Memorandum submitted by Oxfordshire PFI
Alert Group (PCT 8)
This group was formed five years ago to raise
public awareness and understanding of the issues surrounding the
use of the Private Finance Initiative in the NHS. A public debate
was held on the subject. Since then the scope has been enlarged
to cover other controversial policies including Foundation Trusts,
Independent Sector Treatment Centres, Payment by Results and the
changes now proposed for primary care. Membership includes representatives
of professional bodies, trades unions and community groups concerned
with health matters.
1. RATIONALE
BEHIND THE
CHANGES
Commissioning a patient led NHS appears to increase
the speed and extent of the internal market. The development of
the purchaser/provider split, Foundation Trusts programme, the
introduction of Payment by Results and the requirement to purchase
15% of NHS care in the private sector are already realities. We
believe these to be unnecessary, divisive and wasteful of resources.
The longest established, the Purchaser/Provider
split, was shown after its introduction in the early 90s to have
doubled administrative costs. Early assessment of the first wave
of foundation trusts presented a mixed picture but fell far short
of being a ringing endorsement.
The National Audit office has already indicated
that its early assessment of Payment by Results will lead to increased
de-stabilisation for the NHS and in particular for provider units.
Attempts to extend the principle to the more long term management
of chronic conditions are likely to consume a great deal of resource
and professional time.
It would appear to us relevant to question the
existence of any evidence in support of these policies.
In Oxfordshire Thames Valley Strategic Health
Authority wishes to go a step further by tendering out the leadership
and management function of the future PCT. Tenders will be sought
from NHS bodies, the voluntary and private sectors. This appears
to us to be a major extension of the market and potentially the
private sector, into the commissioning of health-care with no
proposed consultation, no detail on governance or costs.
This proposal has the unique distinction of
uniting all Oxfordshire's MPs in opposition to it, together with
most councillors of all parties. Many non-executive directors
of NHS trusts have also expressed dismay.
2. LIKELY IMPACT
ON COMMISSIONING
OF SERVICES
Reduction in the number of PCTs (from five to
one in Oxfordshire) will lead to a diminution in the local knowledge
applied to the process and may reduce the frequency and ease of
direct contact between primary care and hospital staff.
Commissioning will therefore tend to be based
more on economic and managerial decisions than on debate and co-operation
between clinicians, at least until practice based commissioning
is fully operational. We are concerned that the implementation
of both initiatives, at the same time, is going to lead to confusion
and difficulties between commissioners and providers and may cause
major fragmentation in service provision as well as commissioning.
3. LIKELY IMPACT
ON PROVISION
OF LOCAL
SERVICES
There is lack of clarity on the intentions regarding
the provider function of PCTs. "Commissioning a patient-led
NHS" refers to decisions on which services a PCT should no
longer provide but makes provision for those where it continues
to do so. Nigel Crisp's letter of 28 July states that PCTs should
totally shed their provider role by 2008. However, Patricia Hewitt
has recently hinted, but not confirmed, that this will be optional
rather than mandatory.
There is already an impact on the staff providing
these community services in that their future employment is unclear.
If it is confirmed that they will no longer be employed by the
PCT the uncertainty will remain, with likely effect on recruitment
and retention.
The effect of the multiple provider situation
beyond 2008 can only be estimated but the instability already
being caused by parallel changes in the hospital sector is not
reassuring.
4. LIKELY IMPACT
ON OTHER
PCT FUNCTIONS, INCLUDING
PUBLIC HEALTH
Commissioning, rather than purchasing, is based
on the rationale of starting from assessing the needs of the population
served and then forming a plan of which services and changes are
required in order to meet those needs. It is not clear from the
proposed changes in Oxfordshire where the public health function
of PCTs will sit. Public Health has been an important part of
the management and leadership of all of the PCTs. We question
where it will sit within a private or voluntary sector team. If
they are within the team—will they be answerable to the
company they work for? If they are not within the team how will
they be able to ensure that the commissioning decisions that are
made are based on the long-term health needs of the population
and not on the need for short-term profits? This may lead to a
major increase in inequalities in the health of our population.
5. CONSULTATION
ABOUT PROPOSED
CHANGES
In stage 1, para 2 it is stated that any merger
changes will be subject to local consultation. In fact the only
option being offered for consultation is the move of five PCTs
into !. No other option is offered. Thames Valley SHA does not
intend to hold any consultation with the public about the major
changes in how the PCT will be managed and lead. We are told this
is because it is not a change in service provision. However, given
the potential consequences of such a change we feel it is essential
that public consultation takes place, before the changes happen.
When the future of services currently provided
by PCTs has been clarified there must also be clarification of
local consultation on proposed changes.
6. LIKELY COSTS
AND SAVINGS
There will clearly be ongoing savings following
the reduction in the number of PCTs but against this has to be
set any redundancy payments or compensation for contracts terminated.
In addition there will be the costs of advertising
and recruiting to new posts and, no doubt, of new logos and stationery.
The support services needed for practices involved
in commissioning should also be taken into account.
The whole question of savings needs to be looked
at in the context of recent history.
Since 1997 there has been in primary care—
The abolition of fundholding.
The establishment of PCGs with the initial intention
that they should move, at their own pace, through four stages,
the final one being becoming a PCT.
2001—the conversion of PCGs toPCTs, the
abolition of Health Authorities and Regional offices and the development
of SHAs.
2005—recognition that there were too many
PCTs and SHAs and drive to amalgamation
By 2006—change to practice based commissioning
By 2008—partial or complete removal of
provider role for PCTs
Whatever may be the merits of any of the changes,
none has been cost neutral. The changes in provider trusts have
also to be taken into account. It is not unreasonable to question
how long the current changes will remain in place before once
again undergoing substantial modification.
7. PRIVATE MANAGEMENT
FOR PCT
Although for obvious reasons this did not appear
in the document under consideration, it is of such fundamental
significance that it should form part of the Health Committee's
investigation of potential changes to PCTs.
In mid October the Thames Valley Strategic Health
Authority suddenly announced that it intended to seek bidders
from the private sector for the management function of the new
single PCT for Oxfordshire to be formed by amalgamating the current
five.
The time table is that the plan has been submitted
to the DOH, advertisements will be placed in the EU Journal in
November, a list of bids published in February and the successful
firm takes over at the beginning of April 2006.
There is to be no public consultation.
The rationale is explained on the basis that
the single PCT will be a very large organisation needing unusual
management expertise. In fact it will be the size of the former
Oxfordshire Health Authority. The argument of size is in any case
undermined by the indication from the SHA and the DOH that it
is being seen as a pilot for other, smaller, PCTs.
The concept of handing over responsibility for
the allocation of a large proportion of the health budget for
Oxfordshire to what seems likely to be a foreign based, for profit
organisation cannot be allowed to proceed unquestioned by the
public or their elected representatives. We believe that the current
return for private companies involved in health care is 10%. With
a budget of £575 million, this potentially means £57.5
million of tax payers money being handed to share holders. We
are already being asked to make £35 million in savings this
year. This will mean major reductions in services to Oxfordshire
residents.
8. RECOMMENDATIONS
FOR GOVERNMENT
8.1 Reject the application by Thames Valley
SHA to tender out management function of the future Oxfordshire
PCT.
8.2 If the application is not rejected,
as suggested in 8.1, a full period of public consultation on the
changes proposed for commissioning should occur.
8.3 If the application is not rejected,
then explicit guidance on the governance of any tender process
and on how the PCT will be managed is required before the process
can proceed.
Mark Ladbrooke
Chair, UNISON Oxfordshire Health Branch
Dr Helen Groom
General Practitioner and member of PEC, Oxford City
PCT
Peter Fisher
President, NHS Consultants' Association
October 2005
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