Public Expenditure - Health Committee Contents


Memorandum by the Royal College of General Practitioners (PEX 21)

EXECUTIVE SUMMARY

  1.  I write with regard to the Health Committee's inquiry into public expenditure. The RCGP welcomes the Government's commitment to the NHS. However we recognise that significant efficiencies will still be required. Current resource allocation will need to be reconfigured with greater emphasis placed on community and social care than is currently the case. GPs have a significant role on this.

OVERVIEW

  2.  The Royal College of General Practitioners is the largest membership organisation in the United Kingdom solely for GPs. It aims to encourage and maintain the highest standards of general medical practice and to act as the "voice" of GPs on issues concerned with education, training, research, and clinical standards. Founded in 1952, the RCGP has over 42,000 members who are committed to improving patient care, developing their own skills and promoting general practice as a discipline.

  3.  The College welcomes the opportunity to give evidence to the Health Committee's inquiry. It is impossible to escape the implications of reduced public spending, but the reality of reduced funding must not be allowed to cloud the fact that providing care for patients is the top priority of the health service.

  4.  At the heart of general practice is the relationship GPs have with patients. We provide them with lifelong care. Patients want personalised care from a GP they know and who knows them. This is the best, most cost-effective way to deliver health services—GP care for a whole year costs less than a single day's hospital admission.

  5.  The RCGP recognises that an effective way to cut costs is to treat more patients in the community and to reduce unnecessary hospital treatment. Making the shift to treating more conditions in the community will require all parts of the health service working together. This is outlined in a Joint Statement from the RCGP and the Royal College of Physicians Making the best use of doctors' skills: a balanced partnership.[30] Doctors must be encouraged to work together across traditional boundaries to meet the needs of patients.

RESPONSES TO SPECIFIC QUESTIONS

Strategic Assessment

    — What level of commitment is national government making to the NHS, and how does it compare with long term trends of demand, cost and efficiency?

    — What are the implications of the "£15-20 billion efficiency challenge" described in the Revised Operating Framework for the NHS as "absolutely critical for the future"?

    — What commitment is the government making on capital expenditure as opposed to revenue expenditure?

    — What level of commitment is national and local government making to Social Care, and how does it compare with long term trends of demand, cost and efficiency?

    — What are the implications of the government's plans for the interface between the NHS and Social Care?

  6.  The RCGP welcomes the commitment made by the government to the NHS. The coalition government has placed great emphasis on its commitment to the NHS in its plans and has ring-fenced its budget. Despite the government's commitment[31] substantial efficiencies will still be required.

  7.  The revised operating framework for the NHS[32] reaffirms how the NHS in England has been tasked with making £15-20 billion efficiency savings from 2011-14 with a focus on improving quality and efficiency simultaneously. To meet this the NHS has identified that there needs to be a focus on Quality, Innovation, Productivity and Prevention (QIPP). Proposals for new ways of working or service redesign should demonstrate how they meet the QIPP challenge if they are to be successful.

  8.  These aims cannot be met under the current methods of interjecting intermediate services and making savings on the margin of the number of referrals. The change required is broader. If £15-20 billion of savings are to be made, the needs of patients currently requiring referral need to be met in other ways: either by redesign of services to lessen unplanned hospital input, by earlier intervention in the community, or (if appropriate) by improved knowledge of both doctor and patient that enables more effective prevention of referral.

  9.  Additionally savings will need to be delivered in hospital care. It is the main part of the NHS able to deliver the bulk of the savings required. However it will need to concentrate on procedures of limited effectiveness, if it is not to stop worthwhile procedures. The implication is that referrers will have to target procedures to those most likely to benefit. Protocol based services are not good at this and therefore it is necessary to roll back on current policy and encourage GPs to target referrals at the individuals most likely to benefit. That produces a profound change in policy and leads to reductions in employment of intermediate services and those performing the unnecessary procedures in hospitals.

  10.  The King's Fund and Institute of Fiscal Studies' (IFS)[33] examination of the impact of the economic crisis on NHS spending from 2009 contends that government estimates of an efficiency challenge of £15-20 billion are somewhat under estimated. They compared likely funding with the original funding estimates produced by Sir Derek Wanless in his 2002 report. Here estimates are in the range of £21-30 billion.

  11.  The King's Fund[34] revisited this study again recently following the change of government. They highlight how critical decision areas for commissioners will relate to allocation of resources and improving health outcomes from existing budgets. They argue that focus should be on reducing spending on low-value interventions; integrating care between health and social care boundaries; and redesigning patient pathways to avoid unnecessary hospital episodes.

  12.  This strategy is also echoed by the Nuffield Trust who state that in the short to medium term the biggest efficiency savings could be made in hospital services. For example, through reducing preventable emergency admissions. (Dixon, 2010;[35] Blunt, Bardsley & Dixon, 2010)[36]

Interface between health and social care

  13.  The Coalition Agreement states that[37] "we will break down barriers between health and social care funding to incentivise preventative action". In addition, they have established a commission on long-term care. However, it is uncertain how this will impact on the funding allocation.

  14.  Preventive action is said to reduce cost, however it does not always do this. First, there are costs to saving premature death and putting patients into chronic disease management programmes as they still need care but it is delayed a few years. Secondly, some programmes have been successful but admissions have still risen, for example, cardiovascular disease where the premature death rate has halved but admissions have risen not fallen due to early intervention and the change to encouraging all undiagnosed chest pain to go to hospital.

  15.  The Government's commitment to social services will hopefully be greater understood by the forthcoming proposals for the future funding of social care and the white paper on public health later this year. It is hoped that greater clarification on the additional remit of local authorities will be provided.

  16.  The RCGP believes that integrated working between primary and social care is important to ensure a joined-up and holistic approach is taken to the delivery of care in the community and the effective reduction of health inequalities. This is particularly important in areas such as end of life care, substance misuse, care of the elderly and mental health services where a high proportion of patients will have co-morbidities requiring non-medical interventions that could be facilitated through the development of an integrated care plan.

  17.  If more people with debilitating illness are treated in the community, then social care will need to reorganise, with closer working with local practices and GP consortia. It is currently focussed on the hospital sector because demand from community is lower.

Centrally funded health services

    — What proportion of the health budget is "top-sliced" (ie reserved for central disbursement by the Department of Health or NHS—and not allocated to PCTs)?

    — What services are procured from this "top-sliced" budget, and how do the government's plans for those services compare with long term trends of demand, cost and efficiency?

  18.  The greatest proportion of Department of Health expenditure is spent directly on the NHS with 80% of the NHS budget spent through PCT allocations.[38] (For example, approximately £80 billion of the Department of Health's £99.8 billion budget was initially allocated to PCTs for 2009-10.) Of the health budget that is "top-sliced"' it is variously allocated to services such as: arm's-length bodies, connecting for health, research and development, NHS Litigation Authority, vaccines and pharmacy. Arm's-length bodies have already been ear marked for cuts and reform.

  19.  The principle of the reform of the NHS is to give responsibility to the user of resources. For the community, that is the GP. GPs will need to manage other community referrers. However for tertiary care, secondary care is the referrer. The move to paediatrics and maternity as separate services means that GPs will find it difficult to control these budgets. These referrers will need training and introducing to budgetary responsibility unless these budgets are also given over to GP commissioners.

  20.  Highly specialist services will have to be purchased separately if it is felt that the service they provide is of value. Of all services these cost the most and deliver the least in population health.

Resource Allocation within the NHS

    — How is the formula for allocation of NHS resources between PCTs constructed and reviewed?

    — What arrangements exist to "cushion" resource shifts implied by the allocation formula?

    — What is the impact of this system on the budget allocations of a representative sample of PCTs?

  21.  The underlying principle of the formula[39] for allocation of NHS resources between PCTs is to distribute resources based on the relative needs of each area. This is to enable PCTs to commission similar levels of healthcare for populations with similar healthcare needs, with the further helping to reduce avoidable health inequalities. The formula covers three main components: hospital and community health services; prescribing and primary medical services.

  22.  Currently PCT expenditure roughly breaks down as follows: hospital services account for approximately 65%; primary care accounts for about 11%; prescribing 12% and community services 9%. (Dixon 2010).[40]

  23.  The allocation of budgets and the variation each year is troublesome. It is a difficult and inexact science. The long term healthcare of populations cannot be turned on and off. The system currently is not that good but a doctor is not going to be able to fix that. The system will need to address the existing problem of variable distribution within PCTs.

  24.  We believe that the way that resources are allocated should be closely linked to deprivation and health need. We believe that the number of patients with major chronic illness, the numbers in nursing homes and other factors are reflective of health need and deprivation, and should be considered within the allocation of budgets.

Locally commissioned health services

    — What are the implications of the government's top-slicing decisions for the budgets for locally commissioned health services? How do the resulting budgets compare with long term trends of demand, cost and efficiency?

    — What proportion of locally commissioned health services are absorbed by services which are:

    —  Demand-led according to nationally prescribed formulae?

    —  Driven by demand for emergency or urgent care?

    —  Available for elective or non-urgent services?

    — What scope exists for locally commissioned health services to manage demand, cost and efficiency to increase the resources available, in particular, for elective and non-urgent services?

  25.  Scope for the management of demand, cost and efficiency potentially lie in a number of areas. For example, shifting care from hospital to community settings, self-care for minor ailments, further reducing waste in the NHS and avoiding duplication. Equally greater integration of services may also reduce avoidable costs.

  26.  In relation to the proportion of locally commissioned health services driven by emergency or urgent care, it is difficult to obtain exact data on this, as it is not routinely collected. It is estimated that non-GP referrals, principally emergency represent 74% of non elective admissions locally.

  27.  As Dixon (2010)[41] who points out there are still significant levels of waste in the NHS that can be reduced. For example, there continue to be unaccountable variations in clinical practice; there have been significant rises in emergency admissions to hospital for patients with conditions amenable to primary care and for admissions with zero length of stay.

  28.  However it is not known if the problem is provider pull or referrer push. The system creates incentives for provider pull. The number of emergency admissions have been rising significantly. A study by the Nuffield Trust[42] found that the overall number of emergency admissions in England rose by 11.8% over the five-year period 2004-05 to 2008-09.

  29.  Currently there is limited ability to control this activity. Robust data and clinical review are required, however Trusts do not collate this data at present. As discussed earlier, referral management needs to be addressed. However it is usually applied to elective not acute activity. It is usually GP not other. The best trained and qualified referrers are subject to review whilst the largest part of the referrers are not. These are new and inexperienced referrers as well. Despite these concerns it is difficult to see how real time review of acute casualty referrals can be introduced. It would be preferable to intercede by referral education.

  30.  There is scope to manage demand, cost and efficiency by shifting care from hospital to community settings. There has already been a considerable shift of care into the community in chronic disease management. The care of many diseases, such as, hypertension, ischaemic heart disease (IHD) and diabetes has largely moved from outpatients to the community. The problem is that resources have so far not followed which needs to be addressed.

Social Care Resource Allocation

    — What is the expected impact of the local authority settlement on social care budgets?

    — How does the local government funding formula reflect differential demand for social care services in different areas?

    — What is the impact of this system on the budget allocations of a representative sample of social service departments?

  31.  The RCGP[43] has previously stated that the care and treatment of those who are significantly sick should be state funded; otherwise those without financial resources are likely to be disadvantaged. Dementia care should be a priority within nursing home care. However, a balance should be struck between clinical, treatment based care and non-treatment based holistic care. We must avoid an over-reliance on technical or drug-based solutions, especially if this at the expense of person-orientated care. The latter can be far more important and effective for many patients, and resources should be allocated with this in mind.

  32.  Social care has embraced commissioning and any willing provider better than health care. It has something to teach in this area.

Social Care Services

    — What scope exists for social care services to manage demand, cost and efficiency within constrained budgets?

    — What are the implications of social service budgetary pressures on the interface between health and social care services in a representative sample of areas?

  33.  Social care budgets are tight now. It is likely that they will become tighter with increased demands and pressures on them. Without sufficient resources there will be pressure to admit and an increased risk of bed-blocking as local authorities struggle to cope with increasing calls on limited social services budgets. Hospitals then become the only resource to deal with desperate situations; and they will be used Intermediate nursing services are required to avoid pressure on admissions. The way quality is assessed and the views of regulators profoundly affect this.

CONCLUDING COMMENTS

  34.  As pressure increases on the NHS and social care services budgets it is ever more essential that services are delivered as efficiently as possible. This will entail greater use of community services and GPs are well placed to deliver this.

October 2010







30   Making the best use of doctors' skills: a balanced partnership. A joint statement from the Royal College of General Practitioners and the Royal College of Physicians on how specialists and generalists can work together for the benefit of patients in the NHS. http://www.rcplondon.ac.uk/news/statements/jointRCPGP.pdf Back

31   The coalition agreement commits to increases in health spending in real terms in each year of the Parliament. Back

32   Revision to the Operating Framework for the NHS in England 2010-11 http://www.dh.gov.uk/prod_consum_dh/groups/dh_digitalassets/@dh/@en/@ps/documents/digitalasset/dh_116860.pdf Back

33   Appleby J, Crawford R, Emmerson C, How cold will it be? Prospects for NHS funding: 2011-17. London: The King's Fund, July 2009. http://www.kingsfund.org.uk/publications/how_cold_will_it_be.html Back

34   Appleby J, Ham C, Imison C, Jennings M. Improving NHS productivity: More with the same not more of the same. London: The King's Fund, July 2010. http://www.kingsfund.org.uk/publications/improving_nhs.html Back

35   Dixon J. Making Progress on Efficiency in the NHS in England: options for system reform. London: Nuffield Trust, June 2010 http://www.nuffieldtrust.org.uk/publications/detail.aspx?id=145&PRid=713 Back

36   Blunt I, Bardsley M and Dixon J, Trends in Emergency Admissions in England 2004-09. London: Nuffield Trust, 2010 http://www.nuffieldtrust.org.uk/publications/detail.aspx?id=145&prID=714 Back

37   The Coalition: Our programme for government. London: Cabinet Office, May 2010. http://www.cabinetoffice.gov.uk/media/409088/pfg_coalition.pdf Back

38   Department of Health: Departmental Report 2009. http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_100667 Back

39   Resource Allocation: Weighted Capitation Formula (Sixth Edition) London: Department of Health, December 2008. http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_091849 Back

40   Dixon J, Making Progress on Efficiency in the NHS in England: options for system reform. London: Nuffield Trust, June 2010 http://www.nuffieldtrust.org.uk/publications/detail.aspx?id=145&PRid=713 Back

41   Dixon J, Making Progress on Efficiency in the NHS in England: options for system reform. London: Nuffield Trust, June 2010 http://www.nuffieldtrust.org.uk/publications/detail.aspx?id=145&PRid=713 Back

42   Blunt I, Bardsley M and Dixon J, Trends in Emergency Admissions in England 2004-09. London: Nuffield Trust, 2010 http://www.nuffieldtrust.org.uk/publications/detail.aspx?id=145&prID=714 Back

43   RCGP Response to Health Committee Inquiry on Social Care. October 2009. http://www.publications.parliament.uk/pa/cm200809/cmselect/cmhealth/1021/1021we28.htm Back


 
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Prepared 20 December 2010