Feature / Clear blue water?

The first shots in this year’s general election have been fired and health has become an early battleground. But, as Seamus Ward reports, perhaps the main parties’ positions are not so different

It says something when the debate on NHS finance in the lead up to this year’s general election will not be limited to manager bashing and will they/ won’t they increase health spending if they get into power. Perhaps it is David Cameron’s attempts to position the Conservatives as ‘the party of the NHS’? Or maybe it’s because we are still in the throes of the phoney war between the parties? But the discussion to date has been more detailed than many would have expected.

Though their policy announcements have been more recent than the government, the Conservatives have set much of the agenda – raising questions on the future of payment

by results (PBR), the NHS allocation formula and public health spending among others. Labour’s policy is reflected in the 2010/11 operating framework and the five-year plan that was published by health secretary

Andy Burnham in December, NHS 2010-15: from good to great.

But while the parties claim to be offering different perspectives on NHS funding and financial flows, how different are their policies? Much of it sounds similar – both major parties have pledged to cut management costs by about a third (the Liberal Democrats, it should be noted, have pledged to abolish strategic health authorities) and both have promised to protect NHS budgets.

The differences

There are differences. As King’s Fund acting chief executive Anna Dixon says, there are a number of areas where the Tories’ policies diverge from Labour.

‘An independent board, changes to the way that drugs are approved and paid for, and real budgets in the hands of GPs could significantly change the way in which the NHS operates. But more detail is needed before the impact of such policies can be properly understood,’ she says.

The Conservatives have claimed they are picking up the PBR baton and running with it – insisting they would use the payment mechanism to drive reform by extending it to all parts of the NHS. The draft health manifesto, launched by Mr Cameron in January, says the NHS would be opened up to new independent and voluntary sector providers that can deliver services to a high standard and within the tariff. ‘To make sure all providers have the right incentives to succeed, we will implement a “payment for results” system throughout the NHS,’ it adds.

Leaving aside the significance or otherwise of the slight change of name, this sounds like government policy, which has encouraged the independent sector to provide NHS services in return for (now, if not initially) tariff.

Mr Burnham has said the NHS is the preferred provider of healthcare, but there is some confusion over what exactly this means. Others interpreted the health secretary’s remarks as electioneering – not for the coming general election but an attempt to drum up activist support ahead of a bid for the Labour leadership in the wake of a general election defeat.

Labour, through the Department of Health, has professed its wish to extend PBR throughout the NHS – mental health currencies will be used in shadow form in 2010/11 and there are working groups, for instance on extending PBR to renal services, together with PBR development sites looking at new currencies and tariffs for services both inside and outside the scope of PBR.

But whichever party gains power at the election, they may be advised to scale back plans for development of PBR. There is talk from within the Department that PBR in its present form is unsuitable for all services. In part, this may be because when PBR is introduced, spending has a tendency to go up – whether as a result of increased activity or improved counting.

Given the current economic climate, ministers may prefer not to risk destabilising the system. Of course, they may prefer the counter argument that PBR creates greater transparency in financial transactions, thus highlighting where efficiencies can be made.

Even where there are policy differences, the gaps tend to close quickly. For instance, last autumn the Conservatives announced  that, if they were in power, they would ensure the tariff was a maximum price and local commissioners encouraged to get the best deal possible. This was a major step away from the policy that existed since PBR was introduced – that the tariff would be an absolute price, thus discouraging many of the problems associated with the internal market, such as layers of bureaucracy, delays and in-fighting between commissioners and providers.

However, in an unheralded move, the Department announced in the 2010/11 operating framework its intention to make the tariff a maximum price. Once again, a policy difference was eliminated.

Tory take on PBR

There remains one area of difference on PBR. In a policy paper on public health, published in January, shadow health secretary Andrew Lansley announced a future Conservative government would use payment by results (note, in this later policy document the term ‘payment for results’ was not used) to ensure the NHS adopts public health programmes that have been successful in other countries. A public health green paper, A healthier nation, said PBR would be ‘one of the driving forces’ to ensure activity focuses on delivering real benefits for people.

‘Much greater responsibility for tackling problems like obesity, drug use and teenage pregnancy will be devolved to communities on a new payment by results basis, with extra rewards for improving the public health of the poorest,’ he says.

But there are question marks over how this would work. PBR has hitherto been about payment for activity. Could the Tories be thinking about introducing payment for a reduction in activity – reduction in lung cancers following a successful smoking cessation campaign, for example? Or would this policy have to be implemented on an inputs-related basis – perhaps like the quality and outcomes framework?

In a further step away from the incumbent government, A healthier nation said the Conservatives would separate the public health budget from that for ‘NHS services’. Mr Lansley says: ‘In spending their dedicated public health budgets, communities will be obliged to partner with local bodies, like schools, businesses, councils and GPs.’

They would be paid for tackling problems such as childhood obesity and ‘given financial rewards for reducing the future burden of disease and cost’.

NHS Confederation chair Bryan Stoten welcomes the focus on partnership but has concerns over how PBR would work in public health. ‘Any proposed payment by results system for similar improvements [to recent public health campaigns] will need to be considered in greater detail and on a long-term basis as behavioural change will not be immediate,’ he says.

When David Cameron launched the draft manifesto, much was made of his promise to target funding at areas with the greatest health inequalities. Seasoned health commentators were perplexed as to how this differed from policy on resource allocation going back many years, which has recognised deprivation and its associated demands for healthcare.

It may just be part of the political theatre as the parties jostle for position, but, taking the announcement at face value, one explanation is that the Conservatives plan a revision of the resource allocation formula. Another is that they plan to move primary care trusts to their target allocations more quickly.

But there are questions about how either could be achieved without destabilising a system already under pressure because of the economic downturn.

The King’s Fund’s Dr Dixon says: ‘A focus on health inequalities is undoubtedly welcome, but the gap in health between rich and poor is a long-standing problem that the NHS has been trying to tackle since its foundation. NHS money is already allocated to areas based on deprivation as well as clinical need. It’s not clear whether [the] announcement is a move away from existing PCT allocation formulas or creates additional public health funding.’

Whichever party is in power come early May (it now seems likely that 6 May will be polling day), one problem will dominate their thinking – how to cope with rising demand at a time of constricting resources and a public that is primed to expect shorter waiting times and higher quality health services.