Commissioning: further issues - Health Committee Contents

Written evidence from Professor Calum Paton (CFI 07)


  1. The Health Bill is likely to return commissioning to a worse version of the often-chaotic state which prevailed from 2001 to 2006.
  2. The new "reforms" are not evolutionary in terms of NHS structure and organisation; indeed, they are highly disruptive. But they are not likely to be revolutionary in the medium- or long-terms: it is likely that "devolution to the frontline" will be a mirage, as before. "Meso-level" institutions for performance management will have to be reinvented.
  3. The Government is fudging the conflict between collaboration and "competitive markets" in the NHS: it has failed to answer the sceptics concerning the possibility of local cooperation between GPs and hospital doctors. Integrated services are only possible under the "any willing provider" regime if they are not local "monopolies". This will lead either to the abandonment of integration or untenably high costs (to create the capacity for local competition.)
  4. The NHS has recently seen a proliferation of "policy by euphemistic slogan" eg World Class Commissioning (WCC), which the Committee rightly labelled "ridiculously named" in its 2010 Report. The latest slogan, "the Nicholson challenge", has an equal capacity to rebound on its authors.
  5. Choice and commissioning are intrinsically opposed, unless the latter is a synonym for planning services by region, area and locality (among which patients or non-budget-holding GPs are free to choose) as opposed to the "market" function it has become, where criteria other than choice come to dominate (despite much rhetoric.)

1.    The Health Bill—Radical or Cyclical? Earlier comment focussed upon whether the Bill was revolutionary or evolutionary. For example, Chris Ham originally implied the former, commenting on last summer's White Paper, Equity and Excellence. More recently Julian Le Grand described the latest "reforms" as evolutionary, building upon the Blairite agenda. To me, the new reforms are neither revolutionary nor evolutionary, and indeed these words may blur their real likely effect.

2.    Most certainly the Bill is not evolutionary in terms of NHS organisation and structure. It drives a coach and horses through what we academics like to call the "meso" level tier (ie between the centre and localities), in abolishing both PCTs and SHAs. The latter had only recently (in 2006) been reconfigured into regional organisations—as had existed before the 2001 re-organisation, Shifting the Balance of Power (StBoP), created nearly 30 smaller SHAs. PCTs had been created (as a country-wide system, as opposed to a "voluntary" option) also in 2001; and then themselves reconfigured into a smaller number.

3.    Yet neither is the Bill revolutionary. Even were "power to frontline GPs" considered revolutionary (about which we might debate), it is already clear that the "new New NHS" will have as its commissioning agencies (in some cases already) large consortia of GP practices which are likely to grow larger over time. That is one of the reasons the reforms can be seen as cyclical. Like StBoP, their ill-fated predecessor sponsored by former Secretary of State Alan Milburn, they are born in the rhetoric of "devolution", "decentralisation", "power to the frontline" and the like; yet the reality may well be very different. Indeed it will have to be, if loss of control at "local health economy" level is not to make the "Nicholson challenge" not so much a pipedream as a nightmare.

4.    We are likely to see a cyclical pattern. Just as StBoP was short-lived (but long-lived enough to underpin much dysfunction, including the "financial deficit crisis" of 2005-06), the brave new world (again) of "local" commissioning will have to be quietly abandoned. In organisational terms, this will mean re-creating meso-level institutions which sit between GPCC and the "centre" in whatever guise (ie the NHS Commissioning Board, the Department of Health and the Secretary of State.) Otherwise, local health economies will lack the control and accountability required to achieve strategic objectives efficiently.

5.    Thus to provide continuity (of the desirable sort), the reforms will have to betray themselves in the implementation phase. The question arises, then: why the upheaval?

6.    In a nutshell, even more than with StBoP, these reforms—through stripping away the meso-institutions—may force both the inappropriate devolution of certain functions and the inappropriate centralisation of others. All is not as it seems—which is not to suggest conspiracy so much as a failure to learn from even the most recent history.

7.    Future Institutions. New institutions will have to fill the lacuna in performance management left by the reforms. The intention—that external "regulation" will replace internal "performance management" —will only come to fruition if (for example) Monitor becomes a system performance manager rather than a "market regulator."

8.    It is not only performance management which will be required. While "consortia of consortia" can do some strategic commissioning (ie for services which are too complex or "cross-boundary" for individual GPCC, yet slipping the net of national commissioning by the Board), agencies will be required to reconfigure and plan services at regional/area level. Whether these are regional offices of the Department of Health ("back to the future") or management agencies acting on behalf of groups of consortia, the function will be required. These management agencies will require the usual functions (strategic planning; finance; et al) which are barely mentioned in the Bill.

9.    In terms of the reforms being part of a cyclical process of "re-disorganisation", the ambition that GPs be at the heart of commissioning was also at the heart of StBoP, which proposed the Professional Executive Committee (PEC) for PCTs. These mostly lost influence, and GPs mostly lost interest, over time. This is because the scale and scope for effective commissioning meant either that unrealistically large numbers of GPs would have to be involved (except for the most local, community services and most simply-defined hospital services) or management agencies would take over.

10.  It can be argued that, this time, as did not happen even with Practice Based Commissioning (PBC), the GPs will control the process, instead of being controlled as in the past. There is some truth in this. But, over time, the vast majority of even these GPs who stay interested will be "non-executives." Two questions therefore arise: how powerful are non-executives?; and how legitimate is it that the governance of GPCC (and their larger collaborative "joint commissioners") is not in the hands of a public body but in the hands of one part of one profession?

11.  The guts of commissioning "9 to 5" (or "8 to 8" one hopes!) will have to be done by professional managers. The real question is whether these come from the private sector or the public sector. If much of the latter cadre melts away, then the hope of saving management costs may well be dashed.

12.  The Government's response to the Committee's earlier reports on management costs is deeply unconvincing. It is not based upon analysis but upon a "fiat." Additionally, in gauging transitional costs, no account is taken of "opportunity cost" (bluntly, lost benefit from spending scarce management time on "non-strategic" things instead of—for example—the three components of the "Nicholson challenge" (ie developing extra-hospital care; a lower tariff; and controlling the pay bill.)

13.  Integrated services? Just as unconvincing is the Government's response on the issue of whether the "market" (Any Willing Provider; Monitor as an "anti-trust", pro-competitive regulator) is compatible with the prospect for meaningful collaboration between GPs and hospital doctors. Any such collaboration will have to go "against the grain" rather than with it. The Government's response to the Committee in effect states that, even although tenders for hospital services cannot be written to favour any one (eg local) provider, the local hospital doctors can still help the GP "commissioners" write the tender (to enable "integrated care" designed along "pathways.") One has to ask: has whoever drafted this facile response ever talked to a busy hospital doctor? Why would the latter labour collaboratively to service a system which is suspicious of collaborative relationships? We may note that some of the most respected commentators who believe in aspects of the new policy also point to the dangers of the "purchaser/provider split" being too rigid or doctrinaire (eg David Colin-Thomé; Michael Dixon.)

14.  It is also argued by the Government (quoting the King's Fund, 2010) that "integrated providers" (one assumes they mean systems including hospital care, community services and GP services) can flourish in the market-place as long as they are not local monopolies. Has anyone in the Departmental "silo" working on integrated care talked to a colleague working on costs-saving? How much would it cost to replicate an English version of California-style Health Maintenance Organisations in the NHS?

15.  Hard Choices and Dilemmas. If the national Board is to commission primary services, then having GPCC commission "extended primary services" which collaborate with hospital services is not likely to be efficient or to lead to an alignment of incentives: the two should be complementary and commissioned holistically.

16.  The national evaluation of past policy most relevant to the "new commissioning" is the evaluation of the "total purchasing pilots" (TPP) (Mays et al, 1988.) There are many differences, but a key result—as also from some US and European comparisons—was that, to be effective, GP commissioning will be expensive and will need long-term nurturing. One cannot think of a less propitious environment than the current fiscal climate against which to banish the cynicism which is so prevalent at "street level" in the medical profession. Additionally, TPP seemed to work better for "extended primary care" (see 16. above) (ie an amalgam of traditional primary services and wider, extra-hospital services) —ironically, almost the antithesis of GPCC s' responsibilities. Budgets to GP groups may be less suitable, on the other hand, for population imperatives such as reducing health inequalities: GPs get involved in commissioning, in the main, as a result of local enthusiasms and "pet projects", not wider goals. Here again, there is a danger of repeating 2001-06 in a worse form as the local enthusiasms of small commissioners come into conflict with system imperatives.

17.  The division into centrally-commissioned services and GPCC-commissioned services is not as convenient as it seems (see 8. above) A flaw with both the 1990s "internal market" and the post-2001 commissioning regime was that different commissioners made commissioning decisions which were not coherent in the aggregate ( not "joined up"). For example, specialised services commissioned from particular hospitals may require a "critical mass" of complementary services, which themselves depend upon GPP decisions. Local GPCC decisions concerning the scale, scope and location of secondary services may require coordination with other GPCC decisions. Between 2001 and 2006, the need to reinvent this wheel (slowly) saw much waste and "planning blight." If this is to be avoided this time around, we will require a system which is devolved in rhetoric and centralised in reality. Since the meso-level institutions are abolished, the centre will have to do what regions/SHAs were doing or should have been doing in the past ie managing performance and not just monitoring it.

18.  Choice and commissioning are awkward bedfellows. Some of this is inevitable. For example, under the last government, the "Darzi reconfigurations" put quality and appropriate scale and scope of services above choice, in reality if not in rhetoric. "Choice" is a politician's sine qua non; whereas, in implementation, the hard reality of combining it with fiscal realities and clinical necessities often reduces it to merely one goal among many. Ongoing evaluation suggests that the differences "on the ground" between the "market choice" regime in the English NHS and the very different approaches elsewhere in the UK are minor. Overt "commissioning" moreover is in clear tension with individual choice (ask an American who is suspicious of the NHS!).

19.  GPCC are likely to push hard for "price competition" (ie the—reduced—tariff as a maximum, not a regulated norm), as they face new responsibilities in a cold fiscal climate. This holds out the danger of quality lapses. A previous evaluation of the 1990s internal market suggested this is not just an abstract worry. A major priority for the NHS ought to be to learn from the current Public Inquiry into Mid Staffordshire NHS Foundation Trust. The weakness of internal performance managers (including the SHA regime) may be an important lesson. It is difficult to see how abolishing such tiers completely might help.

20.  The Hardest Choice of All. Bluntly, there are three objectives of which two are attainable: cost-savings of 4% a year; integrated services for a wide range of "clinical pathways"; and competition. The Government asks for all three -without any evidence that they are jointly attainable, and much to suggest that they are not.

21.  An Alternative. There is much myth about the inevitability and desirability of the "purchaser (commissioner)/provider split." The Committee's 2010 Report rightly drew attention to the fact that this may have produced lots of cost without commensurate benefit. The usual response however is to call for "improved commissioning" or the like (as with WCC.) This mirrors the call for "improved purchasing" during the 1990s internal market. Yet the fundamental direction of travel may be flawed.

22.  Integrated organisations organised at district or area levels containing both primary/community services and hospital services are attacked on two grounds—that they are "anti-competitive", "Old Labour" (ie the "forces of conservatism" in Blair's term) or both. Yet the pre-1991 NHS did not have integrated organisations: the GP service was separate from both hospital and community services. No-one is suggesting a retreat to a golden age.

23.  It is possible to have "choice without (much) market", just as it is possible to have "markets without (much) choice"—the prevailing situation post-1991 and post-2001, despite prevailing perceptions based upon ideological closure. With this approach, GPs are non-budget-holding, and are free to refer patients in line with patients' preferences. Where patients choose non-local services, money flows with them (the partial absence of this being a problem with the pre-1991 NHS, although not as severe as advocates of the "internal market" implied.)

24.  "Commissioning" then becomes a synonym for needs assessment and the provision of services to meet these needs. Ironically the best scale/population size for this function is probably the sort of Health Authority we had from 1997 to 2001, with a regional tier (lean but strategic) to "performance manage" the system as well as to coordinate the provision of regional specialist services. But such a Health Authority would be an integrated organisation, with GPs sharing executive (and perhaps non-executive) authority with other professions. GPs are neither heroes nor villains, so to deliver 80% of the NHS budget to them (mostly as non-NHS employees) is surely bizarre.

25.  For the marketers to argue that such a system would be "inefficient" invokes images of motes and beams. I am under no illusion that this approach is on the political table in England (as opposed to the rest of the UK.) But the "development needs" of such a system would be parsimonious by comparison with the bloated and often wasted investment in failed market systems.

Calum Paton[19] [20]

February 2011

19   Professor of Health Policy (1993-2009) and Professor of Public Policy (2009-date), Keele University; Chairman, University Hospital of North Staffordshire NHS Trust, 2000-2006; Editor-in-Chief, International Journal of Health Planning and Management (Wiley Blackwell) Back

20   Relevant Publications: "Radical Change or Groundhog Day?", Public Servant, November 2010; "The Coalition and Health Policy: Too liberal a dose of conservatism?", Public Servant, July 2010; "Commissioning in the English NHS", British Medical Journal (BMJ), April 15, 2010; "What the NHS Can Learn from Stafford", Public Servant, April 2010; "NHS Confidential: Implementation…..or how great expectations in Whitehall are dashed in Stoke-on-Trent", in Exworthy, M et al (Eds.), Case Studies in Health Policy and Management, Policy Press, Bristol, 2011 forthcoming; "New Labour's Health Policy: Assessing the Blair Years", in Powell, M (ed), Modernising the Welfare State: The Blair Legacy, Bristol, Policy Press,2008; "The NHS After New Labour-Healthier than New Labour?" in Casey, T (Ed), Britain After Blair, Basingstoke and New York, Palgrave, 2008; New Labour's State of Health: Political Economy, Public Policy and the NHS, Ashgate, 2006; Competition and Planning in the NHS: The Consequences of the Reforms, Stanley Thornes, 1998. Back

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© Parliamentary copyright 2011
Prepared 5 April 2011