Who’s really in charge of the new NHS?

pharmafile | December 12, 2011 | Feature | Business Services, Manufacturing and Production, Medical Communications, Research and Development, Sales and Marketing |  NHS, NHS reform 

Each year the health service, the Department of Health and the UK pharmaceutical industry get an opportunity to say what they think of each other at the Wellards conference – and each time they provide health service observers with something fascinating to work on.

In the recent past, the big themes have been the eternal conflict between pharma and the health service, and how dreadful things will be as a result of the ongoing financial crises. But with financial limits biting hard, the mood was different this year. DH and NHS speakers called again and again for suppliers to move beyond flogging pills and gadgets and to instead throw their customers lifebelts in the form of help with cash-releasing service redesigns, data analysis and solid business cases.

Another theme was that several different groups clearly believe they’re in with a chance to rule the roost in the health service post-reform. Ever since government officials released the blockbuster White Paper Liberating the NHS, some GP leaders have believed their war on PCTs was over, and that commissioning power was theirs by right.

For example, this year, NHS Alliance chief and GP Dr Michael Dixon mounted the dais and said: “It used to be PCTs versus GPs – but now it’s us.” During the course of the day his audience heard a series of claims that contradicted this rather simplistic view, suggesting instead that other players will hold the balance of power. The Department of Health’s QIPP tsar said the Commissioning Board will be the instrument that will bring the big changes.

A councillor revealed that local government working with the Clinical Commissioning Groups (CCGs) will be in charge. And a very experienced and senior PCT finance official predicted the government could not abandon its existing financial controls – and PCTs would therefore remain, albeit with a new name.

The show kicked off with Professor Chris Ham, who gave us his King’s Fund policy analyst’s view of the health service in 2011. He explained how extra money that had gone into health under the Labour government had produced results including improved access to care, but that era is now firmly over with tiny real-terms increases and pressure to find ways to ‘do more with the same’. 

The biggest opportunities to improve quality and productivity are at the interfaces between organisations, but Ham says improvements here require integration. This is difficult when hospitals are organised as profit centres and financial incentives are not designed to support integration, and he warned the NHS was responding slowly to the new imperatives.

Mixed messages were clear to see in the reforms: while the new legislation seeks to devolve power to CCGs and others, DH top brass are maintaining a tight grip to prevent things going wrong in the transition.

What’s more, none of the reforms are likely to achieve the complex hospital reconfigurations that are really needed, and which the NHS has been avoiding for years. The prime minister had pledged to ensure budgets do increase in real-terms each year, if only by a very small amount, and that the NHS would return a good performance on A&E access and the 18-week target objective.                           

“Everyone will be following trends in performance to make sure that indeed happens, but maintaining the achievements of the last decade is going to be incredibly difficult,” said Professor Ham.

The words ‘incredibly difficult’ here sounded remarkably like code for ‘virtually impossible’. The background dealt with, the lynchpin DH official leading the charge to make £20 billion in efficiency savings through QIPP was the speaker everyone needed to hear. QIPP tsar Jim Easton didn’t disappoint. In some ways he had a simple message – health services are unaffordable as currently constituted, and the only way to avoid disaster is for both the NHS and its suppliers to follow DH orders.

“Healthcare costs in developed countries are growing faster than GDP and that is unsustainable. So your business model is as broken as mine because they’re both predicated on growth,” he said, looking his largely pharma audience squarely in the eye. 

The issue was not about politics and policy, but the economics of healthcare, he added. The first 40% of QIPP had been delivered, he said, but the second 40% in QIPP savings was coming from choking resources down – something hospital staff and NHS suppliers were seeing right now. “We are going to get increasingly clear about the message and, alongside that, about the help we’re giving to help people through that change.” 

Easton says there is a definitely a right way and a wrong way to find the QIPP savings. Reducing the number of beds in a hospital could be done by carefully redesigning services – or by just closing a ward. The pattern of the workforce could be changed using the tools in the NHS Institute’s Productive Series.

This would allow a redesign of care and ensure staff time isn’t wasted and allow them care for more patients in a quality way, often with fewer staff. Alternatively, hospitals could be tempted to simply put a red line through your budget sheets for staff numbers. What does it all mean for relations between the NHS and its suppliers? “For two years we have talked about trying to find the sweet spot where what you have to offer helps this agenda, and we haven’t really landed it – not yet,” he said.

Easton then addressed two major issues: the NHS’s slowness in adopting innovation and its role as a customer.

“We know there is a problem in the adoption of the innovations that will help us. A current example is fluid management in operating theatres. It’s classic QIPP: better fluid management in operating theatres requires a small amount of investment in equipment, it’s well proven, saves lives and massively reduces length of stay and allows you to improve quality and gain efficiencies. But the current take up is about 4 per cent.”

The issue was being addressed he said: in early December the prime minister will talk about growth in the economy and in response, Sir David Nicholson will publish an innovation review that will be the NHS’s attempt to improve the dissemination of innovation and to make happen those things that really work.

“We’re a difficult customer,” said Easton. “A nightmare in terms of entry points for those trying to make progress, with local people having their own criteria. People look at what we describe [in health reform] and they see what they think is an even more disaggregated system. But I’d strongly advise you to think about the new points of scale.” 

The Commissioning Board is a £20 billion a year direct commissioner of services that wants to bring about change. For the first time there will be a single national body, not a series of independent boards making their own decisions about which drugs to use. 

The CCGs will aggregate for a lot of their support functions, and will rely on a number of professional commissioning support organisations to do a lot of the purchasing and commissioning. ‘‘Of course invest in your relations with your CCGs,” he said, ‘‘but I would say pay particular support to the emergence of the commissioning support organisations. They are going to be the professional procurement analysis and change management organisations.”

Also, people in the trusts were realising that they needed to come together for certain functions including procurement, particularly in communities of interest such as specialist hospitals. ‘‘If I was in your shoes, I’d be watching those developments very actively, and thinking about how up to 20 trusts working together will deploy resources,” said Easton.

The NHS was less and less interested in buying pills or gadgets. “What we need are solutions that unlock value. You might find this frustrating, but we sometimes need help in unlocking that value – so I’d encourage you to think how you can offer us in the application of your products wrapped into services that can make some of this change happen.”

However he warned it would be less willing to buy things it doesn’t need: “The economics will drive us to be tougher and more able. The front edge of your portfolio that’s brilliant, we need to do a better job of, but about the back end we need together to become tougher. That’s as much of a change of mindset for you as for us.”

Gordon Coutts

Colchester NHS Foundation Trust Hospital chief executive Gordon Coutts spoke from a purely personal standpoint – but given that he’s a foundation trust chief exec who has been in the role since September 2010 and previously enjoyed a high flying career in pharma, his was a perspective that had his audience riveted. 

What could they learn from this man who has made a success of both sides of their business? Coutts become a non-executive director at Colchester FT in April 2010 but by his own admission was quickly been drawn in by the people he was working with – colleagues for whom he expressed great admiration.

On service redesign, he again appealed for the industry to help with service re-design, an area where NHS struggles. “If you’re going to be the sort of company that isn’t just trying to push a device or a pill, isn’t that something that you can help with? If we do what Jim Easton was talking about and we put together consultants and social services, how are you going to help us integrate those things together? You do that kind of thing really well.”

Another area where industry could help is analysis. ‘‘Data pours out of every pore of the hospital,” he said, “but the information we’ve got is poor and we’re trying to work on that. You’ve got analytic skills which can help us pull together different data sources and make sense of it. I think you’ve got fantastic skills that you might just undervalue relative to some of the needs we’ve got to make these fundamental changes. If you’re ambitious, you can help us deliver fundamental change in the health service.”

Despite the potential, Coutts revealed that no pharma company had tried to make an appointment to meet him during his year as chief executive. “That’s something I was really surprised about,” he said. “As long as it’s done in the right way, you’re really clear about the benefits to patients, and have some track record and evidence, I think that’s very credible and realistic – but you need to go high up enough in an organisation that people will listen.

“You can go to the pharmacy,” he said, “but you’ll have a very different discussion compared with if you go to the service manager. It’s where you pitch your entry point.” 

The other speakers

David Rogers, a councillor in Sussex and chairman of the Local Government Association’s community Wellbeing board, described local government’s new role in healthcare enthusiastically, saying that the Health and Wellbeing Boards alongside the CCGs will be the main leaders of health service reform, of service transformation and of action to improve health outcomes.

The aim of the boards was to enable health and social care services to be integrated, and this made sense because the biggest users of social services are often among those most reliant on health services. They would also provide democratic accountability. Their roles in developing joint strategic needs assessments (JSNAs) and a joint health and wellbeing strategy will make them central to commissioning, he said, although the structures and terms of reference remain unclear. 

Healthcare Financial Management Association policy committee chair and retiring University of North Staffordshire FT financial chief Chris Calkin talked about how North Staffs was dealing with tough times in healthcare funding.

“We’re modernising, trying to reduce length of stay, reduce waste in the system caused by did not attends (DNAs) and cancellations, we’re looking at pathway redesign and at improving the care of long term conditions, and at improving productivity. 

‘‘We’re encouraging patients to use their own drugs, boosting the generic hospital formulary, reducing the numbers of days of take home drugs we give to patients, trying to reduce mistakes, trying to get prescribers to prescribe more effective and relevant drugs, and we’re trying 365-days working.”

The trust is also seeking to improve procurement and looking at just-in-time purchasing. ‘‘My challenge to you (the industry) is how can you help me achieve all these goals,” he said. ‘‘We have an opportunity: if we can have reduce length of stay and improve productivity, I can cut hospital care by delivering care in people’s own homes – and you can have your 12% growth.”

Growth of 12% sounds remarkable in our time, but Calkin’s most remarkable assertion was that and PCTs will continue, or at least some of their functions.

“They [government] are going to have some sort of outpost. They will change the name, but PCTs are going to remain because the risk of putting that money into GPs’ hands will not be tolerated – that’s one of the big concerns around the reforms – that there must be checks and balances to make sure the NHS doesn’t overspend.”

NHS Alliance chairman Dr Michael Dixon put on a bullish, optimistic performance. “It used to be PCTs versus GPs – but now it’s us,” he told conference goers. When he then asked those in favour of the health reforms to put their hands up and got and almost unanimous approval, he nearly danced with glee.

The reforms don’t get that sort of approval when he talks to doctors and nurses, he said. Service redesign hadn’t happened in the past because of central targets and people being straightjacketed by the system, but now GPs would be able to make sure this changes.

However, Dr Dixon acknowledged that things seem a little strange to many in the health service. “We’re living in uncertain times when PCTs’ lights have gone off but the CCGs’ lights haven’t really come on that brightly yet.” 

He also appealed to the industry audience: “With the NHS having resourcing issues, can you help me to save money as well as improve care? Can you give me a business case that shows that whenever I take on whatever it is you’re offering, it is actually going to help my budgets as well as my patients?

“There may be different ways of doing that – you may want to give me an offer I can’t refuse in terms of sharing financial risk, or you may accept a tariff that isn’t in terms of activity but really is by results or outcomes.”