Health and Social Care Bill

MEMORANDUM SUBMITTED BY THE INSTITUTE OF HEALTHCARE MANAGEMENT (HS 138)

RESPONSE TO THE HEALTH AND SOCIAL CARE BILL

EXECUTIVE SUMMARY

30 March 2011

i. The Institute of Healthcare Management (IHM) is the professional organisation for managers in health and social care in the UK. (1.1)

ii. Most of our members (59.1%) are employed within the NHS and work in primary and secondary care. Our primary care members work in GP practices and commissioning. (1.2)

The Institute’s response

iii. We believe the proposals should result in greater clarity in the commissioner/provider relationship but that the evidence base for the changes and their benefits should be published. (4.4)

iv. We also believe that whatever the strengths of the proposals, they are unlikely to deliver all the intended benefits without critical concerns being addressed. (4.6)

v. We are also very concerned about the NHS’ capability to deliver the changes and against the planned timetable. The changes are in themselves radical and wide-ranging, while cutbacks are disorientating and only add to the challenges that managers will face. (4.7)

vi. Whatever the final shape of the changes, it is vital that managers are involved on the NHS Commissioning Board and its regional offices. How arrangements are run in practice is as important a success factor as organisational and procedural structures. (4.8)

vii. The changes will require a paradigm shift in the underlying culture of the NHS, particularly if existing NHS staff provide the support to the consortia. (4.9)

viii. We strongly advise that regulation is not a substitute for professional or managerial judgment (4.13) and that it is important that the Monitor’s and the Care Quality Commission’s functions concentrate on outcomes, as well as inputs and cost, and emphasise continuous improvement. (4.18)

ix. We believe that more work needs to be done around the role of Monitor and the CQC to take into account, as appropriate, the following principles:

§ Regulation should not be reliant on targets, particularly national targets.

§ Care needs to be taken that the application of competition law does not militate against commissioners developing integrated care pathways.

§ That external regulation can never replace internal leadership and assessment of performance.

§ That Monitor’s remit as an economic regulator should be comprised of limited, clearly set out duties and that Government should be realistic about the number of objectives that pricing signals will deliver.

§ That price competition alone will not drive up standards, particularly in areas not covered by the National Tariff, and risks creating barriers to effective working with a range of partners.

§ That tariffs have to be continually adjusted and refined without increasing the likelihood of ‘gaming’ and allow more risk and gain sharing.

§ The regulatory approach should be risk-based and built on a principles-based approach.

§ There should be further efforts to improve the delivery timely and accurate information across the NHS.

§ The regulators need to carry out their functions without interference.

§ Clarity is needed around the statutory remit of each of the regulators to enable them to work successfully. (4.19)

x. We believe that data flows between commissioners and providers will need to be better than now for the reforms to be effective, tariffs to be robust and for the changes to deliver benefits for patients. (4.20)

xi. The proposed changes will mean that leadership at all levels will be vital and that many managers will need additional or enhanced skills to work in the new environment. (4.23)

xii. The NHS is multi-disciplinary. Managers have to be acknowledged as belonging to a discipline that is critical to a modern healthcare system (4.28) and it is perhaps the time to redefine the term "manager" and move away from the clinical/managerial divide that has bedevilled discussions internally and externally. (4.29)

xiii. A market approach needs to be applied with caution. Organisations will almost certainly want to seek flexibility in terms and conditions as a result of price pressures. This carries the danger that competition may disadvantage organisations and/or geographies, leading to fragmentation and local skill and resource shortages in a national service. (4.30)

xiv. The IHM will support other organisations in resisting any attempt to fragment the national control and application of clinical and social care standards of education, training and continuing professional development. (4.31)

Going forward

xv. The IHM recognises that its position is an interim one. The detail of the implementation plans will inevitably create other issues on which the Committee and the Government will no doubt be seeking – and we will be happy to give – our views. (5.1)

xvi. We will be more than happy to work with Government to help implement whatever changes emerge from this process successfully and for the benefit of users. (5.2)

INSTITUTE OF HEALTHCARE MANAGEMENT

RESPONSE TO THE HEALTH AND SOCIAL CARE BILL

30 March 2011

1. The IHM

1.1 The Institute of Healthcare Management (IHM) is the professional organisation for managers in health and social care in the UK with 3,923 members. [1]

1.2 Most of our members (59.1%) are employed within the NHS and work in primary and secondary care. Our primary care members work in GP practices and commissioning.

1.3 The remainder of our members are drawn from across social care, independent providers, health and social care consultants and the Armed Forces, crossing the clinical/managerial and commissioner/provider boundaries. We are therefore well-placed to comment on the impact and challenges arising from the Bill’s proposals.

1.4 Our focus is improving patient/user care wherever and whenever they need it. We believe that a critical route to this is through the promotion of excellence in healthcare management. We achieve this by publishing standards of management practice, the Management Code (behavioural and ethical aspects of management practice), our Accredited Manager Scheme and Professional and Educational Development framework.

1.5 Managers are vital to the current delivery of care and will play a vital role in delivering the changes. Our members specifically will do so with integrity, honesty and openness, probity, accountability and respect in line with our Management Code [2] and with the benefit of patients as their ultimate goal.

1.6 Ultimately, with their families and children, our members are also taxpayers and users of and stakeholders in the NHS and its services. They also want to see effective services delivered cost-effectively.

2. The background

2.1 The Health and Social Care Bill [1] was introduced on 19 January 2011 to give effect to the Government’s aims of putting patients first, focussing on continuous improvement and empower clinicians to innovate.

2.2 Through the provisions of the Bill, the Government intends to:

§ Establish an independent NHS Commissioning Board.

§ Increase GPs’ powers to commission services on behalf of their patients.

§ Strengthen the role of the Care Quality Commission.

§ Develop Monitor into an economic regulator for the NHS.

§ Cut the number of health bodies to reduce NHS administration costs.

§ Extend the role of Monitor to the provision of adult social care.

3. The context

3.1 The challenge for the NHS is putting in place the leadership and management capability to deliver £20 billion in efficiency savings by 2014-15 while implementing these radical changes.

3.2 The nature of Monitor’s new role will also be critical. The White Paper that preceded the Bill clearly set out that, like other regulators, Monitor should have "ex ante" powers to protect essential services and help open the NHS up to competition and be able to take "ex post" enforcement action. [1]

3.3 The Bill adds Monitor to the Competition Act 1998 and the Enterprise Act 2002. It sets out its primary duties, including the promotion of competition and the economic, efficient and effective provision of health and adult social care and desirability of securing continuous improvement. [2] It also sets out proposals for Monitor’s oversight of national tariffs and the possibilities of local modifications. [3] In all cases, the mechanisms remain unclear.

3.4 The BMA believes that competition, alongside rising costs (e.g. treatments, an ageing population, technology) and reform will be disastrous. It remains unconvinced that competition will bring benefits for patients. [4] The King’s Fund has expressed support for increased competition where it benefits patients, although it sees the Bill as promoting competition at the expense of collaboration and integration of services. [5]

3.5 The NHS Confederation [6] sees quick adjustments in prices as a major drive in successful markets and that the lessons of Payment by Results suggest that:

§ There is a limit to the number of objectives it is possible to pursue through pricing signals and tariffs have to be continually adjusted and refined.

§ Tariffs have to send clear signals to providers about what they need to do and be sufficiently high powered to make it worth responding but not so high powered as to create ‘gaming’ or other distortions.

§ Item of service tariffs are very effective if the objective is to increase the quantity of what is produced. New forms of tariff will be needed to allow more risk/gain sharing between commissioners and providers.

4. The Institute’s response

4.1 The IHM response covers the scope and speed of the changes, the role of sector regulation and the role of workforce regulation.

The scope and speed of the changes

4.2 Taken as a whole, the proposals represent the most sweeping changes to health and social care in England since the creation of the NHS.

4.3 They will increase the level of commercialisation across health and social care and create a market in which health commissioners will have greater freedom to provide services through any qualified provider.

4.4 We believe the proposals should result in greater clarity in the commissioner/provider relationship but that the evidence base for the changes and their benefits should be published. The SHAs and PCTs increased the complexity of accountability and budgetary control without always bringing benefits for patients or operational efficiency.

4.5 On the other hand, the creation of GP-led commissioning consortia alongside GP practices and GP-led provider consortia has the potential to ‘muddy waters’ and blur roles and accountabilities.

4.6 We also believe that whatever the strengths of the proposals, they are unlikely to deliver all the intended benefits without critical concerns being addressed:

§ The need for Government to lay out in advance what it considers to the correct measures of success of the reforms .

§ Doubts that the commissioning consortia will have all the skills and capability required to operate the new arrangements effectively.

§ Any rigidity in National Tariffs will reduce the ability of providers to respond to the needs of commissioners in terms of cost.

§ The need to emphasise outcomes and not inputs in the contracts between commissioners and providers.

4.7 We are also very concerned about the NHS’ capability to deliver the changes and against the planned timetable. The changes are in themselves radical and wide-ranging, while cutbacks are disorientating and only add to the challenges that managers will face. The cost reductions required in the first year alone are greater than the NHS has ever delivered but savings are needed over four consecutive years.

4.8 Whatever the final shape of the changes, it is vital that managers are involved in the NHS Commissioning Board and its regional offices. How arrangements are run in practice is as important a success factor as organisational and procedural structures.

4.9 The changes will require a paradigm shift in the underlying culture of the NHS, particularly if existing NHS staff provide the support to the consortia.

The role of sector regulation

4.10 As NHS services start to be delivered by a wider range of commissioners and providers, an effective regulatory regime becomes even more important.

4.11 The proposal for Monitor to become an economic regulator has attracted direct analogies with others. Indeed, the Secretary of State has confirmed that it will have "concurrent powers" with existing regulators. [1]

4.12 The King’s Fund has pointed out that the approach set out in the Bill places a heavy onus on Monitor as the economic regulator to oversee a step change in competition in the healthcare market. It sees the outcome as dependent on how Monitor interprets its duties and invokes its powers. [2]

4.13 We strongly advise that regulation is not a substitute for professional or managerial judgment. A tick box approach, reliant upon process and not outcomes, does not guarantee quality. W Edwards Deming saw a need to "...cease dependence on inspection to achieve quality...by building quality into the product in the first place".

4.14 There have been high profile examples of failures in inspection regimes. These include the failures in the Mid Staffordshire NHS Foundation Trust, where the inquiry report highlighted:

§ The high priority placed on the achievement of targets, creating a fear that failure to meet targets could lead to the sack. [3]

§ Evidence indicating that the Trust was more willing to rely on favourable external assessments of its performance than internal assessment. [4]

§ Independent scrutiny would help restore confidence in searching for and explanation of why appalling standards of care were not picked up. [5]

4.15 The report by Lord Laming into the case of ‘Baby P’ also identified key issues that needed consideration:

§ There remained significant problems in the day-to-day reality of working across organisational boundaries and cultures. [6]

§ Effective leadership sets the direction of an organisation, its culture and values, and ultimately drives the quality and effectiveness of services. [7]

§ Performance indicators were inadequate. They focussed on processes and timescales and their impact on positive outcomes was unclear. [8]

4.16 The range of regulators includes the utilities, postal services, aviation, financial services, pensions, fair trading and competition. The regimes are, however, linked by the duty to further and protect the interests of consumers.

4.17 The House of Lords Select Committee on Regulators reported on the regulatory process in November 2007. [9] Many of its findings relate to specific sectors and their regulatory bodies but a number dealt with principles that the Committee believed were more widely applicable:

§ Independent regulators’ statutory remits should be comprised of limited, clearly set out duties. [10]

§ Regulators should consider risk-based regulation more explicitly, particularly as a means of using resources more effectively. [11]

§ Regulators should consider the scope for replacing detailed rules by a move to a principles-based approach. [12]

§ Regulated industries need to recognise the need for regulators to receive timely and accurate information on their activities. [13]

§ A mechanism is needed for resolving potential policy conflicts so that regulators can carry out their function without interference. [14]

§ Clarity is needed around the statutory remit of a regulator to enable it to work successfully. [15]

4.18 It is therefore important that Monitor’s and the Care Quality Commission’s functions concentrate on outcomes, as well as inputs and cost, and emphasise continuous improvement. Providers should be able to deliver services of an acceptable quality within the limits of a National Tariff without an over-specification of how they deliver them.

4.19 We believe that more work needs to be done around the role of Monitor and the CQC to take into account, as appropriate, the following principles:

§ Regulation should not be reliant on targets, particularly national targets.

§ Care needs to be taken that the application of competition law does not militate against commissioners developing integrated care pathways.

§ That external regulation can never replace internal leadership and assessment of performance.

§ That Monitor’s remit as an economic regulator should be comprised of limited, clearly set out duties and that Government should be realistic about the number of objectives that pricing signals will deliver.

§ That price competition alone will not drive up standards, particularly in areas not covered by the National Tariff, and risks creating barriers to effective working with a range of partners.

§ That tariffs have to be continually adjusted and refined without increasing the likelihood of ‘gaming’ and allow more risk and gain sharing.

§ The regulatory approach should be risk-based and built on a principles-based approach.

§ There should be further efforts to improve the delivery timely and accurate information across the NHS.

§ The regulators need to carry out their functions without interference.

§ Clarity is needed around the statutory remit of each of the regulators to enable them to work successfully.

4.20 We believe that data flows between commissioners and providers will need to be better than now for the reforms to be effective, tariffs to be robust and for the changes to deliver benefits for patients. The issue of data quality has already been identified by the Audit Commission. [16] It has identified HRG error rates of between 0% and 28% [17] (a quarter of trusts averaging 12%) [18] and clinical coding errors at an average of 11.3% in 2009/10. [19] It also saw scope for commissioners improving their contract management and monitoring arrangements. [20]

4.21 It also has also demonstrated that the quality of submissions underpinning PbR tariffs was variable. Basic quality checks on the data were often lacking and the quality of reference cost submissions needed to improve. [21] All these issues are about quality but we are aware that, in many Trusts, timeliness is also a critical issue.

The role of workforce regulation

4.22 The scale and speed of the changes and the potential for fresh regulatory approaches will have a significant the impact on the workforce.

4.23 The proposed changes will mean that leadership at all levels will be vital and that many managers will need additional or enhanced skills to work in the new environment. The shape of the consortia is still unclear and the Institute of Commissioning Professionals sees the current challenge as determining what good leadership of a consortium will look like. [22]

4.24 Even before the Bill, a survey for Skills for Health had identified that directors and managers saw re-skilling, training and staff development as the most pressing concern for health workforce managers, ahead of budget cuts or maintaining service quality during organisational change. [23]

4.25 The survey also identified which workforce development solutions and support could best help them over the next year. Responses included:

§ Greater availability of standardised training for emerging roles.

§ Cost-effective tools and guidance to support workforce transformation

§ Training and advice to help managers deal with organisational change

4.26 The emphasis on standardised training chimes with the BMA’s concerns that "...appropriate national oversight of key issues such as education, training and workforce" [24] is needed to reinforce what it sees as the founding principles of a national service delivered in a "...cooperative and coordinated environment...". [25] The Royal College of GPs, more supportive of the aims of the Bill as a whole, has doubts around the destabilisation of the NHS. [26]

4.27 Clearly these concerns are in the context of the education and training of clinicians. For managers the position is slightly different. A range of bodies delivers training and accreditation across various disciplines. We believe that these provide national, sometimes international standards. The IHM provides the health and social care-specific training and accreditation expertise.

4.28 The fact remains that the NHS is multi-disciplinary. Managers have to be acknowledged as belonging to a discipline that is crucial to a modern healthcare system. Similarly, back office functions, e.g. ICT, booking systems, medical records and bed management, provide vital support to frontline staff without which services would simply not be delivered.

4.29 It is perhaps the time to redefine the term "manager" and move away from the clinical/managerial divide that has bedevilled discussions internally and externally. The current proposals will put clinical staff into clear leadership roles but managers will also need to lead to implement the changes successfully.

4.30 A market approach needs to be applied with caution. Organisations will almost certainly want to seek flexibility in terms and conditions as a result of price pressures. This carries the danger that competition may disadvantage organisations and/or geographies, leading to fragmentation and local skill and resource shortages in a national service.

4.31 The IHM will support others in resisting any attempt to fragment the national control and application of clinical and social care standards of education, training and continuing professional development.

5. Going forward

5.1 The IHM recognises that its position is an interim one. The detail of the implementation plans will inevitably create other issues on which the Committee and the Government will no doubt be seeking – and we will be happy to give – our views.

5.2 We will be more than happy to work with Government to help implement whatever changes emerge from this process successfully and for the benefit of users.

March 2011

References