Recent NHS ‘reforms’

The Health and Social Care Act 2012

Before the 2010 election we were promised that a Conservative government would not bring about a top-down reorganisation of the NHS. So it came as a huge surprise shortly after that election that well-developed plans emerged to radically transform the NHS through a new Health and Social Care Act (HSC Act). Although these plans had no political mandate, their scale was massive: the then Chief Executive of the NHS, David Nicholson famously described them as ‘visible from space’.

The Health and Social Care Act was eventually passed in 2012 (and came into effect in 2013) after a very difficult path through Parliament and despite huge opposition from health care workers; professional bodies like the Royal College of GPs; the Royal College of Nursing; the British Medical Association; trades unions; and service user organisations.

The government has said that the HSC Act was largely about increased patient choice and putting GPs in the driving seat. But others have seen it as providing the legal framework for fragmenting and privatising the NHS. Some services (like mental health or sexual health) became the responsibility of local authorities. The majority of remaining services now have to be put out to competitive tender. In addition, it is no longer obligatory for all services to be free. (For example, free service provision is no longer mandatory for younger and older children, or for pregnant or breastfeeding women.)

The Act is a highly complex piece of legislation that, from April 2013,

  • abolished the duty of the Secretary of State for Health to provide a national health service across England. This was the legal foundation of the NHS and of our rights and entitlement to health care. This duty has been replaced by one to promote a comprehensive health service – not the same thing at all.
  • brought about a massive restructuring of the NHS, costing £3 billion (as well as subsequently increasing the cost of administering the NHS each year).
  • required General Practitioners (GPs) to group together in local Clinical Commissioning Groups (CCGs) and become responsible for most of the  planning and buying (‘commissioning’) of health care services for their patients. CCGs replace primary care trusts (PCTs). Much of this work is now being devolved to Commissioning Support Units (CSUs) which, in turn, are contracting out aspects of commissioning (such as managing service contracts and redesigning health services) to private companies that may also be in the business of providing such services.
  • transferred about 80% of the NHS budget to CCGs to buy healthcare services for patients in the area they cover, together with the power to decide which services to provide from this  (and so, potentially, which services or treatments patients must pay for, or manage without).
  • set up NHS England to oversee CCGs and the commissioning of health services. This non-governmental body is both powerful and largely unaccountable. Notably, its current chief executive, Simon Stevens, previously worked for UnitedHealth, an American company dealing largely with private health insurance (see http://www.bbc.co.uk/news/health-24635890).
  • met a long-term political aim of successive governments of using competition to drive the NHS, and turn the NHS into a market place. For example, Regulation (S75) included in the HSC Act (but not evident when the Act was being discussed or voted on by MPs) makes it compulsory for those services that can potentially be provided by non-NHS organisations to be put out to competitive tender – in effect ordering the NHS to use the private sector. As Dr Mark Porter, Chair of the British Medical Association put it, “An Act that the government denied loud and long would lead to privatisation, had done exactly that”. (See http://www.theguardian.com/society/2014/nov/19/private-firms-nhs-contracts-circle-healthcare-bupa-virgin-care-care-uk.)
  • created Monitor, a public body sponsored by the Department of Health, to regulate  health services, “promoting the provision of healthcare services that is economic, efficient and effective, and maintains or improves their quality”. It covers the provision, pricing and procurement of NHS services, and sets the standards that all Foundation trusts must meet. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/326396/About_Monitor___July_2014.pdf. Monitor is also charged with preventing ‘anti-competitive behaviour’ – it has shared powers with the Office of Fair Trading to enforce competition law in the NHS, and has a role in assessing certain mergers involving health care providers.

The costs of turning the NHS into a market

There is no evidence to show that turning the NHS into a market (a process that began in 1990 but has seriously intensified since the HSC Act) addresses any of the NHS’s real needs or problems.  Operating as a market introduces huge ‘transaction costs’ that the NHS would otherwise not have to face – such as advertising, legal advice on competitive tendering, monitoring contracts etc. – and that divert vital funding from front line services.

Estimates of the extra costs from ‘marketisation’ are difficult to calculate but the most conservative estimate is £4.5 billion a year (http://chpi.org.uk/wp-content/uploads/2014/02/At-what-cost-paying-the-price-for-the-market-in-the-English-NHS-by-Calum-Paton.pdf)  – or enough to pay for either ten specialist hospitals, 174,798 extra nurses, 42,413 extra GPs, or 39,473,684 extra patient visits to A&E.

According to a House of Commons Health Select Committee report, before the NHS was run as a market, 5% of the NHS budget was spent on management and administrative costs. According to research carried out on behalf of the Department of Health (but not published), after turning the NHS into a market, these costs rose to 14% of its budget each year. (http://www.theguardian.com/society/2010/mar/30/nhs-management-costs-spending)

(For more details, see https://www.opendemocracy.net/ournhs/caroline-molloy/billions-of-wasted-nhs-cash-noone-wants-to-mention.)

A review of academic studies  by the New Economics Foundation – a leading think tank promoting social economic and environmental justice – found that there is no sound evidence to support the claim that competition can improve efficiency and quality of care in the NHS. Instead, they find that a market in health care

  • makes regulation highly complicated,
  • has largely inconclusive or negative effects on efficiency or quality of care, and
  • encourages a focus on cure rather than the prevention of ill health.

In addition, there is no conclusive evidence that using ‘patient choice’ as one of the drivers for restructuring the NHS has made services more responsive to patients. (see http://www.neweconomics.org/publications/entry/the-wrong-medicine).

At the same time, the NHS ‘market’ is not a level playing field.

Example 1: The NHS Choices website informs patients about all the hospitals in their area, including private hospitals, that they can choose to go to for NHS treatment. However, while patients can find out about the safety record of the NHS hospitals, for reasons of commercial confidentiality, only minimal information is available about the private hospitals paid to provide NHS care. For more details see https://www.opendemocracy.net/ournhs/colin-leys/why-do-private-hospitals-want-to-hide-their-patient-safety-records.

Example 2: NHS England met with private companies, such as Lockheed Martin (an international arms firm) and G4S,  to discuss bidding for a £1 billion contract to run GP support services. However, NHS commissioning support units were excluded on the basis that any bid they made could be challenged under European procurement laws once they become autonomous in 2016. http://www.mirror.co.uk/news/uk-news/worlds-biggest-arms-firm-targets-4657964.

Example 3: Unlike NHS services, private companies that have won contracts to provide NHS care can recover the 20% VAT they pay when purchasing drugs. This gives private companies an unfair advantage as they can undercut NHS providers when bidding for contracts. See http://www.independent.co.uk/life-style/health-and-families/health-news/private-healthcare-companies-accused-of-using-tax-relief-to-undercut-the-nhs-10251549.html

Failure of the ‘reforms’

The NHS became one of the key issues for the general election in 2015. A report from the King’s Fund, a think tank whose independence from the government is sometimes questioned (see, for example, https://www.opendemocracy.net/ournhs/gary-walker/kings-fund-suggests-nhs-fees-but-is-it-really-independent), has recognised the disastrous effects of the HSC Act, acknowledging that services are rapidly deteriorating, waiting lists are at a record high, morale is low and GP and mental health services are under severe strain. It suggests the top-down reorganisation of the NHS that the Act brought about has been damaging and distracting, and the new systems of governance and accountability it brought in are complex and confusing (http://www.kingsfund.org.uk/publications/nhs-under-coalition-government).

The British Medical Association says there is near universal agreement that many of the changes brought in by the HSC Act 2012 were a terrible mistake. Among a range of issues, they are calling on the new government to

  1. repeal the Health and Social Care Act,
  2. make it the norm from CCGs to use non-competitive ways of buying health services, and
  3. remove market mechanisms, including the purchaser-provider split

(see ‘No More Games with who is providing patient care: A publicly provided health service’ at http://bma.org.uk/working-for-change/policy-and-lobbying/general-election-2015/read-the-election-briefings).

It seems that even some senior Conservatives are now admitting that reorganising the NHS was the biggest mistake they made in government. Downing Street sources are claiming that David Cameron did not understand the reforms, while George Osborne regrets not  preventing what they call a “a huge strategic error” [see Chris Smyth, Rachel Sylvester and Alice Thomson, “NHS reforms our worst mistake.” The Times, 13.10.2014, pages 1 & 2].

Repealing the HSC Act

Recently there have been legislative attempts to reverse elements of the HSC Act 2012, such as the the National Health Service (Amended Duties and Powers) Bill, sponsored by Labour MP Clive Efford.  This Bill has been criticised by some as not going far enough – for example, it fails to reinstate the duty of the  Secretary of State for Health to provide a comprehensive and universal health service, and it does not deal with the risks to the NHS from competition law. (For more details, see https://www.opendemocracy.net/ournhs/caroline-molloy/efford’s-save-nhs-bill-does-it-do-what-it-says-on-tin.) The Bill was introduced in November 2014 but seems to have got stuck at the Committee stage in Parliament.

Recently there have been legislative attempts to reverse elements of the HSC Act 2012, such as the the National Health Service (Amended Duties and Powers) Bill, sponsored by Labour MP Clive Efford.  This Bill has been criticised by some as not going far enough – for example, it fails to reinstate the duty of the  Secretary of State for Health to provide a comprehensive and universal health service, and it does not deal with the risks to the NHS from competition law. (For more details, see https://www.opendemocracy.net/ournhs/caroline-molloy/efford’s-save-nhs-bill-does-it-do-what-it-says-on-tin.) The Bill was introduced in November 2014 but seems to have got stuck at the Committee stage in Parliament.

In parallel, leading public health and legal experts, in consultation with a range of individuals and organisations, have drawn up what was initially called the NHS Reinstatement Bill 2015, and recently tabled in Parliament in 2015 as the NHS Bill. This aims to reinstate the founding principles of the NHS, and campaigners are pushing for it to be included in the Queen’s Speech after the General Election.

This Bill is part of a move to stop the dismantling of the NHS as a result of the HSC Act (2012) and to end the marketisation of the NHS. Instead the Bill aims to restore the NHS as an accountable public service.

It would:

  • reinstate the government’s legal duty to provide the key NHS services throughout England, including hospitals, medical and nursing services, primary care, mental health and community services,
  • integrate health and social care services,
  • declare the NHS to be a “non-economic service of general interest” and “a service supplied in the exercise of governmental authority”. This would ensure the autonomy of the UK government to legislate for the NHS without being trumped by EU competition law and the World Trade Organization’s General Agreement on Trade in Services,
  • abolish the NHS Commissioning Board (NHS England) and re-establish it as a Special Health Authority with regional committees,
  • plan and provide services without contracts through Health Boards, which could cover more than one local authority area if there was local support,
  • allow local authorities to lead a ‘bottom up’ process with the assistance of clinical commissioning groups (CCGs), NHS trusts, NHS foundation trusts and NHS England to transfer functions to Health Boards,
  • abolish NHS trusts, NHS foundation trusts and CCGs after the transfer by 1st January 2018,
  • abolish Monitor – the regulator of NHS foundation trusts, commercial companies and voluntary organisations – and repeal the competition and core marketisation provisions of the 2012 Act,
  • integrate public health services, and the duty to reduce inequalities, into the NHS,
  • re-establish Community Health Councils to represent the interest of the public in the NHS,
  • stop licence conditions taking effect which have been imposed by Monitor on NHS foundation trusts and that will have the effect of reducing by April 2016 the number of services that they currently have to provide,
  • require national terms and conditions under the NHS Staff Council and Agenda for Change system for relevant NHS staff,
  • centralise NHS debts under the Private Finance Initiative (PFI) in the Treasury, require publication of PFI contracts and also require the Treasury to report to Parliament on reducing NHS PFI debts,
  • abolish the legal provisions passed in 2014 requiring certain immigrants to pay for NHS services
  • declare the UK’s agreement to the proposed Transatlantic Trade and Investment Partnership and other international treaties affecting the NHS to require the prior approval of Parliament and the devolved legislatures,
  • require the government to report annually to Parliament on the effect of treaties on the NHS.

Critics of the Bill have said that the NHS cannot face another reorganisation. In response, those supporting the Bill say that

  • the HSC Act, rather than reorganising the NHS, aimed to dismantle it. It has not left the NHS in a stable condition: the disorganisation, fragmentation and chaos resulting from the Act continue to mount;
  • Having a market in healthcare means that NHS services at every level have to be put out to tender, and then retendered on a regular cycle. Successful tenders win because the new provider promises to deliver more services for less money, but in order to achieve this this they often need to restructure – often by closing premises, reducing staff and/or increasing workloads. So in a market system, there is a never-ending (and destructive) restructuring the NHS. The NHS Bill aims to restore a stable NHS, through a planned process of re-integration.
  • The Bill aims to restore the NHS through a locally-led, bottom-up approach, as opposed to the imposition of a top-down approach employed by the HSC Act 2012.

In March 2015, MPs from 5 political parties tabled the NHS Bill in the House of Commons. Inevitably it fell when Parliament closed prior to the general election. However it was an important step as the measures set out in the Bill were there to draw on when questioning candidates during the run up to the 2015 election, and can be used as a marker against which a new government’s proposals for the NHS can be judged.

There was hope that a new government might be persuaded to include the Bill in the first Queen’s Speech following the election. It is unclear what supporters of the Bill will do now that there is a surprise Conservative government. See www.nhsbill2015.org for further news.

To read the Bill, see http://www.publications.parliament.uk/pa/bills/cbill/2014-2015/0187/15187.pdf

To see frequently asked questions  (and answers) on the NHS Bill see http://www.nhsbill2015.org/wp-content/uploads/2015/04/FAQs.pdfhttp://www.nhsbill2015.org

The 5 Year Plan

A new 5 year plan was published in October 2014 by NHS England (http://www.england.nhs.uk/wp-content/uploads/2014/10/5yfv-web.pdf). This highlights a £30 billion shortfall in NHS funding by 2012 but also outlines how the NHS needs to be re-organised to take advantage of new opportunities that science and technology have to offer, and in order to cope with growing challenges to the NHS, such as the fact that we are living longer, often with complex health issues (challenges that the ‘reforms’ were supposed to address).

It suggests that, in future, either groups of GPs will organise all the services that their patients need (including running hospitals) OR local hospitals will employ GPs to provide integrated care for all their patients. In either case, the emphasis is on breaking down the divide between hospital and community care, and on the development of locally, rather than centrally, organised services. For an initial assessment, see http://www.theguardian.com/commentisfree/2014/oct/23/nhs-plan-simon-stevens.

updated May 2015

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