4 Jun 2010

Coalition's programme for NHS

The NHS Support Federation has just issued it's latest news letter (copied below) with an update on the impact of the new Coalition Government. If folk are interested I would strongly urge joining up at their website which has lots more info: www.nhscampaign.org/

Much to be worried about - how will these changes impact on health services in Gloucestershire? See Caroline Lucas' speech last week 'Austerity is not the way out of recession' here. See also campaign group 'Look After Your NHS' here.

The coalition's Programme for Government affects four key areas of health policy: the NHS budget, GP fundholding, structural change, and the provision of services. We've outlined the main issues below.


It's true it could have been worse, but the coalition has stuck to the Tory pledge of a year-on-year real-terms increase in the health budget. That's better than savage reductions, but in the NHS it will still feel like cuts because medical innovations mean healthcare inflation rises much faster than general inflation. Lansley has said the government will introduce harsher efficiency savings than the £15-20 billion planned by Labour. Those plans would have meant a 3% saving each year - a figure many health economists say is unrealistically ambitious, but the new government will go further. Initially the coalition wants us to believe this will be done by cutting the cost of managers and administration by a third over four years, but it is impossible to imagine that services won't suffer.


Before the Tories lost office in 1997 they introduced GP fundholding, whereby doctors were given the power to buy treatments for their patients in a market system. It was a failure and New Labour abolished it, before changing their mind and bringing it back under the name Practice Based Commissioning. Despite evidence that it doesn't work, the Tories remain enamoured with the idea and want to go much further. It seems this is an area where the Lib Dems have given way despite previously believing that the scheme.

Worryingly, the expectation is that under the Tory plans GPs will have to enter into partnerships with private companies to split the risk and the workload of commissioning. Companies like Humana are already preparing for such partnerships and have said they welcome the chance to provide 'commissioning muscle', at a price. This will give private corporations huge powers over what kind of treatments patients receive and who provides them - an entrenchment of the market system.


Oddly, the new government promised to end the continuous structural change of the Labour years, before immediately pledging to abolish Strategic Health Authorities altogether. There will be a Health Bill this year which will introduce an independent NHS board to oversee the commissioning of services, working alongside the foundation trust regulator Monitor, which will be beefed up and given the power to regulate the finances of all trusts. This kind of distant administrative change is hardly likely to have people protesting in the streets, but from the sketchy details released so far it looks like an important cementing of the structure of the market in healthcare.


So, of course, if you thought that the crazy market reforms of the Blair era had been dashed on the rocks of evidence and cost, you were wrong. Neither the Tories nor the Lib Dems opposed marketisation before the election, and their joint Programme for Government could only be clearer if it ditched the euphemism 'independent' for 'private':

"We are committed to much greater involvement of independent and voluntary providers. We will give every patient the power to choose any healthcare provider that meets NHS standards, within NHS prices. This includes independent, voluntary and community sector providers."

This means that Labour’s “preferred provider” status for NHS bodies is out. This was a concession won by the unions before that meant the NHS was the first choice to provide NHS services - which might seem simply logical, but which infuriated the private sector. Now the marketers are seizing their opportunity - Jill Watts, chair of the private body NHS Partners Network, told the Financial Times: We would like to see it spelt out that preferred provider has gone.


It’s fair to say that so far there have been some positive developments. The Programme for Government promises to stop the centrally dictated closure of A&E and maternity wards, and Lansley has ordered a halt to the Darzi plan to reconfigure services in polyclinics. The new government will also make PCTs more accountable to local authorities and add local elected members to PCT boards, although it remains to be seen whether this will be more than a token gesture.


The direction of the coalition's health policy is clear, but we'll get more detail in the upcoming Health Bill and policy statements.

A dangerous Tory idea in opposition was so-called ‘true payment by results’, whereby hospitals were to be paid according to health outcomes rather than activity. We will have to see whether this policy survives the realities of and the compromises of coalition, but the fact that the new administration has abandoned NHS targets suggests true payment by results may well be on the cards. Meanwhile, private hospitals are predicting a surge in business as waiting times begin to rise again in the absence of targets.

True payment by results’ would be a structural disaster, leaving hospitals with no ability to plan because they wouldn't know how much money to expect. The bureaucracy required would be immense with league tables for every conceivable treatment. But there are hints in the Programme for Government that this is indeed the plan, as there is a commitment to publish detailed data about the performance of healthcare providers online.

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