Economic policy, not reform, is the current threat to the NHS

NHS Funding

Labour may have lost the election but much of its health Manifesto is being implemented by the Conservative Government. David Cameron and Jeremy Hunt are sticking to their centrist, “glazier” strategy (at least in hospital land) with market plans conspicuously side-lined. While they need to make further changes to tramp the dirt down on the toxifying Lansley legacy, economic policy is now the NHS’s greatest threat.

Simon Stevens told the CBI that “The era of go-it-alone individual hospitals is now being superceded by more integrated care partnerships” – the very argument pursued by Labour in opposition to the Health and Social Care Act. His Vanguards programme appears to have left private providers out to pasture rather than using them as a battering ram for change.

The creation of single regulator for all Trusts – previously proposed by Andy Burnham – is seen by some FT stalwarts as dilution of the special status, although it was an idea also mooted by Alan Milburn last year. He expected a levelling up of autonomy to create an all-FT market place, with failing hospitals allowed to go bust before a wave of new management franchises and mergers. But these solutions have had mixed results so far and the alternative – bringing challenged FTs under closer political supervision – seems more likely.

The recruitment of a new regulator leader from within the hospital sector is another centrist shift. Jim Mackey has put his (local authority’s) money where his mouth is in rejection of Private Finance Initiative. Will he lobby the Treasury to buy-out the rest of the country’s PFI schemes with low interest public borrowing, as Jeremy Corbyn has urged?

The further roll out of devolution plans clearly takes a leaf out of Burnham’s whole person care vision. DevoManc split the Labour party locally and nationally but was an example of George Osborne’s “land grab” of progressive Labour thinking.

Finally, we are also seeing the revival of regional planning, with moves afoot to tie the £8bn Stevens Fund to production of plans for new models of care co-produced by providers and commissioners. Last time the NHS did this was in 2007 under Lord Darzi and Gordon Brown – resulting in trauma, stroke and cardiac networks, and improved patient outcomes.

But system leaders and policymakers still need to clear the way for such plans. Clinical networks need to be able to direct specialist patients to centres of excellence and keep local activity at their nearest hospital. This conflicts with the letter of patient choice policy, if not the spirit. After all, choice was originally intended as a means to improve local hospitals, and under Stevens and Milburn it was restricted to some patients waiting more than 6 months. Referral restrictions have so far been blocked, but financial constraints mean popular hospitals cannot expand capacity and end up delaying specialist care and sub-contracting with local private hospitals at a premium.

An alternative might allow patients to choose a distant specialist centre for their routine appointment, but with a longer waiting time – as long as they were also offered an 18 week wait locally. This could help the Shelford Trusts, drowning under secondary care demand, to protect specialist services whilst maintain local hospitals’ elective income streams. It would also be an efficiency saving, reducing the cost of subcontracting waiting list patients to the private sector.

As for the competition elements of the Act, the “see you in court” approach can only work for the short term. For a more planned approach to service reform, legislative and contractual changes would still be needed to protect the system from competition and procurement law.

In the medium term it is not privatisation or system reform that is biggest threat to the NHS but The Economy. The NHS ring fence, already leaking the through Better Care Fund transfers, will squeeze out training, public health and research budgets. Outside the ring fence is the Wild West, with an 8 percent fall in older people’s care spending since 2010, one quarter fewer care packages and a drop in care home beds at a time of rising older populations and increasing frailty. A 27% increase in delayed transfers was a factor in last winter’s hospital bed gridlock and A&E chaos.

The Spending Review should therefore expand the scope of the 5 Year Forward View (and its budget) to include costs and service reform for whole person care. The elderly-friendly Government should relaunch reform of long term care funding. Learning from the reform of pensions, an auto-enrolled insurance scheme might be one way to start.

All fantasy politics of course. The centrist strategy on the NHS has secured a Conservative majority and space for take-off in outsourcing (outside hospital walls for now) and shrinking the state as a spending and regulating force. There lies the nightmare, as hospitals become 21st century workhouses, picking up the destitute, mentally ill, homeless, disabled, frail and undocumented left behind by a decimated welfare state and fractured society. Then, as the provider sector buckles, enter stage right a “window breaker” minister to unleash the full force of the Act.

Joe Farrington-Douglas is a former Labour policy adviser and works for an acute NHS Trust. He is writing in a personal capacity.