Commissioning - Health Committee Contents

Examination of Witnesses (Questions 245-279)

Professor Chris Ham, Dr Jennifer Dixon, Professor Gwyn Bevan.

16 November 2010

Q245 Chair: Thank you very much for sitting through the last evidence session, which I am sure will inform to some degree the discussion during this session. Would you like to introduce yourselves briefly, please?

Professor Chris Ham: I am Chris Ham, Chief Executive of The King's Fund, and I have a Chair in Health Policy and Management at the University of Birmingham.

Dr Jennifer Dixon: I am Jennifer Dixon. I am Director of the Nuffield Trust, a research think tank, and I am a physician by training, a former adviser to the NHS Chief Executive Sir Alan Langlands, and a member of the Audit Commission.

Professor Gwyn Bevan: I am Gwyn Bevan. I am a Professor in the Department of Management at the London School of Economics. I was an early advocate of giving budgets to GPs. In 1988, we tried in Wales to get a pilot experiment in which we gave GPs budgets for buying all of healthcare and it was blocked by the local medical committee at that time.

Q246 Chair: I would like to begin, if I may, by asking each of you to answer the question that I opened the previous session with. The purpose of our inquiry is to examine the Government's proposals set out in its White Paper against the test, "Will this deliver effective empowered commissioning?", and in particular to ask ourselves the question whether this is consistent with the changes required in the health service during the next four years against the background of the comprehensive spending review. So it is a two­part question really. Is the concept right, and does it reinforce the management of the health service in the short to medium term? Professor Ham?

Professor Chris Ham: I think the concept is basically right in the sense that we need greater clinical and GP involvement in commissioning than we have had in the past. There is evidence, as your previous witnesses have said, from studies that have looked at fundholding and total purchasing, that when it is done well it can bring innovation and help to contribute to more patient­centred care and greater efficiency. For those reasons, moving in this sort of direction is something the King's Fund has welcomed, but it relates to the second part of your question, which is that there are always risks associated with a big reorganisation and change of this kind because for a couple of years at least the people involved in that reorganisation are distracted from the core business. While they are reorganising the structures, the focus on improving care for patients and getting better efficiency will often take, sadly, second place. We need to be cognisant of that risk, particularly at a time when the NHS is having to find this £15 billion to £20 billion that David Nicholson has spoken of—the QIPP challenge. To reorganise the structure, take out 45% of management costs, replace PCTs and SHAs with GP commissioning, and to improve patient care and find £15 billion to £20 billion in cash-releasing efficiency savings seems to us to be a huge ask of the NHS at a very challenging time.

That is accentuated by the necessity of creating—quite rightly, in terms of good management—some degree of risk pooling to deal with provider failure on the one hand and the possibility of commissioner failure on the other hand, because while there will be really good GP commissioners they will not all be terrific and there will be some that will probably need some support if they don't manage their finances well. Inevitably, if you are creating risk pools out of a fixed budget, you are taking money out for that contingency that otherwise might be put into direct patient care. That might be too detailed a point for the Committee, but it is something of which we are increasingly aware.

Dr Jennifer Dixon: I think I agree with all of that. I think it is too risky—too much, too soon. We know what we get with GP commissioning because we have 20 years of evidence.

I would put a different gloss on the evidence to Julian, having been involved directly in evaluating both fundholding and total purchasing. Fundholders were small, they took off, they had budgets for easy services, elective care, pharmacy and outpatients. It took seven years for 50% of practices to be interested in it, and even then, they had quite strong incentives to be interested in it—more than practice-based commissioning groups because they were able to set up limited companies and vire money from hospital care into GMS. Total purchasers were also quite slow but had some positive results. But for both those sets of groups, they were able to do more by boosting up primary care. They had very little impact on hospital care. In particular, the big challenge for efficiency is emergency care and medical care, care of the dying, older people and people with chronic conditions. There, total purchasing and fundholding had practically no impact whatsoever. Practice-based commissioning, as others have said, was pretty inert. The incentives were lukewarm and it hasn't gone anywhere. It has been a disappointment.

To do this at the same time as there is this huge financial pressure and when the people who will hold the hands of—mixed metaphor—or give birth to the baby of GP commissioning are disappearing is high risk. I think, at best, it could be pretty inert. The whole principle of putting clinicians closer to decisions and responsibility for budget is absolutely the right one. That is the nub of the White Paper and it is a good one, but to enact it in this way is highly risky.

Professor Gwyn Bevan: I absolutely agree with what has been said. The attraction of involving GPs with budgetary responsibilities, and the reason why I was attracted to it, is that we have a formula that gives money to populations and we have to involve people in managing resources for those populations. The obvious building block for that is general practitioners and general practices because they have defined populations and all other administrative bodies are artefacts. But the experience, both here and in the United States, is that it is terribly difficult to get that to work. My very good friend Julian is from the same institution, and he and I have disagreements from time to time. But the experience I have, both looking at the evidence of GP fundholding, and also because I was involved with the evaluation of total purchasing, is that as others have said many times, a few do it tremendously well. I am sure some GP consortia will be absolutely fantastic and beacons and put the PCTs into the shade, but the real trouble, of course, is managing to raise standards across the whole of the National Health Service. For that, this just seems terribly risky.

The truly alarming prospect here, as Jennifer and Chris have said, is that we have five years of severe financial restraint. We have something like three years of tumultuous reorganisation in which I am not sure who is looking after this, and then it will take two to three years for the new reorganisations to bed down. Over this five years, when there is this huge financial pressure, we just don't seem to be well equipped to respond to it.

Q247 Chair: Sarah is going to come in, but can I just ask one specific question, which arose really from the last session as well as from the answers you have just given? It addresses specifically the evidence available of what results from GP­led commissioning in its various forms. Would it be fair to say that the evidence is primarily around relatively simple transaction­based activities—prescribing, elective care, referrals and so forth—rather than the more complex issues around emergency care and around pathways involving, in particular, long­term conditions? Is there any evidence, good or bad, of GP­focused commissioning delivering significant change to those more complex issues?

Professor Chris Ham: The way I would respond to that is twofold. One is that most of the evidence, as you say, is about the benefits you get from GP­led commissioning around elective planned care bringing more services into the practice than would otherwise be the case, because those are the bread and butter issues that are of most concern to most GPs in their day to day work in their practices. The more complex things around how you organise stroke services across a city so that you concentrate them to get better outcomes, or how you reorganise children's services, as has happened in Manchester after many years of debate and discussion, are not issues that most GP commissioners will have much expertise, appetite or confidence in engaging with. You need an organisation, which is the local, we would call it, system leader taking that strategic view, and able to work across a very complex set of hospitals and other organisations, to bring about those kinds of benefits.

But the other way of answering the question is this. Both Jennifer and I in our respective institutions have looked at the US experience, because there are a lot of examples in the States where, if you capitate medical groups—these aren't just GPs; they are GPs and specialists—what results do you see? And you do see, from the managed care era, that the incentives in that arrangement do encourage physicians controlling budgets to look at how they can avoid avoidable emergency admissions to hospital and deal with more complex patients by putting in place case management and services in the community to deliver those sorts of results.

The caveat is that they often do so with very generous management allowances, much more so than seems to be the case for the emerging GP commissioning consortia, and they invest hugely in developing their GPs to take on the key leadership roles to make that happen. It takes them many, many years from a standing start to be able to do so. One of the issues that is of concern is the speed at which these ideas are being put in place. They are moving in the right direction, but it is hugely ambitious to do so this quickly.

Dr Jennifer Dixon: I think your assessment is correct. I would just add a couple of things. The first thing is that some total purchasing pilots did actually track patients and arrive at the house when the ambulance came in order to go to hospital, or to decide that the patient didn't need to go to hospital, or tracked an older person around a hospital by putting a nurse in, paid for by the practice, to try to get them out as quickly as possible because that was better for the patient and efficient. So there were some sporadic examples of that. There is some evidence, but it is weak, that they then made some dent in the upward rise of emergency admissions. It was not strong evidence, but there was some suggestion in the early days that that is what happened.

The other thing that total purchasers and fundholders did was that they spent a lot of time building up primary-care­type activities over which they had more control than the hospital, to boost some of those activities. But as Chris said, the big thing that is going to sweep us is the need to close down hospital beds, effectively, or whole institutions, and there is no evidence that practice­based commissioning or anything from fundholding had any influence at all on that big issue.

The other thing was that they didn't really engage with hospital clinicians, which they need to do to get patients out of hospital. There is very little email contact; there is very little phone contact. It's the 1948 Berlin Wall—still there, outside of a few specialties. If we are going to really make these efficiency savings, we have simply got to get over the contractual, budgetary, cultural, training and governance divide that separates general practice from primary care. So this is a provider issue, not necessarily a commissioning issue.

Professor Gwyn Bevan: I strongly support what Jennifer has said and there is the great division in British medicine between general practice and specialist care. One of the early studies in the 1960s showed how they communicated by mail only. It was an observation that Alain Enthoven made in 1985 and it is what strikes American visitors today.

On the point about more structural change, when we were doing this evaluation of total purchasing, I remember vividly a discussion with one hospital that relates to the point Julian Le Grand made that GP fundholders were able to move money around between hospitals. They said, "We are very happy to give them the average price for moving money around because that is a limited part of our budget, but once they move into the whole of hospital care it is destabilising to let that happen." They found it much harder to do the sort of structural changes that we are talking about.

Q248 Dr Wollaston: We have heard from several witnesses about integrating health and social care, providing the best model for savings and also delivering better care; there are some very successful pilots around the country, in Torbay, for example. Do you think the White Paper puts models like that at risk or do you think it is likely to make it more likely to be deliverable, and do you see the loss of coterminosity as being a really serious threat, and, again, the issue of a rigid commissioner/provider split?

Q249 Professor Chris Ham: I think there are risks, inevitably, when you go through this kind of structural change with the established partnership arrangements. I know Torbay very well, and they have been working at integration of health and social care, particularly around frail older people, with really excellent results for many, many years. But it is based on the care trust now being in place and the formal arrangement between the NHS and the local authority.

If I can generalise from that particular example, there are many of those formal partnership arrangements in England under the Health Act flexibilities. They take different forms and they are all based on the primary care trust and the local authorities having signed up to formal statutory arrangements. I am not aware of what the plans are for the future of those formal partnership arrangements. If GP commissioners, for example, say, "Actually, we think there is a better way"—I know some GPs in Torbay would say, "We want the nurse attached back to our practice rather than working in this integrated health and social care team for a locality"—they may want to move away from what they have achieved. For them, it might be a different model.

The answer is we don't really know what is going to happen to health and social care integration. We do know that there are likely to be some risks because of the structural change. I think a lot will hinge on the new health and well-being boards that are going to be set up under the White Paper, the stronger role that local authorities will have there, how they engage with these nascent GP commissioning consortia, and whether they are able to take forward those partnership arrangements in a positive way and not lose some of the really good examples out there.

Q250 Dr Wollaston: Would it have been your preference to have built on existing models of good practice?

Professor Chris Ham: Absolutely. I think many of the laudable objectives set out in the White Paper, around patient­centred care, better quality and better outcomes, could be achieved through evolution, not revolution. In the example that Jennie Popay gave earlier—again, I know this from personal experience—in Cumbria, which the Secretary of State is fond of referencing in support of his policies, they are already doing, through the existing PCT practice­based commissioning arrangements, what the White Paper would like to see done across the whole of England under the current system. If you go to Cumbria, if you go to Torbay and you can see the White Paper ambitions being delivered, surely we could get there more generally without the risks associated with such a "big bang" radical reform.

Dr Jennifer Dixon: I agree with all of that. Coterminosity is a loss if it undermines integration of health and social care. The White Paper is pretty opaque, as Chris says. Some of the issues about GP consortia forming seem to be based on their affinity for one another, and for me that is almost a coda that practices who don't necessarily get on don't have to join the same club. But there is the actual rub, because to have a step change in the quality and commissioning of general practice you really need to manage GPs. GPs need to be managed. It is very difficult, as we know, within a practice to manage other partners, let alone to manage across a consortium. I think that is the thing that needs to be tackled more than anything else.

Professor Gwyn Bevan: I agree with what is behind your question, which is that I think now there must be doubt about the efficacy of the purchaser/provider split. Other countries have gone away from this and abandoned it, although they started this in the 1990s, and integration—the sort of thing that Alain Enthoven talked about when he talked about GPs and specialists working alongside each other, sharing notes and all that sort of thing—you just think that must be better.

On the point about coterminosity, I remember vividly when I was at the Commission for Health Improvement that we were trying to look at how we could assess mental health care. With the move to community care, these have become large organisations so one was covering two counties, which meant it dealt with a number of local authorities and a different number of primary care trusts, and it just found it horrendously difficult to co-ordinate health and social care plus mental health.

Q251 Rosie Cooper: Have any of you been consulted by the coalition or made any submissions to them in the development of this White Paper?

Dr Jennifer Dixon: Not directly.

Professor Chris Ham: We have made submissions. We responded to the White Paper.

Q252 Rosie Cooper: Yes, but not before the White Paper, i.e. to the coalition Government in their thinking in outlining what is going on.

Dr Dixon, I have four quick points and the fourth one you have already answered, which is that it is really difficult to manage any group of people, particularly doctors, all independent contractors, and not necessarily agreeing with them, and then from the consortia upwards having a long distance to the Commissioning Board.

To come to the two real questions I would like to ask, the first is the danger of PCT implosion, which is right on our doorstep now. The Secretary of State, and indeed Sir David Nicholson, talked to us about the time between now and 2013, which would enable consortia to get up and running, and the PCTs and strategic health authorities will be there to support them. I would suggest there is an almost imminent implosion there. What do you think the consequences will be? And could you perhaps address conflicts of interest in discharging the commissioning role within consortia and how that should be addressed?

Professor Chris Ham: I think there is a risk around the impact on PCTs because as we are already seeing, especially in London—this will be the best example—the NHS has said that it wants to move more quickly to winding down PCTs, the rationale being to free up some resource to invest in GP commissioning consortia to enable them to develop more quickly and to take over the responsibilities of PCTs. But effectively it means that the existing PCTs will cease to exist in all but name from March, and we are talking about March/April 2011, not 2013, and the arrangements in London will then be based on sectors, so five or six PCTs will be having to take on that responsibility.

Inevitably, middle and senior managers in those organisations will be thinking about their own personal futures. We have a lot of people in the NHS who thought they were coming in for a career, a job for life, who are now thinking about their mortgages, their financial commitments and their families, and how all that is going to work when management costs are being taken out. It wouldn't be surprising, therefore, if PCTs, whatever form they take in the interim, were losing a lot of the talent and the experience and expertise they need to manage the transition effectively. That is what I think David Nicholson has been arguing for the last six months in his two major letters to the NHS on managing the transition well to avoid the "implosion", to use your word, and to ensure that that transition occurs as smoothly as possible. So I think you are absolutely right.

On the conflicts of interest, that is a very negative way—I know it's the phrase that's being used—of talking about some of the issues around GP commissioners. I put it more positively. I think the interesting issue here is that the Government are saying, "We are going to put the main primary medical care providers in charge of commissioning", at the same time as the Government are saying, "Actually, we want to make sure there is a real separation between commissioning and provision." There's a kind of gap in their logic there, isn't there? And what you would say, potentially, is you can use that to your benefit, because if GPs have the ability to provide as well as to commission, it gives them the opportunity to make, not just buy. A lot of the GPs we have talked to at The King's Fund say the big prize around commissioning is not writing more detailed contracts with big acute hospitals and getting them to be more efficient; it is the opportunity to use control over commissioning to develop more services in the practice, in the community, to avoid those avoidable admissions. Sometimes that will involve practices working together with the community and nursing staff, with social care, to develop better models of provision in the community.

Q253 Rosie Cooper: I don't demur from that. I think we have to deal with the perception that there is a really big conflict of interest and that any "profit benefits" are actually for the health service and not for the consortia and the practice.

Professor Chris Ham: If you follow through the logic of that, one response would be, therefore, we need a very open, proper competitive tendering process. Any contract that a GP commissioning consortium wants to let has to go through standard procurement rules. I hope none of us wants to see that, because you would end up with telephone directory documentation around making sure there is fair play and you avoid those conflicts of interest. There needs to be a better, simpler and more transparent way of avoiding the legitimate concerns that people have while ensuring proper accountability.

Q254 Rosie Cooper: On the boards of consortia?

Professor Chris Ham: Through the mechanisms that consortia have to use in deciding how to use their funds, which would include the governance arrangements, as yet to be defined.

Q255 Chair: It does also leave open the question, doesn't it, of how you deal with the areas that we were hearing about earlier where primary care isn't currently innovative, cutting edge, likely to rise to the kind of challenge that you describe. You describe what an effective primary care commissioner does, but the next question is who commissions the primary care commissioner?

Professor Chris Ham: Indeed. If you say that the problems with the NHS and performance require more choice and more competition to avoid provider capture, shouldn't the logic be, well, maybe choice of competition should apply on the commissioner side as well as the provider side rather than ending up with geographical monopolies of GP commissioners? There are big debates there, but you can see the logic.

Professor Gwyn Bevan: I have been working with a scholar in the Netherlands on the development of their model of insurer competition there. I am enthusiastic for more integration between primary and secondary care because the evidence is that that is beneficial. But we also know in the United States that there are models of these fantastic high-performing organisations like Kaiser Permanente, but when they tried to spread that in the 1990s it failed and there was this backlash against managed care, with some of them being dysfunctional. The troubling thing is that if we were to move away from the purchaser/provider split towards integration, which I favour, but you didn't allow people choice, then they could be stuck with a truly dysfunctional organisation. Although when Alain Enthoven proposed an internal market he wanted the Kaiser Permanente model in England and thought choice would be politically unacceptable between them, I now think, given the evidence we have in the 1990s, that is undesirable.

In the Netherlands they have moved towards insurer competition, but it is a quite complex process to get right, with a sophisticated regulatory regime, and it took them 20 years to do it. It may take even longer than Martin Roland's two Parliaments if we want to do it.

Dr Jennifer Dixon: On the integration business, if you integrate across health, primary and secondary, then, as you say, there still has to be some commissioner at some level. The reason why all this is blurred is because if you have integrated networks taking on a capitated risk fund, effectively, those physicians or clinicians inside that organisation are indeed commissioning; they are making or buying—okay? So they are doing what you want them to do—the principle. Somebody then has to not just allocate resources directly to those people but needs to commission from them and hold them to account, and there are a variety of ways of doing that. Inside these integrated care organisations we know some of the features that make them work in the United States, which goes back to your question about incentives and conflicts. The best ones are pretty clear that they don't have very much personal remuneration as an incentive.

For example, Denis Cortese of the Mayo Clinic came over here recently. He was absolutely adamant that they pay everyone's salaries, and the added incentives come from professional incentives; they are non­financial. It is about doing a better job, the working day being easier, better quality care for patients, reputation enhanced, and those seem to be incredibly powerful.

Kaiser used to have huge extra pay—something like 20% to 25% extra pay for clinicians if they did a good job and didn't spend up to the budget, and then they thought that that perverted professional behaviour so they then scrolled back to something like less than 5%. Sure, professionals do need to be incentivised to do this type of stuff and manage budgets well, but there may be other ways that actually are pretty strong that are crafted inside the organisation—not an external pressure coming from contracting, from regulation, or indeed from some command or control or community group—that relates to information, shared governance, clinical leadership and aligned incentives. Those sorts of things can be as powerful, if not more so, as we have seen in the United States in a highly competitive arena.

Q256 Yvonne Fovargue: I want to go back to choice. At the heart of this is supposed to be patient choice, and we have heard that, in fact, obviously the more articulate have more choice. Do you believe that this system will actually reduce or increase inequalities in the service?

The other thing I want to ask about is the market being involved. Of necessity, we have heard that some providers may well be squeezed out of the market. How will that affect perhaps the more disadvantaged areas and the people who depend on those services?

Professor Chris Ham: On the choice issue we, at the King's Fund, published a big review of the experience of patient choice under the previous Government. It came out about six months ago, and I think it showed that we are in the foothills. Although there has been a policy for a number of years now to give patients more choices at the point of GP referral and at other stages in the system, patients' awareness of that and GPs' willingness to support patients in exercising those choices is very variable and actually in some places quite limited. I don't think it is because of fundamental opposition to the idea. It is just that it takes time for these ideas to get traction.

One of the things that came out from that work was to say, "If this is going to be part of the health policy reform programme in future, we need to do a lot more to raise awareness of the existence of choices, to provide really good information to support people to make choices and maybe to provide more advice and support for patients when they are in that position." There are some groups in the population who will find that relatively easy to do and others—I think this is where your question is pointing—who will need more advice, more support and more confidence to be able to realise the potential of patient choice.

Professor Gwyn Bevan: This is one of the points on which Julian Le Grand and I have a continuing disagreement about the efficacy of choice as an instrument of change. No one is arguing about whether you should have choice, and it is right that we have gone away from a system in the NHS where you had no choice at all. But there is choice in principle and there is choice as a lever of getting better services.

There are systematic reviews in the United States for putting information out on a hospital's performance. They consistently find that people do not switch from poor to high-performing hospitals. One of the paradoxes about the New York study where they issued data on risk-adjusted mortality rates for cardiac surgery is that patients continued to go to hospitals with high mortality rates. But by publishing the information, the hospitals got better. The most famous case is Bill Clinton, who had his quadruple bypass in a hospital that the information said at the time was one of the two worst outliers in the whole of New York State he could have gone to.

The other evidence relates to the point Jennifer was making earlier. It is reputation—putting stuff out in the public domain, and putting pressure on providers who are performing poorly—that is the one that causes them to respond to that. When I was at the Commission for Health Improvement, I was actually involved with the star-rating exercise and there's a vast amount of evidence showing that to be very, very powerful in driving improvements. So I am sceptical about choice as a driver of change.

Then you get into the further problem that if choice were to be effective and money moved, then the people who will suffer—it is your concern—is the local population. If you have a poorly managed hospital and it is in serious financial difficulties, it is even worse and the people who can't go elsewhere will have to keep going there. There are these issues.

I remember this being raised by Ken Jarrold at the start—this was in 1991 when Working for Patients came out. We know what the high-performing hospitals look like but what about those who suffer in the marketplace? It is a serious problem.

Dr Jennifer Dixon: People need support, and some people need more support than others; that's for sure and that should be in the system. Patient choice at the moment is too anaemic to prod providers into better performance, which is where we need to be for the Nicholson challenge. It is not going to work any time soon. It is important to have, but it is not going to be a major instrument for efficiency or effectiveness, I don't think, and in the meantime, as you say, there is a lot of turbulence going to go on. There needs to be some regulatory or some national oversight as to what is happening on access to care, some process measures during the next transition period, because there could be quite a lot of chaos going on in terms of some services disappearing, cuts here, there and everywhere, which could systematically add up to a poorer service in some parts of the country. So somebody somewhere needs to be monitoring that. Who that will be, whether it is the CQC or whether it is the Board, is not clear yet, and also what teeth they will have to do something about it.

Q257 Valerie Vaz: Politicians sometimes are a bit disingenuous. We're always saying we want to do things in the people's name, but I was just wondering whether you think Joe and Josephine Public on the Clapham omnibus are part of all this, whether we have taken their views on board, and whether you have any evidence that they are engaged in this process. Secondly, do you have the latest figures on how many GPs want to be part of consortia, because there have been a number of polls out to say that many of them don't want this? And, thirdly, £80 billion of public money is going to be in their hands. How do you see the accountability of that money when GPs obviously haven't been elected?

Lastly, Professor Ham, could you outline what is so good about Cumbria? I don't know about it and I've never been there, so it would be helpful if you could outline the best practice there.

Professor Chris Ham: Okay. Let me pick up the last point. I will leave the other easier questions to my colleagues.

Cumbria is really good because for a number of years Sue Page, who is the chief exec of the PCT in Cumbria, has been an advocate of more integrated models of care in the way we have been discussing. She has sought to devolve as much budgetary and other responsibility to a locality level. Cumbria is a county of—what?—500,000 people. They have six localities. Those localities are the units for practice­based commissioning, which will be renamed GP commissioning at some point in the next two or three years, and Sue and the PCT have been strongly committed to pushing as much responsibility out there as the GPs are willing to take on. They have some great GPs in Cumbria and they have been wanting to take on more responsibility year on year, not just for a commissioning budget but, as I said earlier on, so that they can use their commissioning budget then to develop these new models of care, making use of their local community hospitals, providing more services in the practice. They have an example of integrated diabetes care in Cumbria, where they have a specialist to come out of the hospital to work in the community to support the practices to be better at routine diabetes management so that only the most severe patients then end up being referred to the local acute hospitals.

As I say, I think that is very similar to what the Secretary of State for Health would like to see happen in the whole of the NHS in England in three or four years' time, and it has happened because you have a visionary PCT with a chief exec who has thought about the model of care, has some great GPs and has supported them and given them training and development opportunities to go away and do wonderful things—and they are.

Q258 Valerie Vaz: So you don't really need the reorganisation to get good practice like that?

Professor Chris Ham: The problem is—if the Secretary of State were here and I wouldn't want to put words into his mouth—that not every PCT is like Cumbria, not every chief executive has that same vision, and that is just a generic problem across the health service. We have wonderful examples of innovation in many aspects of care—Torbay being a good example around health and social care integration—but they are exceptional, isolated examples.

Q259 Rosie Cooper: So sharing the chief executive's vision could help us achieve this without the "big bang"?

Professor Chris Ham: Well, yes, people matter much, much more than structures.

Q260 Rosie Cooper: Absolutely, which is why I am just left frozen in this process because I can only see paralysis. I used to work in Littlewoods and we had this up-down structure, it was fantastic, and then a chief exec came along and talked about matrix management. So then, suddenly, we were all responsible to each other, going across as well as up and down. Nobody knew who the hell we were responsible to, what we were doing, and it was not a good system. I can see us going into that here—so much going on, money being required, efficiencies being required, the "big bang" structural system. Very quickly I would like to ask you, are we all—

Valerie Vaz: After me, Rosie, after my question.

Q261 Rosie Cooper: But this will answer it. What will the NHS look like in 2014?

Professor Chris Ham: In 2014?

Q262 Rosie Cooper: Yes.

Professor Chris Ham: When you say "look like", what do you mean—the structure or the service to patients or something else?

Q263 Rosie Cooper: How will the patients see what is going on around them?

Professor Chris Ham: I think you can construct an optimistic scenario or a pessimistic scenario or something in between.

Q264 Rosie Cooper: What is your scenario?

Professor Chris Ham: At the King's Fund, and I think Jennifer has echoed this from the Nuffield Trust's perspective, we think that there are significant risks in going so far so quickly, even if the objectives that the Government are pursuing are absolutely the right objectives. The risks are around the transition and losing experienced managers to maintain the financial control, the control of performance, keeping waiting times short, and so on, over the next two or three years, while creating the as yet non­existent GP commissioning consortia to take on responsibility for £80 billion of public money, as you were saying.

The reason that is actually revolutionary and not evolutionary is that although it is very similar to previous primary care­led commissioning initiatives, we have never before been in the position where so much of the financial responsibility rests with the GPs. I hope I am wrong. I hope we can navigate successfully during the transition and there will be patient benefits at the other end, but none of us can be sure.

Professor Gwyn Bevan: I think where we will be in 2014, as I said before, is there will be a small number of GP consortia that have done fantastic things, then there will be the rest who are still in a state of shock and some where it is dreadful. The thing is that with the pressures you are under, obviously, on the one hand you would like to get it done fast, because otherwise the clock is ticking in the financial crisis and every year you delay the pressures get more and more intense. Leaving it for three years means it is going to be horrendous when they actually get in a position to do something. But if you take too long over that, then it is going to get even worse when they get there—with limbo and blight from reorganisation. Words fail me at this point, so I'll shut up.

Q265 Grahame Morris: I have a fairly short question for Professor Bevan, hopefully, in relation to some of the issues around identifying what the evidence base is from overseas. You mention in your evidence the dangers of the NHS going down the Dutch road, and I am particularly thinking within the context of some of the earlier contributions from Professor Popay about material aspects of choice where there isn't free choice of GPs or services, particularly for areas where there are issues around health inequalities. What do you mean precisely by the risks of going down the Dutch route?

Professor Gwyn Bevan: There was this famous health insurance experiment by RAND that randomly allocated people to different kinds of insurance coverage and showed that the integrated care organisations, the Group Health Cooperative of Puget Sound, was more cost-effective and had better outcomes for all except the poor and seriously ill. People thought, "What we need to do is to replicate. That is the secret. We'll just get that to happen throughout the United States." Alain Enthoven saw this as the way they would get universal coverage at a price they could afford, and then they discovered they couldn't.

It is very, very hard. The things that Jennifer has described—what they have looked at, and the way these organisations work—have taken them decades to work out how to do it. They have a particular culture and they carefully select people who work there. The idea that you can just roll that out and create an organisation in which GPs and specialists work together with a capitated sum and, there you are, you'll get Kaiser Permanente in two years' time, we know just doesn't happen. The problem is that if you go for integrated care without choice you could be trapped in a dysfunctional organisation.

I wasn't talking about the dangers so much of the Dutch system. The Dutch system works quite well and they do have choice of insurer, and the Dutch system could evolve where you do have choice between integrated care organisations. But I am saying that again both these models—both the high­performing integrated care organisation and managed competition between purchaser or commissioner—are quite complex things to evolve and they take a lot of time and development to get there.

Dr Jennifer Dixon: On the story about the integration in the US, there are probably about 10 highly performing integrated organisations in the US, and there has been a study about why they haven't been able to transplant to different states. The biggest one was why Kaiser California, which was incredibly successful where it started, did not transplant to North Carolina. The story there was that it wasn't the model that was the problem: it was the environment in the state that was hostile. The regulatory environment, the professional environment, the financial environment, was not conducive. It is almost as if you have got these seeds that were flung on to stony soil.

There's an issue for us here, if we do go down the integrated route, that we have to make sure the soil is fertile enough to let it have a chance to grow. That is a complex issue—interplay between what the regulatory environment is, what the payment mechanism is, what the medical and training culture is, and do they get in the way of integration and so on and so forth.

Q266 Chair: Presumably, to pick up Professor Ham's point, it is also about people as well as structures?

Dr Jennifer Dixon: It's about people. The other big thing about these organisations is that they can select in people who have the same mission, and that really makes them fly. If you can't select in or, conversely, deselect out people with the wrong mission, they don't fly.

Q267 Valerie Vaz: Can you continue with my questions?

Dr Jennifer Dixon: Yes. Yours was about engagement of the public in the reforms?

Q268 Valerie Vaz: The public and the GPs, whether they want it, the latest figures on that, and the accountability of £80 billion of public money.

Dr Jennifer Dixon: With the engagement, I don't know. I haven't seen any evidence that the public have been involved in the crafting of these reforms and with the top­down national system that we have, it is very difficult to involve them. If we want to involve them, we should have a different way of going about things.

I have seen various surveys that run along that 20% of GPs are quite interested, but those are BBC surveys. So it will be the minority, but you don't need every GP to be enthusiastic. You just need a few to lead and bring the others along, but it does help if more are enthusiastic. The incentives for GP consortia to take part do not seem to be as strong as those in fundholding, so again they are asking the question, "Why should we?"

Yes, the accountability of the money is a severe issue, isn't it? With PCTs, there is no evidence to suggest, the way these consortia are set up, that they will be any more successful than PCTs were before them at controlling costs and expenditure and extracting value, and PCTs had a long way to go, even though they have been formed for several years.

Professor Gwyn Bevan: Can I follow that up? We looked at this in the total purchasing pilot, which is where the GP fundholders could opt to take on a larger share of the hospital and community health services budget. As it happened, in the pilot some of these were single­practice fundholders that had taken on a wider purchasing role and others were networks of quite large populations, something like 50,000 to 100,000. It is one of these things that is obvious after you have found it, but we found that if you have the GPs in the single-practice total purchasing pilots they were involved in managing budgets, but once you go from one practice to a network it was much more difficult to get them involved. That led to the paradoxical finding that in terms of managing risk of real costs of their referrals, the larger networks, although they had a bigger population, were no better than the single practices because it is about getting the GPs involved in the process. Of course, these were GPs who had actually opted for fundholding, taken on budgetary responsibility and opted to extend it to total purchasing, and now this proposal is to uniformly require all GPs to get involved in this, so it is going to be a major challenge.

Professor Chris Ham: One thing we haven't touched on, which we think is really positive, is the Government's commitment now to develop the pathfinders among GP commissioners, which wasn't in the White Paper but has come out in the recent past. It is to be able, if you like, to develop proof of concept in some parts of the country by enabling the enthusiastic GPs, working with supportive PCTs, to use next year and the year after as shadow years to learn some lessons. That seems to us to be a very common-sense way of going about it.

Chair: Chris Skidmore would like to ask some questions about the Commissioning Board.

Q269 Chris Skidmore: Dr Dixon, I was intrigued that in your evidence you said, "We anticipate that the NHS Commissioning Board will quickly become the 'headquarters of the NHS'." To what extent is this whole process smoke and mirrors? We have seen devolution of power down towards doctors' surgeries, GPs and consortia, and at the same time the Commissioning Board will have an enormous sway about how these consortia are run, delivering outcomes and for their financial performance in particular. You also say in your evidence that you are uncertain as to what extent the Commissioning Board will be able to truly remain independent of the Secretary of State.

I would like to get the panel's view on the Commissioning Board, whether this is actually going to centralisation, in effect, with the Commissioning Board running the NHS rather than actually the consortia having true freedom to commission?

Dr Jennifer Dixon: Of course, in the White Paper it says explicitly that the Commissioning Board will not become the headquarters of the NHS, but I guess the reason why we put that in is because we think that if GP consortia are too green, effectively, to be able to manage expenditure, then effectively what happens is that someone will have to step in. The less traction there is with consortia, the more that the Commissioning Board will have to exert itself. I think, if things go pear-shaped, it could really have to take on quite a large role, and it has the mechanism to do that because the consortia will be statutory NHS bodies with a performance management line straight to the centre.

The intention is the right one for devolution, but given the financial squeeze we are now in—we are not in five years ago; we are in a different land now—that is the worry. Yes, like many people, I have longstanding issues about whether there can ever be an independent board separate from the Secretary of State. And not only that, but there could also be unresolved conflicts, unless this is carefully crafted between the Commissioning Board and also the economic regulator, whose objectives may not be the same. That has to be thrashed out pretty carefully.

Q270 Chris Skidmore: Professor Ham, would you like to comment at all?

Professor Chris Ham: The issue of having an arm's length board separate from the Department of Health has been around for as long as I have been around, and that is saying something. Every time it has been looked at before, the decision has been that it is probably not a runner because if you need to ensure proper accountability to this place for spending £100 billion of public money, can you offshore that to a National Commissioning Board even if you put in place proper arrangements for that to relate to the Department of Health and the Secretary of State? This time round, the argument seems to have been won and we are going to go in that direction, but as always, the devil is in the detail, particularly the relationship between the National Commissioning Board on the one hand and the Department of Health and Secretary of State on the other. Exactly how is that going to work? How can we avoid the kind of Michael Howard/Derek Lewis challenges of the Prison Service from a number of years ago?

Then, secondly, what about the relationship between the National Commissioning Board and however many GP commissioning consortia we have? I won't speculate on the number, but my expectation is that there will be more GP commissioning consortia than there are PCTs at the moment, and therefore there will be quite a big span of control between the National Commissioning Board and those commissioning consortia. There will be regional office structures, also known as strategic health authorities, in some shape or form, to mediate that relationship because there always has been an intermediate tier at the regional level since 1948 onwards. Why would this be any different from that? So that kind of looks like we are recreating, but putting different names on the door, some of the elements of the system we have at the moment.

Q271 Chris Skidmore: What does the panel think about the fact that the new GP contract with the BMA is going to be negotiated by the NHS Commissioning Board rather than the Department itself?

Professor Chris Ham: It is a continuation, isn't it? When I had my four and a half years—it sounds like a prison sentence and it felt like it at times—as a secondee in the Department of Health, at that time the Government, in its wisdom, said it wanted the NHS Confederation, through what we now call NHS Employers, to take on responsibility for negotiating contracts, not with doctors—well, actually with doctors to some extent, because that is part of the mechanism we now have. It was one of the elements around distancing Government, and DH in particular, from some of the detailed issues that the NHS in theory was better placed to deal with. This arrangement around the GP contract you could see as being a continuation of that. I don't think it removes from the table any of the complex issues that will undoubtedly be involved in renegotiating the contract as that goes forward from here.

Dr Jennifer Dixon: I just wanted to add something, and it is slightly different from the question you asked. It is about the ability of the Commissioning Board to manage some of the local contracts, the PMSs and the locally enhanced services, which are additions to the GMS contract. So 60% of the country at the moment is GMS and 40% is PMS. There is quite a lot going on locally that is a very long way away from even a region actually, so how a board can do this sensitively in a way that reflects local needs for primary care provision is again opaque.

Q272 Nadine Dorries: Going back to your earlier points about how groups of people are difficult to manage, do you see that it will be viable and useful for the negotiations taking place at the moment for there to be contracts which are not dedicated to GPs but to the consortia, so that there is a consortia contract directly with the Commissioning Board rather than a GP contract?

Dr Jennifer Dixon: Yes, I agree with the other witnesses that there should be a consortia contract, not with practices. It is just unmanageable at practice level, I would think, and the consortia really should be more actively managing primary care provision, which may be a reason why some GPs don't want to get involved in it, because it's hard. But, effectively, that is the single biggest thing that the consortia ought to be doing.

Q273 Nadine Dorries: There is a resistance.

Professor Gwyn Bevan: There is an issue around this because it is my understanding that within the consortia the practices can choose to move between consortia, so when we discuss how we allocate resources to the consortia, it starts with the practice as the building block. If you were to negotiate a contract with a consortium and then a practice decided it was going to move, that would then become enormously clumsy and you would have to renegotiate.

Q274 Nadine Dorries: Except that it looks as though, just on the information that we are going through at the moment, the consortia are more or less going to fall on a county or county-wide basis. It would be tricky for one to move from one consortium to another if they were on a county basis; it would be a highly unusual situation.

Professor Chris Ham: Do you mean the contract for primary medical care provision to be with the consortia?

Q275 Nadine Dorries: Yes. The negotiations are taking place between the Department of Health and the BMA, and the NHS Commissioning Board will be the actual holder of the contract between the Department of Health and the GPs. It will go to the Commissioning Board, directly to the GPs. My question is, does it not seem more sensible, rather than individual GP contracts, if the consortia had one contract because that would possibly provide scope for savings also but would be just much simpler in management? Dr Dixon raised the point a little while ago about personalities and how individuals would be difficult to manage, but consortia would be easier to manage than individual GPs.

I want to put a point that was raised with me last week. At the moment the timing may not be right and there is a generation of GPs who would be absolutely resistant to this—who will probably, as a result of this, be falling off the edge in terms of this is not going to be for them—but a new generation of GPs are coming through enthusiastically who now find GP practice a more interesting sphere of medicine to go into and they would be more amenable to that kind of thing. I suppose the timing is probably the issue.

Dr Jennifer Dixon: Yes, and actually the younger GPs may be less interested in a GMS contract. They don't want to become a partner; they actually want to be salaried and have flexibility. They don't want to buy into a mortgage for life in a practice. It could be that GMS withers away anyway as more people leave, and it could be also that some of the GMS practices could be bought out or traded. At the moment that's not allowed, but it could be that consortia could take on this role to remove some poor performers, or at least to bring them under performance management through a different route.

Q276 Chair: Marketability of GP goodwill might be a dangerous subject to raise at 6 minutes to 1.

Professor Chris Ham: In concept, of course, you could do it. The practicalities are twofold, aren't they? One is that it would pull the rug very firmly from under the BMA because a large part of its raison d'être is to negotiate a contract on behalf of GPs across the country.

Nadine Dorries: Absolutely.

Professor Chris Ham: You may see that as being a good thing or a bad thing; I wouldn't want to pre­judge that.

Nadine Dorries: On the basis of what happened a few years ago, I'd say it was probably a bad thing.

Professor Chris Ham: Okay. The second thing is in terms of the psychology. If I am a GP with a GMS contract at the moment, thinking about whether it would be beneficial to me to have that contract held by the commissioning consortia in future as opposed to the current arrangements, I think it would depend a great deal on who I saw leading the commissioning consortia where I was practising in future. If there were really respected, credible GP leaders and good managers there, it probably wouldn't make a huge amount of difference to me, but if the opposite were true then I think there would be a lot of antibodies in the GP community because what this does is to change the whole dynamic within general practice. You are getting one group of GPs to manage and lead all the other GPs and, as I say, there could be an upside to that but there could be a real downside too.

Chair: Grahame wants to ask a quick question and then I think we are probably coming to a close. Rosie wants to ask a quick question as well.

Q277 Grahame Morris: It is just in relation to the health and social care provisions and the £1 billion of resource that is being transferred from the NHS capital budget. If this transfer to social care is an integrated model of care, particularly thinking about care of the elderly, older people, where the purchaser/provider split perhaps is not advantageous, should we really consider that is part of the NHS, or is this part of a partnership that Dr Nixon referred to between the NHS and local government?

Professor Chris Ham: My view on this is that I think it is, on the whole, a good thing that this has been done around identifying some of the NHS funding to support social care, because I think the NHS is going to be under huge pressure anyway, but without that flexibility, the ability to discharge patients at the right time, to free up beds and to enable admission from A&E would be much more challenging. It raises the bigger question as to whether we should sustain this budgetary and organisational division between health and social care. If you go back to examples like Torbay, which has the care trust and they have broken down those divisions certainly around adult social care, although not around children's services, their experience is that they have invested health money to increase spending on social care because that is a better way of keeping people independent and living in the community and avoiding avoidable admissions than more investment in health and medical care services.

The caution here is let's look at Northern Ireland, which has had a fully integrated health and social care system for many, many years, but it's a structural integration, not a real service, and clinical integration in many areas, and that really isn't the solution to these problems. You have to get the teams working together on the ground. It is back to the people who will make it happen rather than the structures.

Q278 Rosie Cooper: Finally, could Dr Dixon give us her view of 2014?

Dr Jennifer Dixon: Yes. I think this partly rests on how successfully the NHS will be able to control expenditure while maintaining a decent level of quality and access. I just fear that the rapidity of all these changes will mean that the NHS could be in danger of slightly being overtaken by events, that cuts and discontent will be high and that there will be a retraction to central control of the type we have seen in the past. So 2014 may look surprisingly familiar to us.

Q279 Chair: There is precedent for that analysis. Thank you very much. Are there any issues that you think we have glossed over that you would like to draw out?

Professor Gwyn Bevan: There's one thing I should have mentioned which is in my evidence. We have been doing work funded by the Health Foundation to help—it was and still is—primary care trusts, but I still think of them as on the way out really, to set priorities. We worked with Sheffield last year to help them move money around. In one service—eating disorders—the lead was sure things weren't right, and working with stakeholders, patients, the local authority, providers from the charitable sector, etc., we found ways of moving resources so they got better outcomes at reduced cost. We were hoping to continue that next year, but it is in abeyance now because PCTs are being reorganised. That is at the back of my deep concerns about this. Through this reorganisation we are losing time to get to grips with what the NHS really has to tackle.

Dr Jennifer Dixon: I have a very practical issue. There was a question earlier about what the right size of the consortia is and the size is different according to what is the issue to be discussed, but one of them is risk-sharing. I just wanted to say that it is an empirical question rather than a value­based question what size they need to be to take on what level of financial risk. In fact we are doing some modelling at the moment to decide that. Some practices of GP consortia will be too small to take on a lot of purchasing of services, and that will have to go back to the Commissioning Board. So it's an empirical—you don't have to have a finger in the wind.

Chair: Thank you very much for your time.

previous page contents

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2011
Prepared 21 January 2011