John Lister comments –

Senior NHS managers have been working out what they want to see as the next steps in restarting a more normal mix of services in the post-Covid situation. One thing is clear: few seem to want to see the NHS flip back to the system that prevailed before the virus hit at the beginning of the year.

The Health Financial Management Association (HFMA) has published a 20-page discussion paper  The future NHS financial regime in England,  which notes the potential to “redesign the national health and social care system from an almost blank sheet of paper.”

Only a minority of the HFMA members surveyed seem to favour a return to the system of commissioning and contracting for services that was established by the disastrous 2012 Health and Social Care Act.

It seems they want to change almost everything – but not enough to make a real difference.

One common factor between the HFMA and the NHS Confederation (which represents commissioners as well as providers) is their fear for the financial squeeze to come.

The HFMA bluntly sums up the looming problem:

“As the country emerges from the immediate needs of the Covid-19 pandemic, finances will once again become constrained. These constraints could be significant with the Bank of England warning of the sharpest recession for 300 years.” (p5)

The NHS Confederation document Getting the NHS back on track also states the problem clearly:

“The recent short-term financial commitments to support providers, including the coronavirus emergency response fund and the ‘writing off’ of provider debt, have been welcomed, but they have not addressed many of the underlying financial challenges. The position according to many of our members in secondary care is that their financial position is rapidly deteriorating.” (p7)

By contrast the equivalent report from NHS Providers (“Recovery Position”) is strangely silent on the financial challenges to come, and their most recent blog on finance is a studied mixture of vague statements, evasion, and ambiguity, while admitting the obvious fact that:

“The financial assumptions made by systems and national leaders about 2020/21, and therefore every subsequent year of the long term plan period, are now obsolete. Moreover, providers’ costs have changed significantly following COVID-19 service reconfigurations, and are unlikely to go back to “normal” in the foreseeable future.”

None of these management organisations apparently wants to engage with a major issue of capacity going forward – most notably the undisclosed, but extremely high, number of NHS acute beds that remain closed after they were emptied of patients back in March to create scope to treat Covid-19 patients.

Unused NHS beds

In mid-April the HSJ saw leaked figures revealing 40% of acute beds (over 37,000) were unoccupied: NHS England has refused to share any more recent figures with The Lowdown, and a Freedom of Information request has been submitted.

With these beds out of action it appears everyone is in agreement with signing a huge and costly long term deal for the NHS to use up to 8,000 private hospital beds as the first step to tackling a soaring waiting list and resuming a more normal balance of services.

The Guardian has reported this could involve spending up to £5 billion – to the consternation of the Treasury which has sent NHS bosses away last month to reconsider.

However there seems to be little or no discussion amongst NHS leaders on what the consequences of any such deal could be for trusts. They stand to lose this income – but would quite likely have to provide the staff to deliver the treatment, leaving their own services short-staffed as well as their own beds closed for many more months to come.

So what changes do the discussion documents want to see?

The HFMA wants to see a change of financial regime and a change in organisation to establish Integrated Care Systems at local level.

It also calls for action to tackle underfunding of social care, and “further Covid-19 capital investment” to ensure that sites are able to deliver appropriate social distancing.

The end of cost per case?

On financial regime the HFMA reports that its members are looking to move beyond the controversial (and currently suspended) Payment by Results (PbR) system which effectively pays acute hospitals per patient treated on a cost-per case basis linked to a national tariff:

“From the survey responses, there is no appetite for a cost per case contract model from any sector within the NHS, although a method is clearly needed to enable calculation of the correct baseline contract.”

The NHS Confederation’s May report STP One Year to Go  also shows managers looking for similar changes, and quotes an unnamed STP Director of Strategy saying:

“At last PbR has been forced out. It will be interesting to see what happens about that coming back. If [NHSEI] lets those rules go back into position and we go back to PbR then… you can’t have an integrated care system with PbR. It is not part of what we’re trying to achieve.”

An additional factor is that restoring PbR, reverting to paying hospitals per patient treated, at a time when Covid restrictions are likely to reduce NHS acute hospitals to 60-70% of their capacity, would spell financial ruin for trusts – especially those with high fixed overheads in costly PFI contracts.

However scrapping PbR would unpick one of the mechanisms brought in by New Labour in the mid 2000s as a basis to create a health care “market”, opening up the NHS budget to private providers of clinical care.

Integrated Care Systems

NHS England’s Long Term Plan in January 2019 sought to replace competition between NHS providers with collaboration, and in this way to at least partially unpick the “purchaser-provider split,” which was first established in 1990 when Margaret Thatcher’s “internal market” established NHS trusts as separate bodies.

Last autumn NHS England requested government action to change the 2012 Health and Social Care Act, to allow greater decision making by joint committees spanning different commissioners and providers.

Even without the legislation they have proceeded to do this anyway, ignoring the letter of the law, and 18 so-called Integrated Care Systems (ICSs) have now been established, in which in theory the boundaries between commissioners and purchasers are blurred – but there is little if any public accountability.

NHS England stopped short of calling for ICSs to be created as statutory organisations – which would open up the question of accountability to local communities, and undermine the autonomy of foundation trusts.

Now the HFMA argues for a faster spread of ICSs, implying a restricted role, if any, for Clinical Commissioning Groups (CCGs):

“Progress towards integrated care systems should be speeded up and more devolved decision making enabled at a local level. The commissioning function should focus on strategic commissioning in order to improve population health and to strengthen system working.”

Eliminating competition and bringing providers and commissioners into “Integrated Care Systems” certainly raises the question of what role is left for the CCGs as commissioners. The HFMA (which includes CCG finance directors) appears agnostic on this, but notes “Some respondents to the survey see this as an opportunity to review the local commissioner role and the purchaser/ provider split.”

The NHS Confederation, on the other hand, seems much more willing to envisage statutory ICSs and the demise of CCGs. Its report (Time to be radical? The view from system leaders on the future of “system by default) is based on survey findings, which include 63% agreeing that the health and care sectors should be integrated on a statutory rather than voluntary basis.

The same survey found a majority in favour of CCGs being subsumed and commissioning taken over by ICSs, with only a minority holding out against this:

“… just over two thirds of system leaders considered that strategic commissioning should move to ICSs at system or place level. However, a quarter disagreed …” (p10)

Private sector

The HFMA makes only one passing reference to the notion of partnership with the private sector, in contrast to the NHS Confederation, which includes private sector providers, and is much more up front in favouring a strategic inclusion of private providers as “equal partners” in the rebuilding of the NHS, arguing:

“There is an opportunity now to reset this set of relationships and to regard the NHS, local government, private and voluntary, community and social enterprise organisations all as equal partners during the next phase of the recovery.” (p5)

And while reopening up the 37,000 unoccupied NHS beds is not mentioned, the importance of the 8,000 private hospital beds is stressed, with the Confed putting it top of their list of “Practical solutions”:

“Putting in place ongoing arrangements with the private sector to provide the health service with the capacity to deal with the major backlog of treatment that has built up since COVID-19.” (p10).

As management bodies, think tanks and others continue to churn around ideas in a new situation, it’s clear campaigners’ calls for reversal of the damaging proposals of the 2012 Health and Social Care Act are being grudgingly embraced, even if in distorted and diluted form, by many in the NHS.

However it’s also clear that more pressure is still needed to ensure the outcome of this confused and halting process is not a new bureaucratic stitch-up, with renewed or extended links with private contractors and providers, but genuinely integrated, publicly provided health care that is accountable at local level.

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John Lister
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