Examination of Witnesses (Questions 1
- 19)
THURSDAY 3 NOVEMBER 2005
CHANGES TO
PRIMARY CARE
TRUSTS
Q1 Chairman: Good morning. May I
welcome you to this first session on our inquiry into the changes
to Primary Care Trusts (PCTs) and Strategic Health Authorities
(SHAs). I realise you do not all represent one organisation. After
an answer you may offer your view, if it is different, to the
committee. We start by looking at organisational change. Everybody
who works in the NHS falls back two or three paces when that is
mentioned. PCTs and strategic health authorities were introduced
in 2002 when health authorities and regional offices were disbanded.
Do you think under the current proposals we are now moving back
essentially to similar structures to the ones that were abolished
just three years ago?
Dame Gill Morgan: I think superficially
you could say that we are but there are some fundamental differences.
The nature of practice-based commissioning is quite different
from the nature of fundholding; it much more akin to what we used
to call locality commissioning where you get groups of practices,
not just GPs because you have to have a broader clinical engagement,
coming together really to influence what is best for their patients.
Because of the nature of how that is set up, that is quite different
from fundholding. The other thing that is very important about
this is that some of the changes are built on things that the
service itself wanted. If you look today, there are 43 PCTs that
felt for some reason they were too small and already had shared
management arrangements. Some of this is about implementing the
learning that has come from PCTs. There were a number of PCT which
had already begun to develop shared ways of doing things—for
example, the Manchester commissioning group of GPs—because
they felt that if you were very small as a PCT, you could not
get the leverage with the acute sector. They have tried to put
together the learning of the last three years. In many cases,
this is about implementing that learning at a local level.
Q2 Chairman: Does anyone have another
view or an alternative to that?
Mr de Braux: With some of the
other changes that are likely to happen to providers, particularly
the introduction of organisations like foundation trusts and other
alternative providers, and with the responsibility for performance
management when they are moving to Monitor (an independent regulator)
rather than strategic health authorities, there is a very good
argument for the future that strategic health authorities perhaps
need to get bigger and have a bigger span of control. I think
we are also seeing, in terms of developing services, the need
to look over a much wider area than just the areas that some of
the strategic health authorities cover. The need to have a strategic
view about what health services should look like so that the local
commissioning can work within that is another reason why strategic
health authorities probably need to be larger and fewer.
Q3 Dr Taylor: If PCTs are already
doing this and coming together in larger groups, why ever do we
need this huge big bang approach to make this tremendous change?
Dame Gill Morgan: Where the 43
organisations have shared arrangements, they need to be allowed
formally to merge to produce the changes and the benefits. What
you have at the moment are organisations maintaining two boards
but one set of management teams. There is the necessity for some
structural change where we are at the moment. For the others,
where they are developing shared commissioning arrangements, they
tend to be small unitary authorities which are co-terminous with
metropolitan boroughs and therefore have some very good reasons
for staying small because of that co-terminosity. They are trying
to develop models that allow them to have more leverage when they
talk to the bigger trust. Without doubt, when you are very small
and you are one of very many PCTs buying services from an acute
trust, you could be at a disadvantage. PCTs have been trying to
get those shared commissioning arrangements. Many of those will
persist after the current changes.
Q4 Charlotte Atkins: Could we have
that list, please, of the 43 and of the shared arrangements? In
your experience, if you take the 43 and those that have already
the shared experience, what numbers does that come to out of the
300?
Dame Gill Morgan: I could not
give you a number now but we could find that out.
Q5 Charlotte Atkins: Is it your impression
that it is half or what is the number?
Dame Gill Morgan: We think it
is 43, plus 40, plus 8; that makes 91.
Q6 Charlotte Atkins: That is less
than one-third that you are talking about. If we are led to believe
that it may come down to about 100, we are still talking about
very significant change, as Dr Taylor mentioned, in those areas
not covered by the shared arrangements and the other arrangements
you spoke about?
Dame Gill Morgan: But some of
that is about the learning from the areas where they have put
in shared arrangements and some of that is about this issue of
scale and size to work with acute trusts. One of the difficulties
with this is that there is not a single right answer. We are very
supportive of the direction of travel which takes primary care
trusts and makes them co-terminous as far as possible with local
government. We think that is a really important opportunity. When
you go back four years, many of the primary care trusts that were
set up were not co-terminous with social services; they crossed
boundaries. We believe that one of the great strengths and successes
of PCTs over the last few years has been the development of a
whole set of new community services, intermediate care services,
with social services. We think the opportunity to get the boundaries
more closely aligned is an important opportunity we should be
taking.
Mr McIvor: I do not think there
would be any PCT in the country that is not part of some shared
arrangements. Often those shared arrangements are around the health
improvement agenda because of a need for a greater co-terminosity
with the local authority; to take the example of Sheffield, next
door to me with four PCTs, it is very much working very closely
together with that one local strategic partnership on the whole
of the health improvement agenda but equally on the commissioning
agenda.
Q7 Charlotte Atkins: When you are
talking about co-terminosity there, are you talking about co-terminosity
with the authority that provides social services or are you talking
about co-terminosity with an equally important local authority,
maybe in the district or the LSP boundaries?
Mr McIvor: I am talking in that
case about a co-terminosity with the local authority that provides
social services, but equally importantly provides for education
and leisure and those other services, housing and so on, which
are very important determinants of health. Therefore it is important
that those boundaries are, wherever possible, and obviously this
is a holy grail you would never get, co-terminous as well.
Q8 Anne Milton: You are going to
miss some of them and gain others. Where there are not unitary
authorities, you are going to lose some co-terminosity and you
are going to have a problem with size. Are we not going to see
huge problems with size?
Dame Gill Morgan: I think the
conundrum that faces this is that you have two scenarios happening
in parallel. If you believe that the holy grail that you really
need to get is social services co-terminosity and that is the
number one priority, that could leave you with some very small
metropolitan unitaries. Simultaneously, it could leave you with
some very large shire counties. One of the things we believe in
trying to assess this is that you cannot set a national template;
you have to make an assessment at local level. Where people are
going for small unitaries, the question we have to ask is: how
do you share services to get the best, to get the leverage? If
it is a very big shire county, the question has to be exactly
what was asked, which is: how do you then get the leverage you
need with local government at the second tier level? It is that
level that a lot of the health promotion activity and health improvement
agenda, particularly with housing and things like that, is focused.
If it is big, we are going to have to think local. If it is small,
we are going to have to think shared. That is the sort of conundrum
that is facing people at the moment.
Q9 Chairman: Moving on further, we
have received evidence from one PCT official that, following PCT
reorganisation, it will take as long as 18 months to restore systems
to their current levels of effectiveness. Given that the NHS is
at a crucial stage in implementing payment by results and developing
practice-based commissioning, are you concerned that these reorganisations
will impact on your ability to develop commissioning skills and
fulfil your current statutory functions as well?
Mr McIvor: I think we need to
be concerned and take on the fact that reorganisation always takes
time. However, I think we are building on a lot of good practice
and experience to date. I would be very concerned if it did take
18 months. That is just far too long. This reorganisation has
to happen when it happens. It is not a question of when it happens;
it has to happen quickly. We need to put in place the right people
to continue to ensure that we continue to deliver. I do not think
that should be a problem. There are some very good and experienced
people out there who can continue to do that. We are, after all,
going down from a large number of organisations to a smaller number,
whatever that may be.
Ms Jeffrey: It is interesting
that you mention payment by results because small PCTs that are
operating in a full payment by results economy, which some of
them are, do not really have enough bargaining power and muscle
to cope with that. It is a completely new regime. We are all learning.
Inasmuch as we think that perhaps 303 PCTs were not really affordable
in the first place with all the management on-costs and board
costs that those entail, in the same way 303 PCTs probably did
not have enough bargaining muscle, commissioning power, strength
of commissioning tools and equipment to cope with the new payment
by results regime. I think there will be a great deal of attention
paid to keeping the show on the road. Obviously business continuity
plans are very important, but a smaller number of PCT will, I
think, be in better shape to do that.
Q10 Chairman: Quite clearly, there
is some support for this. I suppose the obvious question is: would
you have initiated this yourselves if it were not for Sir Nigel
Crisp's letter of 28 July?
Mr de Braux: Within the strategic
health authority that I manage, we had already moved towards that
model because of the difficulty PCTs were finding. If you take
Hertfordshire, for instance, there are eight PCTs in Hertfordshire
averaging about 100,000/120,000 people each that they cover, which
are trying to commission from two very powerful providers. They
spent most of their time, in terms of commissioning, bargaining
with each other rather than with the two providers that did rather
well out of their inability to get their act together quickly.
We had already started to move to a model where we were already
at four teams instead of eight; I think we had recognised that
we had to take that even further than we were taking it. We were
doing it on a step-by-step basis rather than in one large attempt.
My own view of that is that it was better than staying at eight,
but in fact the time taken on each step was not terribly valuable
time when you could have done it all in one go. Whilst it does
lead to some disruption—all reorganisation is disruptive—I
think, as we have already said, if we make the decision to do
it, we need to get on with it and do it quickly and make sure
we retain the good skills we have in the many organisations into
the fewer organisations in the future.
Ms Millington: It is patchy in
the health economies around the country. As to direction of travel,
I have not met anybody who is against it, but I think it has been
a flawed process. The pace, for some of us certainly, has been
very challenging indeed. I do not think there has been a proper
communication plan, either within the NHS or between the NHS and
everybody else involved. I think there has been a danger, as always
in any restructure, that form has come before function. You are
trying to design organisations before you have fully worked out
what their new function is going to be. There is a huge passion
and commitment to making it work, as you would expect, and to
making sure that improved patient services come out of this. That
is what it is about, but it has been a flawed process. I think
there would be very few people who would not acknowledge that.
It is easier for a non-executive to say, this however.
Q11 Mr Burstow: That is a useful
insight perhaps into evidence sessions like this. On this 18-month
period of disruption which we have had put to us in some of the
evidence, and I hear what Mr McIvor has said to us, I wonder if
you could give us some sense of what you think the best case will
be in terms of loss of focus on day-to-day running of organisations
and what you think the worst case could be? What are the parameters
in terms of how long there will be a disruption to normal service
and in terms of trying to make sure the commissioning now is being
done well?
Mr de Braux: May I say what we
are doing in my strategic health authority? Recognising that business
continuing is very important during this process. In working with
our primary care trust, we have agreed with them that the strategic
health authority will be the level at which we manage commissioning
for the next year. We are bringing people from the PCTs together
in a "commissioning team" to work on the commissioning
for our four main providers. Whilst the PCTs will retain responsibility
for that commissioning, the actual management of it will be done
by a larger team working out of the strategic health authority.
The role of the strategic health authority is to make sure during
this process of change that business continuity is maintained.
Q12 Mr Burstow: That is helpful.
It gives us an insight into process. It does not answer the question
which is about the worst case and the best case. It would be very
helpful to gain some sense of what those might be?
Dame Gill Morgan: You have to
remember that many PCTs will not change at all. The best case
is that there will be no disruption because people will continue
to work in their own patch. There are significant numbers of PCTs
in that category.
Q13 Mike Penning: How many are there?
Dame Gill Morgan: I cannot answer
that because the things are being looked at. For example, if you
take London where there are currently 32 PCTs, the current proposals
are that that will continue. There will be large areas. If you
take Manchetester, the scale of the change is probably from 14
down to 10.
Q14 Mike Penning: Both of those PCTs
are metropolitan. Lots of the small PCTs are not metropolitan.
Dame Gill Morgan: Absolutely.
The places that are going to have the most difficulty will be
the big shire counties, which is where the sort of solution that
John is talking about, which is trying not to have any delay in
terms of commissioning by having the strategic health authority
take a key lead, should reduce. It may take 18 months for the
PCT to be up and fully running, but that does not mean we drop
the ball in the meantime.
Q15 Mike Penning: That is the risk.
Dame Gill Morgan: Of course that
is the risk and that is why each submission is being assessed
for its business continuity and how it will deliver the current
agenda, as well as what the organisation boundaries are.
Q16 Dr Stoate: When this Government
came to office in 1997, the plan was for a primary care led NHS.
Is it primary care led? I should ask the PCT to start with.
Mr McIvor: In the majority of
cases there is a huge amount of primary care involvement in leading
and setting the direction for the NHS. The challenge of this change,
it seems to me at the moment, is to balance this desire for co-terminosity
while keeping that clinical engagement and ownership of what happens
in the NHS.
Q17 Dr Stoate: What about the power
structure between the primary care and secondary care sectors?
How do you think that currently pans out?
Mr McIvor: I think a lot of the
context in the NHS has changed over the last year or so, particularly
this thing called payment by results, which has meant that, from
my PCT's point of view, we feel we have a much greater ability
to commission services in the right place and see the money move,
if that is appropriate, from the acute sector into the primary
care sector. I know the GPs, nurses and allied health professionals
who are part of my PCT have seen real investment in out-of-hospital
services.
Q18 Dr Stoate: But the Government
does not see it that way because the Department of Health's view
is that there is currently an unequal power structure between
primary care and secondary care, which is one of the reasons for
your reorganisation. I am slightly concerned that you think things
are going pretty well.
Mr McIvor: Perhaps I am talking
about my area and perhaps they are going well there, and it may
not be the same across the country, but I know that the majority
of PCTs feel that there is much better clinical engagement than
there ever has been and that the context means that we are actually
seeing much greater investment in out-of-hospital services.
Q19 Dr Stoate: Most of the PCTs I
speak to, and it is a fair number, are very concerned indeed in
the hospital sector about gaining power at the expense of PCTs,
which is one of the driving factors, I am told, behind the reorganisation
and the mergers. Is that the case?
Mr McIvor: My own view on that,
and it is a personal view, is around the context in which we are
operating and the fact that the biggest driver for this is about
the way we pay for hospital services. I can give you an example.
I know that every time an emergency admission goes into my local
hospital, it is going to cost me round about £2,000. If that
emergency admission does not go in, I do not pay £2,000.
That is a great incentive for my primary care professionals to
look at better alternatives and to invest in them.
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