NHS Confederation Health Bill Summary

For more information please contact Kate Ravenscroft on 020 7074 3322 or email [email protected].

parliamentary briefing Health and Social Care Bill Second Reading – 31 January 2011 The NHS Confederation’s view on the Health and Social Care Bill The NHS Confederation’s members support the government’s objectives. Empowering patients is clearly the right thing to do. We see real potential benefits in involving clinicians more closely in decisions about both the design of care and management of resources. We also see benefits in extending the range of providers in order to drive quality, efficiency and innovation. There are major opportunities to improve the way the NHS works for patients, if the reforms operate effectively. However, after analysing the proposed new system, the NHS Confederation has identified some significant risks, worrying uncertainties and unexploited opportunities. The government has gone some way to addressing these since the White Paper was published in July but we still have a number of concerns. We agree that the health system needed to change. Indeed, the system is already geared up for change and we cannot afford for these reforms to fail. The key test will be whether the new health system is better than the one it replaces. The focus in Parliament has to be on forensically analysing the Health and Social Care Bill and making improvements so the reforms will have the best chance of success. The main elements of this Bill which require further scrutiny are: Powers of the Secretary of State over health organisations Accountability mechanisms Integration, competition and choice The new public health service.

At the same time as implementing these reforms, NHS leaders also need to deliver £15-20bn efficiency savings to bridge the gap between rapidly increasing demand and limited budget increases, whilst also cutting management costs by 45%. The biggest concern of NHS leaders is to manage the smooth transition to and implementation of the new system. It is important Parliament also considers how this will work. The NHS Confederation’s 12 point plan to help the reforms achieve success is included as an appendix to this briefing.

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For more information please contact Kate Ravenscroft on 020 7074 3322 or email

[email protected]. .

About the NHS Confederation The NHS Confederation is the independent membership body for the full range of organisations that make up the modern NHS. We have over 95 per cent of NHS organisations in our membership including ambulance trusts, acute and foundation trusts, mental health trusts and primary care trusts plus a growing number of independent healthcare organisations that deliver services on behalf of the NHS. Powers of the Secretary of State over health organisations Overview The Bill makes clear the intention to reduce the Secretary of State’s ability to intervene in the day-to-day running of the NHS. We support this change but recognise the weight of political and media expectations resting on the shoulders of the Secretary of State may prove difficult to resist, especially given the tough decisions that will be made, for example, about some local health services changing and closing. Reducing central interference should not be allowed to lead to a lack of accountability. Key points The powers in the system need to incorporate adequate checks and balances to deal with failure and promote improvement, but without creating a machinery that will allow the re-invention of a top-down command and control NHS system. The extent to which the Bill achieves this should be scrutinised and debated. The power given to the NHS Commissioning Board to make an annual assessment of consortia may in practice confer more central power and control than has been suggested. The behaviour of the Board in exercising this power will be important. For example, annual assessments will need to be objective, challengeable and based on transparent criteria which are agreed in advance. The potential for the Secretary of State to direct the NHS Commissioning Board and for the Board to direct commissioning consortia through regulations ultimately remains significant. For example: The Board will have delegated powers to issue various forms of statutory

guidance to consortia. If the Secretary of State considers the Board is failing he can direct the Board in

discharging specific functions, discharge them himself or direct another body to. In practice, much will depend on the behaviours of Secretaries of State and the Board. Further clarity is needed as to the extent to which consortia will genuinely have autonomy to set priorities and make commissioning decisions in the context of all the potential directions from the Secretary of State and the Board as well as the procurement rules and competition law that may apply to them.

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Accountability mechanisms Overview With central government loosening day-to-day control, we need to be sure what is going to drive improvements and who is going to get a grip when things go wrong. Accountability mechanisms need to be strong enough to ensure the system achieves its objectives – for example, improved outcomes and greater responsiveness to patients and communities. Having argued for a clear accountability framework in response to the White Paper, we are pleased the Bill goes some way to explain how commissioning consortia, the Board and regulators will be held to account by the government, although much of the detail is left to regulation. It is also important that Healthwatch England and local Healthwatch organisations are able to act as independent and representative voices for patients and users of services. Key points Legislation will confer a complex, competing array of important and finely balanced duties and responsibilities on various organisations in the new NHS architecture. The effectiveness of the system will depend on how these organisations make the necessary trade-offs between these competing and finely-balanced priorities. The key test will be how the new system and proposed accountability arrangements deal with issues that emerge, for example: A commissioning consortia is ‘coasting’, with relatively poor outcomes, but is not

actually deemed to be failing. A major reconfiguration is initiated by a hospital. A patient is dissatisfied with the refusal of a GP commissioner to fund a treatment.

Further clarity is needed on how the performance of consortia and the Board will be judged. The Bill does not explain how the Board’s mandate is passed down to consortia, how their performance will be measured or published, or how their failure or likely failure will be determined. We welcome the duties on the NHS Commissioning Board and GP consortia to involve the public, and to have regard to the need to promote the involvement of patients and carers and to enable them to make choices. We have particularly emphasised the need for strong governance of GP consortia. The Bill requires consortia to appoint an ‘accountable officer’ and publish a constitution, an annual report and accounts. The legislation needs to strike a difficult balance between over-specification of governance, leading to an over-bureaucratic approach, and a ‘laissez faire’ approach which leads to inadequate governance arrangements in some places. The Bill suggests the NHS Commissioning Board can give guidance but this is not mandatory. We would prefer tests to be applied to consortia governance arrangements rather than detailed prescriptive guidance. It would be useful to clarify what tests the government intends to apply to consortia governance arrangements.

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Responsibilities for commissioning services for certain groups of people, for example individuals who are not registered with a GP practice, are to be set out in regulations. It will be critical that these regulations are drafted in a way that ensures every individual has equal rights and access to services, and that vulnerable groups are not further disadvantaged. Provision should be made to strengthen the independence and autonomy of Healthwatch England from the Care Quality Commission (CQC) by, for example, giving it a dedicated budget and support team and the ability to set its own agenda. Healthwatch England must be able to publicly challenge the response of the CQC, Monitor, NHS Commissioning Board or local authorities or the Secretary of State where they believe the relevant body has failed to take sufficient account of the evidence Healthwatch England has presented to them. In the case of the specified bodies, this could include referral to the Secretary of State who may direct the relevant body to review its decision. Local authorities should be required to assess whether local Healthwatch is representative of the local community or takes regular and systematic steps to gather the representative views of the local community. Where local people feel the local Healthwatch is failing to represent the views of key groups of service users adequately, there should be provision to raise this with the local authority and/or Healthwatch England. Healthwatch England should provide mandatory advice to the local body on how to ensure it reflects the range of community views. Integration, competition and choice Overview Choice and competition are critical components of creating a patient-centred and patient-led NHS. The proposals on competition and provider regulation, when implemented, could transform NHS provision from a managed system, with some internal competition, to a real regulated market similar to the regulated utilities, with the intention of significantly improving frontline services. In order for this vision to be realised, a major shift in understanding is needed about how providers will operate under regulatory rather than direct government control, with greater variation and fewer constraints on service change. Key points There is consensus in the health sector that cooperation and integration will often be beneficial to patients and taxpayers. The application of the Acts should allow competition to drive quality, value and innovation. At the same time, as in other complex sectors, a “tailored” competition regime will need to be built up so that areas where patients and the taxpayer are best served by cooperation and integration are not jeopardised by competition law. These areas could, for example, include coordinating clinical networks and integrating care pathways (that is, different providers working together to share expertise and deliver joined-up care

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for a person). It will also be important that the procurement rules the regulator sets allow integration and avoid the risk of services fragmenting. The new economic regulator will have a large amount of power in the new system. We welcome Monitor’s overarching duty to protect and promote the interests of people who use healthcare services. It will be important, if its decisions are to be acceptable and sustainable, for the regulator to retain the confidence of staff, public and patients. Monitor may in practice find it difficult to balance its different, competing objectives and much will depend on how this works. Further clarity is needed on how Monitor will be accountable, other than to the Secretary of State. We note that the public consultation and patient and public involvement requirements on Monitor appear to be minimal at present. There are risks to quality associated with price competition, where quality cannot be measured in a way that is clear and easily comparable. It will be important that Monitor and the NHS Commissioning Board weigh these risks when deciding whether to set maximum rather than fixed prices. The Bill places much more emphasis on individual organisations driving quality improvement in a competitive market. This is welcomed by providers who want trust Boards to have the freedom to run their organisations. However some of our members have concerns about the removal of regional and local system management and quality improvement support infrastructure currently in the Department of Health, SHAs, PCTs and arm’s-length agencies including the National Patient Safety Agency and NHS Institute. Under the new NHS system, NHS services will close if they are financially unsuccessful or fall foul of more stringent minimum standards quality regulation. A key issue will be the extent to which the public and politicians are prepared to tolerate this, and the potential pressure on the Secretary of State to intervene. Balancing the powers of the Secretary of State and wider accountability mechanisms will be very important. The Foundation Trust Network welcomes the abolition of the private patient income cap as a means to secure additional investment in the NHS for patient benefit and to enable design of more efficient and effective patient-centred services with commercial partners. With an expansion of the provider market it is important that there is a level playing field. The new public health service Overview The NHS Confederation welcomes the strengthened role of local government in public health, including public mental health, given the impact local government can have across departments and sectors including education, transport, leisure, housing and economic development. There are a number of measures needed to ensure this system works effectively.

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Key points The NHS still has a crucial role to play in the commissioning and delivery of health protection and improvement services across primary, secondary and tertiary care as well as local authorities. There are likely to be practical problems with identifying public health activity and spend as the work of many healthcare professionals combines prevention, treatment and long term care. Connecting commissioners at local levels will be just as important as Public Health England working with the NHS Commissioning Board on a national level. Public Health England will have to be flexible enough to respond to local and national emergencies. In the past intermediate bodies, such as health protection units, have provided a key function in managing emergencies. Public health reform should be based on the principle of subsidiarity. This means that decisions will be made locally wherever appropriate. It is unclear how much power the centre would exercise over decisions made locally. In practice this will depend on the behaviour of the Secretary of State. Lines of accountability need to be clearer for commissioning public health services at national and local levels between Public Health England, the NHS Commissioning Board, local authorities, health and wellbeing boards and GP commissioning consortia. This is particularly the case given consortia boundaries may not be coterminous with local authority boundaries. Accountability within the system for the ring-fenced public health budget also needs to be more clearly defined. GP consortia will require engagement and support from public health professionals to support informed commissioning decisions and will need adequate funding for this. We are pleased the Bill goes some way towards clarifying the future home for many public health functions. To avoid losing specialist public health expertise, the Government should clarify as quickly as possible the future home for all remaining public health functions currently performed by PCTs.

Liberating the NHS. What might happen?018

Reducing the risks – implications for policy-makers

Create a compelling narrative about why the 1. reforms matter in order to engage patients, the public and staff in the enterprise. This is key when you consider the scale and complexity of the changes as well as the challenging financial environment. This might be better if it were not created by Government, but it is needed.

Address the significant cultural and behavioural 2. changes required and develop capacity and capability. GPs will retain their role as patient advocates with a focus on individuals, but will also need a population viewpoint to take decisions in areas like rationing and reconfiguration. Some help can be provided by external agencies. There are similar challenges for local government and providers. The professions have the opportunity to take a leadership role in helping to lead improvement and identify where change is needed.

Recognise that low GP involvement is among 3. the biggest threats to success. The NHS in some areas could be overwhelmed by demand if GP involvement is low or if consortia either carry on with the current model of commissioning or confine themselves to micro issues.

Ensure hospitals operating in a market-based 4. system can reconfigure services and organise multi-faceted specialist care. Markets work best when suppliers can quickly adjust costs or what they supply, but this can be difficult in the NHS where many services are inter-dependent. Measures to make this easier are required.

Realise the benefits of the market in terms of 5. improving quality and efficiency by creating space for new entrants. This will not happen naturally when, as in the case of the NHS, the size of the total market is not increasing. Closure of existing services will be necessary.

Learn the lessons of the past when driving 6. change through payment mechanisms such as the NHS tariff. This means pursuing a limited number of objectives, continually adjusting and refining the approach, and ensuring tariffs send clear signals that are worth responding to.

Clarify weak arrangements for oversight and 7. accountability, particularly those relating to the quality of care. New accountability arrangements contain potential for misunderstanding and conflict – this at a time when the financial environment will put pressure on quality.

Carry out further work in three areas8. :

The reforms ignore the need to improve primary care, in particular in relation to enabling the best GP practices to help those in less well performing areas.

There is a need to integrate primary and secondary care, as well as health and social care, but the reforms may not achieve this and could push them further apart.

There are insufficient practical measures to empower patients, encourage choice, and bolster shared decision-making – despite strong rhetoric in this area.

Help the new relationship between GP consortia 9. and local government to work. Consortia will need access to public health professionals. Health and well-being boards will need to help provide strategic leadership. These are new bodies so building relationships will not be easy.

Recognise that removing politicians from the 10. day-to-day running of the NHS may prove difficult. Local commissioners will be making difficult decisions and providers will be outside state control. History suggests politicians will struggle to resist pressure to intervene.

Address the biggest risk: transition11. . This means: getting consortia into action more quickly; acting now on long-standing hospital reconfigurations; ensuring well-developed back-office support for consortia; avoiding devaluing those driving change; and setting up as soon as possible new bodies such as the economic regulator and NHS Commissioning Board.

Be realistic and recognise that the reforms will 12. take some time to deliver. GP commissioning is likely to produce some early results but big improvements will take time and it will take even longer for the public to recognise them.

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Documents

NHS Confederation Health Bill Summary