APPENDIX 6
Memorandum by The King's Fund (FT 10)
BACKGROUND AND
CONTEXT TO
THE POLICY
The UK Government appears to be in a quandary
about the NHS. On the one hand it has been responsible for a huge
central drive and investment to modernise the service. On the
other hand, the pace of change has not been nearly fast enough
to produce the desired "step change" or "transformation"
in the quality of the patient experience in the service. In particular
there has been frustration in two key areas: the difficulty of
achieving the primary performance target for the NHS set by the
NHS Plan—reductions in maximum waiting times; and perceived
widespread antagonism in the NHS to the "management style
of the centre—too much "command and control".
Questions are now asked at the highest level as to how best to
improve performance in a large state bureaucracy.
A number of policy initiatives have been developed
over the last two years, primarily to tackle the waiting times
targets. Four key themes have emerged in Government policy in
health care:
— increased patient choice (principally
designed to allow patients to bypass hospitals with long waiting
lists);
— encouraging diversity of provision
of care (partly to expand supply to be able to achieve waiting
times targets);
— competition for state funding via
reimbursement using a fixed price mechanism (an incentive for
providers and purchasers to increase the volume of care to help
reach waiting times targets, and an incentive for providers to
become more efficient) through healthcare resource groups (HRGs);
and
— attempting to decentralise power
by allowing more (albeit limited) managerial and institutional
autonomy initially for selected providers (Foundation Trusts).
Holding the ring in this new economic environment
are primary care trusts. As PCTs are the (government) agency responsible
for purchasing care on behalf of their populations using funds
allocated to them by the Department of Health, and as distinct
organisational entities separate from other NHS trusts, and further,
as they are held to account by ministers and the Department for
achieving (centrally determined) performance targets, PCTs face
a clear structural and economic incentive to select providers
on the basis of performance. In short, the economic environment
in which the NHS operates looks set to develop into a competitive
market (albeit one with particular rules, regulations and constraints).
Foundation Trusts are central to policies that
attempt to operationalise these themes—in effect spearheading
the development of local entrepreneurialism within the hospital
sector in the NHS.
COMMENT ON
OVERALL DIRECTION
OF POLICY
The basic assumptions behind these themes are:
first that greater autonomy for providers, a dose of (limited)
competition between hospitals, and/or more choice for patients,
might offer more chance to improve the performance of health services
(particularly elective care) than "top down" directives;
second that if better performance resulted, then any loss of equity
would be tolerated—the presumption being that the "floor"
(the level of poorest performance in the NHS) would be raised.
The first assumption is questionable empirically.
However we believe that competition, choice and greater autonomy
are worth trying (again—we have been on similar terrain
before when the NHS internal market was implemented in 1991) particularly
with respect to improving elective care. Too many requirements
from the centre (for example to achieve specific targets) have
a deadening effect on local managerial talent, preventing it from
developing and being exercised and result in too great a focus
being put on national rather than local priorities, as well as
local "gaming"—the lesson of the local massaging
of waiting list figures to reach targets demonstrates this point.
In our King's Fund paper, The Future of the NHS, published a year
ago we advocate greater autonomy for providers along the lines
of the policy put forward. Despite the prevailing rhetoric, the
idea of Foundation Trusts is one place to start. But questions
can be asked as to why select 3-star hospitals and not allow all
hospitals in, say, a geographical area, to pilot the policy, and
also why not allow primary care providers also to become Foundation
Trusts? Perhaps a more fundamental question is, if greater autonomy
for providers is thought desirable, then why not reduce the number
of directives and targets from the centre to the NHS to all providers?
The way to allow greater managerial innovation in the NHS is less
to impose structural solutions (like Foundation Trusts) and more
to change behaviours, including the behaviour of the centre.
It is the second assumption that is particularly
contentious because it signals a reduced emphasis by the Government
on a basic principle guiding the NHS—equity of access to
care. Indeed, recent statements from the Government have emphasised
this focus. For example, "[In health care] the only thing
that matters is that it is based on NHS principles, free at the
point of use to the patient. Outside of that, our duty is to get
the best possible service." (Tony Blair, Financial Times,
10/12/02). In the list of NHS core principles republished in the
latest guidance on Foundation Trusts, equity of access for equal
need does not appear. It is our belief that the objective equity
of access to care should not necessarily trump all other objectives
for the NHS including that of achieving better quality of care,
and that time is overdue to try new means of improving performance
and quality of care even if they mean a reduction of equity, provided
that standards do not drop. Putting equity as the top objective
of the NHS would put a straitjacket on the NHS, and would not
allow the necessary experimentation to improve performance.
Whether or not this broad direction of policy,
as we have described it, is "good" (the answer depends
on what values are held), or whether it will produce overall benefits
(the benefits and drawbacks can be mooted at this stage, but it
is not possible to know this empirically without pilots and evaluation),
we note that the logic behind the policy is inconsistent with
some other aspects of Government policy towards the NHS. For example:
Care pathways
The policy bolsters the concept of institutions
(hospitals) as central to patient care whereas other Government
policies have promoted the concept of care pathways and "whole
system working" which put patients at the centre of good
patient care. For example, the National Service Frameworks, clinical
networks, the care collaboratives and the expert patient programme
are all designed to put the patient at the centre of care in a
seamless clinical pathway of care. Focusing on institutions, such
as developing Foundation Trusts, could erect unnecessary barriers
in the development of care pathways and integrated care;
Elective and chronic care
It is notable that in speeches and government
policies, the themes underlying the idea of Foundation Trusts
(choice and competition, encouraging diversity of provision of
care; money following the patient; and decentralising power) have
been mainly discussed in relation to elective care, waiting lists,
and acute hospitals. Yet while these themes may, or may not, be
appropriate to improve the performance of the elective care system,
they are unlikely to be appropriate for patients with chronic
medical diseases (the most costly conditions for the NHS to treat)
and the services which these patients mostly use—primary
care or community services. Chronic conditions are more difficult
to treat, often occur in older patients with more complex needs,
and often require multiple treatments in primary and secondary
care. There has been some focus by the Government on improving
care of people with chronic conditions, for example by developing
integrated care as noted above, but the policy of Foundation Trusts
cuts across these initiatives;
Primary and secondary care
One broad theme in recent years in health care
has been the need to change the balance between hospital care
(which is dominant in the NHS) and care in primary care or in
the community. Evidence accumulated over the past decade or so
offers support for switching some hospital functions—such
as rehabilitation and stepdown care—away from large hospital
sites, and for community-based measures designed to reduce emergency
admissions. Similarly, modern technology offers the scope for
much of outpatient care to be carried out in GP surgeries or small
community hospitals. These can also be the sites for a range of
elective as well as diagnostic procedures, some emergency care,
therapies and outpatient consultations where these continue to
be necessary. This type of thinking has influenced several key
policies. Yet the policy of Foundation Trusts puts the emphasis
again on the hospital sector, potentially strengthening its position;
Partnership working
Another broad theme of Government policy has
been to encourage organisations to collaborate more and work in
partnership, primarily to help solve some of the most difficult
and entrenched problems in delivering public services to people.
For example local health economies have been encouraged to develop
plans for investment and development of services together. The
policy of Foundation Trusts encourages the latter to be more autonomous,
for example in developing new services. Although there are mechanisms
suggested to improve the regulation and local accountability which
might help encourage Foundation Trusts to work with others towards
achieving local and national priorities, it remains to be seen
whether these mechanisms will be strong enough.
Our broad view, then, is that the Government
is (a) reducing the emphasis on equity of access as a policy goal
in favour of trying to improve performance of specific providers
(which may not be a bad thing up to a point, but the policy and
assumed trade-offs need to be made explicit, and the presumed
method by which benefits will "trickle down" to other
providers made clear) and (b) pursuing policies that are inconsistent
and run counter to one another. The Government has made no attempt
at producing a coherent vision of how the various policies it
is implementing will fit together once they are all in place.
In particular it has not attempted to define those services in
which competition may be workable. On (a), this is partly borne
of frustration at the obvious limitations of "command and
control" as a method to improve performance in the elective
sector and a willingness to try other methods, notably a very
weak form of a market. On (b), this is partly because, we believe,
that elective care—in particular targets to reduce waiting
lists and times—has been a priority and this has, and continues
to be) a central driver of policy. While initiatives have been
developed to improve the care of those with complex and chronic
conditions, in effect these have been trumped by policies deemed
to improve elective care. The prevailing view of how to improve
the performance of the elective care system (more market forces
in the Government's eyes) is not consistent with the apparent
view of how to improve care for patients with other conditions.
One way forward could be to develop a system of elective care
which is quite different from that dealing with chronic and emergency
conditions, with different incentives, separate providers, a different
method of paying providers for example. This is implied by current
policy but not made explicit: if this is the prevailing policy,
then it should in our view be made explicit, given very careful
consideration by those inside and outside government, and piloted.
SPECIFIC POLICY
ISSUES RAISED
BY FOUNDATION
TRUSTS
The policy
The specific features of the policy on Foundation
Trusts, as we understand them, are as follows:
—Foundation Trusts will be granted certain
freedoms:
— to pay extra supplements to staff
and change terms and conditions of work;
— to use funds released from land sales
and retain surpluses; and
— to raise capital on the private market
for new developments.
They will be released from the need to carry
out directives from the centre, and instead will be accountable
to four organisations:
— to local commissioners via contracts
with Primary Care Trusts (PCTs) and other commissioners. Contracts
are to reflect national priorities such as reduced waiting times
and improved clinical outcomes;
— to the new Commission for Healthcare
Audit and Inspection (CHAI). The Commission will assess performance
and ensure that national standards of service and quality are
met;
— to an Independent Regulator; and
— to the local community via a new
Stakeholder Council consisting of locally elected people, NHS
staff, and local PCTs.
The 30 strong Stakeholder Council will appoint
the management board. The Secretary of State will relinquish the
power to appoint non-executive board members;
A "legal lock" will prevent the hospitals
selling assets and establish Foundation Trusts as non-profit making
organisations. However the assets need to be clearly defined—some
may consider land to be a key asset;
Hospitals will have to abide by the details
of a license, which for example, will limit the extent of income
from private patients, and guarantee that their "primary
purpose" is to treat NHS patients
The best performing hospitals (with "3
star" ratings) can apply. Trusts earn the right to the limited
set of freedoms outlined above if they achieve a 3-star rating
and show:
— evidence of high standards of clinical
care and sound clinical governance arrangements;
— commitment and support of doctors,
nurses, other healthcare professionals and staff and evidence
that they are being given opportunities to develop their skills
and develop patient services;
— the existence of high quality leadership
and management within the Trust;
— evidence of responsiveness to patients;
— effective working with other local
organisations such as social services.
Evidence of proper financial management.
The first wave of short-listed applicants will
be announced in March 2003, successful applicants announced in
autumn 2003 will operate in shadow form until their establishment
in April 2004.
POTENTIAL IMPLICATIONS
What the implications of such a policy might
be depends on whether it is believed that Foundation Trusts will
have, and exercise, significant freedoms in practice, or whether
a reduction of top-down "vertical" control of Foundation
Trusts by the centre will simply be replaced with "horizontal"
control by PCTs or regulatory bodies potentially leaving little
room for autonomy. It is not possible to know this at this stage,
although the experience of the 1990s with NHS Trusts suggests
that there were fewer freedoms than the NHS and policy community
were initially led to believe.
But assuming that there will be freedoms, and
there will be the managerial expertise and leadership required
to exercise them, then the following points should be considered.
(a) Contracts with Primary Care Trusts
A primary concern must be that PCTs are underdeveloped
as commissioners at present, and they generally do not have the
managerial expertise, or specifically the information, required,
to hold Foundation Trusts properly to account for performance
against local contracts. For example, a study recently completed
by the King's Fund in London highlighted the improving, though
still inadequate, state of computerised information available
to PCTs for contracting with hospitals, or many other purposes.
More notably few PCTs were making the best use of the information
they had access to, especially for commissioning purposes. Specific
help could be given, perhaps through the National Primary Care
Development programme, to developing at least the information
required by PCTs for commissioning, targeting PCTs whose main
acute provider will be a Foundation Trust.
Foundation Trusts, being high performing providers,
are likely to be staffed with more, and more experienced, managers
and have more comprehensive information about activity and costs
of services. This imbalance of expertise and information puts
PCTs in a much weaker position in arguing for its own local priorities,
and in countering the priorities of the Foundation Trusts where
they are different from those of the PCT or other local NHS organisations.
By deciding to give PCTs the majority—75%—of funding
for the purchase of health services, the Government has followed
the lead of its predecessors in trying to "control"
the hospital through the commissioning role. In principle, locating
purchasing power at local level makes it easier to develop community
options and puts a brake on the provider power of the large acute
trusts. In practice, PCTs are unlikely to manage to impose themselves
in this way. But over time, as with the experience of GP fundholding,
they may well develop consortia and other commissioning arrangements
which will give them some degree of leverage in practice. This
process should be speeded up, in our view, with significant development
targeted on PCTs who commission from Foundation Trusts. Also,
the Department of Health have indicated that such leverage will
be enhanced through legally enforceable contracts, it is unclear
what this will mean in practice. It is difficult to see, for example,
what a PCT might gain through litigation.
(b) Staffing
The Guide to Foundation Trusts states that Foundation
Trusts will be free to recruit and employ their own staff building
using the local flexibilities already available to NHS Trusts.
They will have the "flexibility to offer new rewards and
incentives", "the freedom to determine the necessary
mix of skills to provide the best standards of care to patients"
as well as the "flexibility to deal with local recruitment
and retention problems in a way that is consistent with the needs
of other local NHS organisations". In summary, Foundation
Trusts will have the freedom to offer rewards, alter skill-mix
and combat local problems with local solutions.
This raises two important questions—how
will these "flexibilities" be operationalised, and what
impact will Foundation Trusts with additional flexible employment
practices have on other NHS organisations within shared labour
markets?
The Department of Health document suggests that
Foundation Trusts will have the freedom to offer rewards, alter
skill-mix and combat local staffing problems with local solutions,
but there is no detail as to the form of these "flexibility"
initiatives, or how they would be implemented. The suggestion
in the document is that Foundation Trusts may become "early
implementers" for Agenda for Change. This implies that these
acute Trusts would continue to pay staff within the new national
NHS framework that is currently being negotiated with the health
sector unions, but with additional, unspecified, "flexibilities".
One of the key drivers of Agenda for Change has been to create
a new pay system that facilitates "new ways of working"
in the NHS, in order to support patient-focused care delivered
by fully integrated clinical teams. As the new pay system is not
yet agreed or implemented, it is too early to assess its likely
impact, but it is clear that the proposals for Foundation Trusts
aims to push further the flexible pay agenda. The key issue is
the extent to which there is further scope for flexibility within
the national pay system, or with additional flexibilities lead
to fragmentation of that system before it is implemented? The
absence of detail in the Department of Health's proposals makes
it impossible to answer this question, but below we highlight
some key issues to be considered.
(i) Rewards and Incentives
Pay
There are two linked issues which need further
examination—first, to what extent will Foundation Trusts
offer pay rates that are different from other NHS Trusts, and
to what extent will Foundation Trusts pay "differently"
by using different modes of rewarding staff, such as performance-related
payments, or team bonuses? In either case the fundamental issue
is what will be the overall effect on staffing and ultimately
on the delivery of patient care.
In relation to the first question, it appears
from the Department's latest document that the individual freedom
for Foundation Trusts would be at least partially constrained
by the policy Agenda for Change, if it is implemented. However
further clarity is required to assess whether this means that
the new national framework would provide pay parameters within
which Foundation Trusts would operate, or a baseline above which
they have freedom to provide additional pay, or non-pay incentives.
In relation to the second, there is already
a "pilot" of team bonuses underway within the NHS, but
currently outside the remit of Agenda for Change, and as yet there
is virtually no published evaluation of the impact of team-based
payments in health care, wither in the UK or elsewhere. Previous
history of attempts to implement performance related pay (PRP)
to encourage increased productivity in their workforce has not
been successful. In a review of the evidence, Bevan and Thompson
(1992) found no link between performance-related pay and organisational
performance. A study conducted by the Inland Revenue in 1992 on
the impact of the introduction of performance-related pay in 1988,
showed that the vast majority of managers believed that the introduction
of PRP did not help to increase the quality of work produced by
staff or the commitment of their workforce to jobs.
Non-pay rewards and incentives
Foundation Trusts may not necessarily choose
to offer rewards and incentives based on pay. They may choose
to offer other incentives such as provided by "magnet"
hospitals in the US, focusing on the wider context of good human
resource practice in order to retain workers. Magnet hospitals
generally adopt a participatory, supportive management style,
initiate flexible working schedules, emphasise professional autonomy
and responsibility, implement planned orientation of staff and
provide better career opportunities to staff.
Evidence from magnet hospitals in the US has
shown that turnover and vacancy rates among nurses were significantly
lower, and job satisfaction higher, compared to other hospitals
(Kramer (1991)). Another study found a link between better staff
relations and patient outcomes—magnet hospitals had a 4.6%
lower mortality rate for Medicare (the federal health insurance
programme) patients than the control hospitals (Aitken (1994)).
(ii) Staffing levels and skill mix
The freedom to recruit and employ staff may
lead to variations in the skill-mix of the staff the Trusts employ.
However, the evidence base surrounding skill-mix is generally
weak (Richardson and Maynard, (1995))(Buchan and Dal Poz (2002),
in particular on the link between staffing and quality of care
, specifically patients" clinical outcomes. A report by the
Audit Commission (2001) states that "Trusts cannot demonstrate
a link between the amount spent on ward staffing and the quality
of care they deliver within the constraints of the existing outcome
data". If there is significant action by Foundation Trusts
to alter the skill mix of staff, then the effect of this on quality
and patient outcomes must be a priority in the evaluation of these
initiatives.
The second question relates to the impact on
local and national health care labour markets of the Foundation
Trusts with additional employment freedoms. The argument put forward
in favour of this move is that it will enable these acute Trusts
to respond more effectively to local needs and labour market conditions.
The Department suggests that this will be achieved in a manner
that will not have a negative impact on other NHS Trusts sharing
the same labour market, but it does not set out in any detail
what checks and balances would be required to sustain this stability.
Evidence from previous attempts to introduce
local pay into the NHS, and from current cost of living supplement
(COLS) suggest that it would be very difficult to prevent a "ripple
effect" if some NHS organisations (Foundation Trusts) offered
more attractive pay and conditions than did other NHS Trusts with
which they shared a labour market The basis of the argument in
favour of Foundation Trusts is that they will provide more attractive
employment conditions in order to improve staffing levels and
morale and therefore improve patient care, and as such they are
bound to have an effect on the wider labour market for health
care. The issue is whether this net effect would be negative or
positive. It would be positive if the "ripples" out
to the rest of the NHS encourage other trusts to make similar
improvements in staffing, but negative if it creates a two-tier
labour market, in which the price of one Foundation Trust's "magnetism"
in recruiting staff would be further shortages in other non-Foundation
Trusts.
Evidence from the Review Body Report (2001)
suggested that the latter scenario could happen. The Review Body
noted, in relation to the regional COLS for nurses and other NHS
professionals introduced in April 2001, that some NHS employers
not eligible for COLS, but sharing labour markets with COLS-paying
NHS employers, reported "losing" staff to those employers
paying COLS.
(c) Local accountability
A key aspect of the policy is to create a stakeholder
council partly made up of representatives of the local community.
In theory, this might improve accountability to the local population.
In practice, the great difficulties of involving a sample of local
people that is even slightly representative, then taking account
of their preferences in decisions, are very well known and it
is difficult to see how they will be surmounted under the new
arrangements. For example a recent study carried out by the King's
Fund into involving the public more in the decisions made by a
sample of six PCTs found a lack of commitment in public involvement
among some PCT board members or a commitment which did not translate
into action, a low value placed on the views of lay board members,
inexperience of lay board members, and marginalisation of lay
views in decision-making. However, there were also many good examples
of how PCTs had attempted to involve the public more in decision-making
at board level, and had used lay members more effectively. The
key question is not can there be successes, but overall what difference
will a stakeholder council really make for the effort and resources
involved.
There is a more fundamental point. Under the
new arrangement, it seems that acute providers will be accountable
to two different communities: to their "members"; and
to PCTs and their registered populations (via the contracting
system). What happens when these two communities disagree?
Finally, NHS policy on patient and public involvement
seems to be confused. Where do the new Stakeholder Councils fit
in with other new bodies charged with representing the public/patients
view, from the Patient Advocacy Liaison Service to the new Commission
for Public Involvement? Again there needs to be some coherence
brought to the broad sweep of policies and initiatives in this
area.
(d) Two-tierism and "elitism"
There are, and always have been, multiple levels
(or tiers) of performance and quality of care within and between
different providers in the NHS. Two key policy objectives have
been to improve performance across all providers, in particular
the poorest performing, and to reduce disparities between the
best and poorest performing providers. Whether or not to improve
performance is generally not contentious, whether or not to reduce
disparities between providers is because the view taken depends
on the value placed on achieving equity in access in health care
as opposed to other objectives such as efficiency or overall quality
of care.
By the selection criteria proposed, Foundation
Trusts will be among the top performing hospitals and therefore
in a "top-tier" judged by the star-rating system. If
Foundation Trust status results in these hospitals improving performance
(and this should be carefully evaluated), we think this would
be a positive outcome, even if it means that the disparity in
performance between Foundation and other hospitals widens in the
short run. However this view crucially depends on the development
of a clear mechanism by which performance improvement is transferred
to other hospitals. Specifically we believe that it will be important
that the poorest performing hospitals should have access to the
same mechanisms that have led to improved performance in Foundation
Trusts, whatever those prove to be. It is a cliche« to note
that there are "no magic bullets" to improving performance
health care—that is, no easy remedies. The solutions are
likely to be complex, and will relate more to the level of managerial
expertise, organisational structure and culture, extent of hierarchy
versus delegation, extent of buy-in to management and the motivation
of professional staff amongst other factors rather than the bald
freedoms conferred by Foundation Trust status. This is our view,
but the factors associated with increased performance will need
to be carefully teased out during the evaluation of Foundation
Trusts to identify more clearly what might be transferable to
other hospitals.
(e) Research and development of the
policy of Foundation Trusts
On wider research, if the Government goes ahead
with the policy, as set of in the latest guidance, we recommend
that it should:
— Commission a study from its own Strategy
Unit (at the Department of Health) setting out ways in which the
new "new" NHS fits together (see above) and the areas
in which competition in health care could be used as a tool to
improve performance
— Consider carefully what powers the
Independent Regulator needs to maximise its chances of operating
effectively.
Specifically on Foundation Trusts, there will
be political pressure to expand the number of Foundation Trusts
as quickly as possible, partly to counter charges of "two-tierism"
or "elitism".
On development, we note above that there should
be significant development particularly of PCTs which commission
from Foundation Trusts. This should focus on building expertise
in commissioning and negotiating contracts, and exploiting available
information for this purpose. Development in our view should be
designed and commissioned now and implemented as soon as the list
of Foundation Trusts is finalised—that is long before they
go "live". The design of such development work should
involve a wider group than those working at the Department of
Health.
On research, careful evaluation of this initiative
will take time. Too often in the past, evaluations of major policies
such as this were either not commissioned by government, or if
they were, the evaluations had almost no policy relevance because
the results were not taken note of by policy-makers, or they were
available way behind the political timetable.
We suggest that things could be different this
time. One way forward would be to commission two types of research.
The first would be rapid action research across a range of issues
which seeks to gather intelligence to an explicit timetable that
is useful to policy-makers, for example to help with decisions
on how many hospitals, and which ones, could become "second
wave" Foundation Trusts. The second would be in-depth research
in a limited number of key areas. We recommend the latter would
include matters relating to the workforce (such as those raised
above) and on teasing out why Foundation Hospitals have managed
to improve performance, if this proves to be the case.
(f) Expansion of Foundation status
Allowing three-star acute Trusts to apply for
Foundation status seems to us to be a place to start, not necessarily
the most logical, as noted above.
In speeches and in papers it is clear that Ministers
would like the assumed benefits of Foundation status to be available
to all acute Trusts. But it is not clear how this is intended
to happen. In the latest guidance it is noted that "gaining
three-star status will continue to be a pre-condition for granting
NHS Foundation Trust status". Yet it is obvious that not
all acute Trusts will gain the three-star status (since the star-rating
is based on a relative not absolute scoring system). Since some
three-star trusts will inevitably fall down to two-star or lower
in future, this raises the prospect of some two-star trusts not
being allowed Foundation status, yet other trusts that may be
two-star or lower will continue to be allowed Foundation status.
This is not logical, or fair and will need to be thought through.
Nothing is said in the latest guidance on what
the vision might be for the future of other NHS provider organisations—for
example those with institutional walls like primary care trusts,
or those which do not, for example clinical networks. Will these
be allowed Foundation status? If not why not?
SUMMARY
The command and control style of the centre
in recent years has not produced the desired level of improvements
for patients in the NHS, or for politicians, in particular with
regard to elective care and waiting lists. The policy of Foundation
Trusts signals the Government's intention to experiment with new
methods to improve performance, in particular weak market-type
mechanisms—competition, choice and greater autonomy for
acute providers.
— We believe that the time is ripe
for greater experimentation, and in allowing the NHS greater freedoms.
The sequelae of such a policy could be in the
first instance a potential reduction in the equity of access to
care for patients, in favour of better performance for Foundation
Trusts at least. We believe that this should be tolerated in favour
of the prize of improved performance, if such a thing results
(and this would need to be carefully measured). The most important
result in the medium to long term would be better performance
for all NHS Trusts, even if this might mean a reduction of equity
compared to now. But it is important to note that even now, after
several years of heavily directed policy from the centre, there
are many tiers to the performance of NHS providers.
— We believe that it is right to
pursue experimentation to improve performance and quality of care
even if there is an overall reduction in the equity of access
to NHS care in the short term.
The policy of Foundation Trusts runs counter
to other aspects of NHS policy because it focuses on institutions,
on hospitals and not primary care, on the means to improve elective
care and waiting lists, and on autonomous behaviour rather than
integrated care and partnership working. In particular it is not
clear in which parts of the NHS the Government intends competition
and choice to be levers to improve NHS performance.
— We believe that Government policy,
especially the means to improving performance, is not coherent.
This should be spelt out, with specific reference to elective
care and the care of those with chronic conditions respectively.
It is not clear whether Foundation Trust status
will confer significant freedoms upon acute Trusts, or whether
the potential freedoms will be constrained in practice by local
and national regulators.
— We believe that Trusts should
be allowed significant freedoms for the policy to be tested.
A major concern of the policy is that primary
care trusts are too underdeveloped to take on an effective role
in commissioning, negotiating and contracting with Foundation
Trusts.
— We believe that significant development
support should be given to the PCTs who are the main commissioners
of care from Foundation Trusts, in particular in commissioning
care, contracting, negotiating, and using existing sources of
computerised information towards these ends. This support should
be provided as soon as the list of Foundation Trusts is announced.
There may be a significant effect on staffing
if Foundation Trusts exercise the freedoms given. In particular
there may be knock-on effects on shortages in other local acute
Trusts.
— We believe that the effect on
staffing should be a major focus of in-depth evaluation of the
initiative.
We are not convinced that, for the effort involved,
the Stakeholder Council will have much effect in improving services
for local people. Furthermore NHS policy on public and patient
involvement is incoherent, it is not clear how it fits together.
We believe that it is important to develop a
research and development programme for Foundation Trusts. We believe
there should be three broad areas of work:
High level
The Government needs to
— commission a study from its own Strategy
Unit (at the Department of Health) setting out ways in which the
new "new" NHS fits together (see above) and the areas
in which competition in health care could be used as a tool to
improve performance
— consider carefully what powers the
Independent Regulator needs to maximise its chances of operating
effectively.
Development
Specifically on Foundation Trusts, there will
be political pressure to expand the number of Foundation Trusts
as quickly as possible, partly to counter charges of "two-tierism"
or "elitism".
— there should be significant development
particularly of PCTs which commission from Foundation Trusts,
as noted above. Development in our view should be designed and
commissioned now and implemented as soon as the list of Foundation
Trusts is finalised—that is long before they go "live".
The design of such development work should involve a wider group
than those working at the Department of Health.
Research
Careful evaluation of this initiative will take
time. Too often in the past, evaluations of major policies such
as this were either not commissioned by government, or if they
were, the evaluations had almost no policy relevance because the
results were not taken note of by policy-makers, or they were
available way behind the political timetable.
We suggest that things could be different this
time. One way forward would be to commission two types of research:
— rapid action research across a range
of issues which seeks to gather intelligence to an explicit timetable
that is useful to policy-makers, for example to help with decisions
on how many hospitals, and which ones, could become "second
wave" Foundation Trusts.
— in-depth research in a limited number
of key areas. We recommend the latter would include matters relating
to the workforce (such as those raised above) and on teasing out
why Foundation Trusts have managed to improve performance, if
this proves to be the case.
References
The Future of the NHS. A Framework for Debate.
King's Fund, London, January 2001.
Department of Health. A Guide to NHS Foundation
Trusts. London: Department of Health, December 2002.
Bevan S, Thompson M. An overview of policy and
practice. In: Institute of
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An overview of the issues.
London: Institute of Personnel Management, 1992.
Pg 5-76.
Kramer M, Schmalenberg, C. Job satisfaction
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Aiken L, Smith H, Lake E. Lower medicare mortality
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Care 1994;32:(8)771-787
Richardson G, Maynard A. Fewer doctors? more
nurses?: A review of the knowledge base of doctor-nurse substitution.
York: Centre for Health Economics, 1995
Buchan J, Dal Poz M R. Skill mix in the health
care workforce: Reviewing the evidence, Bulletin of the World
Health Organisation 2002;80:(7).
Anderson W, Florin D, Gillam S, Mountford L.
Every voice counts. Primary care organisations and public involvement.
King's Fund, London, 2002.
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