The NHS: in an awful place

simon-stevens-at-pac-2-september-2016

It was a shock to switch on Parliament TV the other week to watch Simon Stevens at the public accounts committee, and to see him sporting a substantial beard.

The Health Service Journal says the chief executive of NHS England has been on holiday to the Arctic. If so, it’s tempting to think he’s channelling Captain Scott: “My god, this is an awful place!”

Hard sledding

 NHS finances are certainly in an awful state. As detailed in blog posts below, the health service in England has known that it is facing a growing gap between funding and demand since 2008.

It has been asked to tackle via Sir David Nicholson’s ‘quality, innovation, productivity and prevention’ agenda and, more recently, Stevens’ ‘Five Year Forward View’. This called for more effort on public health and the introduction of new ways of working to help bridge a funding gap now projected to reach £30 billion by 2020-21.

Unfortunately, acute finances went over a cliff last year, with the sector finishing 2015-16 some £2.4 billion in deficit, and the NHS as a whole only making it through in balance by the skin of its teeth (and, ahem, forgetting to mention that it was going to get £750 million than it expected out of National Insurance).

In a financial ‘reset’ in July, trusts were asked to accept ‘control targets’ to try and get the acute deficit down to £250 million this year; but some are holding out, and there’s widespread scepticism about whether the rest can deliver.

Meantime, the ‘Sustainability and Transformation Plans’ that are supposed to help local organisations deliver £15 billion of savings over the next five years are yet to emerge from central vetting.

(The rest of the £30 billion is being closed by £8 billion from the government, most of which will arrive towards the end of this Parliament, and £7 million from cuts to the budgets of the various bodies that oversee and regulate healthcare).

Unhelpful questions

 Unsurprisingly, reputable think-tanks are starting to post blogs asking whether the STP agenda can deliver, and if not whether the NHS is financially ‘sustainable.’ Stevens probably finds these unhelpful.

He certainly didn’t react well to a succession of PAC members asking what would happen if the STPs didn’t deliver, or whether he had a Plan B for that. After all, he won’t want trusts thinking there is an alternative (like a bail out) on the way; because they won’t get into the change agenda if they do.

And he doesn’t want policy makers or the public thinking seriously about failure ; because the local results will be awful, and the national results could include a new ‘debate’ about the future of the NHS as a taxpayer-funded, universal service.

Cancel Christmas

 So, no failure and no plan B. This message was backed up by the NHS ‘to do’ list that Stevens told the PAC would be out some three months earlier than normal, on 22 September, rather than Christmas Eve.

This document, officially the ‘NHS operational planning and contracting guidance 2017-19’ says commissioners and trusts will be expected to get into balance and hit key targets, and that if they miss in the next financial year they will simply have to catch up the year after that.

Oh yes, and there’s to be no moaning about contracting being difficult. And if there is, or if healthcare communities miss their targets, or if they fail to sign up in the first place, they won’t get any of the very small carrot that NHS England has available in the form of a £1.8 billion ‘Sustainability and Transformation Fund’.

Cancel the internal market?

There are lots of interesting aspects to the guidance. It tries to tell trusts that they won’t be able to play off one central body (NHS England, with its control targets) against another (NHS Improvement/Monitor with its operational requirements, or NICE and the CQC, with their expensive treatment and staffing rules).

All these bodies are united, it says, in “supporting” the NHS to deliver the STPs. This is sensible, but suggests the NHS in England is no longer trying to operate anything like the internal market introduced during the Thatcher era.

In its latest incarnation, trusts (regulated by NHS Improvement/Monitor) are supposed to compete for business from clinical commissioning groups and patients (acting on CQC information).

But the guidance not only says these bodies will work to bring some central rigour to the situation, but that in future less attention will be to commissioners and trusts than to STPs. These are starting to emerge as administrative areas and ones in which “co-operation” rather than competition is the order of the day.

To support this, the guidance says that STP areas will be given their own control targets. Subsequently, Stevens said that he would not be adverse to them applying to suspend ‘payment by results’ in order to meet them.

The end of PbR would definitely mean the end of the attempt to get money to ‘follow the patient’ that was at the heart of the internal market. This will cheer many, including the BMA, which has been arguing for some years that the NHS can simply not afford the plethora of organisations required to run it, or the transaction costs.

But the STP areas would be very convenient vehicles for the kind of ‘accountable care organisations’ that some left-wing commentators believe that Stevens, who spent a chunk of his career in the US, wants to introduce to England, in order to “privatise” the NHS.

There is no alternative (well there is…)

It’s worth saying that even if the NHS did move towards and ACO model, it would not have to be operated by insurers. It could be run by the NHS itself, to reward the kind of integrated and preventative care that the STPs are being told to develop.

A shift to insurance would be a political decision, and not one it’s easy to see health secretary Jeremy Hunt signing up for.

Just in case, though, the NHS should really try and make it back to base camp. On which front, Stevens’ message is that the sled dogs are not on the way with more provisions. And there ain’t no map out there except the Forward View.

Analysis: I have been writing analysis pieces on financial and policy issues for the research arm of Digital Health Intelligence (picking up the implications for the healthcare technology market). There’s more on the reset here and the planning guidance here.

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