Living with a zombie

The Health and Social Care Act is a zombie – a dead concept that NHS England is obliged to work around

NHS England’s Sustainability and Transformation Plan (STP) project is an attempt to answer two major problems. One is to find ways to do without the £22 billion a year that the NHS, as it presently   operates, will need to cut by 2020-21 (and post-Brexit the gap may of course be much larger). Britain already spends 1% less of its Gross Domestic Product (equivalent to about £20 billion a year) on health than France, Germany and other comparable European neighbours, leaving very little fat to trim. So the primary aim of STPs is to make both Clinical Commissioning Groups and NHS providers adapt to falling per-capita budgets, using a mixture of carrot (a piece of the £2.1 billion STP fund) and stick (no money from the fund if NHS England’s requirements are not met).(The 2016/17 Sustainability and Transformation Fund by CHPI Research Team)

Both carrot and stick also aim to force CCGs and providers to implement the new organisational models for healthcare outlined by NHS England chief executive Simon Stevens in the Five-Year Forward View (FYFV) – multispecialty community providers, primary and acute care systems -transformations that the FYFV sees as being better for patients as well as saving money.


The second problem STPs are intended to overcome is the failure of the 2012 Health and Social Care Act to make providers more efficient by having to compete for patients. By 2013, NHS clinical work had been opened up to private providers for almost 10 years. But the private sector had secured footholds in only a limited range of NHS services. For example, in 2014 it provided 31% of out-of-hours GP services in England, and in 2012-13, 20% of community health services. In 2013 Monitor allowed CCGs to renegotiate contracts with existing NHS providers, without serious private sector protest. It seemed that with the post-crash state paying for healthcare out of constrained revenues, ‘More extreme’ means two things, first the STP process places extraordinary power in the hands of the chief executive of NHS England, since under the 2012 Act the NHS is independent of the secretary of state who  is now only responsible for promoting the NHS not providing it. Second, in exercising power through the STP process, the chief executive is acting outside the law. That is not the same as acting illegally. Schedule 4 of the Act authorises the secretary of state or a CCG to do ‘anything which is calculated to facilitate or is conducive or incidental to, the discharge of any function conferred [on them] by the Act’. Yet when asked about the legal status of the changes to health and social care proposed in STPs, health minister George Freeman replied for the Government that “The STP has no legal basis” and “any plans submitted will be proposals that will form the basis for discussion [which] may form the basis for further plans and actions…” and keeping a close eye on costs, there were no big profits to be made from care. So the FYFV made no mention of competition; improved efficiency was now to be achieved by command and control, arguably more extreme than any the NHS has ever known. Implementation of the new models of care, and meeting numerous other requirements laid down in the STP planning guidance, is to be enforced by tough financial incentives and disincentives mentioned above.

This could hardly be more vague. Yet all over England CCGs, NHS trusts and social care providers and others were scrambling to come up with what the planning guidance says are plans, and to do so by the end of June this year if they didn’t want to lose their footprint’s share of the STP fund ‘footprint’ as defined in the guidance as ‘geographic areas in which people and organisations will work together’. That could hardly be more definite: because as Freeman went on to say, once real plans have been made informally CCGs must adopt them formally into their legal planning processes. He said: “The local, statutory architecture for health and care remains, as do the existing accountabilities for chief executives of provider organisations and accountable officers of CCGs. Organisations are still accountable for their individual organisational plans, which should form part of the first year of their footprint’s STP.”

Recipe for chaos

The changes that ‘local health systems’ are thus being required to make in their ‘footprints’ are substantial, involving serious sums of public money, with serious implications for patients. Yet how agreement is to be reached between the multiple players in each footprint, and how decisions are to be made if there disagreement, is not specified in law. When Dr Marlowe, a CCG board member in Hackney, London, asked whether in case of disagreement any two of the seven CCG chairs in the north-east London footprint could outvote his own chair, he was told that legally they couldn’t, but one CCG withholding consent could mean that the whole footprint got no STP money.

This kind of informal policy-making process, with the law saying one thing but practice being driven by quite different incentives, is familiar in the developing world. Being untransparent and unaccountable, it risks producing bad policy and falling prey to conflicts of interest, special deals, nepotism, cronyism and corruption, at the expense of the public interest. It is hard to think of any other major field of public policy in England where policy is made in this way. Why is it now being accepted for the NHS?

The obvious reason is the desire for urgent action to cope with the intensifying squeeze on resources, combined with the Government’s unwillingness to admit that the 2012 Act is an expensive failure, even though many Conservative MPs are believed to say so in private. Leaving the Act in place also has a political advantage. The cuts in services that are likely to be made in order to stay within shrinking budgets, plus any problems from implementing the new care models of the FYFV, will be blamed on those in the CCG who signed the plans, as many GPs warned would happen when the Health and Social Care Bill was put before Parliament in 2011.

Lack of evidence

But why might implementing the FYFV give rise to problems? The FYFV cites examples of the new models of care that it wants to see adopted, and which are said to be working well, but that is not evidence. How many of them have saved money? How well will they work in widely different socio-economic local settings? Most innovative models of care are time and place dependent, and often turn out to cost more than the model they replace. People impatient for reform are tempted to gamble on success, but it is a gamble with resources that are critical for patients’ health. Past reorganisations of the NHS have been the subject of extensive public discussion and parliamentary debate. What justification is there for the unaccountable process being followed this time round?

And the 2012 Act has become a zombie: it is dead, but has to be ‘worked around’, as insiders say. It fragmented the NHS into multiple self-financing structures so that they would compete, not collaborate. It was with this in mind that in October 2013, when two hospital trusts in Dorset wanted to merge in order to rationalise services, the Competition Commission vetoed the merger. Yet ‘urgent and emergency care networks’ (rationalising emergency care services between hospitals) are now one of the ‘innovative’ care models STPs must encourage. The ‘purchaser-provider split’ is central to the idea of competition, but a merely awkward formality under the STP regime: what is commissioned must reflect the aims of a plan made under duress and finalised at a higher level. Some CCGs also now seem likely to be allowed to merge with each other – for example, to form a single CCG for Birmingham and Solihull. In such cases the original justification for CCGs, that they would be groupings of GPs who ‘know what is best for their patients’, is abandoned in favour of the advantages of scale. The Health Service Journal puts it bluntly: “The bodies created at great expense and even greater opportunity cost four years ago [CCGs] are not fit for purpose in the eyes of those responsible for their stewardship [ie NHS England].” And it is true: they were not designed for the purpose – integration – which NHS England is now pursuing.

Accountable care organisations, embracing both commissioning and providing services, are increasingly viewed as the logical outcome.

How acceptable is all this? How far should voters and taxpayers accept the surrender of the independent authority that the Act appears to give to CCGs to shadowy decision-making structures under direction from the regional teams of NHS England? And how content should commissioners be with being obliged to use their formal powers as, in effect, directed by NHS England, and not as they themselves judge best?

As noted, the changes CCGs are being required to sign off on are not minor. For example, NHS England’s ‘new care models’ team wants primary and acute care systems and multispecialty community providers to cover 50% of the GP-listed population in England by 2020, and intends to achieve this via the STP process. Although no evidence has been publicly provided that these models will be good for patients, or save money, CCGs must adopt them or be financially penalised. We must hope that the overall effect will be positive. Endorsing the plans means officially committing to whatever the changes turn out to mean for patients – and the cuts in funding they are premised on. It will be interesting to see how CCG members feel about them in five years’ time.