Feature / Work in progress

I have often been fascinated by Grand designs, the Channel 4 programme about people and their dream houses that they have built from scratch.  There is always a strong concept, great ambition, detailed planning and a huge implementation task. The owners then invariably declare themselves satisfied with the outcome of their dream. 

NHS reform is like that, though judgements about outcome are much more difficult. Since the government announced the NHS system reform programme in 2000 in the NHS Plan, the NHS has made big progress. There are shorter waiting times and the quality of care overall, as measured by the Healthcare Commission's annual health check, has risen. 

A recent joint report by the Audit Commission and Healthcare Commission, Is the treatment working?, examines the impact of the system reform programme on the progress made. It concentrates on key aspects of the reforms:

• Patient choice,
• Payment by results (PBR)
• Practice-based commissioning (PBC)
• Foundation trusts (FTs)
• Greater NHS use of the private sector through the introduction of independent sector treatment centres (ISTCs)
• The impact that major workforce contractual changes have had on hospital efficiency.

It also reviews developments in the commissioning of patient care. Although these are not the only reforms introduced by the government, they are those identified to secure devolution of decision making and enable a more market-oriented NHS.

The reforms were intended to operate as a package, with commissioners and empowered patients able to take advantage of a wide range of provision and more autonomous providers better able to respond to the choices made. Changes in the financial regime would help to support these developments. The broader reform agenda has developed over time with more attention being paid to hospital leadership, clinical engagement and staff understanding, and behavioural issues involved in successful change, but these have not been included in this report.

Scale of the task
The programme is ambitious and the operational changes required took time to implement. The reforms were not imposed uniformly on a national basis and the programme recognised that different health economies were in differing stages of development. A staggered introduction was appropriate to reflect their complexity. But this inevitably means their impact so far has been more limited than might have been the case.

The report is based on fieldwork between May and November 2007. This included a literature review, national and local data analysis, national workshops in four local health economies, and interviews with strategic health authorities, primary care trusts, FTs, acute trusts, health commentators, providers, regulators, commissioners, strategists and independent sector providers. It also draws on other work including studies by the Audit Commission  - for example on PBR and PBC - and by the Healthcare Commission on, for example, ISTCs.

Individual parts of the reform programme have been implemented to different extents in the health economies we visited.  This variation is also reflected in other national surveys and reports.  While the new workforce contracts, and to a certain degree PBR, are almost universal across the NHS, patient choice is in reality not always offered; PBC has yet to be fully embedded; less than half of trusts have achieved FT status; and there are few ISTCs.

Given the controversy surrounding the reform programme, its ambition and the scale of the NHS, it is little surprise that more progress has not been made. In fact many economies have only recently been provided with all the tools and levers for change.

Nevertheless, despite limited implementation, we found that the reform programme was having a positive effect on the NHS:

• NHS patients are beginning to benefit from the existence of a diverse range of providers and there is anecdotal evidence that competition is improving services for patients in some areas.
• The fear of the impact of patient choice, rather than actual choice, appears to be driving a positive change in attitude among providers. Some PCTs can also point to improving services through tendering.
• The focus that PBR and FT status have placed on improving existing financial management arrangements and encouraging a more business-like approach has provided all providers with incentives to improve.
• PBR has brought welcome clarity to NHS funding of hospital care for commissioners and providers and has had a positive impact on trust efficiency (although perhaps not as much as that expected) and demand management by PCTs.

However, we also found that the reforms were not yet delivering the desired change:

• Despite the intention to move care out of hospitals and into a primary or community care setting, limited progress has been made. There has been no real change in the number of outpatient appointments for example. Commissioning and contracting skills are not yet strong enough to drive this agenda, although some PCTs have had successes.  PBR also needs further refinement to facilitate care transfers more effectively. The ability to unbundle the tariff is the key here.
• Choice is not offered universally.  No PCT met the Department of Health's March 2007 benchmark of 80% of patients being offered a choice of provider.  The infrastructure is also still not fully in place to support patient choice based on the quality of care provided, although information is improving.
• On a national level, despite the improved quality of services, FT status is not yet empowering organisations to deliver innovative models of patient care.
• PBC incentives are not yet sufficient to engage most GPs in commissioning.
• When introduced, the workforce contracts for hospital and community staff were a missed opportunity for change. They have so far resulted in higher expenditure, without a proportionate increase in productivity, although it is hard to measure quality improvements that can be an  important component of productivity. Nevertheless, the new contracts continue to offer opportunities for change.

Limitations on reform
Progress on the implementation of the reform programme has been limited by several factors. These include two structural reorganisations; under-developed commissioning capacity; and weaknesses in the infrastructure to support and monitor the reforms, particularly in regard to data collection. We also found that many who participated in our research did not fully understand the aims of the reform programme, how the elements contributed and how they could best be made to work.

Improving commissioning capacity and capability is critical to the success of the reforms. Given the 2006 reorganisation, PCTs need time to progress this agenda. More work is needed to strengthen commissioning, without which  we won't see the balance of power between primary and secondary care. The World Class Commissioning programme is clearly going to be crucial here.

Service improvement has been substantially delivered without using the system reforms. Other policies pursued by the government, such as waiting list targets, have had a much greater impact. Our fieldwork found that the health economies that had made greater progress in implementing the reforms were not performing much better than those with limited reform levers in place.

There is some evidence, through the annual health check, that FTs are becoming even stronger organisations compared with other acute trusts. But they were deliberately selected for foundation status on the strength of their service delivery track record, financial standing and financial management arrangements.

Many of the reforms have the potential to deliver significant service improvement, but need time to bed in. There has so far been a stronger focus on the supply side but greater development of the demand side using patients and commissioning to drive service improvement is needed. There is evidence that patients will choose alternatives if the choices are real and the relevant information is available, and that even the fear of choice can be an important lever for change.

As I know to my own personal cost in my own (mini) 'grand design', many building projects can take just that little bit longer than you first hoped and expected.

Andy McKeon is managing director for health at the Audit Commission