Future options for the NHS

Labour Health Policy NHS

How should Labour be approaching its future health policy?

In this article we first briefly summarise some of the main developments likely to take place in the NHS in the run up to the 2015 general election, and then outline possible responses by a future Labour government.

Developments in the near future

Between now and the 2015 general election the NHS is likely to have a significant part of its community health services (and some hospital services) provided or managed by the private sector, even though the privatisation process is running more slowly than the government would like. Nearly a third of current mental health services is currently provided by commercial or third sector organisations, and this is the shape (although not necessarily the size) of things to come for the wider health service. This trend towards commercialisation of health services does of course have a long history. At its foundation in 1948 the NHS relied on franchises with for-profit small business to provide general practice, dentistry, optician services and pharmacy; and the third sector has for many years provided contraceptive and abortion services, as well as palliative care. Meanwhile the last Labour government encouraged NHS hospital Trusts to become franchise-like organisations through the adoption of ‘Foundation’ status.

Clinical Commissioning Groups (CCGs), which became the local purchasing organisations for the NHS in April 2013, will be struggling to balance rising demand and expectations for services with shrinking budgets, but will have limited powers to achieve this. Not only will they have to put services out to tender; they must also plan for a 20 per cent reduction in NHS spending over a four-year period – the so-called ‘Nicholson challenge’. Some CCGs will manage these pressures better than others, but some will almost certainly fail to develop new services or balance their budgets. What’s more, CCGs are also being asked to draw up plans for a further period of greatly reduced funding.

Despite the political rhetoric from government about ‘liberating’ the NHS from central control, there will be increased effort by the central administration (now called NHS England) to manage (and micro-manage) the health service, and to promote more efficient organisations of services. This will be exacerbated by various forms of interference from other quangos (such as Monitor and the Care Quality Commission) as they stamp their new-found authority on the system. We will hear much about service ‘fragmentation’ and the need for ‘integration’. But the economic instability of NHS hospital and community services, combined with unachievable savings targets, will undermine efforts in this direction, and topdown management will also fail more often. The blaming and demoralisation of staff will continue.

Financial instability in the hospital sector will increase, being worse where there is Public Finance Initiative debt. This instability will also arise because of the inability of the hospital sector to respond to social and demographic changes (such as more very old people with complex problems and needs, and fewer family carers), inherent inefficiencies in hospital organisation, and declining staff engagement, motivation and confidence. There has always been a difference in the quantity and quality of services provided by the relatively well-endowed Teaching Hospitals and the District General Hospitals (DGHs) that provide the bulk of NHS specialist care, and this divide will widen. We will hear more about failures like the Mid-Staffordshire scandal, and fifty or so Hospital Trusts will not be organised
well enough to achieve Foundation status. We will also hear much about proposed solutions to the DGH problem, but with little consistency.

Despite the generally accepted need for change, every local attempt to reconfigure services, by whatever route, will be robustly contested. Attempts to distance political decision making and substitute legal processes, such as Special Admnistration, will fail to insulate politics from the service.

Social care provided by local government has always been restricted to those with limited financial resources, and the availability of publicly-funded social care will shrink further, affecting the third sector especially. Individuals trying to manage their own social care by using the benefits system will be challenged by benefits cuts and restrictions, even as political rhetoric emphasises ‘personalisation’ and ‘personal budgets’. The initial positive responses to the Dilnot Commission’s proposed cap on personal contributions to long-term care, and hopes that the Care Bill will improve access to care and actual support, will come to be seen as being based on little more than smoke and mirrors.

General practice has been blamed by this government for many things, including failing to stem rising attendances at Accident & Emergency departments; generally increasing admission rates (especially for older people); and the rising demand for hospital outpatient appointments. At the same time it has also been criticised for tolerating delays in the recognition of cancers, and of dementia. There have for decades been wide differences in the quality of general practice, and in the efficiency of GP services, with the poorest and least well-run practices tending to be in the most deprived areas. The differences may have shrunk somewhat during the last decade, but variability in the quality of general practice will persist, despite the modernising forces within clinical commissioning groups and the ambitions of NHS England. Debate within the profession about the future for General Practice is however at an early stage and may not have got far by 2015.

There will be more public engagement with the NHS, both through official channels such as the NHS consumer body Healthwatch and the local government Health & Wellbeing Boards, and through unofficial ones such as campaigns to preserve existing NHS hospitals and community services. The conflict between local accountability to vociferous campaigners and interest groups and central accountability to NHS England will increase tensions within the NHS.

Public debate about the NHS will be dominated by the exposure of scandals by the right-wing press, and to a lesser extent by shroud-waving campaigners defending local institutions. Catastrophists will warn about the imminent downfall of the health service, whilst vested interests in the insurance industry will press for system change, replacing funding from central taxation with compulsory health insurance on the French or German model. Arguments about the scope for competition will continue, largely free from evidence. The government will promote discussion about the importance of individual responsibility for health, while family and friends will be seen as essential support for those in hospital, acting both as advocates in an increasingly impersonal system and as direct providers of care – as substitutes for nurses.

The background rhetoric of the government is likely to be that the previous administration failed to take the actions necessary to make the NHS safe and sustainable, and that the Coalition government has now rooted out and dealt with the poor quality care it inherited – and will continue to do so.

Immediate problems and solutions

At our Health Matters seminars we identified nine problems that a Labour government elected in 2015 will need to address (but not necessarily solve) over a ten year period.

The NHS budget

As the economy recovers, funding constraints on the NHS will need to continue for a period, but not with the level of intensity experienced with the ‘Nicholson challenge’. These constraints require both ‘smarter working’, as advocated by NHS England, and the continued rationalisation of NHS services.

The next Labour government cannot however escape from the fact that NHS costs inflate faster than prices in the wider economy, at about 5 per cent per year. Government policy should therefore seek to ease the pressures on local NHS services, for example by finding extra resources in the short term for overwhelmed A&E departments, and by reclassifying PFI and other historic debts as ‘toxic’, so that they can be managed separately from NHS cash-flows, or renegotiated.

In the medium term, investment in the development of extensive, 24-hour community services will reduce pressure on the hospitals. More generally the NHS budget will be difficult to separate from the total care budget, as top-sliced NHS funds are diverted to social care or integrated care. The trend to cut social care funding and reduce entitlements will have to be reversed.

In the longer term, spending 8 per cent of GDP on health services is perfectly viable: substantially larger proportions of GDP could be spent on the NHS without the economy being in any way destabilised.

Social change

The next Labour government will also be unable to escape from generic challenges – those that are common to all health services in industrialised societies. These include social and demographic changes (such as increasing consumerism, and increases in the oldest old); system obsolescence (hospitals designed for a previous era); unwarranted variability in service performance and outcomes in hospitals and community services; increasing public expectations and intolerance of poor quality health and care; and resistance to innovation within the health service itself. The NHS is good at co-ordinated care for specific time-limited activities (maternity care, surgery, rehabilitation, palliative care) but less good when care co-ordination is needed for high-volume, complex, long-term conditions, such as frailty in the rapidly growing population aged 85 and over. General practice and the network of DGHs are no longer capable, as currently organised, to deal with these challenges. For example, there is a need to incentivise preventive work over reactive responses to demand, particularly in community services, and a need to reduce perverse incentives for hospitals to admit patients too readily and discharge them too early.

‘Joined-up’ services

The separation of mental health services from other services, and their fragmentation by out-sourcing, adds to the challenges facing the NHS rather than reducing them. Physical and mental health are not separable, and nor should the services for them be kept separate, as they are now. ‘Joined-up’ care is needed in the NHS, and between the NHS and social care. Patient experiences of care are so often poor because of service boundaries; and this means that joined-up care can make financial trade-offs possible and generate efficiency savings. The next Labour government will need to invest to save, by promoting the changes that we know result in collaborative working – such as shared budgets, and professionals being invested with the authority to cross organisational boundaries.

General practice as the weak link

The variability of quality of care in general practice, together with its limited skill set and poor level of organisation, make it a weak link in the NHS chain. General practice is still a franchise of the NHS – part of the public domain rather than the public sector. But although general practitioners still have the ability to write their own job description, they are now more closely tied by tight contracts to the health service than at any time since 1948. At the same time GP instincts about investment are conservative, which causes the under-development that is so widespread, which in turn prompts patients to seek medical help elsewhere, especially in A&E departments. This means that although general practitioners are in theory well positioned to provide co-ordinated care, they are unlikely to do so under their present contract.

A new GP contract is needed, which will, for example, restore responsibilities for 24-hour care to general practice and extend ‘opening hours’. Although this will be resisted by the profession, the next Labour government should pick up the GP contract problem where its predecessor left off.

The care home sector

The needs of frail older people, and some younger disabled people, are currently met by residential and nursing homes – the care home sector. The differences between the two are currently dwindling, as they become residences for the most frail amongst the oldest old; and the residential part of the sector is likely to convert to nursing home status. This sector is three times the size of the NHS, and 90 per cent is owned by a mix of for-profit chains such as BUPA, Barchester and the failed Southern Cross; third-sector bodies like Methodists Homes or the Order of St John; and a shrinking number of owner-managers. The means-tested and privatised economy of this system of social care is fragile, with owner-manager homes sometimes on the edge of insolvency whilst larger chains are tempted to pull out when profits are thin or other opportunities beckon. The sometimes weak working relationships between this largely commercial care home sector and the NHS can result in variable quality of care for care home residents and avoidable costs for NHS hospitals, when frail people at the end of life are inappropriately admitted to hospital. This situation is unacceptable, and tinkering with it is unlikely to solve the sector’s problems.

The next Labour government should commit itself to universal social care, which could be funded by an Estates (Death) tax, or through additional, hypothecated compulsory social care insurance. Universal social care could be introduced in stages. One early stage could involve drawing the care home sector further into the public domain, through an NHS franchise. Such changes are necessary, but not sufficient. Providing universal social care will not in itself deliver more harmoniously functioning services. Collaborative working between care homes and the NHS needs to be fostered, by the kind of investment described above.

Democratic deficit

A historically weak political culture exists around the NHS, in which change is seen as a threat, blame is widely spread, and  whistleblowers are traitors. There is also a deep democratic deficit, in which the public is excluded from NHS decision-making. These are features of a centrally managed service in which there is a constant struggle for resources. Power in the NHS is dispersed across the health economy, without commensurate accountability across different centres of power, as seems to have happened in Mid-Staffordshire (according to the second Francis Report). This is especially the case in the commercial sector – as the Winterbourne View private hospital scandal demonstrated. Citizens have little influence over the health services available to them; professionals may be disempowered by local management; and local services are often resistant to ‘command and control’ management from the centre; meanwhile the commercial sector hides its activities behind a screen of ‘business secrets’. It is not clear how a democratic culture could be promoted in and around the NHS, but there are some available options. A ‘community development’ approach, in which civic activists, involved citizens and professionals work together to build stronger and more resilient local communities, is one such option. The Health & Wellbeing Boards in local authorities may also be a route to grounding the NHS in elected government.

Whatever the eventual methods chosen, there is a need for a mature political dialogue. The mechanisms for this dialogue need first to be established, and then used systematically. The risk to a new Labour government is that this kind of culture change will be strongly resisted, making politicians draw back from the challenge.

The market has advantages here, because it offers an individual solution to the problem of decision-making.

Public health

Public health has been marginalised just at a time when the social determinants of health and illness have become clearer than ever. Lifespan has extended greatly since the NHS was founded, when most people did not live beyond 65. For some of the most well-off, illness and disability are now being compressed into the last months of a long, full and energetic life – the ‘compression of morbidity’ – but this is occurring on a large scale only in England, not in Scotland or Wales. As austerity damages communities we will see the health gap between the rich and the poor widen in England too.

The next Labour government will need economic and health policies to repair the damage. The community development approach, mentioned above as a way into participatory democracy, also has the effect of increasing social capital, and so generates early benefits for health and wellbeing. Closer working between CCGs and local government Health & Wellbeing Boards should be promoted on these grounds, as well as those of its reduction of the democratic deficit.

Organisation without a memory

The NHS management has been re-organised too often, and has lost a great deal of experience, and its collective memory. The decay of leadership means that the cadre of management that is needed not only to stabilise the NHS but also to promote organic growth within it is weak. The lack of experience of many NHS managers and the churn in management staff are frightening. Recovery of memory is an urgent task, and debate is needed on how to achieve it, preceded by a moratorium on any ‘top-down’ organisational change imposed by or on the NHS central administration.

Quality of care

Quality of care in the NHS is undermined by rapid and repeated organisational changes, a narrow focus on targets, and the decay of leadership amongst clinicians as well as managers. Perceptions of the poor quality of care are also currently being manufactured by those hostile to the NHS. Their dominance can be undermined by adopting a person-centred approach to future service development.

The debate about ‘integration’ of services is an opportunity to do this. ‘Integrated care’ is an unhelpful term because it starts from the perspective of existing services, not from the needs of people. It would be better framed as ‘joined-up care’ (see above) or ‘whole person care’, or ‘co-ordinated care’. National Voice has a useful working definition of joined-up care which is very patient centred.

Future options

An incoming Labour government in 2015 could base its long-term policy towards the NHS on a response to these generic challenges from two angles.

First, there is a need for a balanced economy of health care that would include incentives for preventative measures, health promotion and a strategic role for public health; would reinforce holistic care; and would reduce reliance on hospitals. This probably requires some organisational combination of hospital and community services with lead commissioners, with shared or programme budgets as possible funding mechanisms; but in most situations these combinations will not be best achieved by formal merger. Since current market mechanisms for allocating NHS funds are an obstacle to natural and organic growth in collaborative working, these need to be greatly reduced or eliminated. The reconfiguration of services that a new Labour government should promote is therefore likely to require the abolition of most of the legal pro-competition architecture – including mechanisms such as the ‘Quality & Outcomes Framework’ in general practice, and ‘Payment by Results’ in hospitals.

Second, the health service itself needs to become a more effective and modernised service. Here there are number of key areas of focus.

Firstly, there is a need for the forward deployment of expertise: the most experienced practitioners need to move towards the ‘frontline’, in hospitals and community services, including in out-of-hours services and social care. If the problem is that relatively inexperienced medical and nursing staff in A&E departments do not know how to meet the needs of frail older people with complex needs, those with expertise will have to take over these clinical tasks. In the same way, out-of-hours services should be staffed by experienced GPs with knowledge of the locality, not the newly qualified or doctors flown in from EU states. The professional bodies are beginning to support the idea of a 7-day NHS, but the next Labour government will need to hold them to this commitment, because some of the workforce will resist.

Secondly there is a need to manage uncertainty. Patient referral, hand-on and ‘buck passing’ are endemic problems in the NHS, and can be so powerful that patients become lost in a system in which no-one takes responsibility for them. Over-specialisation and declining numbers of generalists fuel these habits, particularly in the hospitals. As a short-term remedy, professional training needs to focus on the management of uncertainty, at all levels of the NHS. In the medium term collaborative working needs resourcing; and in the long term the problem of over-specialisation needs addressing, perhaps through commissioning, combined with contract change.

Thirdly there is a need for more participatory democracy in the health service. Engagement of the public in NHS decision-making, and of the NHS in community development, should become a precondition for continued funding of local NHS services. The emphasis here should be on increasing the power of patient ‘voice’ through the use of social media and other mechanisms, rather than through traditional forms of consultation. Patient participation groups, now incentivised in general practice, will contribute to this process as they change from being a vehicle for consultation to become part of the mechanism for priority-setting and decision making about investment.

Fourthly there is a connected need for a shift to local control. Deepening relationships and encouraging effective and efficient working between local authorities and the NHS have the potential to shift the NHS’s centre of gravity towards local control. The NHS could evolve towards a situation in which local government Health & Wellbeing Boards sign off CCG plans, thereby giving local government increasing responsibility for healthcare commissioning.

Fifth, the maintenance of collaborative and trusting working relationships between disciplines should be the primary task of NHS management. This will mean that NHS managers will need to foster close-knit professional networks, a mutual sense of long-term obligation amongst staff, less concern about reciprocation, a high degree of mutual trust, and joint working arrangements as ‘core business’. Establishing single budgets and shared financial accountability as the norm across community and hospital services will be helped by developing a single outcomes framework; communication systems for sharing of information between services; and funding mechanisms that are aligned to desired outcomes.

Finally, there is a need to end the separation of mental and physical health services. This may once have had advantages, in allowing the disciplines of psychology, mental health nursing and psychiatry to escape from Cinderella status, but the distinction is now counter-productive. Ways of merging mental and physical health services need to be discussed within the NHS, and between NHS Trusts and the CCGs, so that new, combined services can be commissioned. Experiments should be encouraged and closely observed, because we do not yet know how best to combine these services. Change need not be speedy however – this is a situation where the NHS should make haste slowly.

A new style for the twenty-first century NHS?

In 2015 a Labour government could begin to promote local health services spanning community and hospital facilities, in a way not dissimilar to privately-run integrated managed care systems in the USA such as Kaiser Permanente, but without their growth being driven through market mechanisms. As with the merger of physical and mental health services, the exact mechanisms for governing such new local services should be the subject of natural experiments (because we do not currently know the optimal mechanism). Again, there is no rush. Changes such as these can occur slowly and the new services can evolve over time. The process can begin within existing legislation, once the section of the Health & Social Care Act 2012 that enforces competition has been repealed (Section 3). Planning for the repeal of Section 3 needs to start soon, including a realistic appraisal of what measures can be unravelled and what cannot. Legally watertight ways of avoiding the privatisation elements of EU law need to be finalised.

Engagement of the NHS with community development, wider public involvement in the NHS, and the evolution of locally co-ordinated services will together have the effect of pushing the NHS towards becoming part of local rather than national government. The old centralised NHS will have served its purpose – that of bringing equitable medical care to a society scarred by poverty and war. The new NHS will fit more closely with the complexities of a diverse and more affluent society. But the shifts in accountability and governance that are needed for this development can also be slow and incremental: there is no need for system wide reorganisation by decree.

This article is based on discussions facilitated by Health Matters and the Socialist Health Association (www.sochealth.co.uk) in spring 2013. The Health Matters seminars included: Richard Bourne, Peter Crome, Ilana Crome, Brian Fisher, Claire Goodman, Steve Iliffe, Jill Manthorpe, Linda Patterson, Martin Rathfelder and Aubrey Sheiham.

This article first appeared in Soundings and is reproduced by permission of the authors

Steve Iliffe and Richard Bourne