News / News analysis: Reading the signs

It is perhaps unrealistic to expect much detail on health policy from a government so soon after coming to power. Especially as vast amounts of time and energy must initially have gone into brokering the coalition and agreeing a programme that both the Conservatives and their Liberal Democrat allies can live with. It is not that nothing has been said – there’s a huge list of commitments and guarantees – but the devil, for the health service, will be in the detail.

Take GPs’ role in commissioning. ‘GPs and nurses will take the lead in combining together locally to plan local health services more efficiently for all the patients in their area. This will enable all GPs in an area to bring their combined strength to bear upon individual hospitals to secure higher standards of patient provision.’

No, that’s not an extract from May’s The coalition: our programme for government but a section from Labour’s 1997 election manifesto. However, the coalition is clearly singing from the same hymn sheet when it promises to ‘strengthen the power of GPs as patients’ expert guides through the health system by enabling them to commission care on their behalf’.

So, in terms of intent, there appears to be no radical new blueprint. It will be how the aim is put into practice that will make all the difference.

With the Department of Health press office unable to offer anything more than the headlines contained in the coalition document, NHS managers have been left guessing what the government pledges mean.

The Conservative manifesto offered a bit more detail on what ‘strengthening GP power’ might involve. It said GPs would be put in charge of commissioning local health services and hold budgets to commission care. These would be real budgets rather than the indicative budgets currently featured in practice-based commissioning.

John Appleby, chief economist on health policy at the King’s Fund, said it was hard to assess the implications until more was known about the government’s intentions. ‘Do GPs want budgets?’ he asked, nodding at surveys that indicate a clear split opinion. ‘What if they don’t? Hard budgets could work but who will give them the support – presumably PCTs? And aren’t we doing this anyway?’

PCTs do already involve GPs, to differing extents, in commissioning decisions. And there are already areas exploring the introduction of hard budgets. The East of England Strategic Health Authority economy is leading the way. It already has three ‘bottom-up’ pilots in NHS Cambridgeshire, North East Essex and South East Essex. Deputy director of commissioning at the SHA Dr Ed Garratt told Healthcare Finance that practice-based commissioning hard budgets were seen as a ‘natural staging post for more integrated and preventative care’.

An earlier board paper set it out more clearly: hard budgets could help control demand. This is a high priority, given that activity data for the patch from earlier in the year showed GP referrals up by 12%, elective activity by 18% and emergency activity by 3% (against plan).

Dr Garratt added: ‘NHS East of England will also provide technical support to help PCTs work through issues such as accountability arrangements and the calculation of budgets.’  Issues around risk and reward have been difficult with indicative budgets across the country. Simplistically, practices want to retain savings but leave PCTs carrying the risk of overspend. Hard budgets would put a huge emphasis on getting the budget right in the first place.

The right focus

Mike Sobanja, chief executive at the NHS Alliance, is encouraged about the proposals for hard budgets, as long as the focus is consortia rather than individual practices. He says the budgets should cover everything except public health and specialist commissioning and would need to be undertaken in partnership with PCTs, not instead of them.

Given that work is already under way to take hard budgets forward, this perhaps isn’t a groundbreaking proposal. There is nothing wrong with that. Health secretary Andrew Lansley always promised to ‘keep what works and reform what doesn’t’. It is fair to point out that Labour’s introduction of primary care groups was more evolution than revolution, building on existing locality commissioning groups and GP multi-funds.

But the impact on costs might be interesting. Right-of-centre thinktank Civitas’ health unit director, James Gubb, has raised concerns about the increased management costs likely to accompany hard budgets, although he accepts these could be justified if the initiative leads to appropriate reductions in referrals. He believes this will depend on the enthusiasm of different GPs to get involved. But how this fits with the wider commitment to reduce administration costs, he is not clear.

GP contracts rethink

Another stand-out commitment in the coalition document is the pledge to ‘renegotiate the GP contract’. Mr Sobanja claims this is a promise to

look at the whole contract, not just parts of it. He suggests this could mean examining the appropriateness of personal medical services (PMS) and general medical services (GMS) contracts, even asking questions about who should hold them. Perhaps it should be the newly announced independent management board?

‘Virtually everyone recognises that the current contract arrangements can be improved,’ he said. ‘Not only do PCT managers require greater levers, so do locality commissioning groups.’ 

Mr Appleby said GPs – and hospital consultants for that matter – would expect some form of contract negotiation as the contracts haven’t delivered against expectations.

Cynics might suggest that recent history of contract renegotiation tells us that costs go up not down as a result – hardly an option at the moment. But Mr Appleby said some changes could be tackled without buying support for a major rewrite.  ‘The quality and outcomes framework [QOF] is one area that needs further examination,’ he said, adding that high levels of achievement (with an average score of over 95% in 2008/09) meant the system had become ‘almost meaningless’. He said a formal review looking at the impact of the QOF – similar to that for payment by results – should be conducted.

Board confusion

The ‘independent NHS board to allocate resources and provide commissioning guidelines’ also has commentators scratching their heads. ‘We already have the Advisory Committee on Resource Allocation, [which has overseen the development of] one of the most sophisticated formulas in the world. So what is the role of an independent board, because surely we’ve cracked that issue?’ said Mr Appleby.

Even if an independent board did decide on a different approach to allocation, moving to ‘fair shares’ is likely to be a slow process in the tough times ahead. Big changes in the past have always coincided with big growth, enabling all health authorities/primary care trusts to receive a basic level of growth and then targeting anything more on under-target bodies. Making progress in a period of flat real (or minimal real increases) would mean cuts to over-target areas and the threat of major financial instability. That seems unlikely.

Of the 30 promises and commitments in the coalition document (see box for a selection), some appear contradictory. For instance, NHS administration costs will be cut by a third (with resources transferred to the frontline) while detailed data will be published online about the performance of healthcare providers. One wonders who will be collecting and quality checking the data.

But perhaps the biggest surprise in the coalition document is what it doesn’t say. Given the need to secure some £20bn of savings over the coming years, very little is said about taking giant steps in productivity (other than administration cost cuts and a vague commitment to ‘extend best practice’ to improve hospital discharge, maximise day care operations and enable community access to care).

The Conservative manifesto talked of spreading the use of the tariff and using payment by results system to drive quality. Earlier policy papers talked of applying payment by results to public health. And Mr Lansley has also publicly backed moving to the tariff as a maximum rather than a mandatory price – a stance widely believed to have bounced the former Labour government to match this aspiration in last December’s operating framework.

But the NHS section of the coalition document does not make a single mention of PBR or tariffs. (It does talk of a move to ‘value-based pricing’ regarding the reform of NICE and suggests the FT regulator will oversee aspects of price setting). Is this a recognition that the tariff cannot be the tool to fix all ills in the NHS – simultaneously driving provider efficiency, pathway redesign and the relocation of acute services in the community.

Perhaps it is a little unfair to expect too much detail, this early in the administration. We have some broad parameters on vision. But all NHS eyes will be on the Department of Health for any indication of how this will be put into effect.