Redisorganisation, Hospitals and Trusts

It looks as if the era of markets and competition within the NHS has come to an end. The vanguards and devolution experiments are challenging the traditional boundaries. Many pages of planning guidance contains no mention of competition – Monitor is being morphed into something else entirely. Commissioning as has been tried through its various guises is adapting further in different ways in different places. Integrated providers and hybrids of commissioner/provider are now possible. New kinds of organisational bodies could be taking over the role as strategic commissioner of integrated services.

So – much thought is being given to future structures.

At one end of the debate is the proposal to fully reorganise the whole NHS back to its 1970’s. At the other end of the debate are those who see progress through evolution; through relationships and people with structures and even legislation being almost irrelevant. Also many fear another top down reorganisation which would be costly and damaging to relationships and so far has never worked.

Going into the last election the Labour Party was in the latter camp – it believed that its policy objectives could be achieved by removing the market structures and making the existing organisations and structures work in a different way. This now appears to be what is actually happening in the real world NHS.

All agree that there should no longer by a market or a purchaser provider split but the two camps differ on the role for planning and/or commissioning. Those in the reorganisation camp don’t really explain how services are to be planned or how the money will flow through the system, we have different systems in Wales and Scotland but both have some form of commissioning – both have some services which are either private, franchised or otherwise outside the core public service provisions – and of course social care is privatised and commissioned everywhere. Some services are better planned and provided across a larger population than the local and so decisions have to be made by someone about how costs are shared or allocated.

In the evolution camp then there is the acceptance that the provisions of some services will remain in the non-public sector (at least for the medium term) and that GP services, pharmacy, dentistry have to be commissioned. So in the evolutionary model there is still a split between the planners and service management of the providers, although this does not mean there has to be separate organisations! Arguably in any system there is a split between commissioning and provision, the issue is how to manage the commissioning bit and ensure accountability.

It is relatively simple to see how most primary care, community care, urgent care and social care services can be organised on a local basis. There could be either a separate health authority, or simply just the existing local authority, planning and providing all the necessary services – they are essentially local in character. So too are many services provided through a District General Hospital. It is a great pity the care system was not set up in this way in the first place but the wrong team won the argument about the role of local democratically elected local councils!!!

But with more careful thought it’s clear that some emergency, hospital and mental health services do not fit into such a local pattern – specialised services certainly don’t. This was even recognised long ago when the major teaching hospitals were allowed a great deal of autonomy outside the main management structure.

Funding for core services can be addressed through weighted capitation but for some services different models are necessary just as some developments and major projects require their own separate funding streams.

Under the reorganisation model all the existing NHS Trusts and Foundation Trusts like Barts, Royal Marsden or Salford Royal could no longer continue as separate organisations. They would somehow have to be fitted into the local health authorities (one for each major local authority areas) or into a regional authority. Already in some places there are developments so that one body provides a wide range of social care alongside both acute and primary care services and also undertakes most of the commissioning responsibilities (from both CCG and local authority). So far those proposing the reorganisation approach have not provided any details about how the transition would be made or what the impact would be on the real organisations that would have to be broken up in some way.

Under the alternative approach, the one favoured by the SHA, there would be no market based commissioning but there could still be separate organisations that provide services. This is the situation in non-market Wales where three major provider bodies were allowed to continue after the market was removed – this appears to work well enough.

In the evolved model there would be some organisations that had their own separate identity, their own board and accountability through the commissioning relationships with one or more commissioning bodies. These bodies will still be part of the NHS and subject to direction by the secretary of state who would have the overall legal and political responsibility for the service. In the SHA version these bodies would be like Foundation Trusts having a two tier governance structure and non-executive directors.

The weakness of the evolved model which retains separate provider bodies is that it is harder to ensure that it is exempt from any externally imposed competition rules. The Efford Bill set out how this could be done by restoring the role of the secretary of state, abolishing the market related parts of the current legislation and by restoring the NHS contracts. Most agree this is enough but it’s hard to ever be 100% sure. Equally it is also possible that any post reorganisation structure could be vulnerable to manipulation but also any incoming government committed to privatisation and markets could simply pass new laws for yet another reorganisation!!!

So two big policy issues are. How does the money flow through the system? And. What role is there for hospitals and independent Trusts of some sort?