The National Health Service remains the envy of the world and is a touchstone issue in British politics. It has been subject to considerable reform by both Labour and Conservative governments since the 19905.
The present arrangements for the delivery of state-funded healthcare services in the UK are of bewildering legal complexity, matched only by the complexity of the management structures of the NHS. The British public has a steadfast commitment to the NHS, and any changes to NHS services have the potential to become politically contentious. However there is a widespread lack of understanding about how the NHS is managed and how it actually functions. In marked contrast, changes to state-provided social care services do not have anything like the political impact of changes to NHS services. Social care services are largely administered by local authorities whose budgets have been radically cut by the present government without any sustained political challenge. However, the successful delivery of health services is dependent on the successful delivery of social care services, and vice versa.
There are however a number of key differences between health and social care services, notably that the NHS is largely free for patients at the point of use, whereas social care services are (and have always been) means tested, with some service users meeting the full costs of their care.
Legal and policy framework
The law relating to the NHS is largely contained within a single consolidated Act, now the National Health Service Act 2006. In contrast, social care law has been spread across a myriad of different statutes, including the National Assistance Act 1948 and the Chronically Sick and Disabled Persons Act 1970, all of which get regularly amended by new legislation. The Law Commission produced a report criticising the complexity of adult social care legislation in 2011 and proposed a consolidated Bill. The present government introduced the Care Bill in May 2013, which became the Care Act 2014 in May 2014 but will come into effect when an order is made by the Secretary of State. Once implemented there will be a single Act of Parliament for care services to complement the National Health Service Act 2006.
It remains to be seen whether a single Care Act will make any significant difference to users of social care services. However, a single statute should make the job of those advising social care users (who are very often not lawyers) more straightforward.
The future of the NHS is the subject of academic departments, policy commissions, endless consultations and vast media comment. NHS controversies have led to politicians losing their parliamentary seats, and those who oppose any set of local or national changes to NHS services can be relied upon to predict the worst and wave shrouds to support their case. The NHS is, as the former Conservative Chancellor, Nigel Lawson said, ‘the closest thing the English have to a religion’. A politician therefore meddles with the NHS at his or her peril.
The Conservative MP Andrew Lansley spent years in opposition thinking about the NHS and finally got his hands on the ministerial red boxes when he was appointed Secretary of State for Health in May 2010. Within a few short weeks he had published his vision for the future of the NHS in a White Paper called Equity and Excellence: Liberating the NHS, which very largely built on the speeches he had made in opposition. That led to the Health and Social Care Act 2012, which was one of the most complex Bills ever presented to Parliament. It eventually got through the parliamentary process after a tortuous passage (including the famous Spring 2011 ‘pause’ to facilitate a ‘listening exercise’). Despite the complexity of the 2012 Act the vast majority of the changes it introduced to the NHS could have been introduced without legislation. The net result of the political fallout was that Andrew Lansley lost his job as Secretary of State for Health soon after the Bill was passed, even though he said it was the only job in government that he wanted. The new Health Secretary is Jeremy Hunt who is largely carrying on the reforms of his predecessor.
However, political shortcomings in the Lansley vision of a ‘Bank of England’ type of NHS, largely run by NHS England and free of political control, have become increasingly clear. In June 2014, junior Health Minister Jane Ellison complained that the NHS was largely ‘out of control’ of ministers, without apparently realising that this was the policy of the former Secretary of State. The 2012 Act provided that ministers remain politically accountable for the NHS, but largely removed their means of control. Ministers were thus left politically accountable for a government service that they had little if any formal means of controlling.
A list of problems
There are a series of problems with the NHS that an incoming Labour government will have to accept. The first is that those who supply the services are trusted far more than those who manage the service. It is thus a sector where ‘provider interests’ have far more weight than almost anywhere else, apart perhaps from the military. The BMA, the Royal Colleges and the staff trade unions all have tremendous policy influence, and are not afraid to use their voices to object to change that will adversely affect their members. The strapline of the BMA is ‘Standing up for Doctors’, but it is highly effective in presenting the interests of doctors as being coterminous with the interests of the patients, and thus gaining public support for its positions. Having said that, the professionalism and commitment of the doctors, nurses and NHS managers is a resource that any Secretary of State underestimates at his or her peril.
Second, after the Health and Social Care Act 2012 is implemented, the legal and management structures within the NHS are wholly unclear to the public as well as to most of those working within the system. Lord Darzi, a hugely respected surgeon and former Labour Health Minister commented in a House of Lords debate as follows concerning the Lansley reforms:
We now have health and wellbeing boards, clinical commissioning groups, clinical senates, local healthwatches, the NHS commissioning board, a quality regulator and an economic regulator …At the end of the day, who is responsible for making sure that the NHS saves more lives this year than last? Who is accountable for how its budget is spent? Who will inspire NHS staff to lead the difficult changes?
Working out who is really responsible for performance in the NHS has never been straightforward and is perhaps even more difficult today than ever before.
The third problem is that many of the complaints made about the marketisation impacts of the 2012 Act failed to appreciate how far a Labour government had already taken the NHS down that path. Lansley was anxious to present his reforms as being a radical departure from Labour policy, while Labour politicians, free from office, were free to complain about privatisation of the NHS by stealth. Simon Stephens, a former Health adviser to Tony Blair and now the Chief Executive of NHS England saw things differently in July 2010 when he said, ‘what makes the coalition’s proposal so radical is not that they tear up that earlier plan [the NHS plans of the Labour government]. It is that they move decisively towards fulfilling it’ . Labour complained about the competition aspects included in Part 3 of the 2012 Act but, unless fundamental changes are made to the structure of the NHS, most of the legal obligations that brought the EU procurement and competition regimes into the NHS were already present. EU competition and procurement law was already having an impact on the NHS before the coalition government took office because of decisions made to create legal separation between commissioners and providers. The duties of transparency, equal treatment and non-discrimination in Part 1 of the Public Contract Regulations 2006 applied to the placing of NHS contracts long before 2010, and thus a disappointed contractor already had the right to sue an NHS commissioner for breach of procurement law duties. Part 3 of the 2012 Act increased the focus on procurement and competition for NHS bodies but, given the structures set up by the Labour government, it probably made little practical difference to legal obligations in this area.
Fourth, the NHS that an incoming Labour government will manage needs to serve an ageing population where demand for NHS services will substantially increase each year by maybe 4 per cent. The Royal College of Physicians reported recently that:
The number of general and acute beds has decreased by a third in the past 25 years, yet during the past 10 years there has been a 37 per cent increase in emergency hospital admissions and a 65 per cent increase in secondary care episodes for those over 75 in the same period (compared with a 31 per cent increase for those aged 15-59).
A 2012 parliamentary select committee report also noted the need to change services and reported:
The National Health Service will have to transform to deal with very large increases in demand for and costs of health and social care. Overall, the quality of healthcare for older people is not good enough now, and older people should be concerned about the quality of care that they may receive in the near future. England has an inappropriate model of health and social care to cope with a changing pattern of ill health from an ageing population. Further fundamental reform to the NHS in the next few years would be undesirable, but radical changes to the way that health and social care is delivered are needed to provide appropriate care for the population overall and particularly for older people, and to address future demand.
It is unclear whether the present government has a coherent plan to manage this increase in activity and equally unclear how an incoming Labour government would do so.
A fifth problem is that, as medical science develops, the treatments doctors can offer that may benefit patients increase each year.
The pharmaceutical industry is a great British success story but each development of new drugs creates a demand for funding for a defined cohort of patients from an already cash limited budget. With every new wonder drug the need increases for robust systems within the NHS to decide what treatments do and do not deliver both clinically effective and cost-effective treatment. An interesting observation on this issue emerged in an NHS rationing legal case where the chief executive of the local primary care trust (PCT) explained the problem as follows:
Doctors have a duty of care to their patients and thus press for the best possible care for each and every patient they are treating. The treating consultants are generally not concerned with issues of overall cost effectiveness. Their role is to press for the best treatment for their patient. Where such treatment is not routinely commissioned by a PCT, the consultant is not able to provide the treatment as part of NHS care unless an exception is made for the patient. The role of the consultant in such cases is to write letters and reports to seek to persuade the PCT to fund the treatment for patients … This means that we need to consider carefully the costs of different treatments and the benefits that a treatment delivers before we plan to commission it. For the PCT, the decision to commission a particular kind of treatment is not just a question of whether a medical treatment is clinically effective: if a treatment is not clinically effective we would not commission it. However, if a treatment is clinically effective, the PCT needs to judge whether the treatment is a cost effective use of the limited resources available to it. As the PCT has a fully committed and limited budget, the duty to break even means that if we commission additional services we need to pay for this by disinvestment from other services … PCTs can only spend money frotft taxpayers once.”
NHS policy makers often underestimate the problems caused by the entirely legitimate differences between the perspectives of treating doctors and those of NHS commissioners. These two groups are using the same resources but, as the above quotation explains, they approach the issues of resource allocation in very different ways.
The way forward for NHS policy under Labour
Against this background one political reality is crystal clear – there are no votes in changing the ‘wiring’ of the NHS. A major reform of the NHS structures is politically undeliverable and should be firmly rejected by an incoming Labour government. Andy Burnham, as Shadow Secretary of State for Health, may have promised to repeal the Health and Social Care Act 2012, but in reality this promise cannot extend further than repealing parts of Chapters 1 and 2 of Part 3 of the Act (concerning the role of Monitor and Competition). However, even that would leave a vacuum which, given the constraints of EU law operating in this field and the Public Contracts Regulations 2006, could not be left unfilled. The last thing that the NHS needs is another major structural reorganisation, and the public and the professions would not stand for it.
However, an incoming Labour Secretary of State may be obliged to recognise that the commissioner/provider divide in the NHS has been largely ineffective and, to date, has been a huge waste of public money. The division between those parts of the NHS that commissioned healthcare and those parts that delivered it was originally devised by former Secretary of State for Health, Ken Clarke, in his 1989 White Paper Working for Patients (and at that time called the purchaser/provider divide) in order to introduce some market mechanisms into a state monolith. But there is little evidence that commissioners (as the purchasers are now called) have acted like effective private sector purchasers and so ‘market’ mechanisms rarely if ever deliver the intended results.
The Health Select Committee came close to recommending the abolition of commissioning in its report of March 2010, The committee concluded that commissioners tended to be ‘passive’ and added that they failed to justify their own existence. It said: ‘Weaknesses [in commissioning performance] are due in large part to PCTs’ lack of skills, notably poor analysis of data, lack of clinical knowledge and the poor quality of much PCT management. The situation has been made worse by the constant re-organisations and high turnover of staff.’
There was no evidence that GPs, trained to deliver services to individual patients, would be any better at commissioning population-based medicine than PCTs. Commissioning has been further undermined because a large number of staff with knowledge of NHS commissioning have left the NHS in recent years as part of the £2obn ‘Nicholson Challenge’ and, as a result, the support structures for the new Clinical Commissioning Groups (CCGs) have been left with fewer experienced staff. However, a King’s Fund report published in July 2013 was not wholly pessimistic. It observed:
Despite the early timing of our fieldwork, we found some evidence that CCGs were already having an impact on members’ clinical practice … The most commonly cited effect of CCGs was that peer-to-peer dialogue had heightened GPs’ awareness of their referral and prescribing patterns and how they compare with those of others. In most sites, at least some practices or localities reported that this had led to their succeeding in reducing their referral rates or prescribing costs. Others, however, reported that their clinical practice remained entirely unaffected so far.”
Making commissioning work for the benefit of patients and the taxpayers is perhaps the most serious challenge in answering the Lord Darzi question about who is really responsible in the NHS. The right answer is the commissioners should be responsible and have all the tools and levers to use to make change happen. But if ditching commissioning is off the agenda for an incoming Labour government (because it would involve a major change to the NHS ‘wiring’), the only alternative for a Labour Secretary of State for Health is to invest in NHS staff and support structures to make commissioning work as effectively as possible. That means reversing the present ‘clinicians good, managers bad’ rhetoric and recognising that something as complex as the NHS cannot work effectively without high-quality and effective managers in both commissioning and providing organisations.
Tools available to a Labour government to change NHS policy
Perhaps the single biggest problem that an incoming Secretary of State will inherit is a lack of legal ‘levers’ to pull to make changes happen. Under the National Health Service Act 2006 all NHS bodies other than GPs and NHS Foundation Trusts were required to follow ‘directions’ made by the Secretary of State. GPs were excluded because they were independent contractors and NHS Foundation Trusts were excluded from the Secretary of State’s direction-making powers in order to give them independence. However the Secretary of State was able to issue directions to all NHS commissioners who could, in turn, use their contractual powers to effect necessary change. The direction-making powers of the Secretary of State have virtually disappeared as a result of the Health and Social Care Act 2012. The Secretary of State does not now even have a clear power to issue directions to the NHS Commissioning Board (also known as NHS England) and in turn NHS England only has very limited direction-making powers in respect of CCGs.
There are ways of influencing the actions of NHS England and, through NHS England, other NHS bodies. The days of instructions coming from Richmond House with the force of law are over. In fact, however, little if anything has changed, and edicts from ministers remain part of the NHS. As political realities emerged, the naivety of a ‘Bank of England’ style NHS became clear. Ministers have thus reasserted political control and are acting as if they remained in charge. At present, however, they have no legal right to do so. At some point the power of persuasion may not be enough, as NHS bodies assert the legal freedoms they were given under the 2012 Act. At that point, ministers may be gently but firmly told to back off. There is an inherent contradiction between a legal Bank of England style NHS and ministers being politically accountable for an NHS they cannot control. It is an issue that will need to be resolved.
An agenda for reform
So what are the major legal issues that an incoming Secretary of State might wish to consider? I would suggest that they should include the following.
Restoring the Secretary of State’s direction-making powers
There are three reasons why an incoming Labour government should rapidly change the law to restore (or create for the first time) the Secretary of State’s power to issue directions to NHS England, and in turn to give NHS England the power to issue directions to any public (or private) body delivering NHS services:
- The Secretary of State is accountable to Parliament for the delivery of NHS services. That accountability is meaningless without giving the Secretary of State the power to intervene if those charged with the day-to-day delivery of the services fail NHS patients.
- The resumption of NHS direction-making powers will make it clear that the NHS is a national health service directable by a single Secretary of State, and not a joined up collection of local health services.
- NHS direction-making powers will make it clear that the Secretary of State retains a measure of control over all NHS services, and thus will allow the NHS to remain outside of the regime for
EU procurement law. It will help bring the NHS back within the Teckal exemption (which avoids the need for procurement exercises when services are commissioned from public bodies under a common system of control by the purchaser).
The Secretary of State imposing his will by making directions is, of course, a last resort. The existence of the power usually means that it does not have to be used. However, now that NHS England has been created as a stand-alone board for the NHS, it makes far more sense to channel a direction-making power through NHS England (with the Secretary of State directing NHS England and NHS England then directing individual NHS bodies) rather than have the Secretary of State directing individual NHS bodies.
Making NHS contracts the norm
An incoming Secretary of State should change the law to insist that all arrangements between NHS commissioners and providers for the delivery of services to NHS patients must be set up as ‘NHS contracts’ and not as legally binding contracts. This may appear to be a minor technical change but it will save substantial legal costs and reduce the scope for providers to miss the big picture when delivering NHS services. Partners who work together under an NHS contract are far more likely to work cooperatively to deliver integrated services for patients as opposed to those who are worried about protecting their own position by attempting to assert their legal rights. It will also assist in ensuring that EU procurement law obligations stay out of the NHS to the greatest extent possible.
Creating legal structures that can take binding decisions on NHS acute service reconfigurations against a fixed timetable
The NHS has some of the finest hospitals in the world, and the Labour government from 1997 to 2010 had a proud record of building new hospitals. But the time has come for the NHS to focus care for fewer patients in fewer hospitals and to deliver far more healthcare in the community. That requires NHS hospital reorganisations, but these have been plagued with both political and legal controversy, in part because of a lack of clear structures that define how such decisions should be taken, by whom and against what timetable.
For example, an attempt to reduce the number of centres at which children’s heart surgery should be delivered suffered setbacks as a result of two judicial reviews that challenged the lawfulness of the complex process adopted by the NHS to resolve this problem. That process has now been effectively abandoned, even though there was a wide medical professional consensus that reducing the number of centres would save the lives of sick children. That consensus did not, of course, extend to which centres should be removed from the list. The NHS will not be able to deliver more services for an ageing population in the community unless robust action is taken to reduce investment in secondary care, which inevitably means fewer and larger hospitals. Four key points about these issues should be noted:
- Although politicians are neither qualified nor politically able to take decisions about the downgrading of individual A&E or maternity services, Labour politicians must be wary of supporting every local service in the run-up to the 2015 election. This was the Conservative approach in the period leading up to 2010 – supporting every local unit under threat of change. This approach resulted in the ludicrously vague and unworkable ‘four tests’ policy introduced in May 2010. This approach makes it extremely difficult to take lawful decisions to make changes to a local health economy because every set of local GP commissioners effectively has a veto to stop change in local services. The only responsible approach by politicians is to make the case for change and to emphasise that decisions about the most clinically effective arrangements for local health services must, at least in the first instance, be for medical and managerial professionals. It may be too much to ask the public to accept that the NHS should be focused on healthcare services and not institutions, but opposing every NHS reconfiguration is a political cul-de-sac.
- Decisions about configuration of local NHS services must involve multiple CCG areas in order to be effective. The NHS Act 2006 does not recognise the term ‘NHS local economy’ but decision making on configuration of local NHS services is rarely effective if confined to a single CCG area. Thus new legal structures needed to take these decisions must treat the local NHS commissioners as participants and consultees, but ultimately cannot give a veto to each individual CCG.
- Reconfigurations of NHS services are afflicted by timidity, delay and uncertainty. The legal structures an incoming Secretary of State should create for taking these decisions should therefore allow NHS England to initiate the process rather than waiting for the local NHS politics to be sufficiently acute to allow a change programme to be examined, provide for clear timetables, and allow (as now) for expert advice and validation to any change plans, but then require swift implementation.
- The role of the Secretary of State for Health as the appellate body for the final decision (on referral from the local authority committee) may need to be reconsidered. Is it a proper use of the Secretary of State’s time to take a decision about the future of a local A&E unit and/or does it unnecessarily ‘politicise’ the process? Or is a final appeal to the Secretary of State a feature of his or her political accountability for NHS services? There are fine arguments both ways but there is a compelling argument that any appellate decision by the Secretary of State or an appellate body should be taken within a short time period (of say three months).
Investing properly in NHS commissioning
Doctors and other medical professionals work with skill and dedication to treat their patients. But without effective commissioners the NHS does not know whether the treatments being provided are either clinically effective or cost-effective, or whether doctors are pursuing a course of treatment which is neither. The only justification for the commissioner/provider divide is that NHS commissioners are able effectively to represent both the patient (but to be more informed than many patients) and the taxpayer to ensure that all NHS care is being delivered in a way that is both clinically effective and cost-effective. But there is precious little evidence that this is happening or has ever happened. The ‘world class commissioning’ programme aimed to achieve this and was widely welcomed, although it was discontinued by the present government before reaching its potential and, of course, many if not most of those who were part of the programme are no longer working in the NHS. In March 2010 the House of Commons Health Select Committee observed:
The key question is whether WCC [world class commissioning] will be enough to address the enduring weakness of commissioning. Although WCC seeks to bring about a ‘step change ‘in the capacity and capability of PCTs to act as effective commissioners, some witnesses thought that the enduring weakness of commissioning was unlikely to be addressed by WCC alone.
The answer from the Committee to that question was that WCC was not sufficient, of itself, but it was part of the answer in developing an NHS that commissions care in an effective manner. A new Secretary of State should explicitly recognise that effective commissioning is a difficult, technical process that requires attention to detail and the confidence to confront clinicians. The present structures deliver greater clinical involvement in commissioning and it is possible that this will deliver more effective commissioning. But that will only become a reality if both GPs and secondary care consultants recognise and respect the role of commissioners, which in turn needs an enhanced role and status for commissioners. The NHS thus needs politicians who abandon the lazy rhetoric of ‘manager bashing’. A key role for the new Secretary of State will be to promote the role of those who speak up on behalf of patients and the taxpayers in the NHS system – namely the commissioners. Either that or to abandon the whole commissioner/provider divide as a waste of time and money.
Tackling postcode prescribing
The NHS has never given patients a legal right to the same level of medical treatment anywhere in the country. Decisions about what medical treatment a patient is entitled to as part of NHS funded healthcare are decisions of local NHS units, with patients being subjected to ‘postcode prescribing’. Variation between policies of different NHS commissioners is thus both lawful and inevitable. Thus a patient who is registered with a GP in Stoke can be entitled to a life-saving bariatric surgery operation with a threshold body mass index of 35, whereas patients would lawfully require a BMI of 50 in neighbouring North Staffordshire. The creation of the National Institute for Health and Clinical Excellence (NICE) was designed to inch the NHS in the direction of a national service as a result of directions made in 2003 which required PCTs to fund treatments recommended in NICE Technology Appraisal Guidance. However, only a tiny number of treatments have been taken through the laborious NICE process. Even then, there are legitimate complaints that NICE decisions involve a process of decision making that is focused solely on the individual treatment in question and does not properly ask how that proposed investment fits into a scheme of local or national priority-setting.
There are two interconnected problems when attempting to tackle postcode prescribing. First, the NHS cannot afford to ‘level up’. Any expansion of mandatory treatment rights would inevitably result in local NHS commissioners being unable to afford other treatments that they currently fund, which would be presented as ‘cuts’. Second, a politician cannot ever be seen directly to take a ‘prioritisation’ decision because those who are denied any item of care will loudly cry foul in the media. The answer to this age-old problem may be for the Secretary of State to set a much more detailed framework and to influence NHS England (via the Mandate if needed) to impose much greater standardisation of commissioning policies across CCGs, thus reducing the more glaring disparities. However, in the end difficult decisions on which treatments are to be made available to which patient groups face formidable difficulties if they fall to be taken by anyone who directly faces election by the public.
Joining up healthcare and social care
The Shadow Secretary of State for Health, Andy Burnham, is presently discussing the most effective way to join up health and social care so that, particularly for the elderly, it becomes about care services and not whether these are health or social care services. There are obviously difficult issues about funding such a service and worries about meeting the cost of the increased demand that such a service change would trigger. However if an incoming Secretary of State was minded to expand the social care services that could be provided free at the point of use, there is an established mechanism that could be used to bring this about without the need for primary legislation. Section 3(1)(e) of the NHS Act 2006 provides that CCGs must provide such ‘other services’ as part of the NHS as the group considers are ‘appropriate as part of the health service’. This is the power that is used by the NHS to fund social care and accommodation costs of patients who are eligible for NHS Continuing Care. The process that CCGs are required to follow to decide whether a person is eligible for social care (as part of NHS funded care therefore free at the point of use) is set out in regulations, which currently require CCGs to follow the National Framework for NHS Continuing Care in making decisions as to where the health/social care boundary lies. This boundary is crucial for patients as it defines the boundary between services that are provided free of charge and those that are provided on a means-tested basis. However, if a future Labour Secretary of State wished to expand the areas of social care that were to be provided without charge, this appears to be the most appropriate mechanism to do so. Adding care services which can be delivered under section 3(1)(e) to include a greater level of social care (and thus making them free at the point of use) would deliver on a joined-up service without major structural reorganisation.
Becoming Secretary of State for Health in a Labour government is both the best and the worst job in government. It is the best because the NHS is so close to the heart of the Labour Party, and is the worst job for the same reason. The above are a series of practical steps that an incoming Labour government could take to regain control over the NHS, restore it as a politically accountable public service and to stop the slide towards the NHS becoming a state-funded healthcare insurance system.
Summary of principal recommendations
- To restore the Secretary of State’s power to issue directions to NHS England, and in turn to give NHS England the power to issue directions to any public (or private) body delivering NHS services.
- To change the law so that all arrangements between NHS commissioners and providers for the delivery of services to NHS patients are set up as ‘NHS contracts’ and not as legally binding contracts.
- To create legal structures that can take binding decisions on NHS acute service reconfigurations against a fixed timetable.
- To invest properly in NHS commissioning.
- To tackle postcode prescribing.
- To join up healthcare and social care by, in the first instance, expanding the ‘other services’ that can be commissioned under s. 3 of the NHS Act.
This article first appeared in Law Reform 2015, published by the Society of Labour Lawyers, and is reproduced by kind permission of the author.