs are to become ‘regional offices’ of a new national NHS Board which will act as the national purchaser of health care.

Will these new structures triumph where many previous NHS structures since 1948 have been found wanting? There was a National NHS Board in the 1980s which has disappeared into history and for which there is no evidence of value for money.

There was GP fund holding in the 1990s which Labour abolished in 1999 and then, in the light of some retrospective evidence of success in curbing elective hospital admissions, began to re-introduce as Practice Based Commissioning. However the GP consortia emerging now will be comprehensive and compulsory, whereas the 1990s organisations were voluntary and partial in their coverage of the primary care sector.

As ever with NHS and health-care reform internationally, the driving force behind reform is faith rather than evidence. A wiser approach, apparently not permitted by the ‘quick fix’ ethos of English policy making, would be piloting of such experiments and the careful evaluation of their costs and benefits. As it is, politicians are set to experiment on patients at the expense of taxpayers and in all probability will fail to evaluate the costs and benefits of the most radical restructuring of the NHS in 30 years.

The new ‘re-disorganisation’ will take place against a background of large public sector cuts. Whilst the NHS budget is supposed to be ‘ring fenced’, in part because of the tragic loss of the lives of the children of the past and current prime ministers, it is likely that the ‘fencing’ will be porous.

For instance the large budget cuts that are affecting local authorities mean that their capacity to fund social care will be curtailed. The current consensus is that one or two hundred patients in the average NHS hospital should not be there and a significant proportion of them will require social support if they are to be discharged. Efficient discharge policies may therefore require NHS managers to switch health-care resources into social care provision.

Hospital funding is already being tightly managed. The Payment by Results (in actual fact, ‘Payment by Activity’) system of setting hospital tariffs was based on setting fees for items of activity based on average costs in the NHS. These tariffs are now being restricted by small up-rating each year and by controls of volumes of activity.

In the current year elective procedures are reimbursed at national tariff rates. However emergency demand is being funded with a two-part tariff in an effort to reduce the rate of growth of admissions. Hospitals are being paid full tariffs up to 2008-9 volumes of activity and above that level they get only 30 per cent of the tariff.

If hospitals have to fund the social care previously provided by local authorities, the impact on financial viability will be significant when taken with tariff reductions. Also if the set up costs of GP consortia are significant, there may be more downward pressure on hospitals’ budgets.

These changes will lead to ward closures and pressure to consolidate the hospital stock. Medical opinion emanating from the Royal Colleges is asserting that hospitals need to increase in size in order to reap economies of scale. This line of argument emphasises the need for surgeons to have large quantities of activity in order to minimise patient mortality.

It is clear that volume is an important issue in some specialties such as cancer surgery and ruptured aneurysms. However this relationship between volume and mortality is not universal and some activities may be equally well managed by rigorous audit, transparency and accountability of practitioners.

If government listens to this medical advice, there will be pressure to shut hospitals and consolidate activity. But government also wants to increase competitive pressure. The evidence is that competitive pressure in places such as London and the North West of England has had beneficial effects on crude outcome measures such as rates of mortality from acute myocardial infarction (heart attacks).

Policy makers face some nice trade-offs. Medical opinion if followed may reduce patient mortality in some specialties. But this will lead to hospital closures which reduce competition and this is one of the principle engines of change that the government wishes to encourage. Hopefully in making these difficult choices ministers and their civil servants will be evidence-based rather than faith-based in their decision making.

To boldly reform without evidence of costs and benefits can be seen as brave or foolish. Undoubtedly the current structures, processes and incentives are wasting taxpayers’ resources and damaging patients in ways well evidenced by the performance of public and private health-care systems worldwide.

It will be unfortunate if the proposed massive ‘re-disorganisation’ diverts attention from the fundamental issue in all health-care systems: doctors are the cause of inefficiency and the cure. They and allied professions should be benchmarking practice, auditing performance and ensuring continuous improvement in the quality of patient care.

Such practices are absent internationally. Without such transparency and accountability, the professions offer neither patients nor taxpayers the protection they deserve and expect. Greater focus on such fundamentals is urgently required and unlikely to be produced by current proposals to reform the NHS.

Alan Maynard is Professor of Health Economics at the University of York and former Chair of the York NHS Trust.