Explanation of Terms

The Health and Social Care Act (HSC Act) of 2012 and more recent plans, such as the Five Year Forward View, have introduced massive changes in the way the NHS is set up and how health and social care services are provided. This explanation of terms is an attempt to explain the new structures and terms you may hear in discussions about the ‘reformed’ NHS.


Accountable Care Organisations are a way of providing ‘integrated care’, originating in the US, where a single organisation is contracted to deliver all the care for a specified population within an agreed budget (irrespective of the number of patients seen or treated), for a defined period of time. The ACO can be either a single health care provider like a hospital, or – more likely – a group of health care providers (potentially including GPs, specialists and hospitals or private company). The providers accept collective responsibility for the cost and quality of care delivered. Cost reduction appears central. Its been common practice that, if the ACO can keep costs below specified amounts, they can share any savings they make with the commissioner, as long as the care provided meets the quality standards set out in the contract. Key features of ACOs include

  • identifying high risk/high cost patients and ‘proactively’ managing their care to reduce costs.
  • Getting patients to take a key role in managing their own health and healthcare
  • Reducing staff costs through the use of volunteers or tele health technology.

The ‘new models of care’ set out by NHS England’s Five Year Forward View share some features of accountable care organisations found in the US and elsewhere. NHS England wants the wide scale introduction of ACOs – something it acknowledges will take some years to achieve. But as an interim step towards this, the local health Partnerships responsible for implementing Sustainability and Transformation Plans (see below) are expected to move towards developing accountable care systems.


An ACS is an evolved version of a local Sustainability and Transformation Plan (see below).  It’s a ‘system’ in which the purchasers and providers of NHS services, along with local authorities, work together to collectively plan and provide health and social care. Partners in an ACS manage the funding for a defined population and have the freedom to abolish the annual purchaser/provider negotiations in their area. They are expected to implement NHS England’s most recent plans (Next Steps on the NHS Five Year Forward View), for example, increasing the use of personal budgets and introducing measures to improve prevention of ill health, ‘enhance patient activation and supported self-management for long-term conditions […and]….manage avoidable demand’.

From 2018, ACSs were re-named Integrated Care Systems.


Following the HSC Act, there are now two ways that healthcare services are obtained. One is by putting contracts for services out to competitive tender (see Competition below) – the NHS is no longer the ‘preferred provider’. The other way is through a scheme known as Any Qualified Provider (AQP) (see also Commissioning).
Under the AQP scheme, patients who need to be referred by their GP for investigation or treatment can ‘choose’ who they want to be seen by from a list of service providers that have been approved by the local CCG. Possibilities include the existing NHS provider, private health care companies, and not-for-profit organisations. At one level this looks like increased choice for patients but there are concerns about whether we will have enough of the right kind of information to make a good choice (not least because the safety record of private providers is seen as commercially sensitive and therefore not available to the public).
At the moment, only certain services (such as adult hearing or community eye services) are available under this scheme but, over time, CCGs will be compelled to make more and more services accessible under AQP. And once a service has been opened up to AQP, commissioners cannot refuse to accept providers into the scheme – as long as they meet quality standards and are willing to provide the service for a certain fee.


The Better Care Fund is a pool of £3.8 billion for local authorities and clinical commissioning groups (CCGs) to spend jointly on social services and community services. None of this is new money and most of it comes from the NHS, withdrawn from hospitals in the expectation that better services in the community will lead to fewer people being admitted to hospital.


With capitated payments, a total package of funding is allocated to a service provider, often on an annual basis, based on the number of people who are registered with them, whether or not these people receive treatment. If the service provider fulfils their contract for less than the capitated payment, they make a financial gain.  Allowing providers to share in any gains is thought to give them an added incentive to keep their patients healthy but it may also encourage them to develop a high threshold for treating or referring patients. Increasingly, capitated payments are being proposed in connection with ‘new care models’ aiming to deliver ‘integrated care’ (see below).


A care pathway (also known as a clinical pathway) is a standardised plan or protocol drawn up by specialist health care professionals for the treatment of a group of patients who have a specific health problem (for example, diabetes). Care pathways are drawn up according to the best available evidence on what represents the best practice for most patients with a particular condition. They are also central to the business of commissioning health care.


These are confidential, written agreements between patients and their health or social care team, setting out agreed goals together with the health care and support services they might use, within the resources available. Everyone with a long-term condition can ask for a Care Plan.


The CQC, sometimes called the patients’ watchdog, is the independent regulator for adult health and social care services in England. From April 2013 all service providers (including private companies, charities, NHS trusts, GPs and Primary Care services, dentists, mental health services and local authorities) have to register with the CQC. Along with Monitor, the CQC should be ensuring that all health and social care providers meet quality and safety standards, not least by responding to whistle blowers, inspecting premises without notice, and lifting the lid on bad practice in residential care and hospitals. The CQC also publishes reports that the public can consult when choosing a service provider.
The CQC is one of the main bodies expected to guarantee safe care standards across the NHS but it has been repeatedly criticised as ineffectual. Whistle blowers, including former staff, have accused it of not recognising failing hospitals. Its procedures are currently being overhauled.


This term is used to describe the way that private healthcare providers can choose to provide just those services (typically routine operations such as hip replacement or cataract removal) that offer the most profit for shareholders while involving the least commercial risk. Cherry picking leaves the publicly-funded NHS to shoulder the provision of complex, less profitable services such as A and E, Intensive Care or the treatment of chronic conditions.


All GP practices now belong to a local Clinical Commissioning Group (CCG). There are 212 CCGs across England, each covering an area roughly mirroring the local authority boundary. They replaced Primary Care Trusts on the government promise that they would put clinicians  who knew patients’ needs best, at the heart of decision-making in the NHS. CCGs have a fixed budget (in total, £65 billion of the £95 billion NHS commissioning budget) to design and purchase planned hospital care, plus community, learning disability, rehabilitation and mental health services as well as urgent and emergency care for patients in their area. Often described as GP-led, and with at least one nurse and hospital doctor (plus a member of the public) on each CCG board, it is unclear for the moment how much actual commissioning CCGs will undertake and how much of this activity will be carried out by Commissioning Support Units.


A Clinical Network is a group of health professionals from different NHS organisations, working together across institutional and local boundaries to organise treatment or care for a particular disease, such as cancer, or health need (e.g. maternity services). The networks advise local commissioners and aim to encourage innovation and reduce variation in services.


There are 12 Clinical Senates. These advisory groups include medical, nursing and allied healthcare professionals as well as patients, volunteers and other groups. They aim to share their knowledge with CCGs, local authorities and NHS England so these bodies can make better-informed decisions.


The HSC Act (2012) transferred responsibility for the planning and buying (‘commissioning’) of health services from Primary Care Trusts to clinicians, primarily GPs, working in clinical commissioning groups (CCGs). At least the Act gave this responsibility to clinicians in theory: the process of commissioning is highly complex and, in practice, is increasingly undertaken by Commissioning Support Units (see section on CSUs below). The ‘transactional’ element of the commissioning process covers:

  • designing services to meet patients’ needs,
  • setting the precise terms of  what is being bought, including which services will be covered; how they are to be delivered and which protocol or system of rules will be followed; which drugs can be prescribed; what the length of any hospital stay can be, etc. Payments are set out per patient and at a set price for each kind of treatment package or ‘care pathway’.
  • choosing who will provide these services on the  basis of who, it seems, will bring the best clinical results and the best value for money
  • monitoring contracts to ensure that services are delivered as agreed.

According to NHS England, commissioning also has a transformational function, which is concerned with introducing change and improvement through service redesign.


CCGs rely on support to carry out their commissioning work. This may come from a number of sources, such as their own internal staff, but CCGs can also take out a contract with an NHS Commissioning Support Unit (CSU). There are now nine CSUs covering England, se provide a range of services including IT, payroll, procurement, managing patient data, accounting and legal services, as well as governance and contract management. CSUs may also carry out work on service re-design or strategic planning, providing CCGs with the kind of information about populations that they need to make commissioning decisions. CSUs will be ‘hosted’ by NHS England until 2016 when they will become independent, competing for work among themselves. There is now a ‘framework’ for the preferred providers for services that are associated with CSUs. The preferred provider list is dominated by big corporations such as Capital Business Services, companies that may also be involved in competing to provide the NHS services they are procuring.


A framework of NHS and private sector organisations, including some Commissioning Support Units, was chosen by NHS England in February 2015 to deliver support services to CCGs and other commissioners of health and social care. While CCGs will retain their responsibility for overall commissioning, this move will allow 14 major US and UK health corporations, consultancy firms and insurers (such as McKinsey, UnitedHealth and AXA PPP) to play an increasingly central role in allocating most of the NHS’s finances. Functions include the buying of services or equipment, the management of contracts, and most influentially, service redesign – everything, according to the NHS England’s Director of Commissioning Support Services, that commissioners need to deliver the vision of NHS England’s Five Year Forward View.   It is anticipated that between £3 to 5 billion of services will be procured through this framework when all current service agreements between CCGs and CSUs will have to be put out to competitive tender in order to comply with EU law.


Following the passing of the Health and Social Care Act (2012), NHS providers have to compete with private, often transnational companies for contracts to provide NHS funded services. The government has argued that competition will bring improved patient outcomes. Those opposing increased competition argue that there is little evidence that competition increases the quality of patient care. In addition, competition for NHS work does not take place on a level playing field. For example, developing a competitive tender is a time consuming and expensive business. In contrast to publicly funded NHS service providers or charities, the transnational companies now entering the NHS market are backed by huge resources. Plus, they are not encumbered by expensive Private Finance Initiative debts and can ‘cherry pick’ the services that they bid for. Cherry picking means that, gradually, the easier and more profitable treatments (such as cataracts and hip replacements) are likely to be taken over by profit making companies. This undermines publicly funded NHS service providers because it stops them from offering the more profitable services and then using their profits to subsidise more complex and costly NHS services (such as emergency care) that private companies won’t want to provide.


European competition law regulates the kind of commercial behaviour that might otherwise prevent or restrict competition and so affect trade. Until now, the commissioning of NHS services has not been subject to European competition law because the health service has been not-for-profit: the provision of NHS services has been seen as a social enterprise, not an economic one. However, current ‘reforms’, such as the introduction of AQP, are transforming the NHS into a competitive market in which providers (whether NHS, voluntary and third sector organisations or private companies) are engaged in economic activity. This means that, in most instances, the process for securing NHS services is now subject to competition law.
Competition law is highly complex and unpredictable as it is decided on a case-by-case basis. Because of the uncertainty this creates, CCGs may feel themselves under constant threat of litigation. It is therefore highly likely that it will be competition law, rather than local decision-making by patients and/or clinicians, that will decide the kind of health services that patients receive. Also, under competition law, private providers are entitled to compensation for ‘infringement of their rights’ if they are denied access to the market. What this means is that, once privatised, the NHS cannot return to being a social enterprise without massive compensation payments.


This is the practice where the NHS purchases services from the private sector, charities or other bodies rather than providing the services itself.


This test was introduced into every hospital in England in April 2013, and may be extended to other parts of the NHS, like GP practices. The test asks patients about whether they would recommend the service to a loved one, on the basis for example of whether they had been treated with dignity and respect, and if there was a satisfactory level of cleanliness. It’s been criticised, not least because it misrepresents the responses of patients. For example, when results are analysed, the only answer that is counted as a positive result is if a patient says that they are ‘extremely likely’ to recommend a service. If a patient says they are “likely” to recommend a hospital, this will be recorded as a neutral response, and all other responses (including those from patients who were unsure what to say) will be recorded as negative. It is feared that this test is being used to undermine NHS hospitals and provide ‘evidence’ of the need for private providers.


Published in 2014 by NHS England, the Five Year Forward View says that the NHS is only sustainable it undergoes further fundamental change, though swift and wide-ranging action to improve the prevention of ill-health; make people take greater responsibility for their own health and healthcare (including through the use of new technologies); and
develop new ways of delivering care, including ‘new care models’ that improve productivity and the dismantle traditional boundaries,such as between the NHS and social care, and between GP and hospital services. The FVFV also calls for ‘system improvements’, such as restructuring the NHS workforce, and ensuring a ‘7 day NHS’.  It also aims to address the NHS’s financial problems by selling NHS assets; calling for more government funding; and finding efficiency savings of £22 billion in the NHS over the five years of the plan. (See also ‘Sustainability and Transformation Plans‘)


See Commissioning Support Lead Provider Framework.


In 2015, NHS England required the setting up of 44 new ‘local health systems’ or ‘footprints’ across England, consisting of ‘clinicians, patients, carers, citizens, and local community partners including the independent and voluntary sectors, and local government through health and wellbeing boards’. These new local health systems – the boundaries of which, in many instances, mirror those of county boundaries – are expected to transform the way that health and care is planned and delivered for their populations. The populations they cover range from 300,000 (in West, North and East Cumbria) to nearly three million people (in Greater Manchester). On average they will incorporate three or four local councils and about five CCGs. These ‘footprints’ will not cover all planning eventualities and it is recognised that different footprints will have different needs. (See also “Sustainability and Transformation Plans


See NHS Foundation Trust


As of April 2013 there is a Health and Wellbeing Board in every local authority area, bringing together a representative from the CCG, an elected member of the local authority, a representative of Healthwatch and directors from services within the local authority. The aim is that board members will work together to understand the local community’s needs, identify priorities for commissioners, and encourage them to offer joined up services. One of their main duties is to create a Joint Strategic Needs Assessment.


HEE is a national body responsible for ensuring that the education, training and development of the healthcare workforce is of high quality and responds to the changing needs of patients and local communities.


While the NHS has traditionally covered the cost of all the care a patient may need,  health insurance does not. Insurance companies insure risk, and not certainties. If a patient has a pre-existing condition, an insurance company will increase its premium to cover the increased risk of a claim. If the nature of the condition means that a claim will be inevitable, the insurance premium has to rise to cover the cost of the care – which puts the patient in the same position as having no insurance. If a pre-existing condition is not declared (in order to keep the insurance premium affordable), the insurance company will not have to repay any of the costs arising from that condition.


Set up as a consumer champion, this organisation supports local Healthwatch networks, with the aim of ensuring that the views of health and social care service users are passed on to the Secretary of State for Health, the Care Quality Commission, the NHS Commissioning Board, Monitor and local authorities in England.


By April 2013, every local authority had to set up a branch of Healthwatch to give a stronger voice to local people who use health and social care services. Healthwatch groups are expected to include lay members and to respond to questions and concerns from individuals and the wider community. However, local Healthwatch groups have to be run as social enterprises and so should not be seen to oppose the government or public authority policy. The fear is that Healthwatch groups are without teeth.


In the US, HMOs offer comprehensive health care to insured groups (like employees) for a fixed and pre-paid annual payment. Incentives for doctors to keep costs low and keep patients fit and away from the surgery, together with fixed budgets, are thought to make HMOs cost effective compared to other forms of private health insurance.


HMUs are a way of providing health services that the NHS may be moving towards. Funded by taxation, and supposedly highly cost-effective, HMUs have responsibility for providing full health care services. Like now, patients enrol with GPs. Unlike now, GPs have to enrol with an HMU, which pays them on the basis of the work done, according to a scale of fees (rather like dentist are paid). If a patient needs to be referred to hospital, the HMU decides which it will be, from a range of competing hospitals.


‘Integrated care’ can refer to care that provides continuity across different sectors, such as between hospital and community care, or health services and social care, in order to improve the patient’s experience. It is also used by policy makers and others to refer to a redesign of health and social care services based on new care models that are essentially concerned with increasing efficiency, reducing cost and – according to some – paving the way to an insurance-based, rather than a tax-based, healthcare system.


IPC is a new, and so far, voluntary approach to providing combined health and social care at the level of the individual, initially for people with complex needs. Currently being tested in a number of ‘demonstrator’ sites across England, the initiative builds on the idea of  personal health budgets, where patients, carers and families manage a ‘year of care’ budget to commission their own health and social care. The voluntary sector is expected to play a strong role through, for example, encouraging and supporting individuals with managing this budget.

Although initially available for those with complex needs, IPC will become more widespread. For example, the assessment of new health footprints’ Sustainability and Transformation Plans (and so the funding available to these ‘footprints’) will be assessed in part by whether they expand the use of IPC.


The JSNA is a local assessment that gives CCGs information about which health care services are needed and should be commissioned in the area so that local needs are met. JSNAs will be created by every local Health and Wellbeing Board.


The LIFT programme involves 49 joint venture companies or Public Private Partnerships   (PPP), each a limited company investing in the primary healthcare and community sector. LIFT offers a range of property services to the NHS, such as estate planning and ‘rationalisation’, refurbishment of properties, new build, estate and property management and asset management. 40% of profits from LIFT are returned to the public sector for reinvestment in local health and social care.


Local authorities or Councils have a new responsibility to protect and improve public health. This includes commissioning and providing public health services, taking this responsibility over from Primary Care Trusts (now abolished). There may be advantages – such as helping to integrate health care with social care. But there is also concern, because of cuts in council funding, that funding allocated for public health may be inadequate or get used for other purposes.


There are 10 LETBs across England. They bring together healthcare and public health providers of NHS-funded services with education providers, professional bodies, local government and universities. LETBs are responsible for the education and training of health and public health workers at a local level.


Managed care is a term that describes the range of measures used in the US to reduce the cost of providing health care while still aiming to improve the quality of care. The kinds of measures used include providing financial incentives to clinicians to use less costly forms of treatment, or controls on in-patient admissions and limits on the length of hospital stay that providers will be paid for. Managed care is used in a number of settings such as Accountable Care Organisations or Health Maintenance Organisations (see above).


For over 20 years, successive governments have been opening up the NHS to market forces and competition: an early example was the contracting out of cleaning and other ancillary services, previously carried out in-house, to private companies (1980s). In the 1990s, the NHS became an internal market, divided between those who provided services (like hospitals) and those who purchased services from them. For a while, the NHS was the ‘preferred provider’ of health services. The process of marketisation has since been greatly accelerated by the Health and Social Care Act (2012), especially Section 75. The NHS is no longer the preferred provider, and has become an economic rather than a social activity, which makes it subject to competition law. As a result, most NHS services must be put out to competitive tender.


Monitor, together with NHS England, NICE and the Care Quality Commission, is part of a system for regulating the NHS. One of its main duties is to promote healthcare services that are economic, efficient and effective.
There is concern that Monitor, with its responsibility to tackle ‘anti-competitive behaviour’, will be used to enforce competition in just about all areas of NHS commissioning. If so, this could ultimately lead to the privatisation of the NHS.

In 2016, Monitor – merged with the NHS Trust Development Authority and a number of other NHS bodies – was renamed NHS Improvement.


NHS 111 is a 24 hours a day telephone service, offering patients advice and referrals when there is a need for a fast response, but it is not a 999 emergency. The service is provided across England by a range of different providers such as GP consortia, ambulance services or private companies (e.g. Harmoni).
NHS 111 services are staffed by teams of advisers, supported by nurses. Advisers make a preliminary assessment of the caller’s problem using a computerised decision-making tool. They then either give advice or direct the caller to an appropriate service (such as an out-of-hours GP, A&E department, an urgent care or walk-in centre, or community pharmacist).
It has been criticised for over reliance on ambulance services because of a lack of appropriately qualified staff – so putting unnecessary pressure on A&E services.


See ‘NHS England’


NHS England (previously known as the NHS Commissioning Board) is a statutory body, free to decide its own organisational structure and ways of working. It is accountable to, but at arms length from, the Secretary of State for Health and responsible for the day-to-day running of the NHS. Its relationship to the Department of Health has been described as ‘opaque’.  Working closely with Monitor, NHS England is responsible for the development of the NHS’s commissioning system. It authorises and sets guidelines for CCGs and allocates their funding. It additionally commissions specialist services (such as secure hospitals). NHS England claims to seek the views of a wide range of patients and carers, patient groups, charities, nurses, doctors and service providers, but it has been criticised for ignoring guidance on good practice in consultation and for being insufficiently accountable to the public.


FROM 2016, NHS Improvement brought together Monitor, the NHS Trust Development Authority, and a number of other NHS organisations to be responsible for overseeing foundation trusts and NHS trusts, as well as independent providers that provide NHS-funded care. They hold local health systems and healthcare providers to account and intervene where necessary. NHSI will also include the new Healthcare Safety Investigation Branch, which will be responsible for investigating serious NHS failures.


The introduction of NHS foundation trusts in 2004 marked a major change in the way that hospital services were to be managed and provided. NHS Foundation trusts were to be not-for-profit, independent legal entities (or ‘public benefit corporations’), authorised and regulated by Monitor (now NHS Improvement) as well as accountable to the Care Quality Commission. Their stated purpose has been to shift decision-making from a centralised NHS to local communities in an effort to be more responsive to their needs. All NHS Trusts were supposed to become Foundation Trusts (FT) by April 2014 (a deadline that many Trusts could not meet because they were unable to comply with one of the conditions for FT status, namely financial viability.

By March 2013 there were 145 NHS foundation trusts (including 41 mental health trusts and five ambulance trusts). Compared to the NHS Trusts they were meant to replace, they have – until recently – had considerable managerial and financial freedom. For example, they were  able to generate almost 50% of their income from a range of non-NHS work (including caring for private patients) at a time when NHS Trusts could only generate around 2% of income in this way. Then the ‘patient income cap’ for NHS Trusts rose to 49% with the Health and Social Care Act of 2012 – just one way in which the distinction between NHS Foundation and NHS Trusts has been blurred in recent years.

An increasing number of foundation trusts are getting into financial difficulties, often due to the vast debt that they have taken on through PFIs.


The TDA, part of the Department of Health, is responsible for providing leadership and support to the non-Foundation Trust providers in the NHS that still remain accountable to the NHS, including 90 NHS Trusts. It oversees the performance management of these NHS Trusts, and gives guidance on what they need to do to achieve Foundation Trust status. Together with Monitor and NHS England it has developed a Success Regime, including the introduction of ‘new models of care’, for local systems such as Trusts that have chronic problems and are at risk of failure.

In 2016, the TDA was merged with Monitor to become NHS Improvement.


NICE was set up to reduce differences in the availability and quality of NHS treatments and care – the so called ‘postcode lottery’. It provides research-based guidance to help reduce uncertainty about which medicines, treatments, procedures and medical devices provide the best quality care and value for money for the NHS. In addition, NICE produces public health guidance for local authorities, the NHS and others on the best ways to encourage healthy living, and prevent disease. Its role is due to expand to produce quality standards for the social care sector.


‘New care models’ refers to new ways of organising NHS services that are charged with reducing costs while improving the patient’s experience and integrating care across different sectors, such as hospital and community care. The Five Year Forward View from NHS England outlines a range of models that may be more or less appropriate in different settings, but that together will describe the way the NHS looks in future. NHS England recently announced a New Models of Care Programme that will speed up the design and implementation of new models of care across the NHS. Sceptics have seen a worrying resemblance between some of these new models and Accountable Care Organisations (see above), and see them as forerunners of an insurance-based healthcare system.


The Nicolson Challenge (also referred to as Quality, Innovation, Productivity and Prevention or QIPP savings) was introduced by the head of NHS England in 2011 and required the NHS to make £20 billion of ‘efficiency savings’ over 5 years. This has been largely achieved by pay restraint, cuts in central budgets and a reduction of managerial staff. Its effects have been felt mostly by front line of the NHS, especially through cuts in tariffs for the treatments hospitals provide (see Payments by Results).


The NHS is increasingly judged by the outcomes it achieves rather than government- imposed targets: for instance, rather than judging performance by targets such as waiting times for treatment, or the number of operations completed, success is being assessed by how effective the treatment or operation was, and how satisfied the patient was with their care.


All G.P. practices are expected to set up PPGs to promote a two-way exchange of information between patients and surgery staff on the full range of health related matters and the provision of services. Practices receive a small amount of funding to cover this work.


Payment by Results is a system by which the government pays hospitals for providing treatments according to a set tarrif of prices. It was introduced by New Labour to encourage hospitals to compete with each other to attract patients (and the cash attached to each treatment that they underwent), and to make these hospitals more efficient. Since its introduction, a new ‘efficiency target’ has been added,meaning hospitals are required to deliver the treatment at a reduced rate, year on year. For example, In 2009/10 a hospital providing non-emergency knee surgery would have been paid £3,007 per procedure. By 2013/14 the hospital received £1,673 for the same procedure. Cuts to tariff payments have made up almost half of the £20 billion of ‘efficiency savings’ demanded by the Nicholson Challenge.


A Personal Budget is an allocation of money from a person’s local authority to help them pay for the social care they need to live more independently.


A PHB is a set amount of money allocated to an individual to spend on healthcare. At the moment, everyone with a long-term health condition (such as severe arthritis or multiple sclerosis) who wants a PHB should be able to have one. The Department of Health (DoH) also plans that, at some point in the future, anyone who feels they can get better healthcare by using a PHB will be able to ask for one. How much money a person is allocated will be based on an assessment and care plan drawn up with their ‘local NHS team’, probably their Clinical Commissioning Group (CCG). A PHB can then be spent on anything that meets an individual’s health needs (other than GP or emergency services), as long as the health team approves it. For example, a PHB might be used for paying for personal care, for training care assistants, or for equipment. Critics fear that PHBs may be a step towards a US-style insurance-based system, with PHBs replacing the current system of ‘to each according to their need’ with a system based on an annual fixed sum to cover all of a patient’s health care.


Until now, PCTs, working with local authorities and agencies providing health and social care locally, were responsible for commissioning primary, community and secondary care. Between them, the 152 PCTs across England were responsible for spending around 80% of the total NHS budget, providing funding for GPs, medical prescriptions, and commission hospital and mental health services. Primary Care Trusts were abolished on 31 March 2013 and many of their responsibilities taken over by Clinical Commissioning Groups.


PFI is a form of ‘partnership’ between public and private sectors in which a private company finances the provision of new public facilities and services, particularly public buildings such as hospitals. The new facilities are then leased back to the public, often for as long as 30 or even 60 years. Interest rates on the loans over this period can be extortionate – taxpayers currently owe about £120 billion on public projects that are only worth about £52 billion.

PFIs are being used for a range of public sector projects but the Department of Health has agreed the largest number. Although the capital value of these projects is £11.6bn, over time, because of the excessive interest charged by investors, the sum total of repayments will be £79.1bn. In some instances, the money spent on one PFI-built hospital could have build at least two, if government money had been used instead. PFI deals also tie NHS trusts into expensive, long term contracts for ‘soft’ services such as catering, cleaning and maintenance. The total bill to taxpayers for borrowing through PFI plus the cost of ‘soft’ services is currently about £230 billion. Increasingly, hospitals are creating huge financial deficits, if not facing closure because they cannot pay debts incurred on expensive PFI deals.


This is where, in commissioning services, a CCG enters into a contract with a single organisation or consortium, which then sub-contracts individual service providers to deliver care. The CCG remains accountable for the services overall, but each of the sub-contractors are only accountable to the prime contractor.


This is a variety of the prime contractor model, in which the organisation or consortium contracted by a CCG to commission services also delivers the care directly, as part if the contract.


Privatisation has been defined by the World Health Organisation as a process in which private companies become increasingly involved in the financing or provision of public services. The Coalition Government insisted that the NHS was not being privatised under its watch because NHS services were still publicly funded and free at the point of delivery. This claim is misleading. Since the HSC Act brought in compulsory tendering, one third of the contracts for NHS services have gone to the private sector. In primary care, for example, private companies like Virgin are taking over GP practices. Capita has been awarded a £5 billion contract to provide administrative support for CCGs, and even it seems to commission services (the very work that CCGs were set up to do). Community services like mental health or sexual health are increasingly being run by companies such as Serco. Circle took over an entire hospital – Hinchingbrooke – but walked away from its contract when it found providing the work to be unprofitable.


See Public Procurement.


Public Health England is responsible for an integrated public health service. It has taken over the roles of organisations like the Health Protection Agency and cancer registries. It has 15 centres across England, each covering three areas of public health – health protection, health improvement and healthcare public health. It’s the body that is responsible for managing national health emergencies, like influenza epidemics.


Public procurement is the process used by public organisations like the NHS to buy or rent  the services or resources it needs – it covers the purchase or rental of anything from paper to new hospitals. Procurement is part of the overall commissioning process: while commissioning tends to refer to the planning necessary to identify the kind of services or resources needed, procurement is more about the delivery of those services or resources. Public procurement is increasingly supposed to seek ‘value for money’, i.e. finding the best mix of quality aPURCnd effectiveness for the least money, and is not supposed to be about finding the cheapest price. The NHS is increasingly procuring services through competitive tender – i.e. advertising what it requires in order to receive competing offers from various organisations that want to supply this (See also ‘Competition’).

Because the European Union operates as a free market, opportunities to supply goods and services to the NHS through competitive tendering must also be open to suppliers across all EU member states, on equal terms with UK providers. If agreed, trade deals such as the Transatlantic Trade and Investment Partnership between the EU and the USA extend these opportunities even further.


The purchaser-provider split refers to the creation of an internal market within the NHS in the 1990s, when the NHS was divided into those organisations that provided services (such as hospitals) and those that purchased services from them: for the first time, NHS hospitals and other NHS service providers had to generate their own income and compete among themselves for business.


In the context of today’s NHS, a service provider is an organisation, regulated by Monitor, that may provide health care under a NHS service agreement. It may operate on one or more sites within or outside hospitals. Examples of health care providers include GP Practices, NHS Trusts, and commercial companies.


A social enterprise may be a charity, a co-operative or a mutual organisation, for example, that operates like a business but is concerned first and foremost with improving social well-being rather than making a profit.


Social prescribing involves a GP referring a patient to practical non-medical services, usually third sector or community based, that will help with problems that may be affecting their health. Problems may include loneliness, anxiety, poor housing, employment issues or debt. Some GP practices involve special ‘link workers’ or advisors to direct patients to organisations that may be of help. Those in favour of social prescribing suggest it reduces GPs’ workload, may reduce the use of hospital or A&E services, and cut costs. Others question the use of NHS money for social schemes (social prescribing is paid for by the local CCG), and argue that social prescribing just papers over the cracks in a disintegrating social care system, while pointing to the lack of evidence in support of social prescribing’s effectiveness. Some research indicates that pilot schemes for social prescribing did not seem to reduce consultation rates or change outcomes (e.g. in levels of depression or confidence in self-management).


ST Partnerships have been introduced to implement the Sustainability and Transformation Plans drawn up by the 44 local health systems (‘footprints’ ) that now exist across England. They are expected to integrate local health and care services by bringing together GPs, hospitals, mental health services and social care as a body that will control the finances and take on the planning and provision of services within their area.  Unlike some of the organisations that they include (like CCGs and local authorities), ST Partnerships have no legal status. They are not required to undergo internal or external audit. Those Partnerships ready to integrate their services and funding more fully will become Accountable Care Systems (see above).


When NHS England set up 44 new local health systems or ‘footprintsacross England as a way of implementing its Five Year Forward View, each footprint was required to produce a five-year Sustainability and Transformation Plan covering all activities commissioned by Clinical Commissioning Groups and NHS England. These plans had to ensure better integration with local authority services, including prevention and social care.

STPs are to become the single process by which cash-strapped ‘footprints’ will have access to  ‘transformation’ funding from 2017/18 onwards. Through its STP, each footprint will have to show how it will implement new models of care and achieve financial balance (or make cuts), in addition to other measure such as expanding the use of integrated personal budgets and introducing ‘seven day’ services.


A transnational company is a corporation that is registered or has operations (such as producing and/or selling goods and services) in more than one country. With no single national base, it can rapidly close down its operations in one country and set up in another where local conditions (such as lower wages) are more conducive to profit. Transnationals are characterised by considerable economic and political power: for example, Wal-Mart Stores, one the largest transnationals, has revenues exceeding the Gross Domestic Product (i.e. the value of all goods and services produced within a country in a given period of time) of 174 countries, including Sweden and Saudi Arabia.

updated April 2017

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