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Government policy aims to move accountability for commissioning of £100 billion NHS care from the state to the private sector by 2012

Filed Under (Accountability, Coalition Government, Expenditure, GPs, Incentives, Primary Care Trusts, Public service reform, Reform of the NHS, Secretary of State) by Paul on 24-05-2010

At first sight the Government’s plan – published on May 20th – appears to provide a confused answer to the question of who is going to commission NHS health care from 2012.

There are two important points in their policy:

  • “We will strengthen the power of GPs as patients’ expert guides through the health system by enabling them to commission care on their behalf
  • We will ensure that there is a stronger voice for patients locally through directly elected individuals on the boards of their local Primary Care Trust (PCT). The remainder of the PCT’s board will be appointed by the relevant local authority or authorities, and the Chief Executive and principal officers will be appointed by the Secretary of State on the advice of the new independent NHS Board. This will ensure that right balance between locally accountable individuals and technical expertise.”


This has been reported as combining the Conservative market with the Liberal Democrat belief in local democracy – as if both bodies are going to be commissioning health care simultaneously. Wrongly people have read this to assume that PCTs continue with their present tasks and have a different governance structure. Within this, in some way, PBC is strengthened.

This is not the case.

PCTs will continue to exist – and with a new governance structure – but they won’t take part in health care commissioning. They may well be the local body commissioning public health – although I think that during the passage of the Bill local government will probably win that. They may well become the patient voice for complaint and redress in the locality, but what they won’t be doing is commissioning NHS health care.

Andrew Lansley has made it quite clear that it is GPs who will be at the heart of all NHS heath care commissioning – even to very specialised levels. Since the inception of the NHS it is they that make the medical decisions, that in the end spend the money, and therefore in the future it is they that will be accountable for the spending of the money.

As far as the commissioning of NHS health care is concerned PCTs will completely leave the scene in 20 months time.

In starting to plan these changes most people are missing the point. At first sight this looks like just another NHS reorganisation – one which shifts the responsibility for commissioning from one bit of the NHS (PCTs) to another (GPs). OK, it’s a drag to go through all of the reapplying for jobs, but isn’t this really just creating a number of new NHS state organisations – a sort of clinician-led small PCTs?

No, it is much more significant than that.

In 1948 one of the cornerstones of Bevan’s NHS was to build primary care services on a private sector model. GPs were set up, and have continued to work, as small businesses. Not all of them, but most of them, practice within a form of private sector organisation. Indeed the way in which they have been incentivised to change their work through the QOF payments has been to use private sector incentives and not the method that has worked in NHS hospitals.

Of course GPs are clinicians and that drives them, but they are also small businesses and that drives them too. GP-led commissioning of NHS health care will be developed so that both drivers will incentivise better commissioning.

But let’s be clear this is not GP-led, state organised, commissioning. This is GP-led, private sector organised commissioning – and the new Government believe that the private sector incentives will create better NHS health care commissioning than state ones.

So those that foresee tranches of PCT commissioning staff moving over to GP-led commissioning organisations will be disappointed. They will have different drivers for good commissioning and they will need different skills to carry that out. This is not a state-to-state transfer of skills. These are new skills.

This is why this is a really radical policy.

I can think of no other example from English history where a Government, having collected resources from the people through national taxation, then hand over those resources to the private sector to commission an activity.

It is a really bold Government that removes public accountability for this money from the straight line that exists at the moment – Chancellor of Exchequer to the Secretary of State for Health, Secretary of State for Health to the PCT CEO.

Secretary of State to small business is a reporting line that lies outside traditional accountability.

I am sure the Secretary of State will be under great pressure to blur this distinction. The Treasury will find it hard to hand over all that money to the private sector since the latter not have the same form of accountability. True there will be very strong contracts and a lot of hedging round for accountability, but given that the purpose of the policy is to remove the state from the commissioning of NHS health care, these will no longer be internal.

Of course one way of doing this would be to nationalise GPs – in a way that Bevan could not achieve.   That would make the Treasury happy but the BMA pretty angry.

From 2012 democratic accountability for this money will start with Parliament and go from them to an independent quango – the NHS Board. And from there to a private sector organisation of GP-led commissioners.

This may well be the right thing for commissioning NHS health care, but it certainly doesn’t clarify democratic accountability – and that is what I thought The Lib Dems were after…

Comments:

2 Responses to “Government policy aims to move accountability for commissioning of £100 billion NHS care from the state to the private sector by 2012”


  1. Yes, tons of almost naive faith in the medical profession to manage health services, with the present cadre of NHS managers cast into the wilderness. Might work I suppose, but a couple of concerns:

    1 Will it really be possible to separate the budget for providing GP services from the budget for services commissioned by GPs? What incentive will there be for GPs to be good commissioners?

    2 Waiting lists. A product of a clinically led service. How is Lansley going to embed a no-wait culture in an NHS led by doctors?


  2. These are really important questions. In the White Paper to be published in July we will know whether the Government has the capacity to answer them perhaps along the following lines:

    1. Will it really be possible to separate the budget for providing GP services from the budget for services commissioned by GPs? What incentive will there be for GPs to be good commissioners?

    The whole system will be working under a set of rules, including competition rules, which will be formulated by the economic regulator. They will have provided some competition rules about the way in which GPs commission their provision. If GPs only develop relationships with themselves and exclude others in the market this will clearly break competition law. So I would look to the economic regulator to provide some rules here and for them to be applied either through an internal judicial system or through the courts.

    There are two main incentives on GPs to be good commissioners. The first is internal – good commissioners commission the very best value for money – and they do so because they are small businesses and understand economics better than state organsiation. They will follow the money spent on patients in hospitals with much more grip because it is their money they are spending.

    The second driver for efficiency will be competition amongst GPs. As a patient – see competition above- I want to be able to choose my local GP commissioner. I will choose the one with the best outcomes and hopeless GP commissioners will be taken over by better ones.

    2. Waiting lists.
    A product of a clinically led service. How is Lansley going to embed a “no-wait” culture in an NHS led by doctors?

    I don’t know if he knows this, but Andrew Lansley’s political career depends upon answering this. If say, a quarter of providers start to have longer and longer waiting lists he believes that patients will choose to move to those providers with shorter waiting lists. This will probably be the case, but if, as looks likely, he keeps all the inefficient hospitals open then there will be parts of the country with long and growing waiting lists. There will be an opposition party waiting to publicise the first patient that waits for 6 months. There will be a great deal of publicity for this patient as it will demonstrate that the NHS under the Tories has gone backwards for patients.

    Things will get tricky if this patient is living in a Tory constituency.

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